Introduction

The development management literature argues that while some pressure for reform in less developed countries comes from their governments, much of it comes from international donor organizations that want to impose their concept of ‘good governance’ (Peters, 2001). Thus, donors have tended to locate the main governance challenges at the level of politics rather than institutions and have looked to political scientists rather than development management specialists to address them, while institutional reform is often seen as a condition for the provision of development aid (Dahl-Øsrtergaard et al, 2005; Manning, 2008; McCourt, 2011).

The theoretical framing of this article draws broadly on the debates on the link between development assistance and institutional reform in the developing world, with particular emphasis on the post-communist states of Central and Southeastern Europe (Denzau and North, 1994; Verheijen, 2003; Pierson, 2004; Stubbs, 2005; Zellner, 2008). However, its main contribution is that it seeks to provide a concrete example of the interaction between the two conventionally separate debates through the lens of a critique of the 2005 Paris Declaration agenda. In doing so, it adds value to the recent scholarly criticism of aid coordination and effectiveness as parallel to (but not necessarily compatible with) aid-supported administrative reform (Hyden, 2008; Booth, 2011; Blunt and Lindroth, 2012). This is indeed the key proposition that the article seeks to empirically test through the case study of Albania. However, the article does not claim that issues of aid institutions and mechanisms are intrinsic to Albania and/or dissimilar to those in other developing countries (OECD-DAC, 2010b, 2011). Rather, the rationale for the choice of Albania as a particular case study is based on its uniqueness as an OECD ‘success story’, at least in relation to ‘administrative capacity-building’ and the EU’s sharp criticism on the progress of this aspect of reform. Given domestic factors including polarized party politics, political patronage and a clan-based administrative culture, this has been highlighted as a stumbling block on the bumpy road to EU accession (European Commission (EC), 2010; Karini, 2013).Footnote 1

Yet, rather than claiming to address all challenges that the donor community faces in its ‘democratization’ and ‘capacity building’ efforts in the post-communist history of the country (Hoffmann, 2005; Elbasani, 2009), the article tackles the role of donors in administrative capacity-building from a different angle. Specifically, it illustrates some of the unintended consequences of institutions and mechanisms of international aid. This very assumption constitutes another important proposition of this article. By focusing on the role of the OECD and the OSCE (Organization for Security and Cooperation in Europe) in promoting aid coordination and effectiveness efforts in the last two decades, the article seeks to address a significant gap, which official donor reports fail to explain sufficiently. This, in addition to its contribution to the aforementioned theoretical debate on the limitations of the aid effectiveness agenda, is seen as a key contribution to donor policy rhetoric on a country level, with broader implications for other countries in the region and perhaps the developing world.

The OECD has taken a prominent role in assessing the impact of international aid on development in a global context through the establishment of formal mechanisms and institutions. It works with national governments to address critical issues in aid policy and provision to developing countries, including ownership and accountability, country systems, managing for development results, and transparent and responsible aid (OECD-DAC, 2005). Following the creation of the Working Party on Aid Effectiveness (WP-EFF) in 2003, these dimensions were the essence of the Paris Declaration on Aid Effectiveness (2005), the Accra Agenda for Action (2008) and the Busan Partnership for Effective Development (2011).Footnote 2

Rather than focusing on the criticism of the technocratic and quantitative nature of these mechanisms, which academics and researchers are increasingly engaging in and which I discuss in the theoretical context of this article, an attempt is made here on two fronts. First, without making claims about the impact of international aid on all segments of the public sector, this article intends not simply to challenge but to add value to the approaches of aid organizations such as the OECD towards assessment of the impact of aid on at least one sector, administrative capacity-building. Second, rather than providing a sustained theoretical account of controversial aspects of international aid, the article draws on the theoretical underpinnings surrounding international policy transfer in order to help understand the Albanian ‘story’. In this way, it contributes a concrete case study to both strands of literature, that of development (aid) management and policy transfer.

On the basis of a qualitative research methodology, primary data were collected from 38 elite interviews with senior and mid-level government officials, from agencies including the Department of Public Administration and the Department of Strategy and Donor Coordination (DSDC) and donor officers and civil society experts in Tirana, Albania between August 2010 and July 2013. The data were triangulated through documentation review using a thematic analysis approach.

The article has five sections. The first section will discuss the link between development assistance and administrative reform in developing country contexts from a theoretical perspective. The next section and the subsequent section cover the history of aid coordination and effectiveness in Albania in the early 1990s and mid-2000s. In the light of the original proposition(s) set out earlier, the section after that and the penultimate section will consider aspects of current institutions and mechanisms of aid effectiveness through the lens of their impact on administrative reform and capacity-building in the research context. Finally, the conclusion will summarize the findings and propose future avenues of research applicable to other contexts in the developing world.

