Last August, a consultancy called Agulhas had a look at DfID's progress on aid effectiveness. Overall it rated the department highly, although this paragraph is telling:

"the evaluation finds that DFID (like most donors) likes to project a positive image of its own performance, and tends to gloss over imperfections in the aid process. (Development NGOs are also guilty of overselling the impact of aid in their ‘Make Poverty History’ campaign.) In the view of a number of internal and external respondents to the evaluation, DFID is over-sensitive to external criticism, and unwilling to engage the public in a frank debate on the effectiveness of external assistance."

White flag

This paragraph is buried deep in DfID's new white paper on development:

"Part of making international aid more transparent is each donor publishing information of the projects they fund. The UK will make information about the projects we fund available to the public both here in the UK, and in the countries we work, through the launch of a new searchable database on the DFID website." (para 7.21)

Now it's up to everyone else to follow suit.

Bah humbug!

Just finished reading William Easterly's A White Man's Burden. In it he describes the unspoken system failure at the heart of the aid merry-go-round:

"I feel like a kind of Scrooge pointing out the ... tragedy [of ineffectual aid] when there is so much goodwill and compassion among so many people to help the poor ... the foreign aid bureaucracy has never quite gotten it - the central problem is that the poor are orphans: they have no money or political voice to communicate their needs or motivate others to meet those needs".

When you buy something in a market or make a vote in a democracy you are sending feedback to the seller or politican. This makes them accountable and pressures them into making decisions whic are your interest, rather than theirs. As the aid system is largely unaccountable the organisations the poor receive a dreadful service.

Since there is no direct line from the poor to the people making decisions, there is a principal-agent problem: aid agencies have too many objectives and each objective is the responsibility of several aid agencies. That is, no one faces the chop when the thing goes wrong.

Having described an all-too-familiar programme failure (this time by CIDA), Easterly writes:

Aid agency watches should tough on such disasters, if only with the aim of strengthening the accountability lobby in foreign aid... The way forward is politically difficult: truly independent evaluation of specific aid efforts... only outside political pressure on aid agencies is likely to create the incentives to do these evaluations.

In the end Easterly sees the way forward as being reliant on pressure from the people who stump up the cash for international develompent: taxpaying citizens.

Mobilize the altruistic people in rich countries to put heat on the agencies to make their money actually reach the poor, and to get angry when the aid does not reach the poor.

We're angry all right!

PS. Check out Easterly's ranking of aid agencies here.

Look harder, Lockhart

June's Prospect carried an article by Clare Lockhart, co-author of Fixing Failed States. She argues that the aid system has failed:

• It's wasteful since so much is spent on overheads
• Recipients cannot hold NGOs to account
• Projects are not thought through with business rigour
• Aid can undermine reconstruction through, for example, distortionary wages

In place of NGO bumph, she argues for greater funding of developing country government activities: "At the heart of the problem lies the failure of the aid system to invest in the restoration - or establishment - of a functioning government, market and civil society."

She's right the system has failed. But her analysis of why it's failed is wrong.

The heart of the problem is actually that the aid system is over-ambitious, unaccountable, opaque, unco-ordinated and not incentivised to succeed. Rather than striving to remake society, aid agencies should try to be effective in achieving specific well-defined goals (such as "Build a road from A to B").

Clare's approach is statist - she calls for "sustained commitments" to governments for "ten to 15 years or more". But, as she notes, aid currently failes to complete even relatively small-scale projects, like building schools (in Afghanistan only 6 out of 140 that had been promised delivered on time). how can it be expected to achieve something so much more ambitious?

What's her suggestion for keeping these externally-funded governments in check? Aid agencies to be made more accountable to beneficiaries.

But this will never happen as long as someone else is paying their wages. Instead, aid agencies must be made more accountable to donors and tax-payers - only we can really demand more.

Disasters at DEC

According to the FT, the Disasters Emergency Committee have stopped commissioning evaluations of how the money is spent. According to the article this "potentially raising questions over whether millions of pounds in donations are being used effectively." It certainly does.

NAO it is available

The NAO report mentioned in the post below is available here.

