Donor agencies and their funding are a valuable resource for a country’s development. Project implementation units (PIUs) centralize project management and ensure effective coordination between the various parties involved, including donors, beneficiaries, and other stakeholders. PIUs are usually integrated into government structures, with the international development community encouraging this to avoid weaker alignment with national priorities, poor capacity building results, less sustainability, and overall aid effectiveness, as well as less accountability. Despite the official recommendation of state-integrated PIUs, there is limited knowledge about their effectiveness and the way they support country systems. DevelopmentAid asked several international experts to share their thoughts on this matter. Check out their opinions below.
Key Takeaways:
- The European Commission describes a PIU as “a specialized unit established to oversee the execution of projects, particularly in the context of development aid or international cooperation.”
- Donor PIUs bridge the gaps between donor practices and local institutions by providing expertise and resources to ensure projects align with national policies, and build local capacity.
- According to experts, PIUs bring new perspectives and practices, strengthening local capacity and gradual improvement. However, they can create double standards if local policies lag behind donor practices.
- One successful example of donor PIUs is the Syrian Environmental Monitoring project, where PIUs facilitated inclusive decision-making and sustained project activities beyond donor involvement.
DevelopmentAid: How can project implementation units benefit country systems?
“Donor PIUs play a crucial role in bridging the gaps between hosting institutions/agencies and donor practices, policies, and expectations. These units provide specialized technical expertise, resources, and management skills that often help the hosting institutions overcome their lack of capacities and reduce the project risks. By working closely with local government agencies, PIUs ensure their operations align with national strategies and policies, thereby enhancing the integration of development projects with local systems. PIUs bring significant value not only to the specific projects they manage but also to the hosting institutions/agencies. They introduce new insights and expertise, identify key gaps in local systems and propose actionable strategies to bridge those gaps. This collaboration serves as a learning opportunity for hosting institutions, and can lead to the adoption of new approaches to be incorporated into state policies. This support helps to build local capacities and fosters gradual and continuous improvement and innovation.”
“Donors coordinate their actions for a certain project with the state authorities via PIUs. This ensures that project implementation complies with governmental strategy. Additionally, the involvement of counterpart agency members helps to develop the authorities’ capacity through hands-on training during implementation, and facilitates the transfer of project ownership to the government after the project is completed by the donor.”
“PIUs can be very effective in supporting country systems by building capacity and working as a team with national counterparts in all phases of the project cycle management, particularly planning, execution, M&E and reporting.
DevelopmentAid: What are the pros and cons of relying on PIUs, instead of strengthening country systems?
“Pros: PIUs help host institutions to see best practices from other perspectives and in project contexts. This exposure offers valuable insights into how their systems might operate effectively in different scenarios. Such exposure can inspire local institutions to adopt new approaches and gradually improve national policies based on proven experience. By working closely with local institutions, PIUs introduce new perspectives and practices that can boost local capacities, fostering gradual and continuous improvement and innovation within the host country’s systems. This method allows for gradual adoption and adaptation, reducing the risk of overwhelming local systems with direct, potentially stressful reforms.
Cons: Relying heavily on PIUs can lead to a dependency on external assistance, potentially hindering the development of local capacities and affecting the long-term sustainability of development efforts. A significant drawback is the potential for double standards. Projects managed by PIUs may adhere to best practices and policies set by donors, while downplaying the local ones, leading to perceived unfairness and disparities in the treatment of project-affected parties. When PIUs operate independently, without corresponding efforts by the host government to adapt and then adapt the best practices, this can perpetuate double standards and undermine the overall effectiveness of development initiatives.
“The advantages:
- Enhancement of project ownership
- State employee capacity building
- Better understanding of the country’s rules and regulations
- Ensures the delivery and reach of program components to a wider number of beneficiaries
- Access to government data
- Facilitation of project activities supported by the government
The disadvantages:
- Possible corruption incentives on behalf of the authorities
- Neglect of certain areas due to conflicts with the government (areas of opposition)
- Favoritism by government staff toward their relatives and acquaintances to benefit from the project
- Delays in implementation due to governmental bureaucracy.”
“My experience includes PIUs being launched predominantly by beneficiary organizations to implement projects funded by international financial institutions (IFIs), according to their specific requirements. For example, such PIUs can be established by a beneficiary ministry. In some cases, depending on the scope of funding and the number of projects, a PIU can even transform into a separate Project Implementation Agency under such a ministry. Another example could be a PIU within a legal entity that is in charge of a specific IFI-funded project due to its nature, such as a waterworks or a waste management company. In this case, a PIU can be temporary, established for the project period. Depending on the scope of work, such a PIU can be staffed with permanent employees to assist with project implementation on a part-time basis. In all cases, PIUs definitely contribute to the economy of the beneficiary countries through capacity building, transfer of know-how, and knowledge sharing. In a broader sense, each properly implemented project is an asset to the public system it targets.”
“The potential advantages of relying on donor PIUs are adherence to the donor’s established guidelines and procedures, which enable an accelerated start-up and rapid implementation of the project. The potential disadvantages are that the PIU can be perceived as a surrogate of the donor, and if not managed well, could create room for “playing the blame game.”
DevelopmentAid: Are there any successful examples of donor PIUs supporting country systems in your experience?
“One of the most successful examples of donor PIUs effectively supporting country systems involves substantial improvements in stakeholder engagement practices. PIUs have demonstrated success by transforming stakeholder engagement from a mere formality into a meaningful and inclusive process. Although stakeholder engagement was required by national policies, it often remained at a superficial level, excluding directly affected parties and local communities. Successful PIUs have shown that actively involving all relevant stakeholders and ensuring their voices are heard and considered in decision-making fosters greater transparency, trust, and cooperation among all the parties involved. This inclusive approach is a crucial mechanism for smooth project implementation and overall success. Notably, these practices have also been adopted by hosting institutions, illustrating that early engagement with Project Affected Persons does not create additional problems but rather enhances the overall process. It helps to minimize grievances and issues that might otherwise require significant effort to resolve at more advanced stages of the project cycle.”
“I will provide an example of a successful project where the donor PIU supported the country system. Entitled “Development of Environmental Monitoring for Directorates of Environmental Affairs in the Syrian Arab Republic”, this project involved the Japanese International Cooperation Agency (JICA) and had two phases between 2005 and 2010. The steering committee of this project was headed by the Minister of Local Administration and Environment and included decision-makers from the Ministry and other stakeholders with steering committee meetings being held twice a year. The technical committee was headed by the General Director of the General Commission of Environmental Affairs and included members from all the directorates. The technical committee meetings were held monthly. The PIU discussed all the implementation details and staff training with the technical committee and received full facilitation and support from the steering committee, where decisions were made. The staff demonstrated ownership of the project and collaborated closely with the PIU to achieve the project’s implementation and overcome obstacles. The PIU listened to the concerns of government staff regarding the challenges faced by the project and reported these issues in technical and steering committee meetings to find solutions. Later, the government contributed a higher budget to continue all project activities. Now, 14 years after the project’s implementation, the staff are still involved and continuing to implement all the project’s activities.”
“I have been engaged in two 4-year PIUs which were very successful. The 9th EDF BRDP in Belize worked very well for all concerned, investing 100% of the committed funds, which was due to the Government having confidence and providing full support to the PIU and vice versa. The second was the 11th EDF RIDP in Malawi, characterized by excellent camaraderie and sharing among the PIU and the country team in four key areas: leadership and management, procurement, M&E, and report preparation.”
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