Development Effectiveness and Administrative Capacity: Normative versus Pragmatic Views

The linkage between development and administrative capacity identified by international organizations in the mid-1980s has been backed up by more recent empirical research, which identifies a correlation between the performance of bureaucracies and their capacities and the socio-economic development of less developed countries (Evans and Rauch, 1999; Holmberg et al, 2009; Pal, 2012). However, in most cases, this has not necessarily been linked to the international aid provided to those countries. In this context, authors such as Collier (2006) and Booth (2011) attribute the lack of evidence of a strong positive link between aid and development outcomes to the failure of development research to take on board the centrality of public institutions, whose constraints limit the effectiveness of aid as a contribution to development. These failures bear relevance for the research context surrounding this case study, and might contribute to the debate on the link between aid and development more broadly. More recent debates have focused on the complexities of the interaction between donors and recipients in terms of institutional and contextual variables as integral to effective policy transfer via international aid (Hyden, 2008; Booth, 2011).

Indeed, the argument that ‘certain socio-economic and political systems can be a significant impediment to the successful implementation of donor aid’ has been supported in the development literature (Böhning and Schloeter-Paredes, 1994, p. 109; see also Lancester, 2007). However, the debates on the roles of both political and institutional factors related to the impact and effectiveness of international aid are complex and contextual. While these debates still represent controversial and inconclusive views rather than well-established theories, which meaningful research should build upon, there is a consensus in the literature gravitating towards a ‘middle ground’ theoretical approach that is built upon the assumption that aid is a form of international policy transfer that has at least the potential to impact positively on institutional capacity (Riddell, 1987, 2007; Collier, 2006).

In the light of increasing criticism over the quality and impact of aid on development, and recognizing that development aid could and should be producing better results (especially in uncertain economic times when better and lasting development interventions are needed), organizations such as the OECD continue to facilitate and monitor the progress of the implementation of the principles outlined in the Paris Declaration and subsequent forums (see Introduction). However, as a recent evaluation of the latter has shown, ‘Even though their principles make a difference for development in helping to transform aid relationships between donors and partners into vehicles for development co-operation through creation of results frameworks, donors still fall short in measuring the impact of governance programs through an unnecessary proliferation of assessment tools and costs, fragmented or duplicated efforts and weak links with their partner countries’ processes’ (OECD-DAC, 2011, pp. 2–4).

Thus, despite the OECD’s efforts to launch, support and promote aid effectiveness mechanisms and institutions, thereby taking the debate on aid policy to a new level, ‘this has not stopped it from coming under policy and academic scrutiny’ (Gulrajani, 2011, p. 1). For today’s academics and researchers engaging in debates on aid effectiveness, while there is a weak link between aid delivered in accordance with the Paris Declaration principles and development outcomes, the debate has not delved deeply into the complex ways donor organization, management and governance impinge on and influence aid quality and institutional capacities (Birdsall, 2004; Bebbington et al, 2007; Hayman, 2009; Birdsall and Kharas, 2010; Eyben, 2010). A benign interpretation of the above might suggest that through the complex language reflected in the Paris Declaration, ‘aid effectiveness’ might have become an end in itself rather than a way towards improvement of development outcomes (Whitfield, 2009; Booth, 2011). From a more critical perspective, Blunt et al (2011, p. 179) have argued that ‘a permissive, legally non-binding and internally inconsistent document such as the Paris Declaration commits its signatories to improving aid effectiveness through donor coordination, sometimes at the expense of other or equally more deserving variables related to aid effectiveness’. These would include ‘the political will and commitment of both donors and recipients, the mismatch between the quality and capacities of donor representatives and their counterparts in recipient countries (or among donors themselves) and/or the gaps that can exist between the rhetoric and the real motivations of both donors and recipients’ (ibid.). For example, Booth (2011) maintains that ‘the key issue with the Paris agenda lies in the inadequately addressed political notion of “country ownership” and “harmonization”, especially because when donors “gang up”, there is, in fact, less policy space for governments’ (ibid., p. 5). Despite the undeniable role of aid organizations as agents of policy transfer and their policy instruments in familiarizing developing countries with ‘Western practices’ and/or spreading doctrines such as Weberianism or the New Public Management (Evans, 2009; Stone, 2011; Pal, 2012), the central argument of this article is that institutions and mechanisms aimed at measuring the impact of aid might have limited the clarity and purpose of international efforts to properly assess the role of aid in the long-term development of the capacities of essential sectors such as administrative capacity-building.

The article addresses the potential incompatibility between the ‘aid effectiveness’ agenda and administrative reform and the unintended consequences of aid effectiveness mechanisms/institutions, through a discussion of the role of two specific organizations, the OSCE and the OECD, in assessing the role of international aid with reference to reform processes in post-communist Albania from the early 1990s to date. In an effort to explore the process, rather than the outcomes of technocratic approaches used by the OECD to assess the impact of aid on a specific sector, the discussion will focus on key in-country mechanisms and institutions of transfer via international aid, and will highlight their implications for administrative capacity-building in the Albanian context.

