Evidence at the country level: the case of Zambia and Uganda

Uganda and Zambia have embarked upon Division of Labor exercises in 2006 and 2007 respectively, to address high transaction costs faced by governments due to fragmentation of aid. Significant gains have emerged in both countries as a result of the exercise.

• An Aid Mapping exercise in Uganda and Zambia allowed government authorities to better understand the current aid landscape in their own countries. In Zambia, a self-assessment instrument was designed to establish each partner’s sector preferences, internal capacities, preferred roles and the perceived comparative advantage of donors in certain sectors. This “self re-positioning” was subjected to a peer review against other submissions. Comparative advantages of some donors over others were identified as a result, and donors who had no previous leadership role emerged as leaders in new arrangements. This also created the expectation that donors would exit from certain sectors, or take on a less visible role (the “silent donor”).
• In both countries, the sharing of information and experiences was seen as particularly useful in forming a more complete picture of the aid architecture in the country; and fostering transparency on donor activities about which the government had previously been unaware.
• The exercise also led to streamlined communication with the government. Although the transaction costs of setting up such a division of labor processes were high at first, there are indications that ongoing transaction costs have been reduced as central government and ministries no longer have to continually communicate with every individual donor on the same issue.
• Another benefit was the creation of a platform to address common problems or constraints. In Zambia for instance, cooperating partners plan a high-level policy dialogue with the Government every year shortly before the budget preparation process.

At the same time, however, several challenges point to difficulties when it comes to donors actually disengaging or allowing countries to lead in the harmonization and co-ordination agendas.

• Donors “ganging up.” Zambian authorities were apprehensive about overly-intensive donor coordination efforts which were seen as conduits for stronger and unified donor pressure. In Uganda, donors were seen to take advantage of their position when chairing co-ordination groups with the effect that the policy dialogue and access benefited their institutions at the expense of other members of the group.
• Donor attribution and visibility. Assigning a role to the more “significant” donor countries was perceived as a major challenge in Zambia. According to the case study report, “Donors that carry gravitas cannot be seen to be just ‘active’ or operating ‘in the background,’ but must have a leadership role somewhere along the line.”
• Donors do not really disengage. Ongoing commitments meant that donors in both countries were reluctant to disengage from projects which could not simply be abandoned. Moreover, the inability of some donors in Zambia to channel funding through other donors prevented the effective withdrawal of donors from specific sectors.
• Emerging donors are not included. In both countries, new donors were not adequately engaged in the division of labor debates, which weakened the entire exercise.
• No clear leadership. Neither donor nor government authorities were perceived to have the requisite skills in negotiation and facilitation required by such a politically-charged exercise. As a result, country leadership was perceived as weak or non-existent in some cases.
• Leaving stakeholders out. Key central government institutions were more informed and actively involved in the Division of Labor process than others in Uganda (sector ministries in particular), thereby reducing incentives to support and lead the exercise across the board. Sector ministries also had more to lose by relinquishing control over aid flows which bypassed central government.

Although Zambia is often cited as delivering “best practice” on harmonization and division of labor among donors at the country level, it is clear that donors are not walking the talk quite yet.6