Communication from the Commission to the Council and the European Parliament - Overall assessment of the operations financed by the Community under the regulation on decentralised cooperation
Date: 2003-07-11
Institutions: European Commission
Subjects: EU financial instrument, aid evaluation, budget, cooperation policy, developing countries, development aid, management

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 11.07.2003
COM(2003)412 final

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE
EUROPEAN PARLIAMENT

OVERALL ASSESSMENT OF THE OPERATIONS FINANCED BY THE
COMMUNITY UNDER THE REGULATION ON DECENTRALISED
COOPERATION

1.

INTRODUCTION: CONTEXT AND OBJECTIVES OF THE ASSESSMENT

Since  its  creation  in  1992,  budget  line  B7-6002  (ex  B7-6340)  has  been  used  to  implement
decentralised cooperation in the context of the Community's relations with third countries. It
has  been  a  material  expression  of  the  Community's  political  will  to  help  partner  countries'
local authorities and civil society play an active role in the development process.

The  legal  basis  for  this  budget  line  is  Regulation  (EC)  No 1659/98.  After  an  external
evaluation,  this  Regulation  was  extended  and  amended  by  Regulation  (EC)  No 955/2002,
which  expires  on  31 December 2003.  Article  12  of  the  Regulation  stipulates  that  "Eight
months at least before this Regulation expires, the Commission shall submit to the European
Parliament  and  the  Council  an  overall  assessment  of  the  operations  financed  by  the
Community  under  this  Regulation,  accompanied  by  suggestions  concerning  the  continuing
promotion of decentralised cooperation and the involvement of civil society."

The Commission ordered this assessment at the beginning of 2003 in order both to fulfil its
obligations under the Regulation and to obtain information, in the form of recommendations
based on the instrument's performance since the 2001 evaluation, to help it decide whether to
extend the application  of  the  budget  line's  legal  basis.  A  team  of  four  spent  42  days  on  the
assessment:  they  interviewed  Commission  staff,  examined  the  basic  acts  and  project
documents, sent questionnaires to beneficiaries, potential decentralised cooperation actors and
delegations and conducted a statistical analysis of projects. Their remit was:

–  to  assess  the  tool's  relevance,  value  added,  consistency  with  other  instruments  and  the

results obtained from its implementation in terms of efficiency, impact and viability;

–  to make practical suggestions to render the instrument more operational in the future.

2.

CONTEXT

Regulation (EC) No 955/2002 entered into force at a time of radical change and reform of the
Commission's external aid practices. This period was marked by a number of key events:

–  the  creation  first  of  the  SCR  and  then  of  AIDCO  and  the  "reunification  of  the  project

cycle";

–  an overhaul of the programming process (CSP and RSP);

–  the devolution of project management from Headquarters to the delegations.

At  the  same  time  the  signing  of  the  Cotonou  Agreement  in  June 2000  enshrined  the  main
tenets  of  decentralised  cooperation,  and  in  particular  the  role  of  non-state  actors  in  the
development  process  and  the  complementary  roles  of  state  (including  decentralised
administrations,  municipalities  and  provinces)  and  non-state  actors,  in  a  broad  cooperation
agreement for the very first time.

The strategic importance of participatory approaches is also confirmed by the joint statement
by  the  Council  and  the  Commission  on  the  European  Community's  development  policy
(20/11/2000), which  recognises  ownership of  their  strategies  by  the  partner  countries  as  the
key to the success of development policies. To that end, the most wide-ranging participation
of all segments of society is to be encouraged. The subsequent Commission communication

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on  the  participation  of  non-state  actors  in  EC  development  policy  (COM(2002)598  final)
emphasises the strategic importance of promoting capacity-building for non-state actors in the
developing countries and the role of EU non-state actors in transferring know-how and skills
to other development agents in the partner countries.

3.

MAIN ISSUES EXAMINED IN THE REPORT

The assessment report is of good quality and satisfies the terms of reference. After examining
the concept of decentralised cooperation and its place in the various cooperation instruments
and  referring  to  the  reform  of  the  management  of  Community  aid,  the  assessment  report
examines  in  depth  the  consistency  and  overall  relevance  of  the  budget  line  (Chapter 3),  the
machinery for the management and monitoring of implementation (Chapter 4) and the results
attained  over  the  period  covered  (2000-2002).  The  report  ends  with  recommendations  on  a
number of levels.

The main topics addressed by the assessment report are as follows:

3.1.

Consistency  with  the  principles  of  decentralised  cooperation  and  with  other
Community instruments

The  assessment  of  the  line's  consistency  varies  from  one  level  to  another  and  is
presented in the report as follows.

