The aid system (or ‘non-system’ would be more precise) faces tremendous challenges in less than a century of its existence. While the Millennium Declaration of the UN has called for clear cut targets in reducing poverty, scaling up aid and achieving clear results, there is general agreement that the aid regime is in dire need of serious reform. This non-system is increasingly becoming chaotic with 23 bilateral donors, besides several global funds and multilateral donor institutions, not to mention private foundations and CSOs.

As a result, channels of delivery are even more fragmented, and yet new non-DAC donors such as the so-called BRICS (referring to Brazil, India and China not to mention Venezuela, Thailand and South Africa) and private foundations have been added to the complexity putting further strain on relatively fragile efforts for reform. These new players pose a challenge to the current aid architecture, as well as to current efforts to reform aid practices.

This situation underscores the urgency for aid effectiveness reform in addressing a wide range of criticisms and demands for better aid management and governance and achieving development results for the poor. The Paris Declaration (PD) represents the most ambitious and comprehensive achievement towards this reform and its implementation will be evaluated at the Accra High Level Forum III in September 2008.

Ownership and conditionality represent the core issues in aid effectiveness – as ownership is the defining issue in development, while donor conditionality poses one of the gravest challenges to country ownership. The process of deepening the understanding of development partnership and advancing aid effectiveness reform requires further interrogation into the issue of ownership and conditionality from the Southern context of development as well as taking the circumstances and needs of the poor as the starting point as well as the final destination or goal.

Southern perspectives on the issue of ownership and conditionality are naturally inclined toward the broader concerns of power imbalances that frame and permeate development cooperation and aid. This paper tries to address these broader contexts and concerns in order to explore some policy recommendations towards authentic national ownership of development processes.

Understanding ownership

Developing countries are supposed to exercise leadership over their development policies even when those policies rely in part on external aid money. The Paris Declaration underlines that donors must respect countries’ choices of policies, and assist them to strengthen their capacity to implement those policies.

Ownership is the first of the five thematic headings of the Paris Declaration – the apex of a conceptual pyramid whose other building blocks are aid alignment, aid harmonization, managing for results and mutual accountability. It comes first because experience shows that aid is most effective when it supports countries’ own development efforts and policies to which leaders, officials and citizens of the country are truly committed. It is less effective where the policies are donor- driven.

The state of affairs visualized by the Paris Declaration is one in which partner countries exercise effective leadership over their development policies and strategies, and co-ordinate the efforts of development actors working in the national territory.

The degree to which governments take the lead in coordinating aid-funded activities is the subject of a specific commitment in the Paris Declaration. Another dimension of ownership is the degree to which countries have set the development strategies that are clear and well operationalized so that development efforts are effective and there is a healthy basis for the alignment of aid with country policies.

In the Paris Declaration partner countries commit to exercise leadership in developing and implementing their national development strategies through broad consultative processes. In the past, donors were perceived to take advantage of the unequal power relations between donors and recipients to drive overall country policy development and priority setting.

There are gaps and problems in the implementation of this principle. Partners may not have prioritised and sequenced development strategies needed for implementation.

Some questions for donors: Have donors really “stepped back” and partner countries taken leadership? Who are the driving forces in preparing Donors’ “country assistance strategies” and what are the processes? How and by whom are donors’ priorities set? How are “Joint Assistance Strategies” prepared?

Some questions for partners: Does the country have an overall country strategy including strategies for key sectors with clear strategic priorities? Do the country and sector strategies have specific targets serving the overall development strategy and are the targets sequenced? What has been the process of preparing the overall country strategy and the strategies for key sectors?

Another problem this is supposed to solve is: Partner priorities are not respected. Donor policy priorities distort partner country priority setting and policy development.

Questions to donors: To which degree and how do they attempt to ensure that donor priorities are taken into consideration in overall partner country strategies? To which degree do they have flexibility to compromise on their priorities?

Questions to partners: Has the partner country taken leadership in setting priorities at the national and sector levels? How and to what extent do you accommodate donor priorities in partner country development strategies? What has been the process of priority setting, i.e. to what extent is the overall strategy the result of sector priorities (which might have been influenced by donors)? Which new ideas have been included in the overall and sector strategies and how were these internalised and negotiated? Did the partner country take the lead in this process?

