Best laid plans

No one else could possibly think of the same thing

There is a wonderful moment in the 1979 film “Life of Brian,” where the People’s Front of Judea, an anti-Roman revolutionary group, embarks on a mission to kidnap the wife of Pontius Pilate to force him to make political concessions. As they sneak through the palace, the group bumps into the Campaign for a Free Galilee, another separatist movement which is also planning to capture Pilate’s wife. The two groups argue over who gets to do this and end up killing each other before Pilate’s guards even get a chance to intervene. You can watch the scene here (fast-forward to 5:00).

Monty Python’s comical vision of a fracture resistance, comprising dozens of similarly-named groups with redundant objectives, is strikingly familiar in the world of aid. While the NGO community suffers from these problems the most, it is official donor fragmentation and duplication which is particularly disheartening as its relative size (a few dozen approaching 100 donors versus hundreds of international NGOs) means coordination and communication ought to be easier.

It is in this muddled context that USAID, has just announced its own “plan” for achieving the 2015 targets for the Millennium Development Goals, soon to be followed by USAID’s overall strategy for development assistance, all ahead of next month’s UN summit on the MDGs.

Let’s simplify things for a minute: Imagine a world where the US was the only donor. In this context, an individual strategy seems quite sensible – the solo donor just needs to decide on what its objective function is (i.e poverty reduction, growth, reaching the MDGs) and allocate aid flows accordingly to best achieve those objectives.

Now let’s move to a world where there are two donors and make the rather strict assumption that they have the same objective (perhaps achieving the MDGs). If each of those donors continues to operate as if they are in a vacuum, without knowledge of or concern over each other’s movements, they will both tend to spend money on the same programmes in the same places. This results in “donor darlings,” countries and programmes that have too many donors and probably receive too much aid money.

The are two ways to back out of this corner: one is to reduce the number of agents dolling out cash. While some donors already implicitly do this by ceding money to larger multilaterals like the World Bank or the UN. However most governments are less keen: the is a perception by the public that aid spent by proxy is less reliable (this view also extends to recipient governments), despite the general lack of concern for analytical oversight of their own aid agencies.

The other, more depressing reality is that while helping people makes us feel good, being identified as the helpers makes us feel even better. As a result we get stickers that read “From the American People” and road signs detailing exactly who paid for this 500m stretch of highway. It’s more difficult to claim the credit when aid is given fungibly to a third organisation.

The other answer to duplication is coordination, which happens in a limited sense in some countries. Again, incentives often get in the way; some methods of helping are less costly, more popular or more photogenic than others. Even when we have a world of perfect information, where DFID and USAID can communicate in real time on their future plans, they are likely to continue, for political reasons, to clump their efforts in the same areas.

The US is renowned for eschewing coordination whenever possible. Much of the electorate practically sits in the same vacuum I described earlier – for most of them the US is the only official donor that really matters, which creates enormous incentives for USAID to act as if this were true. In this context, a grand strategy might actually be a good thing. By announcing “this is what we are going to do regardless of what anyone else is doing,” USAID might be allowing more flexible, more thoughtful donors to pursue complementary strategies. In essence, by declaring openly that they are going to kidnap Pilate’s wife, they nudge other groups to focus their efforts elsewhere. Let’s hope they respond to that nudge.

For a more detailed discussion of the US’s strategy, see Duncan Green (who I owe a hat-tip) or Laura Freschi at Aidwatch.

15 thoughts on “Best laid plans

  1. Ian

    August 3, 2010 at 2:58pm

    I’m a sucker for any aid discussion that manages to include Monty Python.

    That said, I’d just like to point out that there often isn’t really an agreement among donors or between donors and recipients about common goals, even if the main actors say there is with their public face on.
    Even if there is agreement on common objectives in development (such as the MDGs) it might not be wise to pool all resources through a single agency, or to have every activity co-ordinated. The main reasons for this are:
    1. A common plan means that we need to know the one true way of pursuing the goals – in practice we rarely know exactly what strategies and approaches will achieve our goals in a particular circumstance – even if we pretend to in the National Development Plan. So if our plan is wrong – then we have put all our resources behind a wrong approach. And if we discover our plan is going wrong but it has to be negotiated and agreed by all participants then it is going to be very slow to adapt. Better to have a bit of diversity to see what actually works.
    2. A common approach also relies on the honesty and goodwill as well as the efficiency of those organizations through which the money is channeled. The fewer the organizations involved the greater the chance of a large problem in this regard.
    3. Co-ordination, while needed, can also create an enormous overhead to carrying out work – there’s probably a trade off between duplication and inefficiency of parallel efforts and spending too much time in meetings and not enough on implementing the projects themselves.
    A few years ago I wrote an internal thinkpiece about why *too much* co-ordination might be a bad thing elaborating on these arguments a little more – the response I got from a colleague was not to worry since USAID will always go their own way and thus create a bit of competition to our own way more co-ordination oriented way of thinking.