Early aid Coordination and Effectiveness Initiatives

As a post-communist state that experienced a very difficult transition from a communist to a democratic regime in the early 1990s (a process that was halted by troubled events stemming from the collapse of the pyramid schemes, civil unrest and failure of the state during 1997–1998), Albania was initially regarded by many donors as another emerging transitional Central and East European (CEE) country. Therefore, aid instruments extended to it were comparable to those offered to Hungary and Poland (Fritz, 2006), which PHARE,Footnote 3 the first EU aid programme to CEE, was committed to. However, the failure of the first post-communist government and political changes in 1997 and 1998 alerted the international community to the fact that Albania had a unique modern history that required more traditional DAC country programming (ibid.) and a specific set of international aid and development activities. The OSCE launched the first efforts to coordinate donor programmes aiming at institutional capacity-building in post-communist Albania, and set up its office in Albania, at a moment of civil and political crisis. Its original goal was not to provide donor assistance, but rather to stimulate political dialogue, undertake political mediation and monitor developments on the ground. This was all done with a view to conflict resolution and prevention.Footnote 4

On the other hand, the EU’s main approach and instruments of aid to Albania included its participation in the PHARE programme (see endnote 3). This was followed by CARDSFootnote 5 around the time Albania signed up for the Stabilization and Association Agreement in 2006 as a first step towards EU accession. Since 2007, CARDS has been replaced by IPA (Instruments of Pre-Accession) as a streamlined mechanism created by the EU to deliver aid efficiently to Southeast Europe. However, since the collapse of communism in 1990, Albania has been struggling to gain recognition by the EU as an official ‘candidate’, a status that the country only obtained in July 2014.

On the basis of the account in an interview with a former political adviser, the OSCE’s aid approach in Albania began to change gradually as the acute crises of 1997 and 1998 subsided and it attempted to launch modest administrative capacity-building projects. However, given that the role of the OSCE in implementing such projects seems to have been fairly modest, at least in comparison with other donors, the discussion below will focus on its ‘transferor’ role in coordinating the programmes of donors as part of their policy transfer. Thus, the ‘Friends of Albania’ group is explored as a mechanism that represents the starting point for aid policy coordination as instrumental to administrative reform in Albania.

Following the troubled events of 1997–1998, the international community had already conceived of a coordinated approach to assisting Albania through the Strategy for Recovery and Growth (SRG) with the assistance of the World Bank (WB), the International Monetary Fund (IMF), the European Bank for Reconstruction and Development (EBRD) and the European Commission (EC), and devised a new mechanism for aid coordination that would reinvigorate the international community’s support for Albania. At the same time it would monitor its progress in undertaking necessary reforms. Thus, ‘Friends of Albania’, set up in October 1998, represented an international initiative to put Albania back on the path to reform (OSCE, 2009).

While the OSCE played a key role in providing extensive ‘sector reports’ on a full range of reform areas, the accounts of interviewees pointed to the fact that, from the very beginning, Friends of Albania underwent constant reform to adapt itself to criticism from both the Albanian government and other key members of the international community who did not like the lead role of the OSCE. Interviewees pointed to the existing ‘rivalry’ between the biggest donors (the WB, the EC and UNDP) as they engaged with the Friends of Albania mechanism in the process of transfer towards administrative reform. As a former OSCE political advisor, interviewed in 2011, noted:

The World Bank as a leader under the SRG initiative and a prime donor for the economic development sector felt that it should be leading donor coordination efforts … The EC, also a large donor under the SR saw that it should be a leader of donor coordination and this was reinforced once Brussels defined the Stabilization and Association Agreement (SAA) process. The root of the European Commission vs. Friends of Albania rivalry had to do with the fact that the former saw the latter as an American creation as the US was indeed a very strong backer of Friends of Albania …

Given the government’s criticisms and the conflict with other donors, Friends of Albania undertook several reforms and improvements. The first big change was to establish technical working groups divided into sectors that mirrored those defined under the Stability Pact.Footnote 6 This change gave the WB and EC joint responsibility for organizing technical coordination on economic development issues. It was a way to fit the WB/EC leadership in the Recovery Program into the Friends of Albania framework, while the OSCE led (or identified) other donors to take up the coordination in other sectors. With the launch of the WB/IMF-backed Growth and Poverty Reduction Strategy (GPRS) in 2000, Friends of Albania also began explicitly to link the reform initiatives to the government’s national strategy for economic development and reducing poverty (OSCE, 2009). This marked a major improvement in coordination among donors in Albania, leading to positive pressure on the part of the government as it developed the 2001–2006 National Strategy for Socio-Economic Development (NSSED), with assistance from the donor community. The latter was then succeeded by the current National Strategy for Development and Integration (NSDI), a medium- to long-term document with a planning horizon for the period of 2007–2013. It encompassed both the reform framework of the EU’s IPAFootnote 7 and Paris Declaration dimensions (World Bank, 2008). The cross-sector Public Administration Reform (PAR) Strategy as an integral part of 2007–2013 NSDI may be taken as an example of the direct role of international organizations in strategic policy transfer towards administrative reform and capacity-building.