Another problem it wishes to solve: Partners have not been efficient in steering the implementation of development strategies and policies.

But partner countries do not have sufficient competence and capacity. The unequal power relations between partners and donors influence the extent and quality of ownership. Another problem is insufficient involvement of civil society and private sector in consultation process.

CSO criticisms of the Paris Declaration on the question of ownership

The PRSP is presumed to be the expression of “ownership” by partner countries of their development strategies. In reality, the PRSP process remains very broadly controlled by the IFIs.

The World Bank and the IMF advisors are ultimately entrusted with approving the PRSPs. Thus the governments of the recipient countries adopt strategies which they know are liable to receive the agreement of the World Bank and IMF consultants. More often than not, governmental involvement is limited to high ranking civil servants from the finance ministries, the PRSF secretariat and the central Bank responsible for preparing the PRSPs with the experts sent by the IFIs. Civil society is involved in the preparation of public policies to a very limited extent.

As a general rule, far from favouring the emergence of autonomous official policies in the economic and social fields, the PRSPs have an economic content mainly determined by the Poverty Reduction and Growth Facility (PRGF), a new IMF economic conditionality framework (targeting macroeconomic stability, privatizations, freeing-up trade and reducing aid-dependence at the expense of the redistribution and reduction of inequality.

The preparation and the “ownership” of the PRSPs are also means through which the power of donors, and the first ranking among them, the IFIs, is wielded. The initiatives aiming to group resources together in approaches/programmes and improve the harmonization of donors’ policies and practices in  the perspective of underpinning the PRSPs are key instruments enabling donors to have considerable control over the development process of aid recipient countries. In the majority of cases, the conditionalities remain highly important, whether they concern sectoral approaches or budgetary aid. These conditions imposed by the weight of the donor coordination, go beyond usual macroeconomic policies, crossing over into the realm of governance and threatening to undermine the already limited autonomy and benefits of the PRSPs.

The omnipresent influence of the IMF and the World Bank on donor policies, through the intermediary of the budgetary support for the PRSPs (and sometimes for the sectoral approaches), is clearly obvious in the preparation of the indicators. These institutions define, to a large extent, for the other donors the conceptualization, analysis and the “certification” of what can be considered as a good choice in terms of development policy.

This prescribing power is all the more significant as it is based on a three-fold philosophy, located at the heart of the donors attempts to improve aid effectiveness and which represents de facto new ways of imposing economic conditionalities. Firstly, this concerns the notion of “good governance” which,
both reduces the dimension of governance to good management of public affairs and the application of “good economic policies” and at the same time, enables the IFIs to interfere in national policies to a great extent. Consequently, in the field of health, the policies encouraged by the IFIs namely privatizing health care and putting in place cost recovery policies via pricing lead to a situation of exclusion which has devastating effect on the poorest of the poor and thus the most at risk.

The Paris Declaration contains no targets or indicators relating to a reduction of conditionality or benchmark triggers for the release of donor funds. Donors often undermine democratic accountability through secret policy dialogue with developing country government officials on aid and debt conditions, in which their citizens are largely unaware and have no role.

The use of aid as a policy tool to impose economic policy and other conditions has no place in an aid paradigm rooted in a commitment to local ownership. Donors should establish monitorable targets in the review of the Paris Declaration in 2008 for reducing, and then eliminating, policy conditions and
similar benchmarks in their aid relationships.

The Paris Declaration asserts that “in determining the most effective modalities of aid delivery, [donors] will be guided by development strategies and priorities established by partner countries”.

Donor rhetoric on the importance of “local ownership” of development policies and priorities, unfortunately, remains in tension with the dozens of conditions and “undertakings” that these same donors attach to their aid programs. The Declaration contains no targets or indicators relating to a reduction of conditionalities and benchmark triggers for the release of donor funds. In Paris at the High Level Forum, CSOs called for annual reports on donor progress in reducing conditionalities and trigger benchmarks, but to no avail.

