Duncan Green has a good pair of guest posts on the results / value for money agenda in aid and development. The first post, by Rosalind Eyben, suggests that the agenda runs the real risk of warping the way we conceive development support, and not in a good way:

… donor governments … can show how many kilometres of roads they have built or numbers of babies vaccinated as compared with before they started the projects. But such facts reveal little about how the change was achieved and what can be learnt for future policy and practice… Donors are ignoring lessons long since learnt: without local people empowering themselves to change those less tangible factors that cannot be counted, once donor money stops the roads will crumble away and the next generation of babies will not be vaccinated…

Experienced staff and consultants know it…They have to work with complex problems – such as why maternal mortality rates refuse to go down – as if they were bounded problems… In a largely unpredictable and dynamic environment, rather than choosing a single ‘best option’, a more value-for-money might be achieved by financing two or more different approaches to solving a complex problem, facilitating variously-positioned actors to implement an intervention according to their different theories of change and diagnoses and consequent purposes.

Claire Melamed from the ODI disagrees, sort of:

If you don’t define in advance what the objectives of an aid programme are, you leave it up to the managers who make the decisions and the politicians who guide them to impose their own values and prejudices onto the aid programme. Of course if they could all be trusted to make the right decision, there’s no problem. But evidence suggests that might be over-optimistic… [and] without measurement, there can be no accountability.

The real question is what results we are looking for, and how to measure them. Of course if donors want to do the wrong things, and measure the wrong things, they won’t get good results. But pointing to examples of the wrong way of using results and saying, ‘so let’s not measure results’, seems to me [a big folly]…

The two positions aren’t as far apart as they may think. Eyben’s post is basically arguing that in complex situations, systems strengthening and supporting a range of possible approaches may be the best way of improving outcomes, rather than rigid results monitoring because what matters is not how a variable changes so much as how the process for changing the variable changes. Melamed’s argument is that what we measure is open for debate, but that we measure is not, and we could measure changes to the processes as well their outcomes, to capture some of the issues that Eyben raises. The positions are actually quite compatible.

I’m not sure, however, that this should really even be the focus of our debate. It seems to me that we should be looking more at some central problems of how results management is undertaken and how it distorts our incentives and actions. The central issues here are the conflation of assessment with quantitative measurement, the bias towards measurable impacts, and the bias towards time-specific measurement.

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Yeeeah... I'm going to need you to go ahead and come in on... Sunday, too.

I was recently having a drink with a doctor who volunteers in a hospital in Tanzania, and the conversation inevitably passed to work (after we’d exhausted more interesting topics, like the Ashes). We were swapping notes on the working environment within our respective organisations, both arms of the extended civil service operating with local management, payscales, skills and equipment. It was surprising how similar our experiences were, despite the fact that he works in direct service delivery while I am safely ensconced several removes away in the Ministry of Finance, working in a technical and policy advisory position. Most of our conversation centred on the ways in which our respective working environments could be enhanced by better use and organisation of the central resource of both: the staff. Leaving aside poor technical skills, a well understood problem, we came up with a number of other troublesome issues.

At almost all levels, many staff don’t actually spend much time on their own jobs. They have extremely high workloads, in theory at least, and are not paid commensurately. At senior and middle-management levels, many therefore seek to supplement their incomes with consultancies or external projects of some kind. This takes many forms. Doctors can do consultancies at private clinics; economists and similarly trained staff can take on research projects or short term consultancies advertised by other Government departments; and many simply have businesses or commercial concerns (such as farms) outside of work and in different fields altogether. This inevitably reduces the time they spend on what is meant to be the core stuff of their job, with knock-on effects to their effectiveness and the effectiveness of the whole organisation.

