Alignment and aid effectiveness

GPE promotes aligning external financing with partner countries’ systems to increase aid effectiveness and support education transformation.

What is alignment of aid with country systems?

GPE defines alignment of external aid with country systems as using a partner country’s institutions, human resources, procedures and tools as the foundation for the implementation of aid to education.

GPE uses 7 dimensions to benchmark the alignment of external aid with national systems.

7 dimensions

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How alignment improves aid effectiveness and supports system transformation

Alignment with country systems:

  • promotes country ownership, responsibility, accountability and coordination
  • links domestic and external financing, both operating on the same national implementation tracks
  • strengthens connections to the ministry of finance and parliament, enhancing transparency on education financing, national budgeting decisions and constitutional accountability
  • opens dialogue on resource allocation and the efficiency of public expenditure
  • connects capacity building support to the day-to-day challenges that national systems face in converting resources into outputs and results.

Using the full bandwidth of the national budget and national systems, external financing can be channeled at scale, which can lead to higher absorption rates.

Between 2019 and 2023, GPE aligned grants using budget support or sector pooled funds, absorbed GPE funding at a 69% higher rate than non aligned grants.

Alignment with country systems allows the introduction of improvements in those systems, conceived and carried out at scale. This contrasts with many off-systems projects that have limited trial phases, insufficiently connected to the broader system and which can then struggle to be scaled up.

Together with sound dialogue and capacity building, external resources through national systems can catalyze transformation by stimulating the acceleration of cross-cutting reforms. This can include reforms in public financial management, public procurement, decentralization, program-based and gender-sensitive budgeting, to lift bottlenecks in service delivery.

Examples of some of these catalytic effects on reforms can be viewed through country cases highlighted in GPE publications and blogs.

Factors for success

Alignment of external financing is a paradigm shift in development cooperation. It puts national systems and human resources at the heart of implementation and works to support transformation of those systems.

Aligned aid practices can be adapted to the variable strength of public financial management capacities in many partner countries, notably in relation to fiduciary risk.  A key first adaptation is the type of aligned modality that is chosen.

Alignment is not to be expected in all contexts and for all types of funding. A significant proportion of GPE grants are not implemented through country systems, although the proportion (by volume) has been growing.

Over the period 2015-2018, 47% of GPE grants by volume of funding were strongly aligned with country systems, and 53% were not. Over the period 2019-2023, the proportion of GPE implementation grants aligned with country systems increased to 51%.

Factors for success vary but are typically grounded in the following:

  • Joint commitments between government and development partners to address aid effectiveness challenges and opportunities.
  • A minimum level of functionality of country public financial management systems, dependent on context and outlook on fiduciary risk management
  • Willingness for open and robust dialogue between government and development partners around country systems.
  • Development partners / grant agents that have the relevant knowledge, expertise and experience with aligned funding modalities and associated opportunity and risk management.
  • Sound engineering of the funding modality, including capacity building, dialogue and oversight arrangements.
  • Making sure the aligned modality is connected to the broader sector dialogue architecture.

Funding modalities

A funding modality is the means by which financing is operationalized and implemented. It consists of a mechanism, with processes, rules, tools, responsibilities and accountabilities. Alternative terms are often used to signify the same meaning: implementation modality, implementation mechanism, aid modality, aid instrument, etc.

Many different funding modalities exist to channel external funds to support implementation in the education sector.

Learn more on funding modalities (PDF)

Choice of funding modality in the GPE model

Before mobilizing and applying for GPE grants, governments and partners are expected to choose a funding modality to implement the grants.

Countries undertake an enabling factors analysis in dialogue with their partners, during which they identify the availability of an aligned modality that will support system transformation, and if none exists, their intent to develop one.

The availability of an aligned funding modality sets the expectation that this modality will be used for a growing proportion of external financing, including GPE grants. Dialogue on this choice, in relation to the priorities and focus for system transformation, should occur as part of the compact development process. This will then inform the grant agent selection and grant application processes.

Guidelines for the selection process for grant agents include recommended steps, accountabilities, transparency, and criteria for the call for expressions interest and subsequent selection of a grant agent. A key criterion is the choice of funding modality and the “ability to work with the most aligned funding modality available and appropriate in the context”.

Here are the key steps:

Key steps

For more details on GPE grants to support education system transformation and how to prepare applications, see How to apply for grants.

Resources to support aid effectiveness

The enabling factors analysis allows to take stock of what aligned modalities may be available. When no aligned modality is available in the short term, a scoping study can be carried out. This will look at the context, the aid environment, associated risk and opportunities, and may recommend conditions and a timeline for the development of an aligned modality over the medium or longer term. GPE’s system capacity grant is available to fund such a scoping study.

If used well, an aligned modality is a powerful mechanism and approach to support system transformation. Aligned modalities need to be shepherded and adjusted to evolving circumstances, to best realize their potential. Additional efforts may be required to deal with challenging issues with an existing aligned modality, that is either not functioning optimally or not leveraging adequate system transformation. Financing for this can also be mobilized through GPE’s system capacity grant.

The system capacity grant guidelines indicate examples of activities that can be funded to support alignment and harmonization, including:

  • Support to education sector resource mobilization and alignment
  • Improved quality of dialogue between partner countries and development partners around questions of aid effectiveness
  • Analyses of public financial management, pooled funding or aid effectiveness
  • Establishment or strengthening of a pooled fund.

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