“Cash on Delivery” -- Progress-Based Aid for Education E-Update

April 2008

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Dear colleagues,

As you know, my colleagues and I are proposing a "cash on delivery" approach to aid, under which donors would pay for measurable progress on specific outcomes pre-agreed with recipient governments. We are proposing a pilot in education: donors would offer a contract to poor countries for $100 per additional child completing a quality primary education, to be used as the country chooses. The approach is also being explored for application by governments to their own transfers to states or districts. Click here to visit the main page of the "cash on delivery" initiative.

I write to update you on the progress of our initiative, including new analysis by CGD and external researchers on how "cash on delivery" aid would work and our discussions with potential donors and recipients. As always, we would be delighted to hear more from you; please email Ayah Mahgoub with questions and feedback.

The Economist highlights "cash on delivery" aid

CGD's initiative on "cash on delivery" or progress-based aid was recently featured in The Economist magazine as a part of a feature assessing progress towards the Millennium Development Goals.

New analysis of how to make "cash on delivery" aid work

CGD and external researchers analyze how "cash on delivery" aid would work in a series of notes on topics including how to incorporate quality into the contract, how to audit the government's report of results in education, and more. Click here to read more.

African finance and planning ministers discuss "cash on delivery" aid

Finance and planning ministers from a number of African countries took time out during the Annual Meetings of the World Bank and IMF to discuss the "cash on delivery" proposal over breakfast. The ministers expressed enthusiasm for the way "cash on delivery" aid would help them work with their counterparts in the education ministries and their other cabinet colleagues, and asked to be kept informed of CGD's work to develop the design for this form of aid.

Donor workshop

In February, we convened a discussion for official donors to discuss the "cash on delivery" idea in detail. Staff of the U.S. Agency for International Development, the Millennium Challenge Corporation, the U.S. Treasury, UK's Department for International Development, the World Bank, the Fast Track Initiative, and current and former White House economic advisor Gene Sperling participated, along with representatives of the William and Flora Hewlett Foundation, researchers from Harvard, Oxford, University of Pennsylvania, University of Manchester, other education and aid experts and advocacy organizations.

Mexican Ministry of Education hosts discussion on "cash on delivery"

Mexican Subsecretary of Secondary (Media Superior) Education Miguel Szekely co-hosted a workshop with CGD and Mexican civil society organization Mexicanos Primero to discuss how "cash on delivery" might be applied in Mexico. The discussion focused on support from the federal government, possibly with matching funds from private donors, to support progress in expanding access and improving quality of education at the high school level in the lower-income states of Mexico. Click here to read more.

Next steps. In the coming months we will be using the research of our contributors and your feedback to write a "handbook for donors and recipients" outlining how progress-based aid could be implemented. Look out for a draft in late spring. I hope you will take the time to send us your thoughts.

Warm wishes,

Nancy Birdsall
President
Center for Global Development

Former Nigerian Minister of Finance Ngozi Okonjo Iweala co-chaired the workshop with Nancy Birdsall, President of the Center for Global Development.

Tanzanian Minister of Planning, Economy and Empowerment Juma Alifa Ngasongwa, left; Ward Heneveld, William and Flora Hewlett Foundation, right.

Minister of Finance of Liberia, Antoniette Sayeh, left; Minister of Finance of Lesotho Timothy Thahane, right.

Minouche Shafik, Director General for Regional Programmes, UK Department for International Development.

George Ingram, Academy for Educational Development, and Greg Loos, USAID, participate in an in-depth workshop for donor agencies on "cash on delivery aid."

Miguel Szekely, Subsecretary of Secondary (Media Superior) Education of Mexico, discusses options for "cash on delivery" funding in Mexico with initiative co-chairs Nancy Birdsall and Bill Savedoff.

Francisco Javier Lozano, of the Universidad Autonoma de Mexico, left; Tomas Rodriguez Pazos, state government of Veracruz, right.

Pedro Lopez Jaquez, state government of Zacatecas, left; Alejandra Rivera, National Scholarship Fund (FONABEC), right.

Ana Santiago, Inter-American Development Bank, left; Marlene Gras, Mexicanos Primero, right.