Charging even very small user fees sharply limits access to preventive health care. MIT’s Poverty Action Lab summarizes the evidence and comes to an unequivocal conclusion. Hope everyone’s listening
‘I write to you from a disgraced profession’ (guess which one…..). James Galbraith‘s written statement to members of the Senate Judiciary Committee
Great (African Development) Bank, shame about the shareholders. CGD’s Todd Moss rates the performance of the ADB as it seeks a threefold capital increase
The Grasshoppers and the Ants: Martin Wolf comes over all Aesop as he sums up the Global Economic Crisis 2.0
And finally, as it’s Friday, some light relief. It’s got nothing to do with development, Oxfam or anything else, but I’ve always been hopeless at understanding song lyrics, so honestly can’t tell what these people are singing. Hat tip for this to an anonymous benefactor (you know who you are KR)
reminds me of the wonderful 80s Maxell advert and its mangling of Desmond Dekker
Enough about aid, let’s talk about campaigning. By pure coincidence, I’ve been spending time with a bunch of Master in Public Adminstration (MPA) students recently – fascinating, not least because of the different approaches taken by their courses. Last week, the winning team from this year’s crop at the London School of Economics came in to pitch us their idea for a campaign on reform of the Common Agricultural Policy. CAP reform is an old chestnut (I know people who have been working on it for 40 years – long before this lot were born), but they had some smart new angles. Their powerpoint is here, but the basic elements were:
1. Reform don’t scrap the CAP: move subsidies away from market support – and market-distorting – measures (so-called “Pillar 1”, which pushes up prices for European consumers and leads to dumping elsewhere) towards rural development (“Pillar 2”) measures, which focusses on making the European countryside more prosperous and environmentally sound.
2. Potential new economic drivers of change to the CAP include the fiscal crisis in member states, the EU’s eastward expansion (lots more farmers, which makes the current CAP far more expensive) and energy insecurity (which makes growing biofuels a lot more attractive)
3. Add to that an important institutional change: the Lisbon Treaty includes a provision for a ‘European Citizens’ Initiative’ (ECI) – anyone that can get a million signatures from at least 9 member states on a call for new legislation will be considered for inclusion in the European Parliament’s legislative timetable. The initiative should be up and running by December and the first successful ECI should have a particularly good chance of winning, since it will be seen as a test of increased democracy and the relevance of EU institutions.
4. Finally, the timetable for CAP reform includes a major review in 2013, with involvement of both the Council of Ministers and the European Parliament. The students had done their analysis of member states’ likely positions on such a reform, noting that France is moving from net CAP recipient to net contributor (surprise surprise, net recipients are usually much more pro-CAP), and Germany is big on green energy and fiscal austerity, so both may be more supportive of CAP reform than in the past.
What I liked about this was the students’ analysis of the politics of change – what we call ‘power analysis’ in Oxfam, which I explored in the How Change Happens section of From Poverty to Power. The book argues that to understand change, and how to influence it, you need to think about
a) Context: in this case, fiscal crisis, energy insecurity
b) Institutions: Eastward expansion; the introduction of the ECI
c) Agents: environmental movement, Oxfam as potential leader, shifting interests in member states
d) Events: the 2013 review
Our advice to the students was that the power analysis was great, but since the new drivers were domestic (energy security, fiscal crisis) they should look to the consumer or environmental movements to lead an ECI.
All this was quite a contrast with Harvard, where as far as I could tell on my recent visit, the MPA in International Development concentrates on technical (economic and administrative) excellence, but includes very little on power, influencing, lobby strategies etc. I suspect the equivalent presentation from their students would be a detailed economic analysis of the evils of the CAP, followed by a general demand for reform and political will. When I raised this with Lant Pritchett, who runs the programme, he said it’s because they can’t find any decent political scientists. In Harvard?! Maybe somebody could help him out. (Note that the LSE’s full name is the London School of Economics and Political Science.)
If you’re a would-be CAP campaigner who wants to know more about the LSE proposal, contact Joe Wales at j.wales@lse.ac.uk or Luis Suarez-Isaza at l.suarez-isaza@lse.ac.uk. The other members of the team were Brian Fuller, Daria Kuznetsova and Sarah Hauser.
