The Guidelines for development contracts have replaced the guidelines for general budget support.
Guidelines for development contracts
Date published: June 2013
View publication: pdf
- The terminology has changed from general budget support to development contracts to underline i) the contractual relation; ii) the harmonisation with the EU and iii) the package that includes both the budget support and other engagements.
- The criteria for assessing whether Denmark should enter into a development contract with a priority country have been harmonised with the criteria of the EU. This is done to make it easier and more transparent for the partner country but also to cater for a closer relation with the EU.
- The focus at results is enhanced. When designing development contracts you are encouraged to get inspiration from the thinking in new designs such as ‘cash on delivery’ and ‘payment for results’. The design should first of all be clear about the results we would like to achieve and how the support is designed to deliver this. This focus is also underlined by the emphasis of the contractual element. Even if the harmonisation with the EU comes out stronger in the new guidelines, cooperation and inspiration from development partners as the World Bank and DfID continues to be vital both in design and implementation.
- Following on the enhanced focus at results, the recommendations regarding the design of tranches and performance structures have changed. Currently, new designs are being tested. The share of ODA in the national budgets of the priority countries are changing and the role of development cooperation is also changing. Hence, the new guidelines give no clear recommendation on the balance between fixed and variable tranche but sums up some of the considerations to be made and some principles. Regarding the performance framework, it is recommended to scale down the number of indicators and hence the time that both partner country and development partners have to invest in monitoring the system.
- The development contract is seen as a package that contains both the actual budget support and other engagements e.g. capacity building, TA, strengthening of PFM, anti-corruption etc. This is not new, but there is increased emphasis on the role of the civil society and the control mechanism that is vested herein. Furthermore, the development contract should to a larger degree draw at and be seen in direct connection to other programmes in the country programme – e.g. the good governance programme.