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Poverty Reduction Strategy (PRS) alignment

Definition

Alignment is the extent to which donor aid is aligned with a partner government’s national poverty reduction strategy (PRS), Medium Term Expenditure Framework (MTEF) and budget. It also the extent to which partner governments' MTEF and budget are in line with the PRS.

Why is it important?

• Donors have often provided aid based on their own strategies, priorities and timetables. With many donors operating in any given country, this has led to two problems: first, a multiplicity of donor strategies and priorities, not necessarily pulling in the same direction; and second, the risk of aid undermining national strategies and priorities for poverty reduction.
• Evidence suggests that aid is more likely to be effective if donor policies, procedures and practices are aligned with partner government PRS processes.
• The PRS approach presents a unique opportunity to change the way donors deliver aid. It can support a national development agenda, increase democratic accountability, and support and strengthen domestic systems

DFID/UK position

• DFID's 2003 Harmonisation Action Plan(106 kb) commits us to harmonise our aid with other donors and align with national PRS processes.
• DFID's Public Service Agreement(38 kb) makes strong commitments to monitoring the extent to which DFID and others' aid is aligned with PRSs.
• DFID believes that locally specific responses on alignment are likely to be more appropriate to need than centralised instructions from London. DFID has however issued guidance(45 kb) to support its country teams and give good practice examples.

International perspectives

The Organisation for Economic Co-operation and Development's (OECD's) Development Assistance Committee (DAC) supported theParis Declaration on Aid Effectiveness which sets out Partnership Commitments on harmonisation and alignment. DFID has played an active role in this process.

Issues to Address

• Reliance on partner country systems requires strong mutual trust. DFID has procedures in place to check and manage the risk of entrusting funds to partner government budgets.
  Donors need to make fundamental changes to their approaches to align their policy preferences, procedures, and timetables with those of partner countries.
• Many alignment principles and examples focus on budget support, but the principles of alignment should be applied to all aid modalities  (including technical cooperation, projects and global funds).
• Alignment is likely to be costly in the short-run, with a lot of time for agreeing new processes with the partner government and other donors. However, partner government ownership of donor aid, and commitment to ensuring it enhances development, should also rise.
• Alignment impacts on how the effectiveness of aid is monitored, as donors should be using national government systems and indicators to monitor impact. In many countries the national monitoring system is not yet capable of handling such demands. Capacity development in this area is therefore a key component of an alignment strategy.

Further information

• Learning Missions to Ethiopia, Rwanda and Senegal - Synthesis Report(48 kb) (Strategic Partnership with Africa (SPA), 2003)
• Harmonising Donor Practices for Effective Aid Delivery(484 kb) (Development Assistance Committee (DAC) Guidelines and Reference Series, 2003)

Last updated: 14 February 2006