Aid Thoughts

Digesting the difficult decisions of development

Posts Tagged DFID

In which Andrew Mwenda might be getting what he wants… sort of

Aug 30

Posted by Ranil Dissanayake in Africa, Aid, Development | 3 Comments

Much like Ray Stantz, Andrew Mwenda should be careful of what he wishes for

Be careful of what you wish for. You might just get it.

Recently, Andrew Mwenda and five other prominent African intellectuals wrote to the Telegraph suggesting that Africa does not in fact need British development aid. Rather, they would be much happier if Britain contributed to the scrapping of the Common Agricultural Policy as a way of helping Africa.

Unfortunately, it seems like the Conservative-Liberal coalition Government might be giving them half of what they want – and not the good part. Yet another DfID-related leak has revealed that the British aid budget will from now on be allocated with a much stronger emphasis on UK security; in effect, moving aid away from being a stand-alone policy area and into a branch of a foreign policy drive aimed at ensuring the safety of the British public. Cynics will say this is nothing new, but it is surely more explicit and more closely felt than at any time since DfID’s formation.

Just to be clear: the leaked document does not suggest that Britain stop funding schools, or healthcare or even economic growth per se. DfID could continue to be a paragon of virtue in international development circles. What it does mean is that whenever DfID want to spend on these things, it will need to justify them on UK national security grounds. Since UK national security is best served by stable, prosperous, well-educated countries existing around the world this isn’t necessarily a recipe for disaster.

However, it’s another indication that the new Government want to make DfID, hitherto one of the best aid agencies to work with from a developing country point of view, more of a tool for an overall UK Government strategy founded in ideology and realpolitik. This is a real worry. Like the news from a few weeks back that DfID was dropping a number of commitments previously agreed, allegedly including the Paris Declaration, it is an indication that the Government wants to free up DfID to respond to its own priorities first and foremost.

Up til now, one of the reasons why DfID has developed such a good reputation was because it had a fairly high degree of operational independence from the rest of Government. This gave it the flexibility to pursue better aid allocations in the context of wider donor and Government spending, sometimes by taking on risk through budget support and other times by improving resource allocation procedures (budgeting, Parliamentary oversight and the like).

Giving DfID a requirement to justify what they do based on UK national security introduces an important restraint to them: it means that they cannot simply respond to country needs given the allocation of other resources, but needs to ensure it’s own resources pass a fitness test at home. What’s more, this all but rules out general budget support (from the recipient point of view, the best way of getting aid, if you care about building the ability of Government to allocate and account for funds), since there can be no guarantee on where this money will be spent.

All in all, this is a worrying sign though not a guarantee of catastrophe.

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We’ll always have Paris…

Aug 17

Posted by Ranil Dissanayake in Aid, Development, Governance, Worst practices | 2 Comments

Of all the Declarations, in all the world...

News from this weekend suggests that DfID will be reversing its hitherto strong backing to the Paris Declaration on Aid Effectiveness. My initial reactions were of shock and disappointment. Shock because DfID has been an ardent supporter of the Paris Declaration and Accra Agenda for Action. Disappointment because it was so unexpected: it has a strong, highly competent aid effectiveness department and has also used the Declaration to push Government reform.

I’ve noted after viewing the original leaked memo that the original advice was in favour of maintaining the Paris Declaration as a commitment by DfID. Most of the other commitments dropped simply serve to cut the amount of ringfencing of DfID’s budget and therefore increase its flexibility to meet the needs of different developing countries.

The decision to rescind their commitment to the PD is a much more problematic one, however. The issues essentially break down as follows:

What has DfID Reversed?

The Paris Declaration on Aid Effectiveness (PD) is an agreement signed by donor agencies and Governments and aid-recipient Governments in 2005. The Declaration establishes a number of best practices in aid management that all parties promise to adhere to, and twelve targets which all parties are to be assessed on. These targets and commitments were strengthened by the Accra Agenda for Action (AAA) in 2008.

The idea behind the PD and AAA is to make it easier for Governments to manage, use and report on aid by simplifying the way aid is contracted, disbursed and evaluated. It also seeks to maximise the benefit to the developing country by untying aid and ensuring that aid be channelled through the working local process of the aid-recipient Government. Thus aid is promised to be channelled through the local budget process, use the local accounting and audit procedures and be evaluated according to local processes. It further stressed the need to make aid as flexible as possible by using fungible General and Sector Budget Support.

Recipient Governments also made pledges to improve their own systems: of audit, budgeting and so on, and to be assessed independently on them.

The Paris Declaration has two very big positive points. The first is that it seeks to increase the ability of local actors to respond to their own problems flexibly and not be dictated to by a multitude of individual donors. It thus helps reduce the coordination problem of aid and encourages local solutions and visions of development.