However, mechanisms such as Friends of Albania suffered from several weaknesses. Its overly political nature (but perhaps insufficiently technical nature), and the weak capacities of the government, made it into a mechanism for some donors to criticize the government. This is supported by accounts of interviewees, including a senior government official who opined:

By choosing the OSCE as the Secretariat for Friends of Albania, the international community had made a conscious choice to give the responsibility to a political organization …The miscommunication between the government and the donors and among donors themselves can be probably attributed to the over-political nature of OSCE …

By being a political organization rather than a donor, the OSCE achieved the minimum it could achieve in terms of aid coordination. However, Friends of Albania was a good information-sharing exercise. It was effective in distributing information about various donor programmes and keeping members of the donor community up to date on reform progress (OSCE, 2011). Yet, despite the OSCE’s augmented support for Friends of Albania as the first official mechanism of international aid, it perhaps became a victim of its own success. Reportedly, by April 2002, the OSCE had held numerous talks about terminating Friends of Albania as it saw a major trend leading to its end: the launch of the Stabilization and Association Process (SAP) as an EU foreign policy strategy, and the Stabilization and Association Agreement (SAA) as one of its instruments with real objectives for the government to adopt reforms. Therefore, it could be argued that Friends of Albania had tried to prepare the way for an eventual handover to the EC. They made the original proposal to the Albanian PM to create a new advisory position, a Minister of State for European Integration, which eventually became the current Ministry of European Integration. Around the same time, Friends of Albania, which until then had been led by the EC, the WB, UNDP and the OSCE and steered by the latter, became a forum whereby the two key donors, the WB and the EU, started discussions on a coordinated strategy for administrative capacity-building in Albania.

The Advent of the ‘Aid Effectiveness’ Agenda

Nearly 2 years after Friends of Albania came to an end, the donor community came together again in late 2003 to find a new solution to the lack of effective donor coordination in Albania. It was exactly what the OSCE had predicted would happen by ending Friends of Albania without a replacement mechanism. On the one hand, the EC’s annual review process started slowly and did not have depth of knowledge on many reform issues, for example, legal/judicial reform or administrative reform, even though the EC-funded CARDS (see endnote 4) was already under way. However, in other areas, particularly economic issues, the EC was very competent and provided enlightening analytical reports. On the other hand, the government still did not have enough experienced technical staff to manage donor coordination effectively. Irrespective of the previous efforts via Friends of Albania, it is believed that only in late 2003 did donors begin to discuss seriously the critical problems of donor fragmentation, wasteful duplication of effort and lack of absorption of international aid in Albania (Fritz, 2006).

Thus, in December 2003, a Donor Co-ordination Architecture was approved, based on the leadership of four multilateral agencies: the EC, the WB, UNDP and the OSCE. Each organization oversaw a series of working groups within the defined sectors, with the EC acting as the chair of the groups. The four were represented in a body known as the Donor Technical Secretariat (DTS), established to facilitate a structured donor-to-donor and donor-government dialogue. As one interviewee stated:

by doing so, while the international community criticized Friends of Albania, it ended up creating a new mechanism that was very much like the old one!

There was one big difference, however, and it marked a major step forward. The DTS explicitly worked to build government coordination capacity. First, this was achieved through the government nominating its own structure, the Government Technical Secretariat, mirroring the DTS, to give coherence to its interactions with the donor community. It worked to formulate a policy document on an ‘Integrated Planning System’ (IPS) launched in May 2005.Footnote 8 This was an important improvement in the coordination issue because it addressed the problem of the absence of government leadership in planning and coordination of aid. At the time this article was written, the DTS (as a review of government reports revealed) had expanded to include two bilateral donors, Germany and the Netherlands.

At the same time, the wider international community launched a new global initiative to address donor coordination issues through the Paris Declaration. The DSDC, under the direct jurisdiction of the Office of the Prime Minister, was therefore established in 2005. The platform for this initiative became one of the building blocks for the DTS and its support for the government in drafting the IPS. Simultaneously, in 2005, the Department of Public Administration (DoPA), as the central government institution responsible for administrative reform implementation reporting directly to the Office of the Prime Minister between 1999 and 2005, was re-aligned as a directorate and reported to the Ministry of Interior. On the basis of the accounts of interviewees, this may be indicative of the government prioritizing compliance with the global aid effectiveness agenda at the cost of domestic administrative reform. Since then, the role of the DTS, jointly with the DSDC, has been to monitor aid programmes based on the 5 dimensions and 12 indicators of the Paris Declaration (2005).Footnote 9 In this capacity, the DTS had coordinated four major OECD/DAC surveys OECD DAC (2006), OECD DCD (2008; 2011) and maintained a ‘Donors Database’ with data on administrative capacity-building programmes, including reports on commitment versus disbursement amounts and on types of aid (for example, grant versus loan) by donor. The focus of DTS’s work is coordination rather than measuring the effectiveness of administrative capacity-building programmes, which, as an interviewee stated, are still seen as the ‘domain’ of donors:

DTS’s work does not involve impact assessment. It is mostly multilateral (EU and UNDP) and bilateral donors which undertake needs assessments prior to their PA capacity-building interventions as well as M&E exercises afterwards. We compile our reports based on their data…

It became evident during the field research that ‘impact assessment’ per se is neither the focus of the DTS nor the priority of individual donors, as donors apply their own monitoring and evaluation (M&E) instruments, which arguably mostly help their internal planning and governance (Riddell, 2007; Easterly, 2010). While compliance with global mechanisms (the Paris Declaration and so on) appears to be a concern of the government, most donors cited ‘limited’ or ‘unavailable’ funding as the reason for the lack of a focus on M&E and impact assessments for administrative capacity-building interventions. However, one particular donor organization, the WB, has been more ambitious than others in conducting follow-up/impact assessment, going beyond M&E and as far as 2–3 years after completion of a given administrative capacity-building programme.