The Paris Declaration discourse on aid effectiveness has not materialized in a vacuum. It must be stated that the Declaration is rooted, in part, in the widely acknowledged failure of aid conditionality associated with Structural Adjustment Programs (SAPs) in the 1990s. But despite the growing agreement on the failure of aid conditionality in the past, the macro-economic policies associated with SAPs remain a strong consensus among the major bilateral donors, the World Bank and the IMF. Many of these same conditions have re-emerged for debt cancellation and PRSPs as well as in coordinated donor program-based approaches (Budget Support and Sector Wide Approaches) with developing country governments. PRSPs and “program-based approaches” are strongly promoted in the Paris Declaration, with little critical reflection on the policy prescriptions that often accompany them.

In fact, the numbers and scope of donor- imposed conditions and undertaking are expanding. For instance, governance conditions now reach deep into the details of the political and administrative processes of government in developing countries. Such governance conditions now make up a significant proportion of multilateral and bilateral aid conditions, despite having little demonstrated capacity to improve democratic governance. One study counted 82 governance-related conditions out of an average total of 114 conditions for each IMF /Bank agreement in Sub-Saharan Africa. Some CSOs argue that donors are no longer “external actors” in the poorest countries, but rather are closely integrated through aid conditionalities into the functioning of the state itself.

Democratic governance is essential to allow citizens to hold their governments accountable, but it cannot be imposed from the outside. Donors often undermine democratic accountability through policy dialogue with developing country government officials on aid and debt conditions, in which their citizens are largely unaware and without a role. This secrecy undermines democratic governance by hiding the trail of how policy changes are made. Donor-led policy dialogue for sector programs in education or health and budget support, with an exclusive focus on state officials, may further undermine democratic process in important social and economic sectors critical to the interests of poor people. The Paris Declaration calls for two thirds of donor bilateral programs to be organized through such program-based approaches by 2010.

The Paris Declaration affirms that donor/recipient partnerships must “enhance donors and partner countries’ respective accountability to their citizens and parliaments for their development policies, strategies and performance”. But this stated intent is largely ignored in the 12 areas for aid reform and the monitoring of indicators.

There is no single path for achieving country ownership of development strategies for reducing poverty. Donors need to see these strategies as inherently conflictual and to be sensitive to complexity and contingency if they truly seek country-specific development results for poverty reduction goals.

This approach implies that aid modalities should continue to support diverse development actors, including southern CSOs.

The use of aid as a policy tool to impose economic policy and other conditions has no place in an aid paradigm rooted in a commitment to local ownership. This basic principle is now recognized by the UK government in its 2005 policy statement on conditionality. The CSO call for a cessation of imposed conditions for aid does not imply that there should be no policy discussions or contractual terms for transparency and accountability in the transfer of aid resources. Rather, many CSOs emphasize the importance of efforts to reform the nature of donor/recipient policy discussions to be more inclusive of all development actors in society and to be structured in relation to mutually-agreed international human rights obligations.

The Paris Declaration, unfortunately, makes no commitments for reform along these lines. The failure of The Paris Declaration to set goals to eliminate donor-imposed policy conditions and benchmarks, which are the most important barriers to ownership because they undermine the space for locally-determined policy options for development and poverty reduction in the poorest countries must be rectified. While there is a strong consensus among all development actors that imposed conditions are both ineffective and unjust to the rights of citizens in poor countries, the Declaration fails to address this critical issue. Governments can never be truly accountable to their citizens, and their parliaments, when policy prescriptions continue to be attached, by donors, as conditions for both debt cancellation and aid. Both donor policy dialogue with government and harmonization of aid practices in program-based approaches have tended to accentuate the impact of donor conditions with numerous additional “benchmarks” that must be achieved for the release of aid dollars.

Within highly unequal aid relationships, the governments of the poorest countries are very vulnerable to such conditions. They face an international environment that permits few options to stray from development policy “consensus”, which is largely a donor consensus. While not ignoring obligations to financial responsibility and accountability mechanisms for aid expenditures, donors must eliminate both economic and political conditionality and the use of donor-imposed benchmarks in their aid programming. As noted above, policy dialogue should be based on shared human rights obligations to progressively realize citizens’ human rights.

