What is a Programme Based Approach

The Vientiane Declaration describes the Program Based Approach (PBA) as a way of engaging in development cooperation based on the following principles:

  1. Leadership by the host country or organization;

  2. A single comprehensive programme and budget framework; noting however, that PBAs allow for a variety of ODA funding modalities including, but not limited to, pooled funding;

  3. A formalized process for DP coordination, and harmonization of DP procedures for reporting, budgeting, financial management and procurement; and

  4. Efforts to increase the use of local systems for programme design and implementation, financial management, and monitoring and evaluation.

The anticipated benefits from a PBA include a better coordinated mechanism for donors to contribute to government development strategies.

Appreciation of the need for more coordinated donor support is based on numerous reviews on aid effectiveness and also on the achievements of the various projects and programmes implemented in Lao PDR.

The PBA is one proposed solution that has been captured in the Vientiane Declaration to address aid shortcomings. This will only be possible if donors have the confidence in the mechanisms developed by the Government in their key areas of concern, i.e. that procurement is effected in an objective and transparent manner, that financial reporting allows donors to clearly see how their funds have been applied in pursuit of government development objectives, and that impact monitoring can be efficiently undertaken and applied in further policy development.

NUDP is developing further opportunities for moving towards a PBA within the ARD sector and/or to an inter-sectoral PBA, recognizing such a transition will be gradually introduced over time as performance can be substantiated.

Initially, the NUDP will have to make compromises between a project and a PBA in terms of how it is implemented, including:

  • Initial limited number of donors and expansion based on lessons: The programme will be funded initially by a limited number of donors—primarily AFD, the EU, the German Federal Ministry for Economic Cooperation and Development (BMZ), and SDC. It is expected to expand over time.

  • Use of government structures: To the greatest extent possible, the NUDP works within the government structures rather than setting up parallel structures. While it is not recommended to set up a separate implementing agency, it is proposed that Programme Management Units and non-parallel project implementation units (PIUs) be established to help manage and implement the NUDP. This would also build upon the lessons and experiences from the Governance and Public Administration Reform Programmes (Annex 1) being implemented in various provinces as well as lessons from the Southern Programme being implemented by ADB and the International Fund for Agricultural Development (IFAD).

  • Decision-making and ownership: Initially, government staff and agencies are in control of budgets and day-to-day decisions, while advisers are in supportive functions only. This will ensure government ownership (government signing off on budgets, etc.), along with ensuring transparency and accountability.

  • Incentives: Incentives for government staff will need to be aligned and harmonized and this should be based upon a government system that is to be established or on current MAF norms and procedures. All donors have mentioned that ultimately the Government of Lao PDR (GOL) should be responsible for salaries.

  • Contributions from the Government: It is expected that GOL contributions will be low in the short term but expanded over the long term. In addition, there is a need to better understand current public expenditure frameworks and see how the government can increase its contribution to the programme.

  • Technical assistance: Substantial levels of technical assistance are needed in the short term and should decrease over the longer term. Still, it is expected that the NUDP will need technical assistance for the whole period.