In essence, while M&E of administrative capacity-building programmes continues to be the domain of the donors, with only a few donors using its results (lessons learned) in their programming, impact assessment has not necessarily been the priority of the government either. The DSDC, as the central government unit responsible for the implementation of the Paris agenda on behalf of government, has two units (directorates) – one for ‘NSDI Implementation’ and one for ‘Aid Coordination’. However, the fact that the DSDC does not have a designated unit for administrative capacity-building, as one interviewee put it, speaks to the argument that the impact assessment of aid on administrative capacity is not necessarily its priority.

Integrated Planning System (IPS) and Sector Working Groups (SWGs)

The research identified the IPS as a key national decision-making system for determining the strategic direction and allocation of resources through a broad planning framework, within which the government’s core policy and processes function in a coherent, efficient and integrated manner (DSDC, 2010). Regulated via government Policy # 692 (2005), interviews pointed to the fact that IPS is, in fact, a product of the ‘One UN’ initiative, aiming to get all donors to use standard systems for review and evaluation of capacity-building programmes. As such, it became operational with the creation of the Multi-Donor Trust Fund (MDTF) in 2008, supported by seven donors and led by the EC in 2007. Managed by the WB and monitored by the DTS, the $7.2 million (or €5.8) IPS Fund (or MDTF) with contributions from the United Kingdom, the Netherlands, the EU, Austria, Sweden, Italy and Switzerland provides a mechanism through which ministries can access donor assistance to build and increase capacity in the management of international aid and EU/NATO membership processes to support core processes such as the implementation of 2007–2013 NSDI. As Figure 1 shows, MDTF represents an increase in coordinated donor funding towards administrative reform given that the total donor funding for the sector for 2000–2008 was € 30.47 million (or €3.38 million per annum).

Figure 1
figure 1

Public administration reform and capacity-building aid allocations.

(Commitments versus disbursements by donor, 2000–2008, in million euros).

Source: DSDC (2009a).

Full size image

The IPS is also intended to be a mechanism for streamlining government policymaking and for improving donor engagement in Albania through the clearer identification of priority areas for international aid: the SAA Process (backed by the EU), the NSSED (backed by the WB/IMF) and the Millennium Development Goals (MDGs) backed by UNDP. At the national level, the significance of the IPS consisted of the fact that, through the addition of the ‘(EU) integration’ element, the NSDI reflected a step forward (compared with NSSED), whereby the EU has been identified as a lead donor and EU accession as a priority. In this way it has become an overall policy-making mechanism into which all the other strategies have been fitted.

As a policy-making tool, the IPS appears to have had a major impact on donor engagement in Albania, as the government has been able to identify its own priorities and what it could afford within its budget. Areas left outside the budget are supported by donors, who therefore would have to take their direction from government-identified priority projects, unlike before when they had pressured the government into accepting donor priorities. Therefore, the creation of the IPS has directly helped create a sense of ownership and strengthened government leadership in the process (OECD-DAC, 2011). Both EU donors and public servants interviewed described IPS as a ‘success story’ in terms of the interaction between the government and the donor community, previously suffering from lack of coordination or a focal point within the government.

A closer analysis of how the IPS has been operating in the last 2–3 years reveals that the mechanisms used for its implementation include CFCUsFootnote 10 (Central Financial Contracting Units) and Sector Working Groups as focal points for the coordination of not only the IPS but also IPA funds at ministerial level currently administered/managed by the EU. In line with the requirements of SAA (EU accession) and upon the accreditation of the government for the management of the EU funds aimed at capacity-building of the government, the Working Groups and CFCUs will function under the mandate of a new structure: Directorate(s) of European Integration (DEIs). According to a division director interviewed, this is likely to supersede existing units in Albanian ministries:

Whether we talk about the CFCUs [supported by IPS] or the DEIs [supported by the EU], these are all parallel structures, which ultimately will duplicate (or perhaps eliminate) the work of the ‘Policy Coordination Directorates’ in ‘line’ Ministries

Likewise, Working Groups were described by both donors and public servants interviewed as a creation of DTS with the purpose of coordinating aid policy, exchanging information and avoiding the overlapping of capacity-building programmes, thus covering 8–10 sectors and 33 subsectors (DSDC, 2010). However, according to some of the interviewees, although the idea of Working Groups is indeed commendable in theory and has led to significant progress in the coordination of aid programmes, their success largely depends on the sector. For example, criticizing the ineffectiveness of the Public Administration Sector Working Group, one interviewee maintained that the way the mechanisms operate undermines the very idea behind their creation:

Unlike other SWGs, the PA Working Group is not very effective; part of the problem is that, after all, it should be run by the government rather than by the donors … In fact, that applies to other sectors too, as in most cases it is not the Ministries but rather the donors who are pushing for such mechanisms.

