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Views from the Center

CGD experts offer ideas and analysis to improve international development policy. Also check out our Global Health blog and US Development Policy blog.

 

Memo to Jim Kim: Please Follow Results, Not Money

One of the biggest hopes people expressed about Jim Kim’s nomination to become president of the World Bank was that he would bring a fresh perspective, focused on achieving results, rather than reinforce the institution’s bureaucratic machinery. Unfortunately, President Kim’s recent remarks at the Center for Foreign Relations suggest that bureaucratic inertia is winning.

Close but No Cigar: Paying for Performance Is Not Necessarily COD Aid

When we make presentations on COD AIDat development agencies, we are frequently told: “Oh, we’re already doing that.” The more we investigate, however, the fewer cases we find where agencies are really disbursing funds against independently verified outcomes in a hands-off fashion. We’re tempted to say “close but no cigar.”

A Critical Moment for COD Aid or “The Trouble with Targets”

As mentioned in our last post, aid agencies are experimenting with programs that incorporate the main features of COD Aid: paying for outputs and outcomes, giving the recipient greater discretion to spend as they see fit, independent verification, and transparency. Once these results-based programs are up and running, they face a critical test when the first results are reported. In particular, most programs create expectations by setting annual targets and are then judged relative to those targets rather than to their baseline. And this means that even successful programs will be viewed as failures (a point also made in an earlier blog). By refusing to set targets, a results-based program can avoid this pitfall. How is it that targets can create such a problem?

A Critical Moment for COD Aid or “How to Be Patient When It Matters”

An increasing number of aid agencies are experimenting with programs that incorporate the main features of COD Aid: paying for outputs, giving the recipient greater discretion to spend as they see fit, independent verification, and transparency. (See our brief and book for more details). We’ve argued that the design of COD Aid programs can be rather easy, though the quality of the indicators chosen and the verification process are certainly critical to success. We have spent less time talking about what happens once the program is up and running. In particular, what happens when you find out how much progress actually occurred?

Can the World Bank Pay for Results or Will Critics Make It Impose Conditions?

Recently my colleague Alan Gelb and I attended a consultation at the World Bank’s annual meeting of its proposed “Program-for-Results” (P4R) policy. This is a remarkable step for the World Bank – the first time in 30 years that it is proposing a significantly new lending instrument. For now, the Bank can disburse funds to clients for expenditures on inputs (investment loans) or when those clients have enacted policies (policy loans).

More Demand for Cash on Delivery

This is a joint post with Nancy Birdsall.

Interest in Cash on Delivery Aid has been so strong that we’ve printed a second edition of the book which can be purchased or downloaded online. Here is our new preface:

Since Cash on Delivery: A New Approach to Foreign Aid was published in March 2010, the ideas we proposed have been embraced by presidents and ministers, by heads of public and private institutions, and by researchers and practitioners. The Education Ministry in Malawi sent us a letter asking for help creating a COD Aid program there, the British government has publicly committed to financing pilot experiences, and articles and essays have addressed COD Aid in a range of publications including The Economist, The New York Times, and Public Choice. In the debates that ensued, we have learned even more about the Cash on Delivery Aid (COD Aid) approach and how significant a departure it could be from current aid practices.

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