NAO or never

I've been given a copy of an unpublished National Audit Office report into NGOs' responses to the South Asia earthquake in 2005. It a damning analysis of aspects of the relief effort, for instance:

• Single person summer tents were airlifted from the UK even though they were unsuitable for a Pakistani winter
• Temporary shelters were distributed without technical advice being given on their construction - causing injury and death as a result
  
• NGOs were largely unco-ordinated and failed to plug into the 'cluster' system

But most serious is the following assessment of the charities' evaluation of their impact:

While financial reporting systems enable accurate reporting of inputs and costs, it is more difficult to assess impact. Reports submitted to donors did not always show clearly what had been achieved specifically with the donors' funds as opposed to others sources of funding...The problem was exacerbated by apparent inaccuracies in reports to DFID and DEC. For example:

• With £300,000 of funding, one NGO claimed to have produced 15,000 temporary shelters and a second NGO 3,300.
• 3,750 blankets cost one NGO £78,000 while another purchased 19,800 with £54,000.

In addition, above it was stated that some NGOs had underestimated family size in planning. At least two increased the average used when reporting against objectives; thereby appearing to increase the numbers reached. For example; one NGO stated that it had met its objective for beneficiaries reached. However, as it had had to distribute more tents per family, while it distributed the planned number of tents, it achieved only 82 per cent coverage for provision of winterised shelter in the target area.

Without assurance that reported figures for purchases and beneficaries are accurate it is not possible to determine where there are errors in reporting and where there are actual variations in performance. Robust analysis of what agencies have achieved with funding is vital for DFID to be able to assess the performance of the agencies it is funding and could also provide an opportunity for agencies to identify areas for improvement in their systems. Agencies should ensure that they have good systems to record outputs and outcomes by donor, and DFID and DEC should review reports for inconsistencies and undertake analysis of the figures.

Only one thing to add: The reports should be published so that there can be public scrutiny of where the NGOs were effective - and where they weren't.

Not a load of CODswallop

Here are the presentations and papers from a recent Brookings conference on aid. Most of them relate to the macro v. micro initiative debate, recently stirred up by Prof. Banerjee from MIT.

However the most interesting thing is a set of slides from Nancy Birsall's Center for Global Development on an idea for development programmes delivered through 'Cash on Delivery' (COD).

The idea is that donors would only get paid for their outcomes (not inputs). For example, a donor working on education would receive $100 for every child who completed a year of primary school. This would obviously put much greater pressure on donors to perform.

Marking up

Development Initiatives have announced an ambitious and exciting project called 'aidinfo' which seeks to make aid information more transparent and accessible to the world:

People in rich countries will be able to find out more quickly exactly where and how their money has been spent – and the impact it has had. They will be able to find out what people think of the services. They will be able to hold their own governments to account for whether aid money has been well used. And if they see that aid is spent wisely, they may be willing to provide more in future.

Their memorandum to the Commons Committee on Co-ordination for Aid Effectiveness, suggests the standard may be based on the International Development Markup Language.

A word of advice to DI: concentrate more on the political hurdles than the technical ones. There is widespread and entrenched resistance to transparency.

It is important to me

In May the Charity Commission published a survey of 1,000 Brits, in which the following unequivocal views were expressed:

• 96% of respondents agreed that "It is important to me that charities provide the public with information about how they spend their money"
• 90% of respondents agreed that "It is important to me that charities explain in a published annual report what they actually achieved"

So why don't they do it?

In a word

At an initial cost of at least €143,000, a group of civil society organisations (CSOs/NGOs) have belatedly begun to examine how their effectiveness can be improved. The process is called 'Framing and Promoting the Effectiveness of CSOs as Development Actors' and kicks off with a meeting on 29th June run by CONCORD.

An interesting tension that emerges from the concept note and FAQ paper is that between 'aid effectiveness' and 'development effectiveness'. Governments signed up to the former as part of the Paris Declaration, but CSOs have agreed that they would rather the latter:

The concept framing the process is “development effectiveness”, which goes beyond the concept of aid effectiveness enshrined in the Paris Declaration. While the latter is perceived by civil society as being a narrow and technical agenda designed to govern official aid, “development effectiveness” is much broader in scope and frames effectiveness in terms of the impact development has on poor and marginalised communities and territories. It therefore reflects more properly the diverse roles CSOs play in development. Aid effectiveness can be conceived as a part of development effectiveness.