Other interviewees linked the ineffectiveness of this particular Working Group to the absence of a focus (or perhaps a specific working group) on administrative capacity-building. The emphasis on exchange of information and coordination of aid through Working Groups rather than promotion of a policy dialogue between the government and the donors is also undermined by the high staff turnover in the administration, which affects the follow-up activities of the Working Groups.

Questions about aid transparency and donor motivations as discussed in the literature (Riddell, 1987; Lancester, 2007; Easterly, 2010) also seem to hinder the process. To this effect, several interviewees highlighted discrepancies in data between those available in Ministries and those reported by donors. Others pointed to the lack of active participation by civil society and NGOs, which increasingly operate as ‘implementing partners’ for capacity-building programmes on behalf of donors. This has implications for the role of Working Groups. As accounts of interviewees revealed, donor funding to NGOs is being seriously under-reported, perhaps because DTS’s focus is on ‘official development assistance’ (ODA). The lack of interest among NGOs in participating in SWGs lowers their impact, while, at the same time, NGOs feel they are excluded from them:

NGOs which are increasingly recipients of donor contracts for ‘capacity building’ programs, are at the same time the most silent in SWG meetings where both donors and bureaucrats participate… In my opinion, the reason for their “silence” is because they are not interested… [in] reporting their activities based on funding which donors themselves do not report …

Some interviewees also claimed that the donors’ tendency to pursue their agenda, via the Working Groups, irrespective of the agreements on the Paris agenda is part of the problem. Challenging the generally accepted view that Albania represents a ‘success story’ in terms of sound aid coordination/effectiveness institutions and mechanisms, a number of non-EU donor officers interviewed referred to the latter as ‘existing but progressing very slowly’. For them, the problem is that certain donors operate in a rather isolated, stand-alone manner and see efforts of others for aid coordination as attempts to control them. In fact, differences in philosophies and clashes between the EU and non-EU donors in Working Groups meetings are sometimes problematic. In the words of an interviewee representing a non-EU donor, Working Groups are ‘simply ineffective’ for many reasons, including a tendency on the part of both donors and Albanian officials to use these groups for ‘self-promotion’.

Arguments discussed in the literature echo the importance of the mismatch between the rhetoric and actual capacities and motivations of both donors and recipients (Booth, 2011; Blunt and Lindroth, 2012). They have clear relevance for the Albanian context. The next section looks at the Fast-Track Initiative of Division of Labour (FTI-DoL), a recent mechanism intended to ensure more effective aid coordination, based on the accounts of interviewees as well as a review of the documentation made available through the DTS. FTI-DoL is part of a broader global initiative, in which the EU, in recognition of issues around donor coordination and their implications for the administrative capacity-building, has reportedly taken the lead by including it in the EU ‘Operational Framework on Aid Effectiveness’ (European Commission (EC), 2007, 2009a).Footnote 11 Under the FTI-DoL, which was agreed by the government and the EU, European lead donors have been identified for specific sectors in order ‘to facilitate sector policy dialogue and aid coordination among European donors and with the government in the framework of the EU pre-accession agenda of Albania’ (European Commission (EC), 2010, p. 3). Thus, the EU has been identified as lead donor in several segments of the public sector, including justice and home affairs, civil registry and infrastructure improvements, whereas other bilateral donors such as ADA (Austria), SIDA (Sweden), SDC (Switzerland) and Italy have been respectively identified as lead donors in sectors such as water supply and sanitation; environment and statistics; decentralization/regional development; and private sector development.

Even though the mechanism does not specifically provide for a lead donor in administrative capacity-building, it aims at enhancing the capacity of the government to lead in results-oriented aid management and in attracting appropriate donor support in strategic sectors, with a special focus on the EU integration agenda and acquis-related sectors (EU, 2010). As such, FTI-DoL will integrate within existing Working Groups especially in those sectors more relevant to the EU integration agenda (ibid.). Specifically, the mechanism will provide for ‘capacity development for the Albanian public administration’s staff to lead the aid effectiveness agenda’ (ibid., p. 3). Coordination among donors being its key objective, the FTI-DoL also seeks to enhance the capacities of donors themselves to deal with the DoL process and improve communication between donors’ headquarters and in-country offices, which was highlighted as an emerging issue by some of the interviewees. Some of them echoed the fact that the mechanism represents an added value to the existing aid coordination mechanisms and as such is embedded in the national Harmonization Action Plan (HAP) (European Union (EC), 2010) (see below).

