Haiti: Where Has All the Money Gone? – Vijaya Ramachandran and Julie Walz

Vijaya RamachandranSince the 2010 earthquake, $6 billion has been disbursed in official aid to help the people of Haiti. Nearly all of it has gone to intermediaries such as international non-governmental organizations (NGOs) and private contractors. Yet there has been a surprising lack of reporting on how the money has been spent. CGD senior fellow Vijaya Ramachandran and research assistant Julie Walz try to follow the money in a new CGD policy paper: “Haiti: Where Has All the Money Gone?” They joined me on this week’s Wonkcast to explain their findings.

“The answer is we don't know what's happened to the money since it's been disbursed to NGOs and private contractors,” Vijaya says. “We know that they’re operating projects in Haiti - hundreds if not thousands of projects—but because there's an overall lack of evaluation either from the NGO side or the private contractor side, it's very hard to tell what has actually happened to the livelihoods and level of income of most Haitians.”

Julie says that a leaked contract from a USAID contractor working in Haiti demonstrates the opacity of the current system. The contractor, she says, “is supposed to provide bi-weekly and quarterly reports on who their subcontractors are and where the money's actually going. But this information is not publicly released and even USAID has stated on its website that they have no capacity to monitor subcontracts. They have no capacity to determine to whom the money from the contractors is going.”

The policy paper suggests three recommendations to improve tracking of foreign assistance to Haiti and thereby improve the results for the Haitian people.

First, funders should insist upon more and better independent evaluations of NGO and contractor activities, says Vijay, who lists six key criteria to get the most out of such evaluations. “It is taxpayer money,” she says. “It doesn't have to be in any elaborate format, all they have to do is release the data. How many lives have been saved? How many bed nets have been purchased?How much food has been distributed?”

Second, those funding or providing services in Haiti should report their activities in the format established by the International Aid Transparency Initiative (IATI), which provides a common accounting standard for aid disbursements. One simple move would constitute a big step forward: USAID, the single largest funder in Haiti, should announce that IATI compliance is a prerequisite for receiving future U.S. funds.

The final recommendation, encouraging the Haitian government to procure services through competitive bidding, starting with pilot projects, is an attempt to include Haiti in the process of its own recovery.

“Right now what we've got is a process dominated by donors and NGOs,” Vijaya says. “The government is almost a bystander. If we can pilot some projects where the government can seek the services of NGOs through contracts, I think that would help increase the accountability of NGOs and private contractors providing the services. It would also enable the Haitian government to build some control over the process of how much services are delivered, reduce replication, and maybe increase efficiency and accountability in the long run.”

According to Vijaya, the propensity of the United States to disburse money to intermediaries instead of the government of Haiti is based on longstanding U.S. distrust of the Haitian government.

“I think the government of Haiti has more capacity than we have estimated. Donors need to try harder to disperse more money to the government of Haiti. The government of Haiti made some requests, for example, to rebuild the government hospital in Port au Prince, and to do some other things, and those were denied in favor of NGOs. I think we could carry out a couple of pilots around some very basic health services. It is worth trying, because in the long run Haiti should not be the republic of NGOs.”

My thanks to Alex Gordon for editing the Wonkcast, and Aaron King for a draft of this blog post.