Ideas to Action:

Independent research for global prosperity

William Savedoff

Senior Fellow at the Center for Global Development

Bill Savedoff is a senior fellow at the Center for Global Development where he works on issues of aid effectiveness and health policy. His current research focuses on the use of performance payments in aid programs and problems posed by corruption. At the Center, Savedoff played a leading role in the Evaluation Gap Initiative and co-authored Cash on Delivery Aid with Nancy Birdsall. Before joining the Center, Savedoff prepared, coordinated, and advised development projects in Latin America, Africa and Asia for the Inter-American Development Bank and the World Health Organization. As a Senior Partner at Social Insight, Savedoff worked for clients including the National Institutes of Health, Transparency International, and the World Bank.

The new leader of the Global Fund would do well to think
hard about why it was established in the first place: to avoid the rigid planning
and input-tracking approaches of other foreign aid institutions. The original
logic of the Global Fund model was to reward performance and, consequently, be
able to respond to country-led proposals and worry less about tracking
expenditures. This is the benefit of a real “results” focus – when money gets
paid out in relation to outputs (or better yet outcomes), it becomes less
critical to know exactly what the funds were spent on. My concern is that most
of the proposals being discussed (or implemented) by the Global Fund today would end up adopting
the approaches of other aid agencies – in which case the justification for a
separate fund simply disappears.

To realize the potential of its flexible and country-owned
model, the Global Fund needs to do two things: invest in measuring outcomes and
generate portfolio estimates of improper payments. First, it needs to invest
resources in independently verifying outcomes in its recipient countries. You
cannot pay against performance when performance remains unmeasured. And this,
unfortunately, is the situation in most countries. I am regularly surprised by reports
justifying disbursements or new grants on the basis of a country’s performance when
basic information about changes in prevalence are simply lacking.

The second thing the Global Fund needs is portfolio
estimates of improper payments. The Fund’s Office of the Inspector General is
doing a better job than most agencies in investigating and transparently
reporting its findings which you can find easily online.
However taken together, the reports still do not allow the Global Fund to
generate a representative estimate for its overall portfolio. The lack of an
overall estimate made it difficult to respond to sensationalist reports in early
2011 claiming that huge amounts of Global Fund money were being stolen. By
investigating an appropriately structured random sample of grants, the Global
Fund would be able to respond more convincingly to critics. It would also be
better positioned to manage risks in its portfolio without adopting the financial
controls and rigid procurement procedures that hamper other agencies.

The new head of the Global Fund has a small window of
opportunity to tackle these challenges. If he or she waits too long, the Global
Fund will never have the basic output and outcome data it needs to measure
country performance and the accumulation of audit reports without a portfolio
estimate could fuel cynicism and weaken fundraising.