Domestic Institutions Mirroring the Paris Agenda

While Friends of Albania and the DTS played a key role in the administrative capacity-building of the government in the late 1990s and from 2005 to date, the accounts of interviewees and documentary analysis concluded that the advent of the Paris agenda has contributed remarkably to improvements in ‘aid effectiveness’ in the last 4–5 years. As official sources within the government state:

Albania has endorsed the Paris Declaration on Aid Effectiveness, whereby the Government is committed to take leadership in making progress against the priority actions identified, taking forward the recommendations of the 2008 Survey on monitoring of its principles. (DSDC, 2010)

The creation of the DSDC as a national institution responsible for compliance with the implementation of the 2008 survey constitutes an important event in terms of Albania’s compliance with the Paris agenda. As in the case of the DTS, the accounts of interviewees revealed that the DSDC was set up in 2005 on the advice of donors as a structure parallel to the DTS. It was created in response to a general concern about the lack of a coordination strategy among donors and in support of reform processes in Albania, thus coinciding with two major events: (i) the political changes of 2005 (Democratic Party’s return to power) and (ii) the signing of the Paris Declaration by the government in 2005. Preceded by earlier efforts dating back to 2001 when the Ministry of European Integration (under the Socialist Party’s rule during 1997–2005) was responsible for coordination of aid-supported capacity-building programmmes, the DSDC supports the ‘directorates of policy coordination’ in ministries in organizing the Working Groups.

The DSDC is responsible for two core processes related to the IPS: the preparation and monitoring of the 2007–2013 NSDI and coordination of international aid (GoA, 2010; OECD- DAC, 2010b). As such, it led the process of drafting the NSDI in conjunction with the SAA, which defined the requirements for EU accession. The interviews revealed that the DSDC has also been a key player in drafting and implementing the IPS through the MDTF (ibid.). However, the interviews also revealed that the WB has taken the lead in the management of MDTF, providing training to enhance the capacities of ministerial staff for the implementation of the IPS. This resonates with the case of the EU IPA-funded programmes, currently managed by the EU Delegation to Albania, an approach that, according to one senior government official, is likely to limit the intended positive impact on administrative capacity-building:

Like the IPS, IPA capitalizes on ‘capacity building’ of aid recipients but, in fact, that depends on the country’ eligibility to manage EU funds … With the gradual withdrawal of bilateral donors, the accreditation of the government’s focal points [CFCUs] by the EU – a lengthy and complex process – is key to their capacity building thus bringing us a step closer to EU standards …

In addition to supporting the ‘Directorates of Policy Coordination’ in each ministry and organizing working groups, the DSDC is responsible for organizing two annual donor-government Round Tables. In line with the OECD ‘aid effectiveness’ agenda and with the assistance of the DTS, it also engaged in the coordination of DAC surveys in 2008, 2011 and 2014 (see p. 12). To ensure compliance with the latter, the DSDC performs its policy coordination and support functions through the HAP,Footnote 12 whose aim ‘to improve the efficiency and effectiveness of the management of aid’ is not confined to Albania as HAPs have been launched in a growing number of developing countries in recent years (Harmonization Action Plan (HAP), 2009, p. 3). The HAPs are specific to the circumstances of the countries and depend upon the opportunities and priorities perceived by both governments and donors (ibid.).

To re-iterate the theoretical debate, although the Paris agenda provides a sound and helpful analytic framework, establishing areas in which interventions need to be taken globally to improve aid effectiveness, it is criticized by both academic and practitioners as dominated by efforts to coordinate rather than ensure development effectiveness (Booth, 2011; Blunt and Lindroth, 2012). This is precisely where HAPs come into the picture. As effective and concrete action plans, with a clear set of tasks for both parties involved and a specific timetable, the ‘success’ of the HAP in the Albania context can be tracked through its progress across specific, relevant administrative capacity-building-related outcomes. Thus, according to the analysis of a recent DAC report, Albania has made a marked improvement in its rating for ‘strengthening capacity by coordinated support’ (referred to as ‘indicator 4’ in the Paris Declaration) (Harmonization Action Plan (HAP), 2009).Footnote 13 Sources within the government claim the increase in the coordinated technical assistance can be mainly attributed to joint efforts to meet short- and long-term needs for IPS and NSDI implementation (NSDI, 2007–2013). Recognizing that there have been improvements in donor policy, prioritizing coordination of aid with domestic strategies, which is likely to continue in the next few years, the HAP document itself states:

[From 2010 onwards] future aid provided through IPA will be based on sector assessments jointly carried out by the EU and the Ministry of European Integration [and] the ‘Country Strategies’ of bilateral donors will aim to be aligned with national priorities of the government. (DSDC, 2010)

Overall, the positive impact of the compliance with the Paris Declaration agenda towards the administrative capacity-building of the Albanian government is demonstrated through the shift of its focus from compliance to self-monitoring of the government’s capacity and performance. As a senior DSDC staff member interviewed for this research explained:

To date, our efforts to monitor aid programmes have been based on descriptive measurements in line with dimensions and indicators of the OECD rather than us doing rigorous impact assessment … But we now need to engage in [our own] impact assessment as a core policy instrument to ensure compliance with government performance objectives …

However, other interviewees within the Albanian public service claim that while the progress with the capacity-building indicators (as set forth in HAP) is part of the ‘success story’ of the government’s compliance with the global aid effectiveness agenda and enhancement of government capacities, this does not equate to public administration reform. Nor does it equate to sustainable administrative capacity-building, as prescribed by both Weberian and New Public Management doctrines, or the New Weberianism that is more typical of countries of the post-communist space. These all emphasize the professionalization of bureaucracy as linked to its administrative capacity (Common, 2001; Archmann, 2009; Pollitt and Bouckaert, 2011).

