Results-based Aid and Systems/Institutions—Tell Simon Maxwell No Problem!

Simon Maxwell has a fantastic posting here on why the recent focus on results-based aid has some development professionals shifting uncomfortably in their seats. In the UK, the new Secretary of State for International Development Andrew Mitchell has promised results and value for money in UK aid spending, invoking Cash on Delivery Aid to my delight. His position makes sense, since the aid budget in the UK is one of the only to survive the recent cuts there.As background Simon Maxwell notes the growing focus in the aid world on results-based budget frameworks; on donors’ growing investments in evaluation; and the creation of the International Initiative for Impact Evaluation aka 3ie (the brainchild of Ruth Levine who identified the Evaluation Gap and who is now leading an evaluation and learning initiative at a recovering USAID).Why the seat-shifting? One big concern is that the focus on results might take aid money away from “systems” and “institution-building”. Hmmm. Absolutely true that development-niks should be “as concerned with institutions and political processes as with welfare outcomes” to quote Simon. But the problem is that development-niks haven’t got a clue exactly how to support let alone build from outside stronger systems and institutions, especially in weak, fragile, flailing states (and so in desperation send consultants and pay sitting fees to civil servants to attend training sessions).What I argue with Bill Savedoff in our book on Cash on Delivery Aid (aka COD Aid) is that a financial and reputational incentive to measure and get a clear result might induce the government of an aid-recipient state to deal aggressively with a political or bureaucratic constraint to getting results, or try a new intervention, and so discover one or another technical or political fix that buys some better or greater “result” – trying, experimenting, testing politically, and reformulating over time (we suggest donors be patient (go to page 4) – lock themselves into a 5-year contract to pay for incremental progress against the agreed result). Not unlike what happens in mature democracies when the mayor or the local legislator tries to do something new or different, with political as well as technical success, or not, over time.That’s why it’s possible to imagine entirely results-based aid that is friendly to reforming and building systems and strengthening those elusive but central institutions – not only property rights and rule of law but accountability relationships inside ponderous government bureaucracies and between politicians and bureacrats) and incentives and rewards in the heart of the beast we call the state.One other comment – Simon lays out what he calls the pooling paradox – that donors who contribute money to a larger pool cannot show their taxpayers a nice clean line of causality and accountability between spending and e.g. lower infant mortality. Another hmmm. That shouldn’t be a problem. I think taxpayers are smart. Let’s hope Andrew Mitchell is able to get his excellent DfID bureaucracy to be in a position to tell the beleaguered British taxpayers: We are paying Malawi (or Papua New Guinea or Tanzania or Burkina Faso) 100 pounds for every additional child who finishes primary school and takes an approved competency test, verified by our independent auditors. Your tax pounds are helping us help the government of Malawi focus on more children finishing school (or fewer mothers dying, or more households getting access to piped water, etc.) And they are helping civil society and teachers and parents in Malawi understand what you are contributing to their great development project. Oh yes, and we are only spending your tax money on this great project when we can assure you there is progress.And there is a process evaluation that is trying to unravel the steps Malawi is taking to accelerate progress on this particular result. Malawi is learning the mechanisms (to use Angus Deaton’s word) of development in its particular circumstances.