The latter point is worth unpacking a little. Of course, if individual staff members are performing below their abilities, this will lower the performance of the organisation as a whole. But when it happens to management staff, there is a more insidious result as well. Most civil services I’ve seen in Southern Africa are very hierarchical, a reflection of societies in which generational conflict has been common, and seniority in almost all spheres of life brings enormous influence. When senior staff are constantly away, or take a long time to approve or clear work or decisions taken by those lower down in the food chain, the entire process of Government slows down to a crawl. This is frustrating in an office like mine, where getting a piece of analysis or a policy proposal cleared and published can take weeks, but it’s even worse in organisations that depend on swift action, such as hospitals, health centres, police stations and the like. In such contexts, well informed and competent people will be extremely reluctant to make a decision even when the cost of delay is extremely high. Part of this is due to a fear of repercussions arising from breach of protocol, but in part it is also because for many it’s simply inconceivable to take a decision without the explicit say-so of their superiors.

This isn’t the extent of management problems either; even when management is around problems are significant. In many cases, it seems that managers are particularly bad at distributing the workload of staff, meaning that some are constantly overworked and others constantly underutilised. In both cases, coupled with poor salaries, this results in very weak motivation and sometimes commensurately poor performance. This is partly a reflection of the common failure to adequately plan for a work cycle. Most Government functions have broad predictability in that certain things need to be done on a regular basis by a certain time, while emerging issues must also be dealt with as and when they emerge. This should result in pretty clear roles for staff in meeting recurring deadlines and a protocol for dealing with ad hoc issues.

A lot of people blame this problem on a lack of management skills, but I think there is something deeper going on. We’re not talking about rocket science here: it’s simply making a basic plan for what you do and occasionally checking it, and making sure people all have some work to do. Rather, I think there’s a great degree of bureaucratic politics at work as well. It can be very profitable to be the holder of knowledge, resources and skills in an underskilled and information-poor Government. They constitute personal power in the sense that the ones who have them are difficult to sack and have a disproportionate voice in Government, and they can also be used to reproduce power in the sense that they can be used almost like patronage goods, to attract followers and build up a personal sphere of influence. Influence within Government increases the scope for both legal and illegal rent-seeking.

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The Rhetoric of Change

Full of sound and fury, signifying nothing?

Full of sound and fury, signifying nothing?

Since reading North of South, one aspect of Shiva Naipaul’s violent criticism of the circus of development work in Africa keeps returning to my thoughts. Naipaul argues that Africa has been so drowned in words, slogans and rhetoric that all meaning in its politics and development has been leached out of it. He gives one remarkable example, from Tanzania:

Ndugu [comrade] Kaiza threw a weary glance at me… “I will tell you frankly – ujamaa is not very interesting.”
I gazed at him in some astonishment. “Ujamaa is the foundation of the Tanzanian Revolution, Ndugu Kaiza. How can you say such a thing?”
“It is people planting. That is all. Why do you want to see people planting? If you want to find out about ujamaa, read the works of Mwalimu [Nyerere].”
“I have.”
“Then why bother to give yourself all this trouble?… People planting… that is all.”
“But what about the spirit of Socialism and Self-Reliance?”
Ndugu Kaiza stared fixedly at his pudgy hands. It was as if he had run out of ideas as to what else he could do with them. “The spirit of Socialism and Self-Reliance is there. But you cannot see it. All you will see is people planting…”

What’s so astonishing here is that this was no ruse to prevent Naipaul accessing an ujamaa village – Ndugu Kaiza went on to write him a letter of introduction He simply did not see what more there was to ujamaa than what Nyerere had written. The practice of socialism did not seem relevant to an understanding of it. Naipaul’s shock was tempered by his belief that this was the basic problem with independent Africa: too many words and not enough reality.

I have been making a less extreme version of this criticism for quite some time, and one not limited to Africa, but to all development actors. When we first started this blog, I wrote about language and in particular the emptiness of the key phrases of development discourse: sustainability, accountability, partnership. Reading Naipaul has only sharpened these criticisms and I’m beginning to believe that the problems run far deeper than they appear at first sight – and that the rhetoric of change is replacing change as the primary focus of aid organizations and Governments.

This is a cynical observation, but not a radical one. In bits and pieces this idea has been circulating for some time. For example, my ex-boss in Malawi co-authored a paper about the budget process there, entitled ‘The Budget as Theatre’ , which argued that the process of budgeting was an elaborately constructed stage on which all the right noises were made, but the actual process of rational budget allocation was completely absent.