And if you have a view on the rival merits of LSE and Harvard, (or on the dangers of elitism) I imagine I’m going to hear from you……..
Update: Make sure you read the comments, especially those from Lant, who sets out in some detail why my first impressions are completely wrong. I fear he’s probably right……. I was also struck by Chelsea Brass’ comment that you are much more likely to pick up influencing skills out there in the real world than picking up rigorous economic analysis, so best to concentrate on the latter while you’re a student. But I don’t agree with those who reckon campaigning can’t be taught – I’ve seen Catherine Barber’s Greenpeace guy teaching a bunch of civil servants at the Uk Foreign Office and it was truly impressive (and a little scary). Last word? Maybe the distinction is not between studying politics or not, but between taking a theoretical or a practical approach – one seeks to understand, the other seeks to actually influence. They require different skills and approaches. (But I’m sure Harvard has loads of both, OK?)
Consensus on size
But tensions on coherence
And definition
This run of posts on aid is starting to seem endless (you probably agree….). But this one, on the outlook for UK aid, is the last of the series, at least for now. From tomorrow, I’ll be getting back to the usual random scattergun stuff, but do let me know if you have any other candidate topics for similar overkill treatment.
So, where does the British aid system stand under the new government? First up, let’s just celebrate what was achieved under Labour. An excellent briefing by Save the Children Fund sums it up:
“Since 1997, UK aid has been transformed. Absolute spending has grown in real terms by about two-and-a-half times, to reach almost US$13 billion a year. As a share of gross national income (GNI), it has more than doubled from 0.26%, to 0.56% today – making it equivalent to roughly 1% of public spending. This year, the UK is projected to be the second largest bilateral donor in the world, after the United States, and is broadly on track towards its pledge to meet the long-standing UN target of giving 0.7% of GNI in aid by 2013.
During this period, there have been far-reaching changes to how aid is given. In 1997, a new Department for International Development (DFID) was established, with responsibility for leading Britain’s efforts to tackle global poverty. In 2001, DFID aid was officially untied, ending the highly inefficient practice of requiring aid to be spent on goods and services from UK companies. In 2002, an International Development Act was passed, requiring aid money under DFID’s control to be spent on activities that promoted poverty reduction. Now, 90% of the UK’s aid goes to low-income countries, mostly in Africa and South Asia.
On the back of this track record, the UK has been able to play a strong role in convening and mobilising the wider donor community. It was instrumental in securing the collective G8 pledge to increase aid to Africa by $25 billion by 2010, and helped to drive agreement on the OECD aid effectiveness targets in 2005. It has played a leading role in the multilateral system, promoting the MDGs, and championing debt relief for the poorest countries.”
But the thing that really surprised Oxfam America staff when I was talking to them last week, was the extent of the consensus on aid in UK
British democracy - it's special
politics. Yesterday’s ‘Queen’s Speech’ setting out the new coalition government’s plans for this session of Parliament, repeated the Tories and Liberal Democrats’ commitments to match the previous government’s promise to increase aid to the 0.7% target (it also made it into the detailed coalition agreement). The new government has made development and health the only two departments to be shielded from the deep cuts that are likely to affect the rest of government.
The pressure on the new government, from inside and out, to break these promises will be intense. In particular, watch out for the 2011 Comprehensive Spending Review as a high risk moment. At a time when many government departments could face cuts of 15% and above, the CSR will have to give DFID roughly a 13% increase each year to reach 0.7%. That is going to test the resolve of the new government, to put it mildly.
Another likely battleground is over the definition of aid. Civil servants are paid to stick with the letter of the law, while bending its meaning. Redefining what is counted as aid is an obvious way to meet ambitious spending targets without actually spending any more money. The Tories have pledged to stick to OECD definitions of aid, but that still allows considerable wiggle room – e.g. refugees and student scholarships can be included (and constitute 17% of French aid), but are not currently counted as such by DFID. The Tories also have yet to pronounce on whether climate change funding will be additional to aid, leaving the door open to raiding the development budget to fund climate change work in poor countries.