The second major benefit, related to the first, is that it moves the lines of accountability of aid. Instead of aid money being handled by the donors, in which case the donors are accountable to their own taxpayers and no-one else, it creates dual accountability. First the donor gives money to the recipient Government to use. That Government is thus accountable to the donor, and must show that the money was used appropriately. But far more important than this, because aid money is now on budget and managed by local Governments a second line of accountability is created: of the recipient Government spending the money to the local electorate. Through the budget debates in Parliament, these people have the chance to contest the use of aid through their elected representatives; they also have the ability to vote a Government out of power if it doesn’t use aid money well. The Government now has to justify aid money in the same way it does tax money.

Additionally, the PD addresses lots of smaller, niggling issues that seriously hamper the capacity of Governments, for example setting a target for the reduction of cumbersome and time consuming donor missions by combining them.

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A Massive Blow

Aug 16

Posted by Ranil Dissanayake in Aid, Development, Worst practices | 3 Comments

DfID have gone all Anderson Silva on the fight for more effective aid management.

A leaked memo reveals that DfID will be dropping its commitment to the Paris Declaration on Aid Effectiveness.

This is a massive blow. The PD (as it’s known)  is very imperfect, and even the refinements we made in Accra in 2008 left plenty to be desired. But it’s the only real commitment the international community has made to improving donor systems for the management of aid – to making it easier to use, receive, negotiate. What’s worse, it’s one of the few places where recipient Governments are tied down to improvements in the way they themselves manage aid and their domestic resources.

DfID have been one of the biggest motors behind improving the PD and getting the simplification of access to and usage of aid money improved. This is not insignificant. Anyone who has spent time in a developing country Government can see how much of the recipient Government’s time is spent on managing, applying for and reporting on aid – not to mention following up on problems in its access, flow and predictability, all of which are covered by the PD. A conservative estimate for a heavily aid dependent country like Malawi is about 60% of Ministry of Finance time. Probably as much in the most aid dependent sectors, too. (To clarify – dropping the PD does not mean that DfID are abandoning the fight for better aid – but they are dropping their biggest weapon in the fight for better aid management.)

Dropping the PD means DfID have just lost a massive amount of moral authority in the fight to improve the way aid is used, and equally in the fight to improve the way Governments manage their own resources.

I’ll collect my thoughts for a more detailed post.

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DFID’s attempt at an educational arcade game

Jan 8

Posted by Matt in Aid, Development | 4 Comments

DFIDgame

The Roving Bandit sent me this link for DFID’s Race Against Global Poverty internet game. It is one of several mini games that DFID is using to educate children about their work on poverty.

The game invites players to drive around various environments, from dusty battlegrounds to lush tropical forests, delivering humanitarian aid out of the back of your large white 4×4 (with the Union Jack triumphantly displayed on the side).

drive

You can drop off things like water, tents, medical supplies, but only get points for giving people what they need. How do you know what they need? Well, the game sort of tells you:

“This village is thirsty, cold and sick” = “Give us water, blankets, and medicine.” Not exactly brain surgery, is it?

As far as development-oriented games go (sadly, this isn’t the first) I suppose this is a decent attempt, but I’m worried about what sort of lessons this is trying to convey: That aid is easy? That it’s driven by basic needs? When I worked for the government of Malawi, I remember that dealing with foreign aid meant lots of sitting in long meetings, not driving around looking for giant crosses to drop food on.

If you were to design a development/aid oriented video game, what would it be  (aside from a wrestling/fighting game that featured a royal rumble cage match between Jeffrey Sachs, Bill Easterly, and Paul Collier)?

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“Game the same. Just got mo’ fierce…”

Aug 18

Posted by Ranil Dissanayake in Aid, Development, History, Political Economy | No Comments

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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Let’s keep it strictly C.O.D.

Jul 20

Posted by Matt in Aid, Development | 3 Comments

The UK’s Conservative Party has just released a policy paper on international development. This ‘green paper’ is basically a discussion of the party’s agenda for international development – the sort of reforms they would enact if they took control of the government. Since the Conservatives are widely expected to take power sometime next year, the green paper has received a large amount of scrutiny.

One of the policies embraced in the green paper is the new(ish) aid modality Cash on Delivery, which was thought up by the folks at the Centre for Global Development a few years ago. The basic description of COD aid (yes, it already has its own acronym) can be found on their website:

Under “cash on delivery” aid, donors would commit ex ante to pay a specific amount for a specific measure of progress. In education, for example, donors could promise to pay $100 for each additional child who completes primary school and takes a standardized competency test.