There are other examples, too. Most countries in Africa are using Poverty Reduction Strategy Papers as their templates for development. I have no problem with this approach insofar as there are a number of interlinked problems which hamper development and some idea of how scarce resources will be allocated to address them is to be welcomed; if there a clear vision as to what should be achieved and how it may be done, it should be welcomed. Unfortunately, my experience has been that most PRSPs have fallen prey to the problem of empty rhetoric as well. The PRSP professes to lay out a plan, and suggests a set of activities that will be performed in its name, but in actuality it is little more than a paper document designed to dazzle.

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Examining Aid Success Using an Octopus, Classical Economics and a Blog

Aid, you say? Well, on the one hand...

"Aid, you say? Well, on the one hand..."

Owen Barder recently wrote an excellent, thought-provoking piece for Open Democracy about what aid does and how it should be judged. There seems to be an incipient groundswell around the idea that the ‘failing aid’ agenda is based on a misconception of what aid should be assessed against. Roger Ridell alluded to the same in his earlier piece that I wrote about here, and Chris Blattman floated the idea following conversations with Owen.

What Owen and Roger essentially argue is that the role of aid is more limited than that which it has been assessed on. Most critiques of aid are concerned with the stylized fact that aid is being poured into countries that remain resolutely poor. But what if aid isn’t meant to affect how rich or poor a country is? What if aid is just meant to make people healthier, give them a better education, and access to clean water? What if, in short, aid is simply about making conditions for individuals better without actually changing the economic structures within which they live? Owen doesn’t completely rule out the possibility that aid may make long term macroeconomic improvements, but he argues that if they do occur, there is little to suggest that they would become visible before many years pass.

The argument is enticing in that it allows a way out for those who argue that economic transformation is the standard against which development must be measured. Even if we believe this, it no longer follows that aid should be rejected, since its virtues are shorter term. This allows us to celebrate unreservedly the education that aid funds, the bednets it distributes, and the farmers it supports. None of us wants these things to be bad or useless: we all like to see individuals made better off. If we completely separate the arguments for economic growth and transformation from the arguments for education, health and farmer-support, we remove any need for us to choose what to support.

By my reading, there are three central components to this argument that we should examine a little further.

  1. Aid is aimed at improving lives of individuals and communities, without changing the structural aspects of the socio-economies in which they live. As such, aid can be successful without causing a transformation in the economy.
  2. Aid doesn’t harm the prospects of structural change in the economy. Owen argues that “aid can be used in ways that make such transformations more likely. It can pay for critical infrastructure – such as power, roads and ports – on which economic growth depends. It can finance new skills and capacity. It can provide access to financial services for entrepreneurs wanting to build their businesses.” He also cites South Korea and Taiwan as countries that grew with the support of aid.
  3. Though aid is working, according to the bounded criteria we should set for it, it could work better. Just because he thinks aid works doesn’t mean that there isn’t much we can do to make aid work even better; at the heart of this is a need for more transparency.

I believe in aid. This may come as a surprise to some of our readers, because I take a critical view of how it works and question much of our dominant thinking about development. At root, though, I believe that aid can contribute to deeper changes that are necessary, but to get there we need to change a great deal of our discourse about development. From this perspective, there are things I would challenge, and things I would wholeheartedly support from Owen’s argument.

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Why is Dead Aid is more important than Dead Capital?

Who wants some? Ash prepares to take on the Evil Dead of Aid and Capital.

"Who wants some?" Ash prepares to take on the Evil Dead of Aid and Capital.

If you’re interested in development, you’re probably familiar with Dambisa Moyo. She’s the young Zambian economist who earlier this year published Dead Aid to enormous fanfare. She was on the news, in the debates and even had the privilege of being labelled ‘cruel’ by Jeffrey Sachs. Though fierce criticism of the quality of her arguments has dimmed her own personal star, there is no doubt that the intellectual thunderstorms that accompanied her book have persisted, and that aid has come to occupy the central position in the discourse on development in non-conflict Africa.

