With the advent of NEX, UNDP now plays a host of roles, including that of partner of government, donor, facilitator of management, assistant project administrator, and performance monitor. In turn, UN agencies are left with an often uncertain, reduced, and fragmented role of providing implementation support in some projects, technical supervision in others, and, less frequently, their traditional full-fledged execution services.

Governments readily accept the ideology that under NEX they have the final executive responsibility for their programmes, only to find that UNDP continues to set the terms, control the funds, and monitor their performance. The widespread notion that the IPF belongs to the government, and that under national execution the government is now in charge, obscures the realities of the continued responsibility of the UNDP for the funds entrusted to it by its contributors and for fulfilling its mandate.

As "executing agency" Government often seems to be owner, general manager, and overseer of its own programmes. In addition, Government often assumes the role of the principal "implementing agency" involving the transfer of management responsibility from one government entity to another, or sometimes combining the two roles in one and the same government institution. The 1992 effort to redefine "execution" and "implementation" has in practice obscured more than it clarified. While the term "implementing agency" is defined in the guidelines in terms of a sub-contractor providing administrative and operational services, too many participants continue to understand the term in terms of the previous usage in which the government recipient ministry was called the "implementing agency".

The time has come to dispel the ambiguities that derive from the recycling of earlier terminology and consider the true functional roles inherent in programme governance and management.

assistance, are essentially partners in a joint venture that comprises each approved UNDP programme. As partners/owners they together establish the specific objectives, determine the applicable rules and procedures, and assume ultmate accountability for the results of the development programme. The partners share the same overarching goal which is to maximize the development impact from multilateral cooperation by exploiting the comparative advantages of the UN system. Based on their joint assessment of technical cooperation needs and of the particular benefits of UN system grant assistance compared to other bilateral and multilateral forms of assistance, UNDP and Government agree on the package to be provided by the UN system typically as integral part of a larger national programme.

The owners, who in the broad sense lack the specialized skills and dedicated personnel to formulate and undertake specific programmes, determine the suitable agent with the adequate capacity to manage the programme on their behalf. The relation between the owners and the agent is governed by what is essentially a "management contract" which is an integral part of the approved "programme document", signed by both owners (UNDP and Government) and the selected management agent. This agent is normally a national institution, either a specialized government department, an appropriate inter-organizational steering committee, an NGO or a private sector entity. The selected management agent will lead the detailed formulation of the programme under a special programme development agreement. If both owners are satisfied with the design, this agency will be awarded the "management contract" turning over programme decision-making to the agency and making it, in turn, responsible to UNDP and Government for the outcome of the programme.

The programme management agent may enter into sub-contractual arrangements with one or more national or international entities whenever their specialized inputs are deemed necessary. Again, the sub-contractors can be national public sector entities, UN organizations, and/or national or international private companies and NGOs. These relationships are not part of the governance of national execution proper, but rather part of the detailed programme management arrangement which is approved by the owners. These sub-contractual arrangements must be approved by the owners and detailed in the programme/project document.

At the operational level, in order to ensure that the programme objectives are met and management performs well, UNDP and Government as owners will have to monitor management. To the extent that they do not have the capacity to technically monitor the substantive and technical aspects of the programme, this responsibility is contractually assigned to a separate agent (government entity, NGO, private contractor, or UN agency) who is independent from programme management and reports to the owners/partners. The same applies with regard to external financial monitoring. These monitoring agreements shall form part of the basic "programme document agreement" along with the management contract governing the relationship between owners and management. The size and complexity of the programme and the track record of the agent in managing similar programmes determine the intensity of shareholder monitoring. The programme management agent reports periodically to the owners/partners who will seek the views of the independent monitor on programme performance.

In order to implement this overall approach the following tasks are required:

• Review the 1992 guidelines and abandon the confusing distinction between "execution" and "implementation" in favor of the conceptually clear and accepted terminology of owner and manager. Refocus the guidelines on governance aspects of NEX first, and then develop the management guidelines.

• Ensure that external substantive and financial monitoring, including evaluations and audits, are included in the governance framework for NEX programmes by developing external monitoring agreements which become and integral part of all programme agreements and for which adequate provision is made in the programme budget.

• Format the programme agreement to accommodate the three contracts for programme management, external technical and financial monitoring with a view to providing the proper contractual basis for NEX. UNDP and Government as well as programme management must sign the programme agreement before it becomes effective; the designated monitoring agents should also be signatories of the document. As necessary, revise the Standard Basic Agreements and PPM to reflect the changed contractual reality of NEX.

• Explore the feasibility of and develop contractual arrangements for involving NGO and private sector entities as managers of programmes jointly owned by Government and UNDP. To make NEX a truly national venture, review, jointly with Country Offices and on a country-by-country basis, the legal foundations for transferring project management responsibilities from Government, the central coordinating ministry, to another government entity, and explore ways to get the incentives right.

• Rely on Resident Coordinators to determine how UNDP and government procedural requirements can be best combined so as to minimize the administrative workload of programmes while preserving proper accountability.

• Relying on the discretion of UNDP Resident Representatives, explore the ways and means of reducing/eliminating the involvement of the Country Office as contractor/sub-contractor of programme management, emphasizing its main function as donor and owner.

UNDP has relied on the UN agencies to assure the quality of UNDP-supported programmes, at least in fields where UN agencies have comparative advantages. Participation of the UN agencies into programmes/projects as provider of technical inputs is still a major comparative advantage of UN-assisted programmes.