But development policy is about much more than aid – trade, defence, foreign and environmental policies are arguably more important in determining how the UK helps/hinders developing countries. For a good discussion of coherence, go to the paper published by the IPPR thinktank in March, written by two of the brighter and more critical minds on the UK development scene, Matthew Lockwood and Sarah Mulley. ‘Policy Coherence and the Future of the UK’s International Development Agenda’ (bright, yes; snappy, not so much) has made serious waves with Tory policy wonks, so it’s worth taking a look. Here are some highlights:
“The Government has made real steps towards greater coherence, especially in some areas such as trade, climate change and conflict resolution. However, more remains to be done. DFID still appears to have a core focus on conventional aid programmes and in-country reform processes, and is criticised by some for its largely technocratic (rather than political) approach to putting the development case in government.
In the current economic and political climate, a public and political defence of aid spending, and of the UK’s successful international development policies, must recognise the interdependency of different objectives. The development debate in the UK will increasingly be linked to debates on issues including conflict and security, climate change, and migration and trade. Similarly, when considering the circumstances of the poorest countries, it seems impossible not to recognise the links between development and issues such as conflict and climate change. So, there are both pragmatic and principled reasons to consider policy coherence. It seems likely that the UK’s international development ‘community’ may need to make these interdependency arguments more strongly in the future than it has in the past, in order to protect the aid budget and DFID’s independence.
DFID needs to continue building closer relationships with other government departments, which brings risks for the ‘purity’ of DFID’s poverty reduction mission. However, DFID cannot afford to keep being seen as ‘the NGO down the road’, as it has been caricatured within other parts of government – perceptions can matter as much as reality. Instead, in the words of one interviewee, the department must become more of a ‘Whitehall warrior’.
The key risk to be mitigated is that, in seeking coherence, the development agenda gets lost or downgraded relative to other issues (for example, security), and that the UK’s core development policies become less effective as a result.”
That last point is the key one – the new government has rapidly introduced a new National Security Council, modeled on the US version, with representation from DFID. The question here, as with the US aid reform process, is which D out of the 3Ds (defence, diplomacy, development) prevails when they enter into conflict?
In an effort to demonstrate the new 3D approach, the Secretaries of State for Foreign Affairs (William Hague), Defence (Liam Fox) and Development (Andrew Mitchell) headed off to Afghanistan together within days of the election, but promptly got into a PR tangle, when Fox told the press that British troops were not there “for the sake of the education policy in a broken 13th-century country. We are there so the people of Britain and our global interests are not threatened.” Mitchell, on the other hand insisted that it was “absolutely crucial” to create a stable society where education was a priority, and Fox later changed his tone in an apparent climbdown. Whoever ‘won’, the confusion highlighted the fact that making the 3D approach work in practice is not going to be easy.
Ros, formerly of DFID and now attached to the Institute of Development Studies, knows the aid industry backwards and is struck by “the dissonance between what [aid workers] do and what they report that they do.” The aid industry as institution thinks in terms of logical frameworks, results-based management and an underlying view that Ros calls “substantialist” – a perspective that “sees the world primarily in terms of pre-formed entities in which relations among the entities are only of secondary importance.”
Good aid workers on the other hand, are “relational”: relationships between actors matter, and actors themselves change and evolve through their interaction with eachother. At their best, aid workers surf the unpredictable realities of national politics, spotting opportunities, supporting interesting new initiatives, acting like entrepreneurs or searchers, rather than planners. But when they report back to their bosses, out come the logframes and strategic plans, as messy reality is shoehorned back into the substantialist fantasies of the machine.
Does this “cognitive dissonance” matter? The machine doesn’t seem to think so. “No official aid agency has been prepared to undertake a study that aims to learn about their staff’s everyday practices – what they are doing, as distinct from what they report they are doing – and their effects.” But Ros thinks it is important, not least because it cripples our efforts to understand change processes. Here she draws a distinction between bounded v unbounded problems:
“The first are “difficulties”. With difficulties there is broad agreement on the nature of the problem; there is some mutual understanding of what a solution would look like; and there are limits to what is required in terms of the time and resources required for their resolution. Unbounded problems, on the other hand, are “messes”. There is no agreement about the diagnosis and therefore the actions required; no possibility of an eventual permanent solution because solutions generate new problems; and therefore no way of determining the quantity and type of resources needed. Governments fail to achieve results because they insist on treating messes as difficulties.” Sound familiar?