Summary and Discussion

This article has looked at the mechanisms and institutions of aid as essential elements of policy transfer from aid organizations to recipients (Dolowitz and Marsh, 1996) in the specific context of Albania, drawing on the literature on aid and its politics (Riddell, 1987; White, 2006; Easterly, 2010). Thus, on the one hand, the discussion has reinforced the presence of somewhat coercive policy transfer, especially in crisis situations, and the role of donors as key policy transferors towards reform in developing countries (Common, 1998; Dolowitz and Marsh, 2000). On the other hand, in line with the theoretical debate, the findings have highlighted the controversial nature of international aid. Thus, having identified ‘Friends of Albania’ as the first aid mechanism created by the donor community, the research revealed that Friends of Albania was more an information-sharing exercise among donors than a platform for reform dialogue. Its demise, as the findings revealed, was attributed to both clashes among donors and between the donors and the government, whose lack of capacity to coordinate and act as equal partner with Friends of Albania exacerbated the ‘dysfunctionality’ of the mechanism.

The discussion has also brought back the dimensions of the link between aid and effective development discussed in the literature (Collier, 2006; Doucouliagos and Paldam, 2008; Booth, 2011). In line with the aid effectiveness agenda (Paris Declaration, 2005, Accra Agenda for Action, 2008 and Busan Partnership for Effective Development, 2011) promoted by the OECD, this article has looked at the implications and limitations of the in-country institutions and mechanisms for administrative capacity development processes in Albania. Thus, the research identified the DTS as the current donor mechanism and the DSDC as the parallel institution within the government designed to ensure compliance with the Paris Declaration agenda. The findings revealed that the DTS and the DSDC have been instrumental in the creation of a number of mechanisms of aid in Albania, including: (i) the IPS, a product of the Multi-Donor Trust Fund (administered by the WB) in support of the implementation of the 2007–2013 NSDI and the EU integration process; (ii) Sector Working Groups, donor-bureaucrat forums designed to coordinate aid policy and avoid overlapping aid programmes; and (iii) the FTI-DoL and the HAP, mechanisms respectively designed to coordinate aid among donors and ensure compliance with the Paris Declaration indicators.

While the review of OECD and government reports reveal that Albania’s compliance with the Paris Declaration agenda speaks of a ‘success story’ in terms of donor–recipient relations and enhancement of general government capacity-building, a more detailed analysis of the data suggests that, in the Albanian context, this has translated into a capacity for management of aid mechanisms on the part of the government and prioritization of coordination rather than effectiveness of international aid. An example of this is the lack of a focus on aid impact assessment in the Paris Declaration agenda.

In the light of the varying perspectives of EU versus non-EU donors interviewed, with the latter being the most sceptical about the Paris agenda, its overall effectiveness appears to be relative and dependent on the sector. Most relevantly for the Albanian context, the findings revealed that the prioritization of aid coordination also had unintended consequences for administrative reform and capacity development. This is reflected in the original proposition of the article and supported by the literature (Booth, 2011; Blunt and Lindroth, 2012). For example, the Working Group on Public Administration was identified as one of the least effective mechanisms, which is reflected in its failure to produce a lead donor in administrative reform or to establish a Working Group on Capacity Building. Prioritization of and compliance with the Paris Declaration on the part of the government may have contributed to not only superseding but also minimizing domestic institutions responsible for administrative reform implementation, rather than supporting the latter as a key condition for EU accession and future aid.Footnote 14 This finding might prompt future research in contexts where mechanisms such as the Paris Declaration might have actually weakened rather than supported those institutions.

In conclusion, the article highlights the incompatibility between an aid effectiveness agenda and administrative reform as discussed in the literature and reflected in the research findings. In particular, both the dichotomous positions of EU and non-EU donors, respectively focusing on ‘EU accession’ and development effectiveness, and the over-emphasis on coordination rather than effectiveness of aid towards key development goals (that is, administrative capacity-building) point to the importance of donor strategies in development processes. This is rooted in real donor interests as opposed to the rhetorical interests of development assistance that the literature highlights (Blunt and Lindroth, 2012).The case of Albania might be taken to suggest that, while political ambitions such as EU accession might not necessarily be compatible with development effectiveness, institutions designed to ensure aid effectiveness might, conversely and paradoxically, be unable to prioritize administrative reform as essential to both EU accession and effective development. This insight might be important in understanding and explaining the dynamics of international aid for domestic politics and development processes in other countries in the region and perhaps more broadly in the developing world.