Of course civil society organisations are not the same as governments and it is not unreasonable to imagine them adhering to a different set of accountability principles. But this paragraph reads suspiciously like CSOs are preparing for a cheeky manoeuvre.

They would be well advised not to try and slide from a tightly defined concept (aid effectiveness) to a more loosely defined one (development effectiveness) for the sake of convenience. Donors are watching!

Tailored suits, tax-free salaries, white Land Cruisers and Geneva

Newspaper commentators are not often worth reading but this sustained attack on internationalism by Simon Jenkins is. Here's the best bit:

We are all still hardwired to treat international as a good thing. In the process we have abandoned the constitutionalism and accountability that should govern any form of government if it is not to run amok. The one facet of neoconservative America that I share is frustration with the UN and related organisations' inability to walk the talk.

Charismatic compulsion

Paul Collier, author of the Bottom Billion, recently spoke at TED. He points out that Angola's annual oil revenues were $50bn, dwarfing the entire $34bn aid to the poorest billion people; and argues a set of international standards on good governance in extracting commodities.

Sure, fine, but as the previous post pointed out net private resource flows to the developing world from US citizens and companies exceeded $130bn last year. It is cross-border links which are really growing; and which aid organisations must exploit.

Tittle-Tuttle

Robert Tuttle, US Ambassador to the UK, wrote a great letter to the Guardian a while back; this is the most important bit:

In 2006, the most recent year for which data are available, net private resource flows to the developing world from US citizens and companies exceeded $130bn, more than the sum of ODA from all OECD members combined. These flows included capital investments and credits of $62bn, remittances of $41bn, and private charitable giving of $30bn. When added to US ODA of $21.75bn in 2007, these resources represent more than 1% of US GDP.

There is therefore a huge imperative to harness that private giving for the good. But as he says "the effectiveness of aid is as important as its volume".

He's wearing clothes

A new and thought-provoking book on 'philanthrocapitalism' has been published by Michael Edwards (a grants officer at the Ford Foundation). It's well worth a read, especially since it's free to download.

His main argument is that business thinking can damage civil society. Since, in his view, capitalism is the cause of so much suffering in the world, it can only go so far towards creating a solution to the world's problems. As he sees it, technology and the market cannot change the political and social root causes of poverty and cannot provide deep 'structural change'.

But the evidence to date is that, in the vast majority of cases, it is civil society which has failed to bring about beneficial change. In international development particularly there are barely any examples of outside organisations instigating or promoting social movements which successfully improve the lives of those at the bottom of the pile.

In any case, rigorous evaluation can determine the extent of success or failure of particular projects, including those which seek to empower disadvantaged groups or support social change. Projects should be evaluated against one another without recourse to ideology.

In the final chapter, Edwards calls for greater accountability of donor organisations - a theme which we have returned to many times on this blog. He writes:

[We should] commission independent impact evaluations for any tax exempt activity above a certain size, and publish the results. Require all foundations and social enterprises above a certain size to compile a publicly available summary of all evaluations every five years, and to solicit feedback from grantees and beneficiaries, and independent experts in the field.

I agree that tax-exempt organisations making charitable donations should face legal requirements to at least publish a basic list of the projects they have supported (including the size of the donation), if not evaluations of those projects as well.

More than a wet flannel

Here's an interview with Matt Flannery, cofounder of Kiva.org, a site which allows people in the developed world to make loans to entrepreneurs in developing countries over the internet.

Interestingly he predicts that:

"[In the future] we could allow women in Ghana to lend to women in Mexico. Increasingly you will see a general trend of blurring of the lines between first and third world. We’ve already had Mexicans lending to Mexicans. We’ve had Malaysians lending to Iraqis. We’ve had all sorts of blurring distinctions between the haves and the have-nots and that’s playing itself out on our site, which is really, really interesting to watch...Eventually I think you will see people in the global South actually lending to people in the global North. So someone in Chicago can take a loan from someone in Kampala, Uganda. That will be really, really interesting as well then all scenarios start playing themselves out."

Of course that future relies on Kiva surviving that long. At the moment they survive on 'tips' and grants from charitable foundations. I suspect that won't last long.

