5. Austria’s delivery modalities and partnerships

This chapter looks at the principles which guide Austria’s partnership approach across its development portfolio, and how Austria uses its financial, diplomatic and technical resources in its global engagement and in partner countries. It assesses whether the approach and principles are consistent with Austria’s development co-operation policy and international commitments on development effectiveness: ownership of development priorities by developing countries; a focus on results; inclusive development partnerships; and transparency and accountability to each other.

It begins by considering Austria’s approach to partnerships for development co-operation with a range of actors, assessing whether they embody the development effectiveness principles. It then explores whether Austria’s work in partner countries is in keeping with its domestic and international commitments to, and principles of, effective development co-operation.

    

In Brief

Austria works with a broad range of actors and is a predictable and flexible partner. It is committed to European Union joint programming and delegated co-operation, but makes limited use of programme-based approaches. Austria’s partnerships are inclusive, but multi-stakeholder approaches and support for local civil society organisations are rare. Austria is not meeting its transparency commitment.

Austrian Development Cooperation country partnerships are founded on country ownership and use partner results and data as much as possible. However, little use is made of government systems and more effort is needed to be predictable, transparent and accountable to partner countries. Austria responds to partner needs using a range of delivery instruments and partners.

Effective partnerships

Austria offers predictability and flexibility to partners

Austrian development co-operation institutions engage with a broad range of actors – national and local governments, multilateral and regional institutions, civil society organisations, the private sector, think tanks, and academia – providing predictable and flexible funding in the short to medium-term (mostly up to three years). Austria emphasises results and financial accountability in its reporting requirements and encourages innovative approaches.

Austria provides core contributions and annual subscriptions to multilateral and regional institutions, mostly on an annual basis. Funds are transferred early in the financial year, which is good practice. Institutions spoken to for the peer review appreciate Austria’s willingness to rely on their reporting systems but noted that multi-year contributions would provide them with more predictability.

Austria’s non-core contributions and its approach to bilateral development co-operation projects provide multi-year predictability to implementing partners. As observed in Kosovo, implementing partners appreciate the flexibility and the close, constructive collaboration shown by staff of the Austrian Co-ordination Office and the Austrian Development Agency (ADA) (Annex C). Austria’s programming process allows implementing partners to respond to change, such as following recent cyclone damage in Sofala province, Mozambique.

While the budget cycles of other Austrian development actors follow three-year planning cycles, ADA’s work plan and budget requires annual approval by the Minister of Foreign Affairs. While this provides flexibility in responding to crises (Chapter 7), overall this appears to be an unnecessary constraint on ADA given that its work is subject to rigorous reporting and oversight mechanisms.1 Annual approval does not directly affect partners with an existing project agreement as ADA is entitled to contract an amount totalling 60% of the current year’s budget for the following year and another 40% for subsequent years. However, there is a risk that contracting, financing and commencement of new projects is delayed until the annual work plan and its accompanying budget are formally agreed, potentially reducing time for implementation in their first year.

Austria participates in EU joint programming but rarely uses programme-based approaches

Austria is committed to participating in European Union (EU) joint programming in its partner countries and territories. For example, rather than developing a separate strategy, Austria uses the ‘European Joint Strategy in Support of Palestine’, 2017-2020’ (European Union, 2017[1]). It is also open to either implementing or contributing to delegated co-operation arrangements with other donors.

While Austria contributes to basket funds, pooled funding mechanisms, and specific purpose programmes and funds managed by implementing partners – comprising 8% of bilateral official development assistance (ODA) projects in 2017 – it makes limited use of programme-based approaches in its bilateral ODA.2 Austria has stopped providing general budget support and its support for two sector budget support programmes in Uganda is very much the exception at present. It lacks the capacity to establish and manage sector budget support programmes, and will not do so if other donors in a sector are unwilling to participate.

Despite inclusive partnerships, multi-stakeholder approaches and direct support for local civil society is rare

Austria values ownership, mutual accountability and inclusion. Its development partnerships are based on openness, trust and mutual respect (MFA, 2019[2]). However, Austrian institutions mostly engage directly with development actors rather than seeking to develop multi-stakeholder partnerships; exceptions include business partnerships and strategic partnerships with civil society. For strategic alliances (one category of business partnerships), participation by civil society organisations and public institutions in projects, including their management, is considered as a criterion but is not compulsory (ADA, 2013[3]). In assessing the quality of strategic partnerships with civil society, ADA considers whether they pursue a multi-stakeholder approach and whether relevant national and local actors, including the private sector, will participate (ADA, 2019[4]).

