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I am pleased to share with our readers at Owen’s request this discussion of Cash on Delivery Aid, which appeared yesterday on his blog, Owen Abroad.
Linking Aid to Results: Why Are Some Development Workers Anxious?
By Owen Barder
The Center for Global Development is working on an idea which they call Cash on Delivery aid, in which donors make a binding commitment to developing country governments to provide aid according to the outputs that the government delivers. I think this is a good idea in principle, and hope that it can be tested to see whether and how it could work in practice. The UK Conservative party have said in their Green Paper that if they are elected they will use Cash on Delivery to link aid to results.
Linking aid more closely to results is attractive from many different perspectives. My own view is that linking aid directly to results will help to change the politics of aid for donors. Many of the most egregiously ineffective behaviours in aid are a direct result of donors’ (very proper) need to show to their taxpayers how money has been used. Because traditional aid is not directly linked to results, donors end up focusing on inputs and micromanaging how aid is spent instead, with all the obvious consequences for transactions costs, poor alignment with developing countries systems and priorities and lack of harmonisation. If we could link aid more directly to results, I think donors will be freed from many of the political pressures they currently face to deliver aid badly; and it would be politically easier to defend large increases in aid budgets.
"Countries know where they want to be, but they may not know the best way of getting there. We would like to see the development of a new institution which can help us generate and use impact evaluation findings and help build capacity within our country to develop evidence and answer some of our enduring questions." --Margaret Kakande, Ugandan Ministry of Finance, Planning and Economic Development
When New York City Mayor Bloomberg’s anti-poverty commission recommended this week that the city pay poor people to send their kids to school and keep up-to-date on immunizations, the idea had an oddly familiar ring to it.
This report by Nancy Birdsall, Adeel Malik and Milan Vaishnav was prepared for the World Bank's Operations Evaluation Department. The report focuses on the role of the World Bank in support of poverty reduction during the period beginning in 1990 and concluding in 2003. It reviews and discusses the Bank's analytic work and its efforts to bring change through policy dialogue and lending programs.