Cambodia's experience since 1993, then, suggests that most projects have been donor-driven in their identification, design and implementation, to the detriment of capacity development. The chronic underfunding of government, to which this is related, hinders implementation of projects and threatens post-project financial sustainability.
In early 1995 the World Bank had suggested a phased strategy for technical assistance and capacity building in Cambodia, with three five-year phases (World Bank, 1995, p. 49), as follows.
(a)
The prerequisite phase, “during which the most basic and essential economic, social and administrative needs are identified and met and the agenda for the next phase is developed.” Key elements of this phase include a reorganized public sector, an appropriate structure of civil service incentives, establishment of local training facilities, and establishment of the laws and judicial system needed for the management of a liberal economy.
(b)
The capacity building and institutional development phase, by the beginning of which the crucial prerequisites should be largely in place.
(c)
The consolidation phase, during which the government “should be in a position to identify its assistance needs effectively and to manage its own development at all levels.”
In the first, prerequisite phase, “substitution” technical assistance, short-term and focusing on “the implementation of specific technical tasks rather than on longer-term goals such as strengthening local capacities” (p. 50) would play a critical role. But the transition from phase one to two would involve a gradual switch from substitution TA to technical assistance for capacity building and institutional development. If the first phase is assumed to have started in September 1993, with the adoption of the new constitution, it should have been over by the time interviews for this research began in September 1998. In fact, none of the key elements identified by the Bank as prerequisites for effective capacity building and institutional development were in place by then.
To some extent, then, the problem of this particular aid-dependent economy is that it has become stuck in the prerequisite phase of technical assistance. The circular process of aid dependence, outlined in the introduction, has been found to be alive and well in Cambodia. A government with one of the world's lowest ratios of revenue to GDP pays its civil servants less than a living wage; as a result, they seek refuge in salary-supplemented projects, largely owned by donors and implemented outside normal government structures in sectors to which government gives little funding; those who are unsuccessful in this search work outside government in order to survive; when projects finish, they leave little behind in the way of institutions, because of the mode of their implementation and because the officials who worked on them, no longer salary-supplemented, look for new projects or outside work; of the four dimensions of capacity development only one, imparting skills to individuals, is achieved, largely to the benefit of nongovernment sectors; neither donors, competing with each other for the best counterparts rather than collaborating, nor top government officials, happily supplemented, exert effective pressure for a rise in pay for public sector employees, etc.
An exit from this circle will take time. The preconditions for the capacity building phase need to be established before Cambodia can move onto the consolidation phase. This will involve some kind of “deal” on technical assistance between government and donors, the elements of which are already fairly clear. The most urgent single priority is to abolish project-related salary supplementation and, instead, ensure that key government officials are paid a living wage for full-time commitment to their work. This will require agreement between government and donors on: the creation of a transitional Salary Fund into which donors will pay an amount equivalent to what they would otherwise have spent on salary supplementation or other incentives; and agreement on a timetable for the transfer of responsibility for financing this Fund from donors to government.5 This proposal would fit well into the plans to create a core group of civil servants “for Priority Missions,” currently being discussed by those responsible for administrative reform in Cambodia. This would make it easier for the government to play a more active role in design and (transparent) selection of projects and personnel, with its concern extending to ways of reducing the cost of projects without reducing their effectiveness, and to monitoring and evaluating performance. The immediate aim should be for government to achieve at least the same degree of ownership of grant-aided projects as it already has of loan-funded projects. In addition, the concept of the Project Implementation Unit (PIU) should be re-examined and alternative ways explored of managing assistance through normal government structures, without affecting transparency and efficiency.
A Report from the Council for the Development of Cambodia to the April 2000 pre-consultative group meeting in Phnom Penh, Building More Effective Partnerships for Development in Cambodia ( Council for the Development of Cambodia, 2000), is a useful step in this direction. The report attributes the lack of genuine progress in capacity building to: the proliferation of formats/demands by donors with regard to rules and procedures for procurement, disbursement, reporting, accounting and audit; the setting up of parallel systems (PIUs, etc.) that put more priority on reporting to donors than to government, while competing with government for qualified personnel; the topping-up of civil servants' salaries in donor-funded areas; and the excessive reliance of donors on expensive experts from their own countries, who are given too much say in the implementation of donor-funded activities. The CDC report sees the solution as “a comprehensive public sector reform program that would ensure that the public sector focuses on a more limited yet appropriate agenda with a smaller workforce that would be better motivated and paid.” It looks forward also to cautious and selective implementation of a Sector-Wide Approach on a pilot basis in selected sectors (health, education, rural infrastructure, governance, and private and financial sector development).
Given the vested interests on both sides, progress toward more effective partnerships is unlikely to be smooth. For one thing, Cambodia has been struggling with plans for administrative reform since 1995 and it is not yet certain that the government has assumed real ownership of such plans (Kato, Kaplan, Chan, & Real, 2000, pp. 60–64). But the effort is worth making. Technical assistance, as it has operated so far, has done a reasonably good job in developing individual capacity. The time has come to move into a new phase of reduced aid dependence, in which the capacity that has been created can be fully utilized within reformed structures.
More generally, the lesson from Cambodia's experience for technical assistance in other aid-dependent economies is not to withdraw assistance from them. If dependence is seen as an obstacle to capacity development, then TA in such economies should be centrally focused on reducing it—by emphasizing other dimensions of capacity development in addition to the individual, and by transferring ownership to government as fast as possible. Governments, in turn, should understand why many donors want to own projects. Usually, it is because they are aiming at efficiency, impact, innovation, experimentation, speed of implementation, visibility or control, and they may see a conflict between these aims and conceding ownership to government and thereby developing its capacity. Donors need to be convinced that there is no such conflict or that, where a conflict exists (as with loss of control or visibility) the benefits of a government-owned process outweighs its costs. Certainly, no reform of development assistance, whether incremental or toward a Sector-Wide, a Partnership or a Common Pool Approach, will succeed unless it recognizes and manages wide differences of opinion on these issues between and within donor and recipient countries.