Rewind one decade. At the turn of the century, a Peruvian named Hernando de Soto published his own treatise on the failure of development. A brilliant thinker and polymath who took ideas from the philosophy of mind, legal theory, the histories of culture, economy and law as well as modern and classical economics, de Soto’s work was called The Mystery of Capital. In it he mentions aid three times. His focus was on the central importance and current absence of socially acceptable, easily accessed forms of legal property. He argued that legitimate, functioning national systems of property rights are the crucial innovation that every single prosperous capitalist nation had to make to achieve economic development. Such a system transforms mere physical property into capital – a fungible, divisible, and secure economic asset that powers the capitalist system which exists only in pockets outside of the West.

De Soto’s work and his prescription that legitimate property systems must be created was widely hailed as a watershed in thinking about development. The New Statesman put him ‘in the pantheon of great progressive intellectuals’. He remains one of the most highly thought of thinkers in world development.

Despite the continuing high regard de Soto’s work commands, I cannot think of any serious attempts to put his ideas about property systems into practice in Africa. Meanwhile, the reform of aid and its efficacy has never had a higher profile. We in the development community have chosen to focus extraordinary energies on an agenda based on aid that does not appear to have the anything like the untapped potential that property does. We have silently but decisively decided that dead aid is a greater problem than dead capital. The evidence does not seem to support this. Consider the following:

  • De Soto’s team measured at least $9.3 trillion dollars dead capital in the third world, certainly an underestimate given that he counted only real estate. The potential value of this dead capital, when unlocked by a national, legitimate formal property system, would be multiplied several times over.
  • By contrast Moyo (and other aid critics) focus centrally on the failure of aid to achieve a result. By various reckonings this is anything between $300 billion and $2 trillion of dead aid – and after a decade of aid-growth regressions it’s clear we have little idea what, if any, multiplicative effect it has.
  • Probably the most robust critique of the aid system comes from Bill Easterly, who argues that the central planned approach to aid is too risky because we don’t know what works, favouring instead a bottom up approach through entrepreneurs.
  • De Soto takes as his starting position that the capacity of entrepreneurs is fundamentally restrained by their participation in a pre-capitalist system; the absence of any property system linking all such entrepreneurs and their assets into a single system is what prevents them from fulfilling their potential to lead bottom-up development.
  • In contrast to the more recent data set of recently developed and currently developing countries that aid critics tend to focus on, de Soto’s arguments about property systems tally remarkably well with the latest thinking among historians concerned with the process by which Europe and America pulled away from the rest of the world in its developing process. The European conception of alienable property was of central import. It also tallies with what we know about Japan, Korea and Taiwain since the 1920s.

Unfortunately, I believe those aspects that make de Soto’s work so important are the same ones that hamper efforts to translate them into to real development programmes.

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Is Aid Working? Is this the Right Question?

Roger C. Riddell, pimping his new book about foreign aid,  has written an interesting piece for Open Democracy about how aid should be assessed and where the main battlegrounds for improving it lie. Some highlights:

Aid’s supporters cite cases of aid to press the general case that “aid works”, aid’s critics cite particular examples of aid’s failures to try to make the general case that “aid doesn’t work”.  The result is that public discussions of aid are characterised by a lack of effective debate and engagement, conducted more like ships passing in the night

Unfortunately, I really think he’s right in this assessment. The Easterly-Sachs-Moyo contretemps a while back demonstrated this. It took the appearance of idealoguery rather than debate at times. Without wishing to cast aspersions, in general I do think some of the aid cheerleaders have a habit of shouting down dissent.

Riddell also worries that we are quickly getting to a point where

… the case for development aid, and the moral basis that underpins it, [is] driven exclusively by performance-based management, the results culture and “value for money” starting-points that have come to dominate contemporary discourse on public expenditure …  Why should the case for or against development aid be driven so centrally by evidence of past or present successes, or failures?  What room is there for providing aid to learn and to innovate?

… those countries which need aid the most are precisely the countries where aid is least likely to work well … many of the causes and manifestations of their poverty are in their turn likely to lower the effectiveness of the aid provided – lack of skills, weak institutions, underdeveloped and distorted markets, an inadequate regulatory framework, poor public accountabilities and a lack of transparency of government expenditures due to fragile democratic systems and weak civil societies.