While some interventions, eg measles vaccinations, lend themselves to the substantialist world of logframes and bounded problems, many others do not. Here change is complex unpredictable and messy. Attributing change to any one intervention by an aid donor or anyone else is impossible. A relational approach is useful, a substantialist one largely futile. But, Ros asks, “if the case for such an approach to the complex context of international aid would appear to be so convincing, then why is it that top management continue to ignore process and prefer substantialist inputs and/or outputs? Why are economists still preferred over anthropologists?”
What would happen if the aid industry opted for relationalism and binned its logframes?
“Just as glasnost brought about the fall of the Soviet Union, so might an admission of what is really happening in international aid result in its dismantlement with Northern taxpayers refusing to buy into such a contingent and messy process. On the other hand, an energetic clamp-down on relational practices might equally lead to institutional collapse. Practitioners need just sufficient encouragement from top management – as well as from relational advocates like myself – to continue subverting the system for the system’s benefit.”
And she mischievously draws a parallel “with the way that the Soviet Union was able to report that collectivised agriculture was an effective means for sustaining agricultural productivity. In practice, the farm workers put their energies not in the collective farm but in their own small holdings, and pilfered collective-farm resources to invest in them, and it was this that led to sufficient food being produced for the authorities to be able to demonstrate that the overall system was working. Without the farm workers realising it, their subversion was maintaining the very system that they were resisting”.
Cash transfers (CTs – regular payments by the state directly to poor people) are all the rage at the moment, prompting heated debates across the development sector. As its title suggests, a new book, ‘Just Give Money to the Poor’ has no doubts about their merits. But Joseph Hanlon, Armando Barrientos (see his blog on the book here) and Hulme are academics with a long track record on development, and their conclusion is not a crude polemic, but an excellent and readable compendium of country experiences, arguments and research findings.
Summarizing the research, they say ‘Four conclusions emerge repeatedly: These programs are affordable, recipients use the money well and do not waste it, cash grants are an efficient way to directly reduce current poverty, and they have the potential to prevent future poverty by facilitating economic growth and promoting human development.
But two areas remain the subject of intense debate: targeting and conditions. Should smaller grants be given to many people, or larger grants to a few? Should recipients be asked to satisfy conditions such as sending their children to school or doing voluntary labor?’ Intriguingly, there is very little evidence that conditions have any actual impact, by the way.
The authors try to locate these discussions in the big historical picture, arguing that CTs represent a paradigm shift on a par with the creation of the welfare state in the North, and moreover constitute a ‘genuinely Southern revolution’, in response to the efforts of a failed northern aid industry. They have been pioneered by the new generation of G20 leaders – South Africa, Brazil, China, India, Mexico and Indonesia. The big shift is away from the insurance schemes preferred in northern welfare states, to direct government-funded schemes that recognize that self-insurance isn’t a viable option for poor people. Posing this as a crude ‘North v South’ argument feels rather retro in these multipolar times, but it’s certainly an interesting frame.
The book summarizes the current state of CTs as follows:
‘At least 45 countries in the Global South now give CTs to more than 110 million families. Every program is different, from universal child benefits in Mongolia to pensions in Africa to family grants in Latin America. Some grants are tiny – only $3 a month – whereas others give families more than $100 a month; some cover more than one-third of the population, and others aim only for the very poorest. The size of public spending varies from 0.1% of GDP to 4%, although most programs fall in the range of 0.4% to 1.5%.’
The four main goals of CTs are social protection and security (for the young, old, disabled); development and economic growth (CTs give poor people the security they need to invest in higher risk/return options like new crops, or migrating in search of work); breaking intergenerational poverty (by ensuring children are better nourished and educated than their parents) and rights and equity (reducing income inequality and promoting the status of women).
And one important caveat: CTs increase demand for things like schools and hospitals, but that can be pointless if their quantity or quality does not respond in turn – the book argues that ‘co-responsibilities’ between citizens and state is a better frame than ‘conditions’ on grants. The same holds for ensuring that decent jobs await this new generation of health, educated people.
