a pioneer in the establishment of coordination mechanisms between governments and donors and a testing ground for the so-called “new aid modalities”. However, claims were repeatedly made that aid is often not aligned to national priorities and programmes, leaving governments with little choice but to accept them. Ministers and officials spend so much time dealing with donors that they have insufficient time left for their other responsibilities. Combined with the fragmentation of the planning and budgeting system, this makes it very difficult for the government to develop alternative strategies due to a lack of capacity and the brain drain. Thus, the fundamental question in the case of Mozambique is not how to manage aid dependency, but how to reduce it considerably. Critical to this is determining how aid can be used to help achieve this goal. cxxiv. At present, the extent to which Mozambique is trying to use aid to create endogenous development is unclear. This is reflected in the absence of an aid exit strategy. Under aid dependency, relationships and bargaining power between agents are highly unequal, and social, political and economic development interests and priorities may differ substantially between them. cxxv. Donors usually take the upper hand in negotiations between agents with unequal capacities and bargaining power, seeking different goals in a contested, dynamic and asymmetric environment. Inevitably, the space for policy initiative and innovation in an aid-dependent country is considerably diminished. cxxvi. Mozambique should seriously begin to address the issue of using aid to build strong and dynamic productive capacities. The country should also begin work in earnest on changing the structure and dynamics of its public expenditure in order to support and expand private investment and develop viable, sustainable and competitive trade and production. 4.7 Information Flow and Paucity of Data cxxvii. The role of accurate and reliable data in policy formulation is of the utmost importance. Information, especially when readily available to citizens, forms a crucial part of any governance system. The quality and reliability of the information are equally important. cxxviii. The problem of the quality of information in Mozambique is intrinsically linked to the nature of the governance system. This is a highly centralised system that operates on the basis of highly aggregated data and does not allow for detailed views of the situation. While significant progress has been made in this area, 1 The 18 key donors include three multilaterals (the African Development Bank, the European Union and the World Bank) and 15 bilaterals (Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Norway, Portugal, Spain, Sweden, Switzerland, the Netherlands and the United Kingdom). 26 A P R M COU N T RY R EV IEW R EP ORT NO. 11