UN agencies still provide significant technical inputs to most programmes, and still participate effectively in many evaluations. However, the agencies often have not participated effectively in programme formulations, due to the changed nature of formulation under NEX. The marginal role in formulation compromises later abilities to effectively monitor and evaluate.

The technical role of UN specialized agencies has diminished more than was intended by the Governing Council resolutions. The Governing Council intended to reduce the management role of the UN specialized agencies, and allow them to focus on providing technical resources, especially to upstream activities including formulation, technical monitoring and quality control, and participating in evaluations.

• Resident Representative should seek to involve the UN agencies as fully as possible and as appropriate in the planning of the Sixth Cycle programme. In this regard, the General Assembly Resolution (A/47/199) calling for the formulation of Country Strategy Notes, providing a macro planning framework, with full participation of UN organizations, under the special responsibility of the UN Resident Coordinator should be noted.

• Enhance the participation of UN agencies in programme formulation, because this is a key to improving the agencies' participation in implementation, monitoring, and evaluation. Because programme formulation under NEX is a longer, more participatory, and more locally specific activity, the traditional short-term agency formulation mission does not contribute adequately to the process. For major programmes, agencies might be invited (and funded) to provide one senior expert to work with and support the government-led formulation process for the duration. This expert could participate in the formulation process in a fashion similar to the way the UNDP country officers now participate, but with the addition of his or her technical expertise.

• Agency support costs are not as yet working as planned (see "Agency Support Costs," Report of the Administrator, 1994/23, Sept. 15, 1994), Care should be taken to make the agency support cost system function appropriately, so that the UN system as a whole stays effective in technical cooperation, making optimum use of its institutional resources.

• Agencies in turn, should continue to improve their reputations with their client governments regarding their responsiveness and the quality of their technical inputs.

Policy issues arising from NEX are dynamic by their very nature; these will require a longer time horizon to be elucidated, pinpointed, resolved, and worked into the overall policy framework. To the extent that the suggestions are carried out and evaluation and assessment results become available, policies should be reviewed, revised and concretized and made internally consistent with the NEX modality. The following policy issues and actions on the part of UNDP Headquarters offices will support and strengthen NEX as UNDP moves into the Sixth Programming Cycle:

• To maintain the internal consistency of its policy framework and to succeed in its Sixth Programming Cycle UNDP will have to assert its policies through careful selection of programmes that coincide with its mandate to address particular thematic issues, such as poverty alleviation, grassroots participation, environmental preservation, etc. In this connection, it appears that under national execution, as applied in the Fifth Cycle, UNDP has lost some of its leverage for insisting upon women's participation in nationally executed programmes and projects. At the UNDP/CO and the government executing agency levels women's participation is quite satisfactory; but the same tendency is not observable at the project level. UNDP/HQ as well as Country Offices should take active steps to leverage women's participation using the NEX modality. The same applies to the other priority themes.

• Sustainability of the NEX projects must be examined in greater depth. Indications are that NEX projects are likely to yield sustainable results. The sense of ownership, capacity building, and government commitment are all conducive to sustainability in the static sense of the term. However, at this point of time these contentions are still mere conjectures. Statements regarding dynamic sustainability, defined as the use of the outputs of a given project as inputs into further projects leading to higher stages of development, would be even more conjectural, since a great number of NEX projects are yet to be completed and their outputs used as inputs in new projects. UNDP may consider the usefulness of assessing the dynamic aspects of sustainability at regular intervals as projects mature.

• The capacity building component of NEX projects also needs to be assessed in the future. Learning by doing is not a fast and easy process. On the whole, NEX's impact on human resource capacity building appears to be rather positive. Its impact on institutional capacity building is not as positive. There appears to be no direct or indirect correlation between the modality and institutional capacity improvements. Nor is there a correlation between NEX and improvements in the enabling environment, Hence, NEX alone is highly unlikely to solve the problems emanating from the absence of such an environment.

• As part of the planning for the Sixth Cycle, national capacity assessments and the search for the optimal balance between national and international expertise need to be reviewed. Capacity assessments have been weak in some countries. Yet, such an assessment is an indispensable component of the Programme Approach. Wherever capacity assessments indicate weaknesses, UNDP should find the ways and means to reinforce such capacity, rather than having recourse to palliative measures, such as contributing to the establishment of independent support units. Also, country visits have revealed that national execution was being understood as execution/implementation by nationals only. This is a misconception that must be clarified.

• The issue of cost effectiveness remains yet to be resolved. It requires a full and specifically focused evaluation that must be carried out as soon as feasible. Opinions are advanced, especially by governments, that NEX is less costly. However, a number of question marks remain. Without entering into the discussion of the relative costs of national and international consultants and their productivity, NEX entails non-trivial indirect economic costs, e.g., government and UNDP staff time that could have been used more productively for other tasks. These costs are usually not properly appreciated; hence definite statements could not be made as to the actual costs of NEX. In this connection, the significant rise of subcontracts under NEX warrants special attention. Moreover, at its introduction stage NEX implied certain costs which were in the nature of investment costs as elucidated in this study. These must be distinguished clearly from recurrent costs. An evaluation is a sine qua non to determine whether NEX is cost effective in the long run or merely cheaper. A series of case studies should be undertaken as soon as feasible in a number of countries in order to build a reliable foundation for such assessment.

This study's end users are those UNDP staff, programme directors, and national officials whose in-depth knowledge and facility in the matter certainly exceed those of the authors. The present study does not pretend to offer the last word on National Execution. "In the eyes of the Gods, nothing is final." That truth applies to this study, and to National Execution itself.