The discussion I found most interesting was on the politics of CTs – when/why are they introduced? How do they spread? They usually start small, both in terms of target group and geography (eg in Brazil, India and China, they started off as regional initiatives and were then picked up by national governments); often politicians introduce them either to head off unrest during a crisis, or as vote winners before an election, but they then take on lives of their own (it would have been good to know more about when this does/doesn’t happen – what distinguishes CTs from old school patronage? Why are similar programmes introduced by governments of very different political stripe?); pensions and child benefits are the best entry points, as they rapidly win political consensus and public support.
The authors tie CTs’ new popularity with southern governments to the resurgence of interest in the developmental state, and the decline of the Washington Consensus. CTs are the basis for a new social contract between citizen and state, in situations where informalization of the economy make taxation (the historical basis of the contract) an unrealistic foundation.
There is often a fascinating conflict between the technocrats’ urge for tight targeting to ‘maximise efficiency’ and public rejection in favour of universality – in Mongolia this led to a targeted programme being replaced by a more popular (but more expensive) universal child benefit. Targeting appears particularly divisive when only a few cents divides the poor and the non-poor, as in many low income countries. In those circumstances, the nominally poor suddenly become much richer than their non-poor neighbours, which, in a lovely throwaway line ‘raises questions of witchcraft and nepotism.’
The path has been smoothest when CTs are nationally owned and driven – donor pressure appears to be counterproductive in many cases, being interpreted by local elites as having their arms twisted to give cash to lazy, feckless wasters.
How to fund it all? The authors are aid-sceptics and argue that domestic revenues should be the preferred source, but also raise an interesting alternative for the poorest countries. CTs require a big pot of cash, without donor conditions or loads of reporting red tape. What better source than a financial transaction tax?
For a comprehensive survey of practice or the policy dilemmas and choices surrounding CTs, I have yet to find a better place to start than ‘Just Give Money to the Poor.’
OK, the blog’s been pretty heavy going of late, so here’s some light relief, c/o the IMF, who have just sent me multiple copies of this pic from a conference back in March on the impact of the global economic crisis in low income countries (see my previous post, or the IMF page on the event with presentations). This is the IMF/Vietnamese government’s idea of a group photo – the two in the front are John Lipsky, First Managing Director of the IMF (curiously, I can’t find any evidence of a Second Managing Director – is this evidence of US-style grade inflation – all those Vice Presidents and Assistant Professors?) and Nguyen Van Giau, Governor of the State Bank of Vietnam.
At least I made it to the inner table – third from the right. You can’t miss me – I’m the white guy in the suit. I also have a bubble coming out of my head. The hierarchy then moves on to the outer table, or worse still, total relegation to the outer darkness at the back of the room.
In case you think this is my normal routine, the next day I was down in Ho Chi Minh City talking to motor bike taxi drivers, street vendors and disabled lottery ticket sellers. Sometimes, this is one weird job. Meanwhile, back at the Hilton, what was going through my mind? I can’t remember, so over to you for some captions – winner gets an honourable mention, but no junkets.
[updated: now included - current front runner from Matt, who is clearly trying to win by sheer force of numbers (monkeys, typewriters etc)]
The first two focus almost exclusively on quantity (although pushing it in opposite directions). The third takes quantity for granted, and tries to improve quality.
But I have seen relatively few attempts to take on quantity and quality simultaneously. From the quantity people, that is probably because people who write about aid are usually either fiercely pro or anti. Anti-aid advocates don’t want to muddy the waters by devoting too much attention to how it could be improved; the pro-aid camp is fearful of giving fuel to the enemy if it acknowledges the failings of aid.
As for the quality people, they have one good motive for skimming over the need to increase the quantity of aid, and one not so good. The good motive is that unless we improve the quality of aid, it will be that much harder to justify increasing quantity in a time of acute fiscal stress. The not so good motive is that arguing for more aid makes you sound a bit naff/naïve/not clever.
But aid is going to come under even greater scrutiny and attack over the next few years, driven by the looming fiscal crunch hitting virtually every donor country. Anyone who cares about aid is going to have to start talking about quality and quantity, including the warped motives for which aid is often given.