Ownership in the context of governance and international relations

The broader implications (and applications) of aid effectiveness and ownership in practice can be found in the evolution of a country’s political system and governance and in the political economy of international relations of donor and recipient countries. These are most obvious to Southern perspectives because aid exerts a powerful political and economic influence in aid dependent countries, far beyond the immediate impacts of foreign assisted programs. Aid is a function of foreign policy of and relations between donor and partner country and has wide implications for a weak, dependent developing country.

The powerful influences that aid wields lead some quarters to question whether aid emanates from truly altruistic motives or remains a tool for postcolonial economic, political and military interests. This is bolstered by problems of subordination of aid to short term foreign policy concernsas well as more problematic instances of instrumentalization of aid for economic, political and military interests of donor countries. Because aid is a powerful element in international relations and cooperation for resource-poor countries, the question of aid subordination and instrumentalization is a serious concern to building ownership.

Aid selectivity and its nexus with foreign policy remains likewise a controversial issue in the development community. In a number of instances, for instance, Sri Lanka experienced various actions including suspension of aid from Western governments and the World Bank as a direct response to its foreign policy actions like expansion of trade and development cooperation with the Eastern bloc and petroleum nationalization in the case of the latter. While the Sri Lankan experience may be explained in the context of the Cold War, other countries have experienced similar unilateral donor actions such as the case of the European Union withholding aid in order to pressure a country to agree to the Doha program at the WTO Ministerial.

Aid has often been used as a carrot to entice governments to take or sustain certain policy actions and as a stick by withholding aid to punish governments for various reasons. CSOs have consistently criticized the aid for trade program as an enticement for countries to sign on to the Doha ‘development round’ negotiations at the World Trade Organization.

On the other hand the proposals to reduce partners for donors to focus on better delivery of more aid to fewer countries such as the German and EU proposals have been met with some concern that this might be used as an excuse to exercise selectivity to pursue foreign policy interests. These proposals are quite valid but must be mediated by a multilateral aid body which does not exist at the moment.

The emergence of new bilateral donors (BRICs) as well as very large private foundations and vertical funds allow policy flexibility and space but needs to be further investigated. However the international policy environment framed by liberalization and globalization advocated by dominant donor institutions, agencies and governments reduces policy space despite the options for countries to pick and choose donors from a broader range of options. Changes in regional power structures which allow countries to play off rival regional leaders, including strong political trends away from neoliberal economic policy such as in Latin America or the Asian Monetary Fund in response to the IMF handling of the Asian financial crisis and the challenge to partnerships such as China’s position on conditionality provide policy space for countries wishing to promote
ownership.

In most developing countries, however, democratic development and consequently democratic ownership is weak as they are in the process of building democratic governance and continue to address problems of their colonial pasts and patronage systems that still exist. Local elites depend on these patronage systems and the support of foreign interests for their existence, resulting in a ‘neo-colonial’ nexus between local elites and foreign powers that prevents the building of authentic democratic country ownership especially in aid dependent countries. Social inequalities and competing political interests, including between factions of the elite create tremendous political tensions and instability as well as weak economic and political systems of patronage which sustain the elite. Typical of patronage politics, ownership is also personalized and not institutionalized in democratic processes such as in the case of Bangladesh.

Especially in developing countries where communities desperately need services for survival, the grassroots base is crucial for democratic development. In the grassroots context, democratic development is the process where the people, especially the poor, should become the drivers of development and the main determinants of the development process.

Conditionality and national ownership

Conditionality is probably the most contentious issue in the aid effectiveness debate. Unlike tied aid where the implications to donor and recipient country interests are clear, conditionality has various dimensions and permutations where it is either proposed as ‘a necessary evil’ in the development of ownership or simply as ‘essential contractual obligations’ in the aid partnership. On the other hand, there is no doubt that conditionality works against national ownership.

Conditionality became the thorniest issue in the negotiations towards the drafting of the Paris Declaration. At the last minute during the Ministerial meeting of the Paris High Level Forum in March 2005, fl oor deliberations were suspended when Norway and the EU raised a last ditch effort to get commitment to reduce conditionalities in the Paris Declaration resulting in a US walkout. As a result, the Paris Declaration is surprisingly silent on conditionality while calling for aid effectiveness reform and building ownership. Researchers and CSOs have criticized the Paris Declaration as fundamentally flawed because of this.