  2. Carol

    August 3, 2010 at 5:44pm

    Your point is well-taken, but I have to call you on the sweeping generalizations you make in the last paragraph. While you will always be able to find people in the US electorate who bear out your anti-coordination sentiments, please keep in mind that amongst 300 million people, there is tremendous diversity. In any election, we are split nearly 50-50, meaning that every time a George Bush gets elected, there are a lot of people cursing and slapping their foreheads the next morning. Some US citizens really do want to play nice with others.

  3. Matt

    August 3, 2010 at 6:05pm

    Carol – thanks for the comment. Yes, I am generalizing a little bit, but from my own experience (I’m a US citizen and I spent the first 21 years of my life in the States), the majority fits that sweeping generalization (and a majority is all you need for bad policy). It’s a natural tendency to think within the sphere of the US which is hard to shake, even when living abroad (I find it difficult to shake, and I see other Americans having the same issues).

    If you look at the debates on aid and development going on within the Capital Beltway, they often really do feel like they are in a vacuum. These are smart, engaged people – but you really do have to remind them that there are other players out there from time to time.

  4. Lars

    August 4, 2010 at 11:33pm

    Is it feasible or possible to try and document this redundancy in a single city on an ongoing basis? That is, to clearly illustrate what work is being done, by whom, with how much money and with what effectiveness. To do so completely independently would obviously be an enormous task, but definitely achievable to a greater or lesser extent.

    I ask because this is something that seems like a worthy project to clearly illustrate the point you’re making — and a task that could lead to greater incentives towards efficiency and coordination. Or it could lead to less openness and more caginess amongst donors and recipients. But . . . nyeah, worth a shot.

  5. Matt

    August 4, 2010 at 11:43pm

    Lars – it would be difficult, but there are some ways to do it on a larger basis – many aid recipients work to get a big picture of who is spending what in their country, starting with aid on the budget, then moving out from there. Using this type of data from Malawi, Ranil and I actually designed an indicator which rates each donor based on whether or not they are nudging the overall spread of aid towards alignment to the receipient country’s priorities - if followed, it would have created an incentive to coordinate – someday we’ll finish that paper and post it on here!

  6. Lars

    August 5, 2010 at 12:00am

    But would it be possible to run something like that on an ongoing basis?

  7. Matt

    August 5, 2010 at 12:04am

    I think so – in Malawi we were gathering that data annually – and from what I’ve seen, many other countries manage the same. Ranil’s the expert though, so perhaps he’d be better able to make this case.

  8. Ranil Dissanayake

    August 5, 2010 at 10:14am

    Hi Lars –

    There are two approaches we could take. One is a simple mapping exercise where we show which donors are doing what within a sector (doing it for a whole country would be very difficult) or a city (which I think would be less useful than doing it by sector). This could be done annually by sector staff in Government in each sector and could show overlaps very clearly. However, it would be quite time intensive to do well so maybe doing it every 2 years would be enough. That’s the non-analytical version, and the number of countries with the info to do this are increasing rapidly.

    The second approach is the much more data intensive one that Matt and I designed; this looks in much more detail at how donor behaviours align them to a strategy and thus, on the assumption that the strategy does not repeat itself, produce an evenly spaced-set of projects. This is more useful and also more difficult to implement, but once the requisite data is collected (and fewer countries have this, though Malawi is one), it is possible to do annually. Indeed, it is designed to be so used.

  9. Mike Tierney

    August 5, 2010 at 3:14pm

    Matt,

    Great post and even better movie clip. I tend to agree with most of what you have said and while I had never thought of having the big guy on the block move first and move clearly as a coordination mechanism, that could indeed work if most other donors had coordination as a top goal (and were willing to essentially defer to the U.S. by giving in places and sectors that the U.S. chose to ignore). I’m guessing some economist has modeled this dynamic in other settings. Anyway, neat idea.

    I write to pick two small nits.

    1. You write, “it is official donor fragmentation and duplication which is particularly disheartening as its relative size (a few dozen donors versus hundreds of international NGOs) means coordination and communication ought to be easier.”

    It turns out there are more than a “few dozen” official donors and that the number of these donors is growing rapidly. I work for AidData. If you search our database today you will find 78 official donors. See http://www.aiddata.org

    We have data that we are cleaning and preparing to put into the database for 16 additional official donors. So, that is 94 donors for which we do have data. Of course, there are about 15-20 other donors for which we have no data (or very poor data). Think of Russia, China, Iran, Libya, Cuba, Venezuela, Turkey, etc… These facts do nothing to blunt your argument since coordination among 24 or 100 donors is not THAT different. But to the extent that many of the “new” donors have preferences that diverge from the “traditional” donors, then you don’t just face a coordination problem where the donors agree on the purpose of aid, you face political and security problems with the possibility of no overlapping win-sets among the various donors.

    2. You say, “While some donors already implicitly do this by ceding money to larger multilaterals like the World Bank or the UN. However most governments are less keen: the is a perception by the public that aid spent by proxy is less reliable (this view also extends to recipient governments), despite the general lack of concern for analytical oversight of their own aid agencies.” I think you are probably right about this. But there is one published paper that I know of that uses public opinion data from the US that directly contradicts this claim. See Helen Milner, “Why Multilateralism? Foreign Aid and Domestic Principal-Agent Problems,” 2006. She argues that the US public actually sees multilateral agents as more reliable than their own government when it comes to allocating aid and this variation in public opinion explains the variation in US financial commitments to multilateral donors over time. She uses evidence to support this argument. I still don’t believe it, but certainly worth reading if you are interested in this kind of thing.