Oxfam, which I would say has in the past paid too little attention to quality issues in its public messaging, has a new paper out today in the UK which tries to get the balance right. ‘21st century aid: recognizing success and tackling failure’, by Jasmine Burnley, is aimed at public opinion, rather than the more arcane aid debates within the aid industry. So not much wonkery on cash transfers or cash on delivery. Instead, the paper combines a good primer on the basic case for aid and some of its achievements, with a look at some of the ways aid needs to be improved, and some handy myth-busting (or at least myth-qualifying) on the standard anti-aid arguments (aid fuels corruption, hampers growth, squeezes out foreign investment or domestic taxation).
What does good aid look like?
“Twenty-first century aid is liberated from rich countries’ political incentives and is targeted at delivering outcomes in poverty reduction. Twenty-first century aid innovates and catalyses developing country economies, and is given in increasing amounts directly to government budgets to help them support small-holder farmers, build vital infrastructure, and provide essential public services for all, such as health care and education. Twenty-first century aid is transparent and predictable. It empowers citizens to hold governments to account, and helps them take part in decisions that affect their lives.”
Much of this has been said before, but against the backdrop of increasing levels of anti-aid rhetoric, a grown up discussion recognising that aid doesn’t always work one hundred per cent of the time, but when it does is more than worth it, is important to have honestly, and in the open.
What does the report recommend? Donors should:
“• Ensure aid is channelled to help support active citizens, build effective states as a pathway to reducing poverty and inequality, and support diverse forms of financing to contribute to development.
• Deliver aid through a mix of models, including increasing budget support wherever possible, and ensure that a percentage of aid flows are channelled to civil society organisations, to enable people to better hold their governments to account.
• Dramatically improve the predictability of aid, by increasing the proportion of aid that is general budget support where possible and by sector support where general budget support is not an option, and limit conditions attached to aid to mutually agreed poverty indicators.
• Give at least 0.7 per cent of their national income in aid, and set out how this target will be reached, with legally binding timetables.
Developing country governments are urged to:
• Reject a culture of corruption, uphold human rights standards, and act in ways which are transparent and open to scrutiny.
• Provide legal environments in which civil society organisations monitoring government activities can flourish and respect the independence of non-government bodies like audit offices and the judiciary.”
Somewhere, we seem to have lost the ability to simultaneously celebrate aid’s many achievements (at its best, it is an extraordinary act of international solidarity) and think critically about how to improve it. We need to do more of both.
and here’s a nice animation on the aid quality arguments
Malawi based aid worker Duncan McNicholl subverts the aid agency and media stereotypes by taking photos of people he meets in two different poses ‘miserable victim asking for help’ and ‘sharp geezer on the mobile’. Lovely idea. [h/t Laura Freschi]. Here’s one example – Edward Kabzela – Chagunda Village, Malawi
The Economist unleashes its satirical blast against Unesco for its bizarre decision to launch a prize for achievement in life sciences, paid for by and named after President Obiang Nguema of Equatorial Guinea. No, you couldn’t make it up….. Non sarcastic analysis here.
Just how much cash is needed from the rich world for development and climate change in poor countries? Alex Evans argues that 0.7% of GNI doesn’t cut it any more – he cites’ Jeff Sachs’ calculation that 2.4% is nearer the mark. Good luck, as they say, with that.
London Citizens on youtube, as background to my pre-election post on some inspirational community organizing in the UK
You’ve got to hand it to the policy entrepreneurs at the Center for Global Development – they sure know how to get new ideas onto the tables and into the minds of decision makers. One of their biggest and most interesting new(ish) ideas is ‘Cash on Delivery’ (CoD), and I’ve just been reading their new book on it. The concept’s been around for a while, but in the UK, is going to zoom up the agenda with the new government, since last year’s Conservative ‘Green Paper’ on International Development included an explicit commitment to introducing CoD.
CoD tries to solve the ‘principal-agent problem’ in foreign aid, which arises when donors and recipients want to do different things with the money. It does this by introducing what is essentially a bonus system, adding a tier of aid that is only paid on results (kids in school, maternal deaths reduced etc). The logic is similar to tying corporate executives’ pay packets to a company’s share price to align their actions with the desires of shareholders. CGD contrasts this with aid’s traditional system of ‘cost reimbursement’ (build the dam, and we’ll pick up the bills, however inflated).