Conditionality may be defined as the application of specific, predetermined requirements that directly or indirectly enter into a donor’s decision to approve or continue to finance a loan or grant. Conditionality takes a number of different forms. Yet the underlying principle remains the same: donors are using financial pressure to leverage actions they believe would not otherwise be taken.

Conditions are spelled out in a range of documents, including Poverty Reduction Strategy Papers (PRSPs) which countries must produce every three years in order to qualify both for concessional lending from the World Bank and IMF and for debt relief under the Heavily Indebted Poor Countries (HIPC) initiative. They are also included in the Letters of Intent and Letters of Development Policy which present a country’s economic reform intentions to the IMF and World Bank respectively.

Conditions form a key element in the individual lending strategies produced by the World Bank and IMF. Both the World Bank’s Poverty Reduction Support Credit (PRSC) and the IMF’s Poverty Reduction and Growth Facility (PRGF) are supposed to be based on policies identified in a country’s PRSP, yet they often include conditions that have not been agreed through the PRSP process. Conditions are also found in the World Bank Country Assistance Strategy (CAS) – ‘a master plan’ for each of the countries in which it works.

The IMF combines fiscal policy conditions that relate to a country’s macroeconomic and fiscal situation (for example, inflation targets, and budget deficit targets that countries must observe in order to get aid money) with other policy conditions. With the World Bank, conditionalities often cover structural adjustment prescriptions that relate to more detailed institutional reforms, often in the public sector, such as privatization, trade liberalization and civil service reform.

Conditionalities fall under three main categories:

1. Prior actions – that must be taken by the government before any IFI lending, to demonstrate commitment to a reform programme. These are the strongest conditions, used most heavily where donors doubt the reform credentials of the government.
2. Performance criteria, or ‘trigger’ conditions – these are periodic conditions that must be met over the course of a programme in order to release a further tranche of money. A country’s credit limit with the World Bank is varied according to how well they meet the performance criteria – there are high, medium and low case lending scenarios, dependent on how well a country meets performance criteria.
3. Structural benchmarks – that are monitored to ensure that a programme is ‘on-track’. They describe the contents and results of the government’s program in areas monitored by the World Bank, or small steps in a critical reform process, that would not individually warrant an interruption of funding. Whereas the World Bank argues that these are only indicators of the direction of performance, NGOs argue that they are in effect conditions since they may enter into a general evaluation of country performance.

Conditionality as we know it today originated with the IMF, and had initially a relatively specific macroeconomic focus. It was intended to substitute for collateral, normally pledged by commercial banks in terms of an asset (a house or a piece of land) to be handed over if the borrower failed to pay back a loan. In the IFIs (IMF and World Bank), conditionalities were originally related to project lending and they were meant to ensure that the funds were used as intended. With the introduction of policy based lending in the 1980s, the purpose changed to enable the borrower to remove what the lender regarded as fundamental policy-induced obstacles to economic growth and development.

In terms of purpose, one may distinguish between the following different forms of conditionality:

• Fiduciary conditionality: This relates to the financial management of funds and to public accountability in relation to those funds. The purpose of this form of conditionality is to ensure that the funds are used for the purpose intended and that the funds are used in the most efficient manner. Hence, this is an element of regular financial accountability. These fall within the normal contractual terms and conditions.
• Policy conditionality/economic policy conditionality: This includes conditions about the implementation of policies believed to be of importance in reaching general development goals. Funding is not necessarily directed towards the areas of policy conditionality which oftentimes are only peripherally related to the program in question and limit the partners’ policy space or freedom.
• Process conditionality: This focuses on the process of planning, adopting and/or implementing policies rather than their content or the management of funds. Generally it involves that certain institutions are in place or certain principles for participation are followed to enhance transparency and representativeness of governance.
• Outcome conditionality: This focuses on measurable outcomes (e.g., GDP growth, poverty reduction) rather than what kinds of policies are implemented to reach those goals. This form of conditionality is central to the concepts of results orientation in aid and output-based aid.