A credible baseline survey would be conducted, the country would publish completion numbers and test scores, and then the donor would pay for an independent audit to verify the numbers. The payment would be made upon a successful audit. Payments would be “cash on delivery” – made only after measurable progress, only for as much as is verifiably achieved, and without prescribing the policy or means to achieve progress.

The payment for the results would then be fully fungible – the recipient government would be allowed to do anything they wanted with it (although the reality is that there will likely be some limits on this). COD aid is initiatlly being targeted at the education sector, likely because the outputs are, relative to most outcomes in this field, easier to measure. The CGD has been working on this concept for several years, writing discussion papers and concept notes – the background information can be found here, and a full-fledged FAQ section.

There are a couple of things about COD aid that I find quite promising:

  • The donors don’t get involved in policymaking; they just pay for the results = no more development training wheels!
  • There would be no attempt to tell the government what they should do with the payout, again another point for
  • It would represent a way of thinking about aid that, for a chance, is impact centered.

However, there are a number of things about the scheme I’m not as confident about – some of my concerns are purely theoretical (and so are likely wrong) – some are observational:

  • The burden of the task - Much of the literature on incentives and the public sector has come to the same conclusion: designing incentive contracts for public institutions is not easy, and most of the time low-powered incentives prevail. Part of the reason is that outputs are usually hard to measure. One would argue that COD, as it’s currently being presented, avoids this problem by very carefully measuring output. However, as Duncan Green pointed out in his recent post on the Green Paper, there are plenty of reasons school results and attendance could worsen (or get better) that are totally out of the control of the education authority. The less control they have, the greater the risk burden they carry (Nancy Birsall responded to that concern here). Agents that are forced to face too much risk might opt to just not play the game – they’ll make little or no effort to affect the outcome. While incentives might be useful in the short-run, a distant, difficult target that requires unprecedented effort might just be too much for the average ministry. For good examples of public incentive schemes falling short of their the desired impact, see Heckman’s work on the JTPA or Burgess on Jobcentre Plus.
  • A numbers game – Development is a tricky business – on one hand, we want to know that our intervention has a measurable impact.  On the other hand, we should always be concerned about turning the business into a stats game (readers familiar with The Wire will know the pitfalls of the pursuit of stats). One always worries if quality is being abandoned for the sake of quality. To be fair, CGD has repeatedly addressed this issue – their hope is also that very strict evaluation will deter attempts to game the numbers.
  • Donors are still playing with sticks and carrots – COD still carries with it that uneasy premise that still makes me wince: it is our job (as donors) to incentivise recipient governments to do the right things for their people – i.e. we know the way to salvation, if only these bloody governments would listen to us. Again, to be fair, this is no worse than the way aid has historically been handled – it’s just a bit patronising. It could be the right way to approach things – I tend to believe that we should be less concerned about getting governments to treat their people properly because we’ll give them money for it and more concerned with getting governments to treat their people properly because they have a natural, endogenous incentive to do so.

All these things said, I’m certain that the Center is just as worried about these same issues. They aren’t blindly pushing this new modality as an instant cure to the woes of ineffective aid – they’re approaching it cautiously, slowly building on the discussion year, and rolling out a pilot programme to see how successful it really can be. That’s the right approach – yet sometimes great-sounding but untested ideas can be quickly adopted and converted into policy. My worry is that the Conservative party, eager to distinguish its new development policy, will take up the idea and run with it before the Center finishes making up its mind whether it’s really a good idea or not!

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What’s in a name?

Jul 8

Posted by Matt in Aid, Governance, Worst practices | 4 Comments

Quite a lot actually. Thanks to the Roving Bandit, I happened upon this BBC news article. The main focus of the article is on DFID’s totally original new strategy to start focusing more on post-conflict countries, but tucked into the middle of the article is a single, terrifying sentence:

His department will also get a new look – branded UK Aid – to try to raise the profile of British government spending on international development.

Noooooooooooooooo! This is such an awful, awful idea. DFID has, since its inception worked up a decent, if spotty reputation for being serious about development, which is a wholly different concept than aid (yes, I know that our blog name doesn’t seem to make that distinction, but it’s catchy, so there). There’s a nice, short discussion by Lant Pritchett over at Aid Watch on the difference between the two, and the very basic problems with USAID’s name, which it seems that DFID, an infinitely better department, is fervently trying to ape.

They do look rather similar, don't they?

Seem familiar?

It’s unclear as to whether or not this is a full re-branding. Currently the new logo sits awkwardly on the right hand side of DFID’s website, peering evilly at its older brother, waiting for a chance to take its proper place at the helm.

On another note, since when did Collier’s ideas on security (which I agree somewhat with wished there would be more discussion about) become accepted enough to start influencing policy? The book has only been out a few months!

His department will also get a new look – branded UK Aid – to try to raise the profile of British government spending on international development.

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