In CGD’s eyes the shift to budget support and policy conditionality loans (sorry about all the aid jargon) are a step forward, in that “programmes, funders and recipients negotiate targets in advance, and funders agree to make payments if targets are met. However such contracts have been undermined by a lack of clarity over targets and too great an openness to renegotiation.”
The core of CoD aid is a contract between funders and recipients that agrees an outcome and a fixed payment for each unit of confirmed progress, and the book even offers some draft contracts for different sectors. The most detailed treatment is for its application to universal primary education, but the book sets out suggestions for applying the concept to HIV/AIDS prevention, clean water, reducing carbon emissions, improving domestic statistical systems and increasing citizens’ use of public data.
How does it work? Key features of the contract are:
- Payment for outcomes, not inputs
- Funders keep their distance – how recipients achieve the outcomes, eg improve education, is entirely in their hands. No results, no bonus.
- Independent verification – key to avoiding either donors or recipients inflating their success or otherwise gaming the system
- Transparency through public dissemination of contracts and results
- Complementarity with other aid programmes
What do I like about this? Getting aid donors out of micro-management via conditions, insistence on governments hiring expensive expat consultants etc etc is a great idea, as is the investment in decent data collection, without which CoD cannot function. It’s a scandal that we have so little idea how many women die in childbirth, for example. I also like the emphasis on this being complementary to all the other kinds of aid instrument – the bonus idea (although this is my characterization, not the authors’ – bonuses aren’t very popular at the moment). If it works, it will certainly strengthen the case for aid at a time when both fiscal pressures and the volume of criticism are rising. All that CGD is proposing is some pilots to trial the idea, and it’s hard to see any objection to that.
But objections there are. The best summary of them that I’ve seen is a paper by Amy Pollard at CAFOD, written in response to the Conservative Green Paper. She highlights the following concerns:
How would recipient countries be expected to fund development initiatives up-front?
The CoD approach might impose a double-penalty on poor performers
CoD would incentivise governments to cherry-pick the easiest districts
CoD governments would not gain from the unanticipated benefits that can result from development initiatives. Particularly with governance work, it is not always possible to predict the outcome of a development initiative and there may be valuable outcomes that were not anticipated in advance.
The difficulty of measuring impacts
CoD is likely to bring unpredictable aid flows
It is not determined under CoD how the rewards of success would be distributed
Owen Barder, who with Nancy Birdsall has done much of the work in developing the CoD concept, responded to these concerns on his blog. All I would add is that a) many of the concerns apply equally to other forms of aid and b) that’s why we need some pilots.
schemes within the World Bank, and a further 23 schemes in other agencies. World Bank OBA schemes comprise $3.7 billion, with the majority of schemes in the infrastructure and health sectors, with some in education.’ And as I pointed out previously, the EU’s MDG contracts look remarkably like CoD. OK, ‘outputs’ (number of vaccinations) are not the same as ‘outcomes’ (reduction in infant mortality), but the dividing line is pretty blurred (is school graduation on output or an outcome?). Given all that experience out there in the aid world, I was surprised that the CGD book didn’t pull together the evidence to date, rather than talking about CoD as if it’s some entirely new idea. Has anyone reviewed the evidence so far?
A couple of further points raised by my colleague Jasmine Burnley (more on her new paper on aid later this week): the model seems to work better if the proportion of aid money spent on CoD is small. If CoD gets too big and becomes the latest aid bandwagon, it could start to cause problems, for example dragging money away from upfront payments that enable governments to invest in education or health in the first place. Secondly, it would be much better to tie CoD to internationally agreed priorities such as the MDGs, to prevent it becoming a vehicle for the latest aid fad.
One final, nagging concern. A lot of aspects of well-being are very hard to measure, let alone package up into contracts. Empowerment, freedom from fear and shame, for example. Now I realize that the Codistas are not suggesting that CoD should become the only channel for aid, but it is part of the inexorable pressure to only value what can be measured. That leaves out an awful lot – including partnership and solidarity. What would the bean counters of an entirely measurement-based, cash on delivery system have made of the struggle against apartheid, I wonder? Cue the customary quote from Einstein.
