General framework and new directions A renewed commitment to development

(See also France's Aid-at-a-glance )

2002 marked a turning point in French development co operation policy, an area that the President of the Republic has made one of his priorities. At the International Conference on Financing for Development held in Monterrey in 2002, the French President pledged to increase France’s official development assistance (ODA) to 0.5% of gross national income (GNI) by 2007 and ultimately to 0.7% by 2012. At least half of this aid would be directed towards Africa to help achieve the Millennium Development Goals (MDGs) and to support the areas specified in the New Partnership for Africa’s Development (NEPAD).

France is keen to promote the mobilisation of development funding: it has endorsed the United Kingdom proposal to set up an International Finance Facility and joined in other initiatives aimed at promoting public private partnerships. France has also commissioned a working party to draw up proposals regarding international taxation. In addition, France is supporting more effective forms of aid, as may be seen from its international commitment to the harmonisation of donor practices and procedures.

Plurality of goals: an impediment to a unified vision of French policy

The plurality of goals which French co-operation must meet is partly due to the complexity of its system. The Ministry of Foreign Affairs (MAE) and the Ministry of Economic Affairs, Finance and Industry (MINEFI) have joint responsibility for the strategic management of ODA. The French Development Agency (AFD) acts as principal operator.

Each of these structures has its own culture and a mandate in which development is not the sole objective. The MAE, with responsibility for co operation and cultural actions, combines solidarity with influence in support of French diplomacy. The MINEFI is responsible for macroeconomic and financial aid and therefore for debt management, monetary and financial co operation with CFA franc zone countries, promoting investment, export financing, and economic and financial relations with developing and transition countries as well as with international financial institutions. The mandate of the AFD, whose sphere of action includes both developing countries and France’s overseas departments and territories, is to promote stable economic and financial development that will both maintain social cohesion and safeguard the environment.

Despite having several key principles – priority to Africa, global public goods and the regulation of globalisation, sustainable development, democratic governance, cultural diversity and La Francophonie – French development policy does not project a unified vision. An overview of the directions for ODA would therefore seem warranted in order to rank goals by order of importance, clarify geographical, sectoral and thematic choices, and determine the role of different institutions and instruments, notably with regard to the MDGs. A policy statement could provide a collective platform and serve as an instrument for communication at the national and international level. It would provide a starting point for involving civil society organisations in the design and implementation of policy and strategy, on the one hand, and in raising public awareness of MDGs on the other.

Efforts needed to focus action on achieving the MDGs

With France now embracing the MDGs, reducing poverty and inequality has become an explicit axis of co-operation, as shown by the depth and breadth of the discussions initiated by French institutions. Rather than targeting the poor, the French approach is aimed at integrating poor and marginalised populations into global interventions and at diversifying remedial strategies to meet the needs of the social groups concerned. This approach is starting to take account of gender, but this dimension has yet to be mainstreamed. The creation of a budget focussed on gender promotion and the development of monitoring and evaluation tools to assess progress might be useful in this respect. As a general rule, French co-operation could make greater use of in-depth socio-economic analyses, including those of the relationship between gender and poverty.

The French approach leads to actions being dispersed among different levels (national, regional and local) and requires a wide range of actors and instruments whose coherence and co-ordination could be improved. While sectoral priorities have been identified (education, health and the fight against HIV/AIDS, water and sanitation, rural development, infrastructure and environment), they are not always linked to the goal of reducing poverty and inequality. French co operation would benefit from a consolidated position on the fight against poverty and inequalities which would spell out precisely how France intends to make a practical contribution to meeting the MDGs. With regard to education, which accounts for almost a quarter of France’s bilateral ODA, only a modest share of activities is aimed at improving educational systems in developing countries. France’s support for the “Education for All” initiative is a positive action in this respect and should be stepped up.

Harmonisation: an objective that needs to be translated into action in the field

France plays a leading role at the international level in harmonising aid procedures and practices. France currently chairs the DAC Working Party on Aid Effectiveness and Donor Practices and in 2005 will host the follow up to the high-level forum on aid effectiveness held in Rome in 2003. An action plan setting out how France intends to implement the principles of the Rome Declaration is currently being prepared. The implementation process is only just starting, however, and the efforts made in Paris have yet to make a substantial impact in the field. The adoption of a programme based approach does not necessarily lighten the administrative burden that aid management imposes on partner countries, given that in Mauritania, for example, French support for the ten-year programme in the education sector is channelled through three different channels (budget support, administered by the AFD, an institutional support project and technical assistance, both administered by the MAE).