    Love your blog.

  10. Matt

    August 5, 2010 at 3:43pm

    Mike,

    Thanks for the comment! Having the ‘big guy’ ignore coordination isn’t ideal, but if we assume that he’ll never ever, ever coordinate, then the second-best if he moves first and makes that move transparent to the others. The problem is when everyone does this. In the paper that Ranil and I seem to never be able to finish, we show that even if some of donors choose to ignore coordination, if we have enough donors willing to coordinate, and information is perfect, you can still get aid aligned properly.

    1). I keep forgetting to check Aid Data on these things, but yes, good point (I’d say 100 donors is a little more problematic for coordination, but some of these donors stick to specific types of programmes or geographic areas (credible movers as well)k, so we can discount them a little.

    2). Thanks for the pointer on the Milner paper. I’ve just glanced at it and will give it more scrutiny later, but it seems to me that she’s regressing current public opinion on current committments… which means the causality could actually be running the opposite way (public opinion plummets as we give more to multilaterals).

  11. Mike Tierney

    August 5, 2010 at 6:40pm

    Yes. Some of those donors are really predictable year to year. Others shift around a lot across sector and region.

    I thought Milner lagged her DV both 1 and 2 years to check robustness. I need to go look at final version again.

    Would love to see that paper when you finish it. Sounds fun and the intuition sounds right. Is it a formal model?

  12. Lars

    August 6, 2010 at 1:59am

    First, Ranil, thanks so much for the comprehensive response.

    Secondly, so, doing an in-depth, ongoing, sector report on a regular basis really means collecting the data and publishing it annually.

    Wouldn’t it be possible to do it on an ongoing basis? That is, as the data becomes available? Or does the data only become available on an annual basis via annual reports?

    I’m curious about this because I have a sense that a comprehensive view of what is happening in a sector on an ongoing basis would not only be valuable to organizations working in a sector who are already in-country, but to organizations looking to join efforts in a particular sector. While the information contained in one of these sector overviews may not be comprehensive (i.e., updated to the minute or to the cent), it could give a rough “gap analysis.”

    Moreover, depending on data quality, it could also make for easier analysis of what is effective and what isn’t . . . or at least point researchers in the direction of the organizations who have the data that could be valuable in conducting such an analysis.

    Perhaps it might make sense to try and set something up with the first approach you suggest with an eye towards getting to the second, more in-depth approach. Is the data you have collected together available online?

  13. Ranil Dissanayake

    August 6, 2010 at 7:23am

    Ugh, I wrote a really comprehensive response to this, but my computer froze.

    First off, it’s possible to do as often as you collect data – in Malawi monthly, Tz, quarterly and so on. But the composition of projects doesn’t change much month-by-month or even quarter-by-quarter, so it isn’t very useful, and you can’t just cancel projects that are ongoing. Doing it annually would give you a basis for rejecting/accepting project proposals and filling gaps in the coming year and over 2/3 years, you could remove duplication.

    Some of the reports are available at http://www.finance.gov.mw, and the one closest to what you want is the Aid Atlas, focusing on donor and sector portfolios, but not in the detail you’re talking about. The previous reports took a more aid effectiveness approach. When I left Malawi they were talking about commissioning an in-depth study of sectors exactly to look at the coordination problem, but I don’t think it happened. In Uganda such a report was produced, I think by the ODI for the Ministry of Finance, but is not public, if I recall correctly.

    Mike – Matt designed a model based on long, long discussions on what exactly we want to measure and what behaviours we want to encourage, as well as what data we would likely have available. We still need to go through a couple more iterations of the model (probably) and several iterations of the paper (definitely!) so it’ll be a little while, but we’re aiming to get it out before we start discussing the successor document to Paris/AAA.

  14. Sceptical Secondo

    August 6, 2010 at 3:18pm

    I think most people find that coordination is preferable to everyone running wild. I do too.
    But isn’t you piece based on two related assumptions that are worth considering at least?

    * With what certainty do we know the best way to obtain ‘development’ worthwhile coordinating all our efforts around? (Consider Owen’s paper …. uncoordinated variety might not be that bad)

    * Do the US, UK, France, Norway, ……….. agree on what ‘development’ is. You don’t have to dig that much into the MDGs before realising that on many points they don’t. Which in many instances makes it hard to coordinate meaningfully.

  15. Jiesheng

    August 7, 2010 at 11:50pm

    It’s of course easy to play game theory given a fix number of donors and recipients and several objectives.

    Coming to reality, My general views are: The US plan will only add a grain of sand to the pit whne they perform counter productive activities with their several dozen other aid instruemtns–DOD, Dept of Agriculture, MCC etc etc

    No donor of course can agree on what development is. No academic has.

    Should the MDGs be tossed out? Then its back to the board with neo-liberalism as the ultimate winner.

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