Summary

Poor governance constrains development. States that are accountable to their citizens are a key element of governance that is good for development. Domestic accountability – in this context the ability of citizens to hold the state answerable for its actions, and ultimately to impose sanctions for poor performance – provides states with an incentive to respond to the needs of their citizens. Ensuring effective domestic accountability is an ongoing challenge for all countries. In many developing countries, states are only weakly accountable to their citizens.

Domestic accountability is driven in large part by domestic politics, but the actions of donors and other “external” actors – in relation to aid and non-aid matters – do contribute to shaping domestic accountability and governance in developing countries. Donors, working in partnership with developing countries, have a responsibility to act, at home and abroad, in ways that strengthen, rather than undermine, domestic accountability.

The Governance Network (GOVNET) of the OECD’s Development Assistance Committee (DAC) is embarking on a two-year programme of work on aid and domestic accountability. The aim of the proposed programme of work is to support improvements in domestic accountability that enhance governance, lead to faster progress on poverty reduction, and make aid more effective. This aim is one that can be supported by all governments that are committed to sustainable poverty reduction and to countries having ownership – democratic ownership – of their own development agendas. The proposed work-stream will achieve this by generating a better understanding and evidence base about the realities of governance and domestic accountability in order to inform the policy and practice of donors and other relevant stakeholders.

The GOVNET work-stream on aid and domestic accountability will make a strategic contribution to the activities of the Working Party on Aid Effectiveness and, ultimately, the fourth High Level Forum on Aid Effectiveness, to be held in 2011. The work-stream is also expected to play an integrative function, providing a common framework that will add value to the activities of a number of other GOVNET Task Teams and foster collaboration with other DAC networks such as those focused on gender equality, conflict and fragility, poverty reduction and evaluation.

GOVNET is committed to ensuring the full and active participation of stakeholders from partner countries throughout the course of the work-stream. Their ownership is crucial. Involving organisations based in developing countries, with first-hand expertise and experience of the realities of governance and domestic accountability in those countries, will help to ensure that GOVNET’s work is realistic and useful and builds on existing initiatives to strengthen domestic accountability. This approach will also help to strengthen capacity in partner countries and is in line with commitments made by donors and partner countries to build a global partnership for development with democratic country ownership at its core.

Section one of the paper provides an introduction to the planned work-stream and the paper itself.

Section two outlines what domestic accountability is and sets out the ways in which aid can impact on it, through shaping the scope for domestic accountability and by helping to build the capacity of key accountability institutions such as parliaments and civil society organisations. If aid is to contribute to improvements in domestic accountability, donors need to ensure that their support to capacity development is effective and that the ways in which they deliver aid do not limit the scope for domestic accountability.

Section three provides a brief discussion of the impact of aid – and different aid modalities – on the scope for domestic accountability, noting that aid can sometimes limit the scope for domestic accountability, but also that the impact of aid on the scope for domestic accountability, and the suitability of different modalities, depends in part on existing patterns of accountability.

Section four outlines and assesses donors’ efforts to contribute to building the capacity for accountability in developing countries through the provision of support to institutions including civil society organisations, parliaments, political parties and the media. It notes that while there have certainly been some successes, donors have tended to adopt “blueprint” approaches that take insufficient account of context, with support often provided in a manner that focuses on building the capacity of individual institutions rather than systems of accountability.

Building on the analysis of aid and its impacts on the scope and capacity for domestic accountability, section five does two things. It makes the argument that donor policy and practice would benefit from greater engagement with the complexities of real-world governance and the politics and incentives that shape the emergence and effectiveness of domestic accountability. It then sets out a conceptual framework and approach that will enable donors and other stakeholders to explore the complexities of governance in particular countries, to consider the impact of aid both in terms of shaping the scope and contributing to strengthening the capacity for domestic accountability, and to analyse the role that politics and incentives play in shaping domestic accountability.

The conceptual framework draws attention to a number of points that must be considered if one is to understand the relationship between aid and domestic accountability. First, domestic accountability is about the relationship between citizens and the state and the extent to which the state is answerable for its actions and inactions. Second, domestic accountability emerges (or doesn’t) through the operation of accountability systems that bring together a variety of institutions, putting into practice and drawing on a number of principles – including human rights principles and agreements – through their engagement with particular issues. Third, citizen-state relations are embedded in specific country contexts, with their own political realities, structures of incentives and configurations of formal and informal power. Fourth, the scope and capacity for domestic accountability can be shaped by aid, with aid that is delivered on the basis of a sound understanding of the prevailing governance context more likely to have a positive impact. And fifth, for a number of issues there will be additional “global drivers”; non-aid drivers of accountability and governance, the dynamics of which are generated, to varying degrees, beyond the borders of the country concerned.

Section five also proposes that GOVNET’s work-stream take issues as entry-points for exploring the landscapes of governance and domestic accountability. This approach offers a number of advantages. First, it will enable the exploration of the political realities and incentives that shape real-world governance and that donors need to engage with if their support to the strengthening of domestic accountability is to be effective. Second, it will allow for exploration of the ways that aid can shape both the scope and capacity for domestic accountability and of what it might mean for donors to deliver support in ways that are better-aligned – where appropriate – with political realities and incentives. And third, it will enable GOVNET’s planned work-stream to play an integrative function, adding value to the work of other GOVNET Task Teams and DAC Networks and fostering collaboration with other organisations working on issues of governance and domestic accountability.

Section six examines a number of issues to demonstrate how the proposed conceptual framework – a political economy framework – can be used to address the question of why domestic accountability is often lacking, in order to inform better policy and practice on aid and domestic accountability. The issues used as illustrative examples are budget processes, taxation, corruption, service delivery and electoral processes. All of these issues play, or could play, a crucial role in strengthening and building the legitimacy of citizen-state relations.

Finally, section seven considers the next steps for GOVNET’s planned work-stream on aid and domestic accountability. It explains in broad terms – subject to decision and discussion with partner country stakeholders in particular – how the proposed framework and GOVNET Task Team on aid and domestic accountability will help to ensure that the results of various groups’ explorations can be put together, piece by piece, to produce a map of the landscape of aid and domestic accountability.

By putting into practice the principles of partnership, the work-stream and approach proposed in this paper will contribute to a better understanding of the complexities of governance. This will give donors and others more scope to support effectively the strengthening of domestic accountability. Whether that scope is used is a question of politics and priorities, at both ends of the emerging global partnership for development.