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Cash on Delivery: A New Approach to Foreign Aid

3/29/10

At the March 23, 2010 launch of their new book, Cash on Delivery: A new approach to foreign aid with an application to primary schooling, authors Nancy Birdsall, President, Center for Global Development; William Savedoff, Senior Fellow, Center for Global Development; and Ayah Mahgoub, Program Coordinator to the President, Center for Global Development, presented an approach that links aid directly to outcomes in ways that promote accountability and strengthen local institutions. Cash on Delivery builds on existing initiatives that strive to disburse aid against results, but it takes the idea further by linking payments more directly to a single specific outcome; giving the recipient country full authority to achieve progress however it sees fit and without interference of any kind from donors; and assuring that the recipient country's progress is transparent and visible to its own citizens.

Cash on Delivery Aid: Ayah Mahgoub on COD in Education

3/9/10

Ayah MahgoubI'm joined this week by Ayah Mahgoub, a program coordinator here at the Center for Global Development who works on issues related to the effectiveness of foreign aid. Along with Nancy Birdsall and Bill Savedoff, Ayah is working on designing a new form of development assistance called Cash on Delivery Aid that would pay for progress on specific development outcomes.

Nancy summed up the basic idea of the Cash on Delivery approach on a Wonkcast last month—read that post or go here for a short introduction to the idea of COD Aid. While discussions are underway to develop COD aid mechanisms for a number of sectors (including water and health), the initial application is in education. In this sector, a Cash on Delivery contract would pay recipient governments a fixed amount for each additional student who completes primary school and take a standardized test. Ayah is helping to match aid donors and recipient governments who are interested in supporting a pilot of this innovative approach. I asked Ayah to tell us about the countries where the first COD Aid programs might happen: Malawi, Ethiopia, and Liberia.

Nancy Birdsall on Cash on Delivery Aid

2/17/10

Nancy Birdsall

Can aid donors find a better way to deliver aid? My guest this week is Nancy Birdsall, president of the Center for Global Development. Along with William Savedoff and Ayah Mahgoub, Nancy is working on a potential new way of disbursing foreign assistance called Cash on Delivery Aid. COD Aid seeks to devise simple, results-based contracts that reward developing countries for making progress towards previously agreed goals—such as increased primary school completion rates, vaccination coverage, or access to clean water.

In the podcast, Nancy explains that the traditional mode of giving aid, in which donors often take an active role in prescribing which actions recipient governments should take, can undermine incentives for governments to identify problems and design and implement locally appropriate solutions. "We have to create a system in which outside resources actually help the developing country governments find out what works in their particular setting," says Nancy.

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