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Another Call for COD Aid Pilots

This is a joint post with William Savedoff and Ayah Mahgoub.

Shout-out to Duncan Green and Oxfam for commenting on our new book and calling, like Nicholas Kristof, for pilots of COD Aid. Best of all, Duncan noted (as have several others such as Owen Barder in this note among others) that many of the usual concerns about COD Aid (see our FAQs for some) apply as much or more to other forms of aid.

But on one big point we disagree: It’s not true that COD Aid has been tried before.

Pressure to Improve UK Aid – How COD Aid Could Help

This is a joint post with William Savedoff and Ayah Mahgoub.

Lawrence Haddad is the Director of the Institute for Development Studies at The University of Sussex in the UK. In a recent blog post, he poses several challenges for the new UK government on development.

Here’s my take on how Cash on Delivery Aid (COD Aid), an approach the UK Conservatives endorsed in their international development green paper, might address some of Lawrence’s challenges to the new government (using his numbering):

Kristof on Cash on Delivery: Bravo, But It's About Us, Not Them

This is a joint post with William Savedoff.

Of course we agree with NYTimes development columnist par excellence Nicholas Kristof that our proposal for Cash on Delivery Aid should be tried. So we are sorry to quibble, but on a couple of points cannot resist.

First Kristof wrote: “The basic truth of foreign aid is that helping people is far, far harder than it looks.” And he’s right. But a big part of the difficulty is with us, not them.

Cash on Delivery Aid…The Book!

Last week was a busy time in Washington for those interested in results-focused approaches to foreign aid, with two major events, one here at CGD and one at the World Bank.

Out of the Tranches

Proposition #1: Details matter

Proposition #2: People hear what they expect to hear

Lemma #1: People often misunderstand details

Theorem: Foreign aid agencies continue to use tranched operations even when a small modification would work better.

I leave the proof to the reader, but this theorem came to mind during recent discussions about Cash on Delivery Aid (COD Aid) as it would apply to financing primary education.

Linking Aid to Results: Why Are Some Development Workers Anxious? (Guest post by Owen Barder)

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.

Major NGOs Comment on COD Aid

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.

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