CGD's Cash on Delivery Aid initiative is mentioned in an article from The Washington Diplomat on aid efficacy.
It's a New Year, which always brings a renewed push to make the world a better place. There are more than 966,000 public charities in the United States alone, according to the National Center for Charitable Statistics. Just imagine how many nonprofits there are worldwide.
Add in development-oriented government agencies, nongovernmental organizations, anti-poverty alliances, etc., and the number of groups around the world aimed at bettering society is impressive — and staggering. But behind the numbers is a basic question: Which ones are actually working?
Launched in 1997 and based on a similar Brazil program, Oportunidades pays poor families to invest in their children's health and education rather than simply allocating money without accountability or doling out food handouts. Academics call such programs conditional cash transfers (CCT) and Oportunidades has spawned similar CCT-based programs in more than two dozen other countries.
Oportunidades, which started as a 300,000-family pilot program and ballooned to cover 6.5 million Mexican families, is not a simple cash handout. The transfers are contingent on the family meeting certain criteria: Children must be enrolled in school and maintain an attendance rate of at least 85 percent. Families must also go to the doctor for regular checkups and meet various nutrition requirements. Pregnant women, for example, must receive five prenatal checkups.
Oportunidades has spawned a whole new way of thinking in the development world. Here in Washington, the Center for Global Development took the CCT concept one step further and created Cash on Delivery Aid (COD Aid), which links payments more directly to a single specific, measurable outcome. At the core of this approach is a contract between funders and recipients that stipulates a fixed payment for each unit of confirmed progress toward an agreed-upon goal. Once the contract is struck, the funder takes a hands-off approach, allowing recipients the freedom and responsibility to achieve the goal on their own. Payment is made only after progress toward the goal is independently verified by a third party. At all steps, a COD Aid program is transparent to the public.
COD Aid programs are still in the pilot stage and will have to overcome obstacles such as technical feasibility (what constitutes a measurable outcome) and buy-in from recipient governments, who may have neither the capacity nor the will to make development a priority.