Again, I have sympathy for part of this, but not all. Yes, the Thatcherite revolution in England has put quantifying success to the fore at the expense of more nuanced discussion. A balance needs to be restored. That said, while aid to learn and innovate is fine, we must never lose sight that past successes in development (not just aid) is all we have to go on with any real evidence. It’s within our knowledge of how development has happened that we should be innovative; new ways of using aid to push for development is good, as long as its based on a solid understanding of what development is and how it has and continues to happen.

He’s no aid cheerleader, however:

… the evidence indicates that development occurs without aid, and that the process of development is influenced predominantly by what happens within recipient countries, shaped by the commitment and capability of aid-recipient country governments and by dynamic changes to the respective power and voice of different interest groups within the national political economy.

… the evidence suggests that choices made by donors of who to support and for how long … have often been inappropriate, or wrong.  This has often been because they have been based on an inadequate or superficial understanding of the complexities of the political economy of aid-recipient countries, and, at times, because they have been based on trying to import and impose alien and inappropriate state, governance and institutional models … The notion that donors have sufficient understanding of the complexities of aid-recipient countries to engineer a desirable social, political and cultural transformation often in a complex ethnic setting, and that they have the “right” to engage in such engineering needs far more debate.

Finally, he concludes that the aid question is not whether or not it ‘works’, but how we can close the gap between what aid should be capable of and where it is now. He presents a number of issues that need to be debated more: incentives, predictability and so on. No answers, at least not in the article, but some interesting questions.

As someone who works in aid effectiveness professionally, there’s nothing earth shaking in here for me and indeed I think it misses out some crucial questions, but this is a really good introduction to the problems in foreign aid. It goes beyond the number throwing and global picture analysis and actually specifies some of the systematic issues that the practical and political realities of giving and using aid throws up. Definitely worth a read. The full article is here.

Sound Familiar?

Unaccountable groups taking key decisions, such as whether or not to kill the alien.

"Unaccountable groups taking key decisions", such as whether or not to kill the alien.

The Guardian is carrying a great front page piece on an independent inquiry into the state of the UK’s education system. It quotes a section from the report that immediately transported me back to the world of aid. Substitute the word ‘educational’ below:

The report notes the questionable evidence on which some key educational policies have been based; the disenfranchising of local voice; the rise of unelected and unaccountable groups taking key decisions behind closed doors; the ’empty rituals’ of consultations; the authoritarian mindset, and the use of myth and derision to underwrite exaggerated accounts of progress and discredit alternative views.

You’ll have to excuse me now, as I must attend a consultation meeting in which pre-formed opinions will be strengthened, doublespeak will be spoken,  myths of astounding success will be perpetuated and we from the Ministry of Finance will be listened to politely, with no real effect on policy design.

The More Money We Come Across, the More Problems We See…

Matt referenced Jonathan Swift recently. I appeal to another noted wordsmith.

Matt referenced Jonathan Swift recently. I appeal to another noted wordsmith.

Recently, I’ve noticed support for a few new innovative solutions in fundraising for development. Duncan Green supports a Tobin Tax for development (a small tax on international currency transactions which when aggregated across many transactions, would result in a large windfall for development), and reports that Pittsburgh G20 provided a small, qualified triumph in getting it on the agenda. Another item that’s been in the news is the ‘plane ticket tax’ for development, which Matt reported on. These are of course, on top of the existing G8 commitments on increasing aid for development made at Gleneagles a few years back.

This all begs a question: where is the analysis that tells us that the constraining factor in reducing poverty is aid funding? I can’t think of any really robust, legitimate analyses that say what is really holding us back is not having enough money to spend on development activities. Nor can I think of any shout-from-the-mountaintop successes that have roll-outs languishing on the proposals shelves because the funds simply can’t be found.

The argument for more money is not based on an analysis of the constraints to development. Rather, it seems to be based on a feeling that we can give more, we can forego more; and given how much people are suffering, we really ought to. It’s a commendable and moral impulse. It’s also wrong. Before we start appealing for more money much more needs to be gotten out of money we currently do have. Getting this the wrong way round may actually hamper efforts for development, rather than help.

