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This is a joint post with Julie Walz

The January 2010 earthquake that devastated Haiti, killed over 220,000 people, displaced several million, and flattened much of the capital, Port Au Prince, also unleashed a tsunami of outside assistance. In the 28 months since the earthquake official donors have disbursed almost $6 billion in aid to help the people of Haiti, the equivalent of $600 per person for a country where per capita annual income is just $670.

Where has all the money gone? On the second anniversary of the quake we set out to answer this question; our new CGD policy paper is the result.  The short answer is that the vast majority of the money so-far disbursed has been paid to international non-governmental organizations (NGOs) and private contractors. And while many of these organizations do excellent work, there is shockingly little information on how they used the funds.

The reliance on NGOs is understandable, given the limited capacity of the Haitian government and weak national institutions. But the proliferation of NGOs makes tracking the money extremely difficult. Estimates of the number of NGOs operating in Haiti range from a few hundred to more than 20,000.  Only a small proportion of the organizations working in Haiti are officially registered with the Ministry of Planning. Using a directory of organizations run by the UN Office of the Special Envoy for Haiti and Inter-American Development Bank, we constructed a data set of 980 NGOs operating in Haiti.

Post-quake aid to Haiti falls into two categories: humanitarian, for short-term relief efforts; and recovery, longer-term financing for reconstruction and development. Humanitarian agencies, NGOs, private contractors, and other non-state service providers received 99 percent of global humanitarian aid – less than one percent went to Haitian public institutions.  None of the $1.28 billion disbursed in humanitarian aid from the United States went to the Haitian government.

Figures 1 and 2 show the breakdown of U.S. Government funding to Haiti in the aftermath of the quake.  Other donors have provided some recovery funding to the Government of Haiti; of total recovery funding, somewhere between 14 and 21 percent of the money has been allocated to the government.

How have international NGOs and private contractors performed with regard to service delivery in Haiti?  The bottom line is that twenty-seven months after the earthquake, it is still very difficult to tell.

Two external organizations catalog evaluations and other reports from organizations operating in Haiti since the earthquake: ReliefWeb and the Active Learning Network for Accountability and Performance in Humanitarian Action (ALNAP).  Less than half of the reports were conducted entirely by an independent party and only slightly over half detail the methodology used.  More than one-third of the reports do not have specific project data.  Especially of concern is the lack of budget or cost data.  Only four program and organization reports have any detail about how the money was spent (how much tents cost, how much money was given per cash transfer, or what percentage of funds went to transport vs. logistics).  Only one of the reports has any discussion about providing the best value for money and what the alternatives might be to the program currently being implemented.  There are almost no publicly-available evaluations of private contractors operating in Haiti.

Despite all of this, given the continued weakness of the Haitian government and USAID’s operating model, it is likely that NGOs and private contractors will continue to dominate service provision in Haiti for some time to come. Fortunately, there are some simple steps to improve accountability for public money and private charitable contributions intended to help the people of Haiti, as a means to getting much greater value from post-quake aid. We recommend three ways to track and evaluate programs and make aid more effective:

[1] Require More and Better Independent Evaluations

There is a great need for systematic evaluation of the $6 billion spent in Haiti since the quake.  There are six key criteria that we would like to see in evaluations:

  • Independence (should be carried out by a third party not the organization itself)
  • Clear methodology, which explains how the evaluation was conducted
  • Clear project data about the number of services provided and number of people benefiting
  • Cost break-down or budget report
  • Discussion of alternative programs, cost comparisons, or other uses for the money
  • Recommendations for improvement

USAID and other US Government (USG) contracting agencies need to clarify reporting mechanisms for recipients of public money, and require evaluations that meet the above criteria for organizations that receive contracts from USG agencies.

[2] Share Data Through the International Aid Transparency Initiative

NGOs and private contractors can greatly improve the reporting of data on expenditures and outcomes.  The International Aid Transparency Initiative (IATI) is a multi-stakeholder initiative that has developed a standard for publishing information about aid spending.  Donors, partner countries, and civil society organizations can publically disclose information on volume, aid allocation, and results of development expenditure.  The UK Department for International Development (DFID) has spearheaded the process and is currently requiring the NGOs which get the biggest grants to implement IATI.  We strongly recommend that the United States, which signed on to IATI last November, adopts the IATI process in a timely manner and requires NGOs receiving public money to become IATI compliant (as in the UK).  Since implementation of standardized reporting requirements is likely to take time, USAID should render public the financial reports from primary contractors and grantees in Haiti and build the capacity needed to track grants and sub-grants, so as to provide some form of transparency in the interim.

 [3] Pilot Competitive Bidding

New Public Management-style contracts to provide services like transportation, health and school construction could help order the NGO landscape in Haiti through a competitive bidding process, while increasing service supply and efficiency. With careful design, they might also increase accountability between donors, NGOs and the Haitian government.  Although Haiti lacks a robust private sector, market competition is possible since there are several thousand NGOs to compete for contracts.  Donor funding for specific projects could be channeled through this model, and competition would help to eliminate the inefficient organizations.  Contracts can be contingent on IATI compliance.  Donors and the Government of Haiti should conduct a pilot of this model in an effort to bring order to the proliferation of NGOs and create a much-needed enforcement mechanism.