The Challenge of Aid in Pakistan: Is Cash on Delivery Part of the Solution?

December 17, 2010

A thorny set of obstacles stands in the way of the United States and other donors as they try to scale up development spending in Pakistan. The sheer scale of the country’s population and development challenges requires effective mobilization of local resources and local institutions. Incentives for politicians to push for reform are weak. Monitoring spending is difficult, especially when it is spent through Pakistan’s own government. Donors and local stakeholders may disagree about which development projects are most needed.

A possible solution to these problems is Cash on Delivery Aid.In COD Aid, funders pay for measured and verified progress against anagreed-upon development outcome. The approach has been most clearlythought out in application to the education sector, but it can be appliedwhenever a donor and recipient can agree on a clear, measurable metricfor assessing progress.

This brief examines options for a COD Aid contract in Pakistan’s education sector and its potential benefits for improving the relationship between official donors and the government of Pakistan, and for increasing the effectiveness of aid spending in Pakistan.


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