3.1.1. With the principles of decentralised cooperation

The  assessment  of  the  consistency  of  the  operations  carried  out  with  the  principles
and  objectives  of  decentralised  cooperation  is  very  positive.  It  highlights  the
emphasis on institution building and the involvement in policy programming, which
are reflected in integrated operations guaranteeing a long-term process approach, i.e.
a  dynamic  approach  differing  from  a  project-based  approach  in  that  it  focuses  on
dialogue  and  seeks  to  strengthen  and  mobilise  endogenous  resources.  Recent  years
have  also  seen  a  significant  increase  in  the  proportion  of  contractors  originating  in
the South.

To  conclude,  the  projects  financed  in  the  course  of  decentralised  cooperation  are
broadly  consistent  with  the  Regulation's  objectives  (participatory  development,
strengthening civil society and grassroots democratisation) and fields of activity.

3.1.2. With other Community instruments

The assessment criticises the lack of structured coordination, in the regions eligible
for heading B7-6002, between operations under programmes  governed by the same
principles  as  decentralised  cooperation  and  operations  financed  under 
the
decentralised  cooperation  heading.  It  recommends  that  experience  acquired  under
other  programmes  be  pooled  and  that  networks  be  gradually  set  up  to  disseminate
information and provide assistance to the various actors and to improve the quality of
proposals.  The  assessment  considers  Community  programmes  applying 
the
decentralised cooperation approach  in Asia  and  Latin America an  example of good
practice  in  this  area  (integration  of  databases  and  harmonised  presentation  of
information and procedures).

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The possibility of calling on actors in the South directly and the overall flexibility of
the line are two aspects that both partners and the Commission's delegations greatly
appreciate.

As regards the ACP countries, the Cotonou Agreement assigns civil society a major
role  in  both  implementing  and  programming  cooperation.  The  decentralised
cooperation heading has definitely stimulated this area of activity in the ACP region,
though its impact in other regions is perhaps less apparent. However, there is likely
to be an institutional trend in this direction. For instance, Article 10 of the EU-Chile
Agreement  signed  in  November 2002  provides  for  the  setting-up  of  a  Joint
Consultative  Committee  and  Article 11  for  regular  consultations  with  civil  society.
Similar clauses are planned for the impending association agreement with Mercosur,
and  the  Commission  is  planning  to  include  them  in  the  new  partnership  and
cooperation  agreements  to  be  negotiated  with  the  Andean  Community  and  Central
America.

3.2.

Relevance to decentralised cooperation actors

A  clearer  distinction  should  be  drawn  between  the  decentralised  cooperation  and
NGO cofinancing lines by defining the value added by the decentralised cooperation
line more precisely and by targeting each line's actors more specifically. To that end,
the  role  of  NGOs  from  the  North  should,  for  the  purposes  of  the  decentralised
cooperation line, be confined to that of facilitator for NGOs from the South.

It is recognised by everyone that the line is already supporting the participation of all
decentralised  cooperation  actors,  including  those  of  the  South,  which  especially
appreciate  the  possibility  of  working  in  direct  partnership  with  the  Commission.  A
closer  examination  of  the  types  of  actors  involved  to  date  nevertheless  shows  a
marked concentration of actors, with NGOs absorbing more than 40% of the funding
allocated.  The  decentralised  cooperation  line  has  not  yet  managed  to  involve  all
categories of potential actors.

According to decentralised cooperation actors, the national authorities should play an
indirect  role  by  disseminating  information  and  choosing  sectors  but  should  not  be
directly involved as an actor in decentralised cooperation.

3.3.

Management of the budget line

3.3.1.

Selection process

The assessment is that the transparency of the selection process and the information
needed to draw up proposals in the requisite format remain inadequate, especially for
actors from the South. There have been considerable delays between the submission
of proposals and the  signing  of  contracts,  delays  likely  to  disadvantage  actors  with
limited means or with political or administrative deadlines to meet. The 2002 call for
proposals  brought  in  proposals  for  about  490  projects  and  a  total  budget  of
€3.2 billion.  The  result  was  a  disproportionate   workload  for  selectors  and  growing
frustration among the actors.

Position of the Commission

This  remark  was  particularly  pertinent  in  the  years  2000-2002,  a  transition  period
which  saw  the  administrative  reform  of  the  Commission's  cooperation  activities.  A

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number  of  measures  taken  during  and  since  that  period  have  brought  appreciable
improvements in this area:

–  All  management  tools  and  responsibility  for  their  application  have  been

concentrated in the hands of AIDCO.

–  A  website  now  offers  a  wealth  of  standardised  information  and  scope  for

responding to calls for proposals online.

