Tanzania : new aid modalities and donor harmonisation

Harmonisation and donor co-ordination are important contributions for making development assistance more effective. The move from projects to program aid have increased recipient governments' ownership and control of their own development.

The achievements have so far been mixed. Since the situation and achievements differ from country to country it is important to share experience in order to avoid re-inventing the wheel and rather use best practice. To achieve this, collecting and disseminating field experience both to headquarters and among field offices is important.

The present report is an attempt to systematise recent experience from Tanzania in the field of new aid modalities and their interplay with donor harmonisation. It is based upon the experience of the two economists in the Embassy of Norway (1999-mid-2003) and Embassy of Sweden (2001-mid-2003). As some of the processes have been taken further in Tanzania than in many other countries, an empirical input in the ongoing discussion on these issues may be of interest.

The report focuses on the links between the harmonisation efforts and programme aid modalities. It covers issues like improvements in donor-government relationship, consequences for transaction costs, harmonisation of budget support and links to the Public Expenditure Review.