A little over a year ago, I invited Nancy Birdsall, founding president of the Center for Global Development, to join me on the Wonkcast to talk about her big new idea, Cash on Delivery Aid (COD Aid), an innovative approach to the delivery of foreign assistance. COD Aid has since gained a lot of traction, so I invited Nancy back to update us on recent developments, including a planned pilot program in Ethiopia.
For those new to the concept, I start by asking Nancy to explain the problems with traditional aid approaches, and how COD aid would solve these. Too often, she says, aid is given based on priorities set by funders who care more about how their money is spent than what outcomes it produces. COD Aid focuses on outcomes by making aid transfers contingent on yearly incremental improvements in an agreed indicator, such as the number of kids who complete primary school and take a test. (For much more on COD Aid, see here.)
Nancy tells me there was initially some pushback to the idea of COD from the donor community, but she insists this is an approach which cannot be overlooked. “[COD] shouldn’t be seen as a substitute for all other aid, but as a compliment to current flows,” she says. “This is an idea that needs to be tried and learned from.”
Lately resistance has turned to interest. Nancy recently returned from London where she presented the approach to the UK’s Department of International Development, which has is preparing to sponsor the Ethiopia pilot.
“In the UK and increasingly in Germany and with some private foundations in the U.S., the discourse on COD Aid is changing from ‘what are the problems’ to ‘we can do this!’” says Nancy.
She explains plans for the DfID pilot program in Ethiopia, which is being designed to increase incentives for teachers to keep girls in middle school and complete their exams successfully. Nancy hopes that the program will encourage officials to get more engaged in figuring out why girls aren’t attending school and to find effective solutions to the problem.
Wrapping up, we discuss some of the exciting ways in which COD has caught fire in other development sectors. Researchers are working on applying the concept to reductions in maternal mortality, anti-tobacco efforts, prevention of HIV/AIDS, and access to clean water.
“The idea…has always been that COD Aid would inspire all kinds of permutations and combinations that focus more on the system and the relationship between donors and recipients,” says Nancy. “We are certainly pleased to see that more people are beginning to focus on outcomes and results.”
My thanks to Will McKitterick for his production assistance on the Wonkcast recording and for assistance in drafting this blog post. If you have iTunes, you can subscribe to get new episodes delivered straight to your computer every week.