At the risk of pissing off the fundraisers on the one hand, and the ‘no shit, Sherlock’ brigade on the other, I propose a short list of what comes before asking for more money below.

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Dirty Words in Development: Incentives

“Whatever you do, don’t mention incentives. I did it once, but I think I got away with it.”

“Whatever you do, don’t mention incentives. I did once, but I think I got away with it.”

Matt’s excellent recent post on aid coordination should make uncomfortable reading for many donors. He argued that one reason for poor coordination is that all donors are trying to impress distinct electorates that perceive the same problems in development due to insufficiently varied global advocacy. This is actually a bundle of important issues that Matt has expressed succinctly, and I want to address just one aspect in a more depth.

Why is it that donors are all trying to impress their own electorate? Well, quite simply, that’s what they have to do to continue their existence. Their primary incentive is to do so.

Incentives. It’s a word much used in economics, one I like a lot. Economists love to talk about an agent’s incentives. It’s essentially economics’ counterpart to history’s interest in motivation. ‘Incentives’ is a little sharper though. It’s not just about why we did something, it’s about why we will always attempt to do so; until our incentives change at least. Yet, despite the dominance of economics in academic thinking about development, it is one concept that hasn’t really filtered down to the practitioners in a meaningful way. The closest we get is our discussion of ‘accountability’ and, in its comedy form, ‘mutual accountability’ (I will justify my cynicism about these concepts in a future blog). Our wish to impose accountability and create mutual accountability are really attempts to change the incentives in aid on both sides of the relationship by introducing a new set of sticks and carrots we hope all stakeholders will follow after or run away from; in other words, new incentives that should motivate actions. Unfortunately, we’re trying to change incentives without first being explicit and honest about what they currently are, and how strong they are, and that is a recipe for failure. What’s more, what little analysis we do make of incentives is almost entirely focused on recipient Governments and not on donor agencies, for which the ways in which incentives affect behaviour are far less well understood.

Incentives work on multiple levels, but the most important for us are probably the individual level and the institutional/organisational level. At each level, agents face multiple incentives of different strengths, and how they balance their pursuit of these incentives is a key determinant of how they behave. Complicating matters, the same incentive can cause different kinds of behaviour in different circumstances.

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“Game the same. Just got mo’ fierce…”

Before, we settled things with a game of chess...

"Before, we settled things with a game of chess..."

Duncan Green recently did an interesting post charting the evolution of DfID’s thinking on aid since it was first created in 1997, through four White Papers. To summarise crudely, he suggests that the first two DfID White Papers were dominated by economics; the third was a step change in the understanding of development by incorporating ‘governance’, which he describes as politics without the power analysis; and the most recent paper takes this forward even further, reintegrating power and politics into the policymakers understanding of development.

I really cannot stress how strongly I agree with Duncan’s ultimate conclusion, that

DFID and its achievements may be one of the lasting legacies of the Labour Government.

DfID have a good reputation as one of the more thoughtful aid agencies and in my personal experience, DfID staff tend to be genuinely committed to change and self-improvement, despite the occasional feather-brained idea (in the interests of transparency: I have never worked for DfID, though they have funded me in the past).

Despite this, I’m pessimistic that really substantial changes are occurring in the aid game. DfID are at the vanguard of one stream of thinking among official development agencies internationally, For want of a more precise adjective, I’ll term these the ‘softer’ agencies, those that focus on social development and governance these days, primarily the bilaterals and the United Nations agencies. The World Bank are at the vanguard of a second stream, carrying the flame of new thought for the (mostly multilateral) agencies that take a more overtly economic view of the world, and producing a great deal of economic research to inform policy.

Though these two groups of aid agency differ in approach, both are in their major attributes part of the same tradition of development work, one which hasn’t really undergone any kind of step change in thinking about development for quite some time. I don’t deny the observed change in focus towards governance and institutions that Duncan highlighted. Rather, I would suggest that if we put this in historical context, it is simply part of a longer-term pattern, one which isn’t entirely encouraging.

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