Austrian Development Cooperation’s default approach with civil society is to co-finance organisations located in Austria, which co-operate with a partner organisation in a developing country.3 Co-funding is provided up to a maximum of EUR 300 000 over two to three years. Austria also currently supports five framework programmes (minimum EUR 900 000 in total for three to four years) and five strategic partnerships (minimum EUR 2.5 million over five years) with Austrian NGOs (MFA, 2019[5]). While this is in keeping with the Federal Act on Development Co-operation (Government of Austria, 2002[6]), it limits Austria’s ability to directly support local civil society. In 2017, funds were channelled from provincial governments, the Ministry of Sustainability and Tourism and ADA to just 31 projects implemented by local NGOs; by comparison, funds were channelled to 914 projects implemented by Austrian-based NGOs.

Austria is not meeting its transparency commitment

Austria needs to be much more transparent about its ODA if it is to be fully accountable to its public and partners, and to meet its commitments under the Busan Partnership for Effective Development Co-operation (4th High Level Forum on Aid Effectiveness, 2011[7]).4 Austria’s reporting to the OECD Creditor Reporting System is rated as “excellent”, and its reporting to the OECD forward spending survey is rated as “good” (Chapter 3; Table 5.1). However, not all Austrian actors are achieving the same standard in their reporting and neither of these mechanisms are sufficient to provide Austrians or Austria’s partners with the detailed information about development co-operation activities envisaged in the Busan partnership.5 Austria could consider joining organisations that advocate for and encourage greater transparency, as other Development Assistance Committee (DAC) members do.6

The Federal Development Co-operation Act requires the three-year programme to include details of any Federal Government contribution to ODA, the priorities for development co-operation and the funding to achieve these. However, this requirement is not being met (Government of Austria, 2002[6]).7 Ensuring that all discretionary activities of Federal Ministries reported as ODA – together with the projected budget – are included in the next three-year programme would strengthen transparency and improve co-ordination.8

The current three-year programme provides considerably less information than its predecessor. It focuses on Austrian Development Cooperation (ADC), which comprises a small percentage of bilateral ODA, but lacks details about Austria’s multilateral co-operation and bilateral co-operation delivered outside ADC. Nor does it outline how other government actors engage in Austria’s partner countries and territories, or the results that are expected to be achieved there (Chapter 6) (MFA, 2019[2]). The annual ODA report is similarly lacking in detail about what ODA is being spent on. It does not offer information about individual projects, choosing instead to provide high-level information on ODA (MFA, 2019[8]). 9

ADA is the most transparent of the institutions delivering ODA, providing summary information online about all of its projects.10 As of 2018, ADA has committed to publishing a range of reports and assessments for projects exceeding EUR 2 million and programmes exceeding EUR 3 million and all interventions funded by the Green Climate Fund (ADA, 2018[9]). However, there is clearly room for a much more transparent approach as this commitment only covers eight of the 683 projects ADA funded in 2017. By contrast, all strategic evaluation reports have now been published (Chapter 6). The Development Bank of Austria also provides summary information online about its projects.11 Detailed information is not available on funding provided by any of the other Austrian institutions.

Country-level engagement

Country ownership is central to Austria’s development co-operation policy

Austrian development co-operation policy states that partnerships with developing countries and territories should be “based on ownership, mutual accountability and inclusion” and refers to the principles of effective development co-operation (MFA, 2019[2]). The policy applies directly to all strategies for Austrian Development Cooperation (ADC). Older ADC strategies, such as for Kosovo (ADC, 2013[10]), explicitly refer to aid and development effectiveness principles.

The Ministry of Finance emphasises the importance of ownership in its strategic guidelines for the international financial institutions (MOF, 2015[11]). While ownership is not mentioned explicitly in the Strategy of the Development Bank of Austria (OeEB, 2019[12]), OeEB is committed to the aims and principles laid out in the Federal Development Cooperation Act, which expects the aims of developing country governments and populations to be taken into account (Government of Austria, 2002[6]).