Recommendations

• Draw up a policy document setting out the strategic directions for the entire co operation system, based on the achievement of the MDGs and on the principle of aligning French co operation with the strategies adopted by partner countries towards the fight against poverty.
• Take on a more active role in the implementation of aid effectiveness principles in partner countries; this will entail finalising and disseminating the action plan for harmonisation, specifying the objectives to be achieved as well as indicators of results and timetables.

Aid volume and distribution

The challenges posed by growth in ODA

France is well on the way to fulfilling the commitment made at Monterrey. France’s ODA increased significantly between 2001 and 2003, rising in volume terms from USD 4.2 billion to USD 7.3 billion and in terms of ODA/GNI from 0.32% to 0.41%. Consequently, France is the most generous G7 donor country. However, a large share of this growth is currently attributable to debt relief under the initiative for heavily indebted poor countries (HIPC), which in 2002 accounted for almost a quarter of all French ODA.

The gradual implementation of the HIPC initiative is a major challenge for France. In the near future, once most of the countries concerned have completed all stages of the debt relief process planned under the initiative, a substantial reduction in debt relief efforts is to be expected. It will then be necessary for the French government to step in to maintain the level of ODA and ensure that it continues to grow. Estimates indicate that ODA may rise to around USD 9 billion by 2007. Mobilising such additional funding in a difficult budgetary context is a major challenge for the government. The programming and procedures for implementing these resources, not to mention the implications in terms of human resources, are other issues that the French authorities will have to turn their full attention to without delay.

Insufficient selectiveness despite the priority given to Africa and to least developed countries

Given the scale of the debt relief programme, the increase in ODA has scarcely generated any flows of fresh money to developing countries for the time being. Moreover, this growth has not yet afforded room for manoeuvre to allow France, through appropriate budget decisions, to follow the strategic orientations announced. The challenges of achieving the MDGs in a large number of sub Saharan African countries – which receive 62% of bilateral ODA – raise the question of aid effectiveness and should compel the French authorities to consider which countries should be given priority for ODA. An analysis should be made of the timeliness of setting priorities within the priority zone for solidarity (ZSP), which contains fifty or so countries. The criteria to take into account should concern the level of poverty and needs in terms of achieving the MDGs, the introduction of sound social and economic policies, good governance and respect for human rights.

Multilateral co-operation: a more explicit strategy needed

France’s desire to play a more influential role within international bodies warrants a more explicit strategy at the multilateral level. Such a strategy could in particular specify the bodies to whose support the French authorities plan to give priority and serve as a basis for better synergies between multilateral and bilateral action. France tends to give priority to global funds such as the Global Fund to fight AIDS, Tuberculosis and Malaria, to which in 2003 France announced the tripling of its annual contribution. As is the case for other European Union (EU) member states, European aid accounts for a substantial share of French ODA (64% of multilateral ODA and 19% of total ODA in 2002). Its contributions to the multilateral development banks represented 6% of its ODA in 2002. Contributions to United Nations institutions – to which France appears to attach strategic importance in response to the challenges of globalisation – are low (2% of total ODA in 2002) and lower than the DAC average (7%).

Making ODA more transparent

It is difficult to link ODA with budgetary appropriation. This is the case for some debt relief operations, France’s budgetary contribution to the development activities of the European Commission (other than the European Development Fund) and ex post accounting of certain expenditure in accordance with DAC definitions (costs induced in France by students from developing countries, costs of assisting refugees and administrative costs). In addition, there is no annual report on French ODA as a whole.

The implementation of the Institutional Act on Finance Legislation (LOLF) from 2006 onwards should make ODA far more transparent. The LOLF will provide for MAE and MINEFI activities to be combined into a single mission, consisting of two programmes, for funding appropriations: (i) economic and financial aid for development; and (ii) solidarity with developing countries. The creation of an interministerial mission for ODA offers a unique opportunity to consolidate the goals of French co operation and planning process through budgetary reorganisation and the drafting of a cross cutting policy document.