–  Calls  for  proposals  have  been  introduced  to  make  project  selection  more
transparent.  In  order  to  limit  the  selection  workload  and  needless  frustration
among  actors,  the  Commission  is  looking  into  the  possibility  of  splitting  the
process into two parts: an initial call for expressions of interest and, after an initial
selection, a call for proposals.

3.3.2. Monitoring and evaluation

The  assessment  severely  criticises  the  failure  to  monitor  and  evaluate  projects.  It
argues that project cycle management has been  heavily dominated  by  evaluation  at
the expense of monitoring, which, despite the small number of projects financed, has
been confined to contractual and budgetary issues. It concludes that there is still no
real evaluation system.

Position of the Commission

–  Projects financed in the course of decentralised cooperation are intrinsically more
difficult  to  evaluate  than  others  because  they  pursue  results  which,  being  less
tangible, are hard to quantify.

–  The  priority  initially  given  to  selection  was  dictated  by  the  pressing  need  to
respond  to  the  many  proposals  submitted  to  the  Commission.  A  review  of  the
selection  process  should  enable  the  Commission  to  spend  less  time  selecting
projects and more time monitoring them.

3.4.

Results achieved

3.4.1.

At the level of projects

There  is  very  little  documentation  on  the  impact  and  results  of  projects.  However,
most  projects  have  completed  the  activities  planned  and  have  often  involved  new
actors from civil society.

Since  2000  there  has  been  increased  interest  in  operations  aimed  at  enhancing
political  and  social  dialogue  or  strengthening  the  institutional  fabric.  This  major
trend  is  undoubtedly  related  to  the  introduction  of  country  strategy  papers  and  the
preparations for the Cotonou Agreement, which take the same approach. Since 2000
there  has  been  a  greater  emphasis  on  building  institutions  rather  than  specific
capacities.

According  to  the  actors,  the  long-term  survival  of  projects,  and  in  particular  their
financial  sustainability,  has  yet  to  be  guaranteed.  Other  Commission  financial
instruments,  for  instance  the  national  indicative  programmes,  could  guarantee
continuity; otherwise projects will remain unrelated one-offs.

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3.4.2.

In terms of the guiding principles

The  progress  achieved  over  the  years  is  real,  but  it  remains  frail  and  sometimes
contradictory.  It  is  often  difficult  to  distinguish  the  material  achievements  from  the
incidental effects of  such  progress,  the increase  in  the number of partners  from  the
South being the most striking development in recent years.

The  types  of  activity  and  the  partners  eligible  for  the  NGO  cofinancing  and
decentralised  cooperation  lines  have  never  been  clearly  differentiated,  a  situation
which has given NGOs an appreciable comparative advantage over other actors.

3.4.3.

At the institutional level

At the institutional level, the creation of this line appears to have been the trigger for
a discussion on the concept of decentralised cooperation, so paving the way for the
changes  introduced  by  the  Cotonou  Agreement  as  regards  the  participation  of  civil
society.

As a result, even if sustainability at project level seems shaky, this new dimension to
cooperation has enhanced sustainability at institutional level.

3.5.

Conclusions and recommendations

3.5.1. Conclusions

The overall conclusions of the assessment concern the consistency, relevance, value
added, results and management of the decentralised cooperation line.

Though  decentralised  cooperation is  judged  relevant,  it  appears  to  lack  consistency
because  it  is  not  sufficiently  coordinated  with  other  financial  instruments  pursuing
similar  goals  and  because  a  lack  of  resources  prevents  it  achieving  the  desired
impact.

As  for  value  added,  the  assessment  sees  it  primarily  in  the  instrument's  flexibility,
especially the possibility for actors from the South to conclude contracts directly, and
the  in-house  dialogue  at  the  Commission,  which  led,  among  other  things,  to  the
inclusion of civil society in the Cotonou Agreement.

The line's management is considered to be too centralised in view of the devolution
process  under  way  and  too  heavily  focused  on  contractual  and  budgetary
considerations.  This  is  at  the  expense  of  the  technical  monitoring  and  evaluation
stages,  which  are  seriously  underdeveloped.  There  is,  moreover,  a  failure  to
capitalise on experience, identify good practice and disseminate results, even though
these figure among the obligations listed in the operational guide.

The results are generally achieved in terms of  activities, but they  remain  of limited
viability,  even  though  they  are  institutionalised.  They  show  greater  progress  in  the
working of institutions than in participation in political dialogue.

3.5.2.

Recommendations

The assessment's recommendations concern improving the consistency and quality of
proposals and results, the specific nature of the line and cost-effectiveness.