Austria uses partner country results frameworks and data, but not their systems

Recent country strategies include specific mention of how Austrian Development Cooperation aligns with the priorities of country partners. In these strategies, Austria’s expected results are aligned with the country results and the Sustainable Development Goals (ADC, 2019[13]; ADC, 2019[14]) (ADC, 2019[15]). This is good practice. In addition, recent country strategies indicate that Austria will draw on partner government reporting and support the development and strengthening of national monitoring and evaluation systems (Chapter 6). The extent to which this is feasible does, however, vary from country to country. In recent years, Austria’s sole statistical capacity-building project supported work on gender inequality through the OECD’s Social Institutions and Gender Index, with a focus on Uganda.12

Despite an improvement in Austria’s use of country systems reported in the 2018 monitoring round of the Global Partnership for Effective Development Co-operation (Table 5.1),13 Austria makes very little use of partner country systems. In 2017, just USD 14.4 million (16%) of the USD 91.8 million disbursed to 496 projects in 12 countries and territories used government channels. This represented 2.4% of total bilateral ODA.

Austria lacks the means to be predictable and accountable

Austria has enhanced its ability to provide indicative expenditure projections to its partners by including in its country strategies an annex outlining Austrian Development Cooperation’s indicative budget allocation for the duration of the strategy (generally five years). However, these projections account for only a small percentage of total flows to partner countries and territories disbursed by the Austrian Development Agency14 and by all other official Austrian development actors (Chapter 3). A whole-of-government approach in partner countries and territories would enable Austria to provide government partners with better information on indicative forward expenditure for all aid flows and would thus enhance predictability (Chapter 3).

Austria’s limited transparency regarding total ODA limits its ability to be accountable to partners, even in relation to the small volume of country programmable aid (Chapter 3). As seen in Kosovo, this is made all the more difficult in contexts where donor co-ordination is challenging (Annex C).

Table 5.1. Austria’s performance on effective development co-operation, 2018
	Alignment and ownership by partner country and territory (%)				Predictability (%)		Transparency
	SDG17.15 Use of country-led results frameworks	Funding recorded in countries’ national budgets	Funding through countries’ systems	Untied ODA	Annual predictability	Medium-term predictability	Retrospective statistics (OECD CRS)	Information for forecasting (OECD FSS)	Publishing to IATI
2016 round	83.8%	62.3%	32.7%	36.4%	88.1%	58.1%	Excellent	Good	Nil
2018 round	61.2%	49.6%	78%	50.1%	87.5%	79.3%	Excellent	Good	Nil
Trend	▼	▼	▲	▲	▼	▲	▬	▬	Nil
Note: The following countries and territories provided information about Austria’s ODA for the 2018 monitoring round: Albania, Bhutan, Burkina Faso, Costa Rica*, Ethiopia, Georgia, Kenya*, Kosovo, Lao PDR*, Moldova, Mozambique, Senegal*, Uganda, and Viet Nam*. Data drawn from 26 projects totalling USD 17.9 million in 14 countries and territories. *: not a priority partner country. CRS: Creditor Reporting System; FSS: Forward-spending survey; IATI: International Aid Transparency Initiative. Green = good performance; orange = progress, but more could be done; red = progress is needed
Source: (OECD/UNDP, 2019[16]), Making Development Co-operation More Effective: How development partners are promoting effective, country-led partnerships, www.oecd.org/dac/effectiveness/Part-II-of-the-Global-Partnership-Progress-Report.pdf.

Austria uses a range of delivery instruments and partners in responding to partner country needs

Austrian Development Cooperation has introduced a ten-step process for developing new country strategies for its priority countries and territories. The starting point is the national development strategy, which is systematically referred to in the latest generation of strategies. The process also involves conducting a range of analyses15 to ensure that the context is understood, and that Austrian Development Cooperation responds appropriately. This is good practice.

Austria uses a mix of aid delivery instruments (Annex B, Table B.2),16 works with a variety of implementing partners, and has a particular focus on working at the sub-national and local levels. While Austria does not place conditions on its aid, it could better leverage its contributions and good reputation to step-up its dialogue with partner governments regarding the need for any policy reforms to address underlying development challenges which are constraining sustainable development (Chapter 1, Annex C).

As noted in Kosovo, achieving a whole-of-government approach is proving challenging (Annex C). Prioritising Austria’s activities – multilateral, regional and bilateral co-operation and other forms of financing – and presenting these in ADC strategies would contribute to a more coherent approach and present a more comprehensive and compelling picture of Austria’s support for partner countries and territories.