Recommandations

• Determine the planning principles and procedures for drawing down the budget resources that will be mobilised to compensate for the gradual reduction in debt relief.
• Review geographical selectiveness within the ZSP by setting priorities according to the needs with regard to achieving MDGs and the potential impact in view of the commitment made by beneficiary countries.
• Explain multilateral strategy in greater detail, including budgetary choices, and incorporate the lessons learned from bilateral experience into multilateral actions.
• Seize the opportunity afforded by the LOLF to introduce a transparent and multi year budgetary process, as well as results-based management, by using the cross cutting policy document as a framework in which to translate strategic directions into budgetary choices.
  

Policy coherence for development

Promoting globalization with a human face, based on democratic principles and social equality, is one of France’s central concerns. The President of the Republic has launched several initiatives aimed at integrating African countries into the global economy. The trade initiative for Africa led to the EU action plan to create fairer trading conditions in the international market for African cotton producing countries. France could follow up on this example and use its influence to encourage the European Commission to pursue reforms in areas which would assist developing countries in sectors where they have a comparative advantage but which were not covered by the reform of common agricultural policy in 2003. French bilateral co operation has often assisted the development of key sectors in the economy of partner countries and expansion of their export capacities, for example cotton in Sahel countries or fishing in Mauritania. French institutional support has also helped strengthen the negotiating capacities of these countries, allowing them to play a more active role at the international level.

The complexity of the issues at stake in terms of policy coherence requires systematic action at the political and administrative levels. EU member states must intervene simultaneously at the national level and at that of the European Community. France’s commitment in this respect has not been explicitly endorsed in the form of a political declaration in which policy coherence for development is identified as an objective for all government actions. The impetus in this area would seem to depend largely upon presidential initiatives. Interministerial co ordination structures and analytical capacities do not appear to be sufficiently mobilised to ensure that greater account is taken of the interests of developing countries in decision-making processes. The creation of a co ordinating unit, specifically tasked with ensuring policy coherence, at the level, for example, of the Interministerial Committee for International Co-operation and Development (CICID) might be helpful.

Recommendations

• Make policy coherence for development an explicit goal of the French government and specify the institutional arrangements to be used – in particular co ordination mechanisms and arbitration procedures.
• To ensure that the interests of developing countries are taken into account more systematically in the policies pursued by France, initiate a more rigorous debate by identifying the practical objectives to be achieved at Ministerial level and within the administration.

Aid management and implementation

Incomplete division of responsibilities between strategy and implementation

The 1998 reform of co operation had been aimed at improving the effectiveness and co ordination of the institutional system around two focal points for policy, the MAE and MINEFI, with the AFD as the principal operator. Interministerial co ordination has been improved by the creation of the CICID which is tasked with specifying the objectives of ODA and the procedures for its implementation, ensuring the coherence of geographical and sectoral priorities, as well as monitoring and evaluating policies and instruments. This committee, whose Secretariat is provided jointly by the MAE and MINEFI, has successfully managed to instigate a dynamic process of formal and informal co ordination. Its power to generate strategic momentum deserves to be strengthened, however, which would require meetings at more frequent intervals and a stronger secretariat.

The dispersion of activities among several institutions is costly. It requires both co ordination and clear definitions of the responsibilities of the actors concerned. It also leads to duplication of know how at the headquarters of institutions and in the field. France’s stated intention of entrusting the principal role in ODA implementation to the AFD has not been fully translated into action inasmuch as the latter is responsible for managing only about 10% of total ODA, with MAE and MINEFI responsible for 29% and 40% respectively. The division of responsibilities between the MAE and AFD should be clarified to make their complementarity a stimulus for synergy rather than competition. As part of its modernisation programme, the MAE looked into ways of enhancing its effectiveness, notably in terms of strategy. Following a strategic reorientation in 2002, the AFD plays a more active role in discussions relating to development in France and at the international level. Activities in the field also reveal overlaps between the actions pursued by the MAE and those by the AFD (particularly with regard to health and education). The question of the division of responsibilities between these two institutions will be even more pressing as greater use is made of the programme approach in French co operation.

The MINEFI shares with the MAE the responsibility for strategic management of ODA. In this respect, compared with other DAC members, the MINEFI has prerogatives that go beyond the traditional role of a ministry of finance. The scope of this ministry’s responsibilities with regard to ODA calls for an increase in staff with greater operational experience.