The World Bank and IMF tend to apply a specific and restricted definition of conditionality using technical terms, for example as: “the specific conditions attached to the disbursement of policy-based lending or budget support.”

In popular use, the term conditionality is often given a much broader definition and has become closely associated with the attempt of the IFIs to impose policies, e.g. of privatization and liberalization, on poor countries. Many of the critics of the IFIs include a broad set of monitoring and review mechanisms in the term conditionality, although not all of these formally or automatically affect the decision to approve or disburse a grant or a loan or part of a loan.

What are some of the critiques against the practice of conditionality?

In 2005 donor governments committed to significant increases in the volume and quality of development aid. A large amount of this is likely to be delivered by the World Bank and the IMF, which are also very influential in the spending allocations of other agencies. However, economic policy conditionality imposed by the World Bank and the IMF on developing countries has harmed development in some of the poorest countries and remains a key challenge if aid effectiveness is to be taken seriously.

When external agencies impose detailed conditions on the finance they provide for developing countries this has a series of unfortunate effects. It limits the policy space available for developing countries to determine their own policies for poverty reduction, and undermines domestic citizens’ rights in decision making processes and national sovereignty. It can delay poor countries from receiving much-needed resources. It can increase aid unpredictability as resources may suddenly stop flowing if conditions are not met. It imposes a significant administrative burden on already over-stretched developing governments.

There is a growing body of evidence – both official and independent – showing that conditionality has failed. The Bank’s 2005 review of conditionality agreed to the principles of ownership, harmonization, customization, criticality, transparency and predictability. Unfortunately, there is little evidence that the Bank is doing nearly enough to change its practice. The Bank claims a reduction of conditionality; however, this is owed, to a great extent, to the fact that interventions that CSO consider conditionalities are not labeled as such by the Bank enabling official statistics to appear more positive than it is the reality.

Recent research conducted by CSOs has found that:

• Aggregate World Bank and IMF economic policy conditions rose on average from 48 to 67 per loan between 2002 and 2005;
• World Bank and IMF continue to put conditions on privatization and liberalization despite the acknowledged frequent failures of these policies in the past;
• The Bank does not give enough space for governments to define their own policies;
• The continuing secrecy of World Bank and IMF negotiations with borrowing country governments inhibits the development of genuine broad based “ownership” and leaves reform programmes open to the accusation that they have been illegitimately forced on governments by the Bank;
• IMF macroeconomic conditions, especially high interest rates aimed at combating moderate levels of inflation and stringent fiscal policies, impair much needed spending on social and economic development.

Many conditionalities are being implemented to fulfi l what is perceived to be fiduciary donor responsibility and accountability to its own domestic constituency. Some donors such as the EC have implemented outcome conditionality to promote results orientation of the PD or in some cases have done away with conditionality. Outcome conditionality does not have a contractual impact on releases of funds but only emphasizes outcomes and appears to be merely a result of a conditionality fetish – the need to impose conditions and avoid moral hazard.

CSOs have been urging governments in the North and the South to show a resolute political commitment to:

• Ensuring the World Bank and the IMF adopt a policy which prevents them from imposing any form of policy conditions on poor countries when providing finance and debt relief;
• Phase out policy conditionality in WB and IMF lending practice;
• Creating forums for equitable policy dialogue between northern and southern governments based on common commitments to international human rights law and other international agreements and its implications for the goals and modalities of international cooperation and aid.

Some CSOs call for the introduction of ‘good’ conditionalities which require policy reform in such areas as democratic governance and human rights, environment and climate change and gender. Some governance conditionalities are actually accountability conditionalities such as participation in project monitoring and have been discussed above.

While the intention for policy reform is commendable, calling for conditionality is a misplaced recognition on the part of CSOs of the power that aid has displayed in  infl uencing behaviour on cash-strapped regimes. But as previously noted, these have been proven to fail in the long run. This strategy among some CSOs perpetuates the practice of aid instrumentalization. More important, it ironically weakens government accountability to its citizens and its duty to international human rights standards. In this sense, prescribing human rights conditionality is an oxymoron for a government to accept a human rights conditionality which, being an aid conditionality, is a violation of the citizen’s political rights to participate in determining aid policy.

