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Is big money really necessary, or even sufficient, to improving learning outcomes for children in the developing world? CGD’s background research submitted to the Commission has convinced us that the key to faster progress is not incremental money; it is focused action in two critical areas. The first necessary, unavoidable step is for political leaders, education officials, and parents in low-income countries to recognize the depth of the problem (children’s lives and public money wasted) in their country, and have the information to design and implement local solutions. The second is to shift education funding to paying for results, rather than inputs and plans.
Over the last decade, Latin America has seen solid economic growth combined with decreasing (but still very high) income inequality – lifting millions of people out of poverty and fueling the rise of a not-poor-but-not-rich “middle” class.
This week I started leave from CGD for three-plus months, to teach at Williams College. For those of you from the US west coast and outside the United States, Williams is among America’s most selective (and expensive!) small liberal arts colleges. It’s nestled in a tiny town in the Berkshire mountains in western Massachusetts.
It’s that time of year when again when university students and their professors return to classrooms around the world, and CGD has a wealth of materials to help educators and students interested in development make the most of their studies.
Last Friday I spoke at this event “What Works in Education”, a research colloquium sponsored by the World Bank, J-PAL, and USAID (which, like the World Bank, has recently released a new education strategy).
Last year, the Center for Global Development convened a roundtable of education experts to discuss global education policy, including what is hindering progress and where the focus of current efforts should be. The roundtable was led by former CGD Visiting Fellow Desmond Bermingham, who asked attendees to reflect on his essay Reviving the Global Education Compact and assess how the development community is doing on global education reform.
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.
We at CGD warmly welcome president-elect Barack Obama's appointments of Timothy Geithner as Secretary of Treasury and Lawrence Summers to head the National Economic Council. Both are members of the CGD Board of Directors. This is no coincidence.