They're gonna getcha

One World Trust has published the list of international organisations, businesses and NGOs who are in its sights for the 2008 Global Accountability Report. The development organisations which should be worried are

• African Development Bank
• Asia-Pacific Economic Cooperation
• Care International
• Catholic Relief Services
• European Bank for Reconstruction and Development
• Fairtrade Labelling Organizations International
• International Committee of the Red Cross
• International Planned Parenthood Federation
• Islamic Relief
• Office of the United Nations High Commissioner for Refugees
• Plan International
• Transparency International
• United Nations Children’s Fund

Including Transparency International was inspired!

Whose knowledge is it anyway?

I've just finished reading Banerjee's important little book on evaluation in international development, in which he calls for the use of randomized trials as a way of assessing the effectiveness of interventions. His argument is overwhelming: without proper experiments, what do we really ever know?

Half of the book is devoted to replies from 'aid specialists' (bravery for which the author should be applauded), many of whom criticise his proposals for one reason and another. One of their objections holds weight - much aid nowadays is delivered as sector support, which cannot be subjected to randomized testing. Some of our knowledge about the way countries develop will always have to come from sources other than field experiments.

I will add one further, rather esoteric, point. The use of randomized trials sustains a technocratic approach - it does not challenge the positions of officials in donor agencies. Wouldn't it be even better to give the beneficiaries of aid genuine customer choice and control over the service they receive, rather than relying on an analysis of what generally works and then imposing it upon everyone?

Mystery shopping

What do you make of this? On 5th February 2008 I contacted eight large international development charities, all of whom are signatory to the International NGO Accountability Charter.

I asked each of them to publish a detailed breakdown of their expenditure for the last tax year. For each project funded within 2006-07 I wanted to know a) the name of the project b) the location of the project c) a list of funders for the project and d) the total expenditure on the project in the tax year.

None of the organisations has been able to produce me with this list. None were even able to give me just the names of the projects they funded over that year.

Their excuses were as follows:

• ActionAid - "we try to balance the need for transparency with what we think readers will find digestible, useful and informative"
  
• British Red Cross - "administrative processes [must] remain cost-effective, thus maximising the money available for our front line services."
  
• CAFOD - no reply
  
• CARE International UK - no reply
  
• Christian Aid - just a link to the annual report
• Oxfam - see this post and this post
  
• Plan International - no reply
  
• Save the Children - "this is a considerable amount of information for us to prepare and will use valuable resources".
  
• Tearfund - a link to total grants made to top 50 partner organisations.

This is simply unacceptable. Producing a list of funded projects annually certainly is time-consuming, especially when financial data is included as well. But charities which take a large proportion of their income from the public should consider themselves to be under a moral duty to be transparent. Publishing a list of funded activities would obviously improve aid co-ordination as well.

No doubt these thoughts were in the chief executives' minds when they signed the International NGO Accountability Charter. This states that "By signing this Charter we seek to promote further the values of transparency and accountability that we stand for, and commit our INGO to respecting its provisions." The Charter goes on to say: "We are committed to openness, transparency and honesty about our structures, mission, policies and activities. We will communicate actively to stakeholders about ourselves, and make information publicly available."

I call on these organisations to meet their commitments.

Philanthropy without borders

New Philanthropy Capital have just published a new report for private international develoment donors. Part of their advice is that donors ensure their money follows projects that evaluate their outcomes. I found the following excerpt extremely compelling:

Despite a growing number of project evaluations, there is virtually no systemic evaluation of the impact of NGOs, which are facing some of the same incentives as official agencies to emphasise observable effort rather than focus on less observable results. Any information on results that is publicly shared is heavily biased towards success stories. As Roger Riddell notes in his recent book, Does Foreign Aid Really Work?, ‘regrettably, there has always been and remains to this day an almost complete absence of data and information with which to assess the wider and systemic impact of NGO development interventions and activities’...Imagine a world in which an effective marketplace for giving existed to ease this complexity. There was publicly-available evidence on what works and the impact of charitable, as well as private and state, projects. There was also evidence on which giving practices generated the best results. Donors were not frustrated by the lack of information or overwhelming complexities of the system. Rather they were galvanised and inspired to support life-changing initiatives. And they could see the impact that their donations had made. Glimpses of this world exist. Much more is needed. Donors need information on which organisations and projects are tackling different issues in different countries. They also need evidence of the results of these activities. Online information sites and giving exchanges are beginning to bridge the information gap. But they are fragmented and, in most instances, do not show evidence of results.