References

[7] 4th High Level Forum on Aid Effectiveness (2011), Busan Partnership for Effective Development Co-operation, http://effectivecooperation.org/wp-content/uploads/2016/03/OUTCOME_DOCUMENT_-_FINAL_EN.pdf (accessed on 7 August 2019).

[4] ADA (2019), Strategic Partnerships with Austrian Civil Society Organisations (CSOs) Funding Guideline, Austrian Development Agency, Vienna, https://www.entwicklung.at/fileadmin/user_upload/Dokumente/Zivilgesellschaft/Strategische_Partnerschaften/StratPart_Funding_Guideline.pdf (accessed on 23 May 2019).

[9] ADA (2018), Public Disclosure of Project Information: Directive, Austrian Development Agency, Vienna, https://www.entwicklung.at/fileadmin/user_upload/Dokumente/Projektberichte/Directive_Public_Disclosure_of_Project_Information.pdf (accessed on 27 June 2019).

[3] ADA (2013), Business Partnerships Guideline: An Instrument of Austrian Development Cooperation, Austrian Development Agency, Vienna, https://www.entwicklung.at/fileadmin/user_upload/Dokumente/Unternehmen/Englisch/Guidelines_for_Business_Partnerships.pdf (accessed on 22 May 2019).

[13] ADC (2019), Ethiopia Country Strategy 2019-2025, Austrian Development Agency, Vienna, https://www.entwicklung.at/fileadmin/user_upload/Dokumente/Publikationen/Landesstrategien/CS_Ethiopia_2019-2025.pdf (accessed on 8 August 2019).

[15] ADC (2019), Mozambique Country Strategy 2019-2024, Austrian Development Agency, Vienna, https://www.entwicklung.at/fileadmin/user_upload/Dokumente/Publikationen/Landesstrategien/CS_Mozambique_2019-2024.pdf (accessed on 7 August 2019).

[14] ADC (2019), Uganda Country Strategy 2019-2025, Austrian Development Cooperation, Vienna, https://www.entwicklung.at/fileadmin/user_upload/Dokumente/Publikationen/Landesstrategien/CS_Uganda_2019-2025.pdf (accessed on 7 August 2019).

[10] ADC (2013), Kosovo Country Strategy 2013-2020, Austrian Development Cooperation, https://www.entwicklung.at/fileadmin/user_upload/Dokumente/Publikationen/Landesstrategien/CS_Kosovo_2013-2020.pdf (accessed on 16 July 2019).

[1] European Union (2017), European Joint Strategy in Support of Palestine 2017-2020: Towards a democratic and accountable Palestinian State, European Union, Brussels, https://eeas.europa.eu/sites/eeas/files/final_-_european_joint_strategy_english.pdf (accessed on 6 August 2019).

[6] Government of Austria (2002), Bundesgesetz über die Entwicklungszusammenarbeit (Entwicklungszusammenarbeitsgesetz, EZA-G), https://www.ris.bka.gv.at/GeltendeFassung.wxe?Abfrage=Bundesnormen&Gesetzesnummer=20001847 (accessed on 22 July 2019).

[5] MFA (2019), DAC Peer Review Memorandum, Federal Ministry of Europe, Integration and Foreign Affairs, Vienna.

[8] MFA (2019), ODA Report 2017, Federal Ministry of Europe, Integration and Foreign Affairs, https://www.entwicklung.at/fileadmin/user_upload/Dokumente/Publikationen/ODA-Berichte/Englisch/ODA-Report_2017.pdf (accessed on 5 August 2019).

[2] MFA (2019), Working together. For our world. Three-Year Programme on Austrian Development Policy 2019-2021, https://www.entwicklung.at/fileadmin/user_upload/Dokumente/Publikationen/3_JP/Englisch/3JP_2019-2021_EN.pdf (accessed on 25 June 2019).

[11] MOF (2015), Strategic Guidelines of the Federal Ministry of Finance for International Financial Institutions, Federal Ministry of Finance, Vienna, https://www.bmf.gv.at/wirtschaftspolitik/int-finanzinstitutionen/Strategischer_Leitfaden_IFI_EN_.pdf?67ry3z (accessed on 6 May 2019).

[16] OECD/UNDP (2019), Making Development Co-operation More Effective: How development partners are promoting effective, country-led partnerships, OECD, Paris, http://www.oecd.org/dac/effectiveness/Part-II-of-the-Global-Partnership-Progress-Report.pdf (accessed on 5 August 2019).