This is the reason why it is exceptional to find Southern CSOs calling for good conditionalities or lobbying donors to impose conditionality on their governments. CSOs understand that conditionality violates ownership which includes national processes for democratic development. Southern CSOs instead call for suspension or cancellation of aid since they see the continuation of aid as a recognition and tacit endorsement of a government whom they accuse of violating human rights such as the case of Burma, Nepal and the Philippines in recent years.

Critical Northern CSOs are wary of campaigning for aid suspension or cancellation since this could be interpreted as an endorsement for donor selectivity – itself  an instrumentalization of aid. But while this call may be interpreted as an endorsement for donors to pressure governments on foreign policy issues, it can also be interpreted from the country stakeholder perspective that development partnership cannot be properly contracted because of a) grave misuse of aid; b) grave dysfunction in country systems that prevent development assistance or any assistance for that matter to be properly used or c) collapse of democratic processes and illegitimacy of government in question. Some may refer to this as state failure which presents several problems in definition as well as particular issues on ownership.

No matter the objectives by which conditionality is utilized nor how good intentioned its prescriptions are, conditionality severely erodes the sovereignty of partner countries and prevents governments from properly responding to the concerns of its citizens or to respect, promote and defend their human rights. A human rights conditionality, for example, is an oxymoron as a superior, external imposition to a government to consider its human rights obligations to its citizens to be superior.

Conclusion and ways forward

The politics and the technicalities of aid are so complicated that Southern voices would recommend that to set the aid system upright, it must stand on its head.

Ownership by the poor, being the ultimate objective of aid, would be a good start to address the question of ownership and conditionality. Starting with this premise, then it is clear that the crucial test of aid effectiveness is whether the poor are able to claim their human rights. This is what development effectiveness means and challenges the notion of development effectiveness in other circles such as in the UN where the fundamental benchmark of success is not necessarily the poor claiming their rights. This is not mere rhetoric but identifying and committing to a genuine standard and goal for aid reform. In the face of complexity of the aid non-system, in the challenges of aid reform considering the diffi culties of building democratic governance, equitable international systems and capacities for development, ownership by the poor in the context of national and democratic ownership of development provides guidance for aid reform.

In particular:

• The Paris Declaration presents an important opportunity to implement aid reform along with commitments to scale up aid. The challenge for all development actors is how to implement the PD comprehensively and not in a technicist manner, and enrich it by developing innovations along its principles to build country ownership, including the increased involvement of all CSOs, parliaments, media and other actors.
• Authentic ownership must be constantly promoted in contradistinction to technicist erosion of ownership and must be enriched to its full concept of national and democratic ownership as the overriding principle that involves leadership in harmonization, alignment, domestic accountability, donor accountability to the country, and aid management with the human rights of the poor as the overriding concern.
• National ownership involves formulating independent development financing strategies that take advantage of the multiplicity of sources for development assistance and opportunities for development fi nance but premised on development for its people instead of labour export and fi nance liberalization.
• Conditionality should be addressed comprehensively in the process of aid reform alongside commitments under PD. Contractual and accountability obligations should be built outside the framework of conditionality but along new modalities of partnership based on national ownership as mandated by the Paris Declaration, where policy conditionalities are completely removed and contractual obligations reduced and reformed.
• Ultimately, the MDGs should be made a genuine challenge for aid effectiveness in targeting the poor in their communities, turning these into centres of empowered ownership by adopting rights-based approaches to development, improving local government accountability and strengthening recognition and roles of CSOs.

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Antonio Tujan is director of IBON International and chairperson of the Reality of Aid. Wim De Ceukelaire is with IBON Europe. This paper is summarizing the most important points on conditionality and ownership of:

• “Primer on Development and Aid Effectiveness” from IBON International, 2007; and
• “Southern Voices on Conditionality and Ownership: Towards Achieving Authentic National Ownership,” paper prepared by Antonio Tujan for Promoting Ownership and Reforming Conditionality: Forum on the Future of Aid Strategic Planning Workshop, 18-20 February 2008.