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The  assessment  proposes  that  the  instrument's  consistency  and  relevance  be
improved by having the new Regulation target the line more precisely. Two targeting
options are put forward, each with its pros and cons:

–  broad geographic targeting (with three sub-options: by region, regional grouping

or country category;

–  even  tighter  geographic  targeting,  confining the  use  of  all  the  line's  resources  to
the exclusive benefit of the ACP countries, where, the assessment suggests, there
are currently neither decentralised cooperation programmes based on the "process
approach"  in  the  NIPs/RIPs,  though  the  Cotonou  Agreement  provides  for  them,
nor  regional  programmes  comparable  to  the  MEDA,  Tacis  and  ALA  horizontal
programmes.

As regards the quality of proposals and results, the assessment proposes a number of
options:

–  The  use  of  networks  could  be  stepped  up  to  increase  the  transfer  of  know-how
from  North  to  South  by  promoting  one-to-one  relations.  Such  networks  would
also  facilitate  communications  between  actors  in  the  South,  helping  them  to
exchange  experience  and  know-how.  The  major  ALA  and  MEDA  horizontal
programmes,  which  involve  universities,  SMEs,  municipalities,  etc.  in  networks
with counterparts from civil society in the North, could serve as a model.

–  Technical assistance networks could be set up for actors in the South.

–  Monitoring and evaluation could be stepped up to help increase knowledge of the
impact  of  operations  and  to  provide  a  sounder  basis  for  deciding  whether  to
extend  them.  Monitoring  should  also  serve  as  support  for  decentralised
cooperation actors. All pilot projects for which a second stage is planned should
be evaluated. The communication on the July 2000 assessment [SEC(2000)1051]
provided  for  pilot  and  preparatory  operations  to  undergo  ex-post  evaluation,
especially if they were to be continued as programmes.

–  The website's content could be improved by creating links to other decentralised

cooperation partners (Member States, international organisations, etc.).

To enhance the line's specific nature, it is suggested that:

–  the  decentralised  cooperation  line  be  distinguished  from  the  NGO  cofinancing

line;

–  the participation of all potential actors, and in particular those from the South, be

fostered;

–  the  arrangements  for  the  participation  of  NGOs  from  the  North  be  changed  by
focusing on their role as an interface with their counterparts in the South, offering
them experience and know-how.

In  order  to  improve  cost-effectiveness,  it  is  proposed  that  the  line's  financial
resources  be  increased,  which  will  also  enhance  the  impact  of  operations.  The
division of tasks between Commission Headquarters and the delegations should also

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be improved. Lastly, it is suggested that the minimum size of projects be reduced in
certain instances from €200 000 today to €15-€30 000.

4.

THE FUTURE OF THE BUDGET LINE IN THE LIGHT OF THE ASSESSMENT REPORT

The  Commission  has  considered  all  the  recommendations  in  the  assessment  report
and endorses many of them. It drew on them when preparing the proposal extending
and amending Regulation (EC) No 1659/98.

Of  the  options  for  the  geographical  focus,  the  one  concerning  countries  with
characteristics  in  common  would  seem  to  be  the  most  appropriate  both  in  political
terms  and  from  the  standpoint  of  the  practical  implementation  of  the  decentralised
cooperation instrument. It is reflected in the draft Regulation's proposal that support
be  focused  on  "difficult  partnerships",  in  which  official  aid  is  unable  to  make  any
significant contribution to participatory development. The assessment report cites the
advantages of targeting aid by country category as being: consistency with NIPs and
the  specific  characteristics  of  decentralised  cooperation  in  the  country,  the  major
impact achieved when the number of countries is limited, the possibility of targeting
countries  with  similar  problems  and  the  possibility  of  achieving  complementarity
with other decentralised cooperation instruments in the country. Among the potential
disadvantages or difficulties of this approach, the assessment report cites the possible
scattering  of  funds  across  a  wide  area,  the  difficulty  of  carrying  out  network-style
horizontal or regional projects and, lastly, the fact that setting priorities might prove
complex. There should also be a special emphasis on the need for the decentralised
cooperation instrument to make a significant contribution to diversifying the type of
actors  involved  in  activities  under  the  heading  to  ensure  that  all  groupings  of  civil
society are represented, with a special emphasis on support for actors in the partner
countries.  Along  the  same  lines,  consideration  should  be  given  to  reducing  the
eligibility threshold for Community funding (currently fixed at €200 000) to enable
partners  from  the  South  working  in  countries  experiencing  political,  economic  and
social difficulties to submit admissible proposals.

Last  but  not  least,  calls  for  proposals  should  also  emphasise  the  need  for  a  certain
degree of  consistency  between  the  projects  submitted  and  Community  programmes
under way or  planned in the  countries concerned  and, in so far as is possible,  with
national  and  local  development  strategies.  Such  consistency  would  help  ensure  the
long-term viability of operations and enhance their visibility.

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