[12] OeEB (2019), Strategy of the Development Bank of Austria 2019-2023. Financing our Shared Future, Oesterreichische Entwicklungsbank Ag, Vienna, https://www.oe-eb.at/en/about-oeeb/our-focus.html.

Notes

← 1. The annual work plan is reviewed by the ADA Supervisory Board prior to being submitted to the Minister of Foreign Affairs for approval. The Supervisory Board comprises representatives of the federal ministries of digital and economic affairs; Europe, integration and foreign affairs; finance; sustainability and tourism; labour, social affairs, health and consumer protection. The annual work plan is based on the three-year programme for Austrian Development Co-operation, country and regional strategies, and existing funding commitments. Quarterly reports are provided to the board, which also approves projects.

← 2. In 2017, project-type interventions (47% of projects), student support (18%), and support for technical assistance and donor country personnel (18%) made up the majority of Austria’s bilateral ODA.

← 3. In addition to development-focused non-government organisations (NGO), applications can be submitted by other actors – associations, foundations, trade unions, local authorities and other public corporations. See https://www.entwicklung.at/en/actors/civil-society/.

← 4. The fourth principle agreed in the Busan Partnership for Effective Development Co-operation is Transparency and accountability to each other; see http://effectivecooperation.org/about/principles/. In paragraph 23, adherents undertake that they “will: a) Make the full range of information on publicly funded development activities, their financing, terms and conditions, and contribution to development results, publicly available subject to legitimate concerns about commercially sensitive information…c) Implement a common, open standard for electronic publication of timely, comprehensive and forward-looking information on resources provided through development co-operation…” (4th High Level Forum on Aid Effectiveness, 2011[7]).

← 5. The Busan commitment is to “make the full range of information on publicly funded development activities, their financing, terms and conditions and contribution to development results, publicly available subject to legitimate concerns about commercially sensitive information” and implement a common, open standard for electronic publication of timely, comprehensive and forward-looking information on resources provided through development co-operation” (4th High Level Forum on Aid Effectiveness, 2011[7]).

← 6. For example, 19 DAC member countries have joined the Open Government Partnership; see https://www.opengovpartnership.org/.

← 7. The ODA matrix and the forecast scenario in the three-year programme do not specify the resources allocated to each of Austria’s development co-operation priorities. In addition, the document does not provide details about how funding will be applied by each development actor (MFA, 2019[2]).

← 8. A significant share of Austrian ODA is “non-discretionary” (e.g. in-donor refugee costs and imputed student costs) – i.e. expenditure that cannot be projected in advance.

← 9. This includes total ODA; the percentage disbursed by Austrian institutions; the main components by instrument; components of multilateral ODA and of bilateral ODA, including how ADA distributes bilateral ADC funds by sector and geographic region; the income, poverty, and economic status of recipient countries; and the channels ADA uses.

← 10. A list of all projects managed by Austrian Development Co-operation since 1999 can be found at https://www.entwicklung.at/projekte/ (German) and https://www.entwicklung.at/en/projects/ (English).

← 11. Information about projects funded by the Development Bank of Austria can be found at https://www.oe-eb.at/en/unsere-projekte/unsere-projekte-im-ueberblick.html.

← 12. The Social Institutions and Gender Index (SIGI) is a cross-country measure of discrimination against women in social institutions (formal and informal laws, social norms, and practices) across 180 countries. See https://www.genderindex.org/.

← 13. The Global Partnership’s 2018 monitoring round drew its data from projects approved in 2017 with a value of USD 500 000 or more. The sample for Austria comprised 26 projects in 14 countries and territories totalling USD 17.9 million. In 2017 Austria disbursed USD 604.6 million to 2 016 projects.

← 14. For example, as the Uganda country strategy acknowledges, flows from business partnerships, NGO co-financing and education programmes are inherently unpredictable (ADC, 2019[14]).

← 15. Step 3 involves a review of human rights, gender, fragility, environment and climate protection, migration, reduction of conflict results including landmines, and poverty reduction.

← 16. In 2017, Austria used basket funds and pooled funding; contributions to specific purpose programmes and funds managed by implementing partners; core contributions to multilateral institutions; core support to NGOs, other private bodies, public-private partnerships and research institutes; debt relief; donor country personnel; other technical assistance; project-type interventions; scholarships and training in Austria; and sector budget support. Imputed student costs and in-donor refugee support were also reported as ODA.