Review instruments and implementation procedures to ensure greater effectiveness

The reference to the MDGs shows that aid effectiveness and the impact of aid are crucial issues for France. This should prompt France to examine the comparative advantages of various instruments and procedures for co operation according to the needs of partner countries. The DAC missions to Benin and Mauritania have revealed France’s desire to integrate co operation more closely into strategies to combat poverty drawn up by partner countries. Despite the adoption of country strategy papers (DSP), French co operation is not part of a multi year planning process in which not only would the goals targeted be specified, along with indicators of results, but also implementation procedures and the respective responsibilities of actors. French co operation remains fragmented and divided into numerous sectors and projects, generating high transaction costs for both the French authorities and partner countries. This damages the transparency of France’s action, including its contribution to the achievement of the MDGs.

France is keen to retain an important role for project aid. This form of assistance allows scope for experimentation and direct contact with realities in the field. Technical assistance (TA) is a key instrument which has evolved considerably since the early 1990s in that numbers have declined from 20 000 to 2 200. TA should henceforth be incorporated into projects aimed at building capacities. To ensure that nationals can subsequently take over from the aid advisors, it would be advisable to: identify requirements more precisely; make provision at the project design stage for the withdrawal of TA; and systematically assess its impact in terms of capacity building. Greater use should be made of the scope for pooling TA funding resources between donors, particularly with regard to the implementation of national poverty reduction strategies and programme approaches.

Shifting to a programme approach

A new instrument, the C2D (debt relief and development contract), provides the means for France to test the implementation of the programme approach. This instrument consists in refinancing ODA debt repayments from HIPCs through grants. The resources thereby released are allocated in the form of budgetary support for certain priority activities (basic education and vocational training, primary health care and the fight against major endemic diseases; infrastructure and facilities for local communities and territorial development; natural resource management). Use of C2Ds has allowed France to support national sectoral strategies in a few countries, in collaboration with other donors, but this approach is based on a complex management system and has high transaction costs. In some countries, France assists the transition to budget support by providing technical assistance for the preparation and implementation of the State budget, in close co ordination with international financial institutions.

The deeper dialogue and closer co-ordination with partners within the framework of national poverty reduction strategies and the programme approach call for a different set of skills to that required for project implementation. The efforts needed to implement new approaches towards harmonisation and the alignment of practices and procedures must not be underestimated either. The French authorities have started to reflect upon the implications of this development with regard to the mix of skills required and the degree of authority to be delegated to representatives in the field. The complexity of the French system argues in favour of increasing the resources in the field devoted to analysis, collaboration, co-ordination and training.

Towards greater participation by civil society organisations

The dialogue with civil society has intensified, as has co ordination with non governmental actors. The High Council for International Co-operation (HCCI) has enabled the creation of a forum where the various actors involved in co operation, non governmental organisations (NGOs) and territorial authorities can meet and hold discussions. The government has on several occasions reasserted its desire to promote more wide ranging participation by actors from French civil society and territorial authorities. A broader dialogue should be initiated with these actors regarding their role in strengthening civil society in developing countries and the implementation of national poverty reduction strategies. In this context, French authorities may need to strengthen co ordination in the field and consider the current level of NGO co-financing, which is one of the lowest among DAC members.

Measuring performance and knowledge management:  A culture that is moving forward

Evaluation has evolved in terms of methodology in that the scope of evaluation has been broadened to include approaches by country, sector and instrument and measures have been taken to improve feedback. Progress still needs to be made in terms of disseminating evaluation reports, which are not always published, capitalising on lessons learned and analysing impacts. A number of initiatives are currently in progress to introduce results-based management into the implementation of the LOLF at the MAE and MINEFI and into the new strategic directions of the AFD.

The compartmentalisation of actors and instruments results in the dispersion of information and limits the benefits derived from implementation experience. The creation of interministerial working parties and the networking of intellectual and operational resources are practices that should eventually bear fruit, provided that the discussions within these parties are reflected at the level of strategy.

Recommendations

• Adjust aid planning to respond more closely to the needs expressed by partner countries through their national poverty reduction strategies, rather than in terms of the instruments used by French co operation, and introduce budgetary programming by country in order to enhance aid predictability.
• Assess the advantages and disadvantages of keeping various implementation structures in place, both at headquarters and in partner countries. On the basis of the experience gained with C2Ds, undertake a more in depth analysis of the effectiveness of various instruments of French aid in relation to the shift towards the programme approach and budget support.
• Pursue efforts to adjust technical assistance to strengthen its contribution to capacity building, while assessing its opportunity cost compared with other instruments. Consider untying such assistance, co financing with other donors and increased use of local or regional expertise.
• Encourage initiatives aimed at inter institutional capitalisation on know how and experience, including evaluation.

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