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I'm joined this week by Ayah Mahgoub, a program coordinator here at the Center for Global Development who works on issues related to the effectiveness of foreign aid. Along with Nancy Birdsall and Bill Savedoff, Ayah is working on designing a new form of development assistance called Cash on Delivery Aid that would pay for progress on specific development outcomes.
Nancy summed up the basic idea of the Cash on Delivery approach on a Wonkcast last month—read that post or go here for a short introduction to the idea of COD Aid. While discussions are underway to develop COD aid mechanisms for a number of sectors (including water and health), the initial application is in education. In this sector, a Cash on Delivery contract would pay recipient governments a fixed amount for each additional student who completes primary school and take a standardized test. Ayah is helping to match aid donors and recipient governments who are interested in supporting a pilot of this innovative approach. I asked Ayah to tell us about the countries where the first COD Aid programs might happen: Malawi, Ethiopia, and Liberia.
In Malawi, she says, government officials have been interested in COD Aid as part of a broader push towards education reform. Donors already give Malawi a significant amount of aid and a large new grant program is in the works that would focus specifically on education. Those new funds are tied to an extensive education sector plan, developed by the government with input from donors. Ayah says that when she visited Malawi late last year, officials were eager for the flexibility that COD aid would offer to strengthen incentives to make those plans a success.
“They listed a number of very innovative ways to improve the quality of education, to improve access, and to improve retention,” says Ayah. For example, she said, the proposed $200 per student who completes primary school could be shared with local districts based on the local increase in the number of students completing school.
In Ethiopia, which has a much larger population, current thinking focuses on pilots in a small number of districts where progress under COD aid could be compared to outcomes elsewhere in the country, she says. Work in Liberia is at the early stages, with Bill and Ayah planning a trip there next month.
Nancy, Bill, Ayah and Kate Vyborny have authored a book, Cash on Delivery: A New Approach to Foreign Aid, to be released this month, that they hope will serve as a guide for people who would like to apply COD aid to a broader set of development challenges in a wider range of countries. I encourage you to read it—and if you live in or near the Washington DC area, keep the afternoon of March 23rd open. CGD will be hosting an event where you’ll be able to hear more about COD aid and get a copy of the book.
Listen to the Wonkcast to hear the interview. Have something to add to the discussion? Ideas for future interviews? Post a comment below. If you use iTunes, you can subscribe to get new episodes delivered straight to your computer every week.