First the plug: I’m in the US at the moment (for quite a long time, if the ash cloud has anything to do it) and will be speaking at Oxfam America in Washington DC on Tuesday at 12 noon (1100 15th St NW, 6th floor). Subject: the UK elections and development policy. Co-speaker Jim Kolbe from the German Marshall Fund. [Update: Sorry, got the address wrong - the event on Tuesday is now taking place at the Ronald Reagan Building, wherever that is.]
Back to business. The reader survey suggested themed series of posts, so this is aid week on the blog – I’ll be posting a series of articles on various aid debates and new papers.
First up, what’s going in with the US aid reform process? (see previous posts for background). I’ve just been reading the leaked draft of the Obama administration’s Presidential Study Directive on the purpose of US foreign aid, which the President set in motion last August. It’s very top level, and quite hard to pin down but here are some initial impressions. First of all, the very big picture: it calls for a US global development strategy - that’s actually the bit the development community in the US are most excited about. Basically, this strategy is a chance for Obama to say US foreign aid should be about poverty, and should be pursued through country ownership. It would be great if he could release some kind of National Strategy for Global Development by the MDG Summit in September.
What’s hot?
Big emphasis on the security aspects of development: ‘[We will] elevate development as a central pillar of our national security strategy, equal to diplomacy and defense’. That means USAID joining relevant National Security Council (NSC) meetings and a new ‘development impact assessment’ as part of the procedures for reviewing trade, intellectual property, immigration policies etc.
Growth, growth growth: ‘Foster the next generation of emerging markets by enhancing our focus on broad-based growth and democratic governance’ (and that ‘broad based’ is the only reference I can find, however oblique, to inequality).
and fingers crossed...
USAID will be beefed up through ‘a commitment to rebuilding USAID as our lead development agency’.
What’s not?
Climate Change strikingly absent, probably due to the congressional rancour over the cap and trade legislation.
The document is big on governments and markets, but there’s very little mention of citizens or their organizations (beyond supporting their right to the occasional election).
So development is ‘equal to diplomacy and defense’. What happens when the three conflict? No suggestion of how such tensions will be resolved. Speaking at Harvard last Friday, the President’s development adviser and person in charge of the PSD, Gayle Smith, said the ‘big test’ of the new strategy would be the extent to which development informs the other two Ds. Good luck with that. The danger is, of course, that the traffic will all be in the other direction, as development policy is placed at the service of defence and diplomacy – coherence is a double-edged sword.
Some other pluses:
Big technology push to ‘increase our investments and engagement in development-focused innovation’ including more public money for research and an intriguing promise to ‘remove impediments to innovation and adaptation by the private sector.’ – Could the US government come out in favour of overhauling intellectual property rules to release more technologies for poor countries?
A welcome recognition that systems matter as well as stuff. ‘the US will invest in systemic solutions that go beyond the provision of inputs, such as building sustainable health systems and productive agricultural sectors. This focus on sustainability will also be central to how we approach humanitarian assistance and our engagement in pursuit of the Millennium Development Goals.’ That sounds promising in terms of reforming food aid, where the US has historically dragged its feet compared to other aid donors, insisting on using it as a means to dump US farm surplus, even at the risk of undercutting local production.
And a possible minus:
An apparent wish to increase policy conditionality (where the aid donor mistakenly tries to micromanage the development process by specifying the policies and reforms governments should pursue): the US ‘will be giving greater attention to pursuing policy reforms essential for development as a matter of our diplomatic engagement’.
Any other good (preferably not too fawning/self-serving) analyses or reactions?
This blog is written and maintained by Duncan Green, strategic adviser for Oxfam GB and author of 'From Poverty to Power'. More information on Duncan and the book is available on the From Poverty to Power official website.
It is a personal reflection by the author. It is intended to provoke debate and conversations about development, not as a comprehensive statement of Oxfam's agreed policies - for those, please take a deep breath and read the Oxfam International strategic plan or consult policy papers on a range of development issues.
and comes to an unequivocal conclusion. Hope everyone’s listening
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