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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.
This is a joint post with Nancy Birdsall and Bill Savedoff.
During a panel discussion we hosted at the World Bank and IMF annual meetings in Istanbul last month on mutual accountability and outcomes in aid, Max Lawson from Oxfam, in referring to COD Aid, said that CGD appears to have more effective publicity strategies and reach than the European Commission. While we do have a (small but) stellar communications team, our ideas spread far primarily because other organizations are seriously engaged in exploring and debating new ideas like the ones we have proposed (otherwise our tiny team would be sleepless, to say the least!).
One case in point is the recent COD Aid briefing paper issued by the Catholic Agency for Overseas Development (CAFOD) – a large international development organization based in the UK which raises about 75% of its funds from individual supporters.
UK Minister for International Development Douglas Alexander presented at a CGD roundtable yesterday a new poverty action plan to help the world’s poorest people cope with the global economic crisis. Alexander said that the measures described in the new UK government White Paper, Eliminating World Poverty: Building Our Common Future would help 50 million people hit by the crisis, keeping children in school, parents in jobs, and the most vulnerable people out of destitution.
In a recent blog post Duncan Green of Oxfam briefly introduced COD Aid (for what that is go here) and raised a few good questions (along with a disclaimer that he needs to learn more) about the approach. One concern he raised is whether the approach doesn’t pass the donor’s usual attribution test, i.e. the test of whether the donor’s aid made some positive and measurable difference.
CGD friend Alcyone Vasconcelos, Senior Education Specialist at the Education for All – Fast Tack Initiative (EFA-FTI) (an international partnership of developing country governments and donors to make progress towards achieving the Millennium Development Goal of universal primary education by 2015), brought to our attention a very interesting idea: a campaign to support