Not longer, but deeper commitments for more aid predictability

It is a truth universally acknowledged, that one of the major problems in development is the unpredictability of aid. It is taken on face value that this can be reached by introducing long-term commitments, 3-4 years, and preferably beyond. It seems to me this is the wrong approach. Deepening commitments would lead to more predictability. If badly done, long-term commitments could lead to even less predictability.

Lessons from Egypt
William Easterly wrote a nice summary on why autocrats eventually fail to adapt to changing circumstances. They can deliver immobility which is often misread for stability. It is not: with the end of the reign comes inevitably the disruption and chaos: the necessary changes are too important to implement through mere evolution. Dinosaurs don’t evolve into mammals, they are too far gone on a path that was right under different conditions in another era. Long term immobility is not always good for development. Long term predictability should rather be an engagement than a cast in stone approach.

Lessons from the UK budget discussions.
The UK-civil servants don’t get nervous because the government’s budget is annual. This is strange: their salaries are approved annually by something unpredictable as a MP. Their whole livelihood depends on it, they have no plan B, and they don’t panic.

This is because most of the budget (perhaps something like 85 %, I made the numbers up, don’t quote me on them, you get the picture) is based on a sturdy consensus in the society, beyond parties. Another 10 % is deeply entrenched with the current majority. This leaves only 5 % discretionary spending. Those are the nervous people, mostly on a short term contract.

Typically, in the donor development budget, over a legislature, apart from the “assessed” or negotiated contributions to the World Bank, the EU and the UN, nearly everything is discretionary. Longer-term programmes are as discretionary as the short-term ones. Only a wide consensus on the development budget would move it away from this haphazard spending.

The European Commission creates their policy in such a participatory way. They bring on board input from assessments and evaluations, the 27 governments, the civil society and parliament, before proposing a way forward. And after only two years there is a mid-term review. A programme based on such a wide consensus has more chance to be predictable and long-term than a programme built on the wish of a single politician. Such a broad based program can be predictable, even if all the engagements coming from it are short term.

Stop-start development
With a longer term commitment to a country, near the end of the commitment period, a thorough assessment will take place.
Firstly the donor will asses whether they want to stay engaged in the country. The results of the current programme will inform this donor decision, together with factors beyond the country (herd thinking among donors, new themes coming up, other countries become a donor darling, etc. ).
Secondly there must be decided whether the sectors and regions of engagement will stay the same, and thirdly whether they will do the same things in the same way within the sectors.
The result is, from the viewpoint of the recipient in a specific intervention, mostly a lottery. The success or failure of the programme itself will play only a limited role in the decision whether to drop it.
The process can be compared to the end of a regime. It is often preferred to start from a blank slate than to build on what was done earlier.

The cost of continuity and the cost of disruption
For the poor in the third world, continuity is central to development results. Startup costs are notoriously high, there is a learning curve, and development results must not only be obtained, but also made permanent and institutionalised.
The political economy on the donor side is not in line with the needs of the poor. The political benefit of development results is notoriously low for the donor, while the political benefit from aid announcements is high.
As donors are spread thinly over a multitude of sectors, political visibility is obtained by announcing reforms and new programmes, not by pledging continuity of engagement, nor by highlighting results.

Unacceptable reporting requirements
Long-term commitments span 3 to 4 years. This means they sit astride on 2 donor legislatures, and 2 postings of donor officials. Donor reporting “should be” limited, as this leads to “too much transaction costs” (how much does it really cost to forward an internal report? Or even, to publish it on the Internet?). This means that in a 3 year program, the first report that arrives at the donors’ desk arrives after 15 months, and is not acted upon before the project is half way. As international agreements go, they are executed without too much questioning: the cost of concluding them was too high. Abandoning an agreement is not good. As development is innovative, this means that normally the project will not be reassessed and rewired for success after 6 months of failure. The project will only be reported on after 1.5 years, and will probably continue for the last 1.5 years after the first annual report was received as it is too late to save the project anyway. Depth of commitment means close monitoring, in order to understand and allow change as it is necessary.

The evolving consensus: don’t become a dinosaur.
A short feedback loop for the donor would help him to steer its commitments towards his “comfort zone”. The areas of division of labour where the donor finds an internal consensus that they are committed. Annually, the choices in who does what, where, could be reviewed and fine tuned. Evaluations should inform this process at every turn, but also the opinions of the opposition. Rolling programmes become the norm.

After some evolution, the programmes should stabilize around some areas of commitment, where this donor can act predictably. Other areas, where this donor cannot reach this consensus, should probably be left to other actors who can. Like in Humanitarian Assistance, where the Central Emergency Response Fund has the role of rapid response and gap-filling where there are unaddressed needs, the World Bank and other development partners could play this role in development.

In search of a deeper commitment: identities count.
Long term predictability can only exist if the donor country builds a deep internal consensus on what, where and how needs to be done by whom. This commitment must go beyond principles, as it is possible to do wildly different things from year to year within the same principles. It probably must be hands on. The example of the Dutch in a former era comes to mind. They used to be the one stop shop for engagement, expertise and funding on everything water.
Depth of engagement is not synonymous for micro-management. As donors stop spreading themselves thinly, they will understand better the need for local ownership for getting results. Donor support should evolve from the evil stepmother, nagging the partner at every step, to the fairy godmother, empowering the partner to accomplish what they long for, and live happily ever after.

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The Fragmentation of Humanitarian Aid: Market failure leads to planning and broken networks.

Is Fragmentation a solution or a problem?
One of the main reasons the donor community pushes for reform in the humanitarian aid sector is the fragmentation of the services. As an antidote for fragmentation, coordination is proposed. The conventional narrative says that small interventions and fragmented approaches are inefficient. If this is the case, a market approach to the allocation of funds, where efficiency is rewarded, would create incentives to consolidate, as it would be more efficient to have less actors. Currently the system seems to fragment even further, even while high level declarations are signed to vowing to stop the fragmented service delivery.Making the system work as a market, with incentives to make it more responsive to efficiency gains would improving the results of the system as a whole. Self regulating systems of incentives normally work better for complex systems than crude top down regulation by decree.

In this blog I will try to determine whether the current humanitarian system can be defined as a market geared towards better results, and identify possible incentives to make it respond better.

Competitive markets and market concentration

A normal market has a few market leaders and a long tail. The redundancy of the market (more providers providing the same service) is not seen as a problem, but as an assurance for getting best value for money. The long tail is for practical purposes irrelevant, but it guarantees that special niches can be covered, and the big actors are kept on their toes, because the small firms could always challenge them if they manage to innovate or produce better.

An example of such a market is the one for PCs: The top 4 manufacturers produce 60 % of the PCs, the 6th a meagre 5.3 %, and all the thousands of others combined master 1/3rd of the market.

Computers are of a decent quality, and there is innovation leading to better, and cheaper computers.

Table 1
Preliminary Worldwide PC Vendor Unit Shipment Estimates for 3Q10 (Units)

Company 3Q10 Shipments 3Q10 Market Share (%) 3Q09 Shipments 3Q09 Market Share (%) 3Q09-3Q10 Growth (%)
HP 15,431,749 17.5 15,513,420 18.9 -0.5
Acer 11,527,716 13.1 11,726,586 14.3 -1.7
Dell 10,816,474 12.2 9,908,099 12.1 9.2
Lenovo 9,140,778 10.4 6,871,379 8.4 33.0
Asus 4,793,186 5.4 3,911,263 4.8 22.5
Toshiba 4,695,600 5.3 4,014,945 4.9 17.0
Others 31,896,091 36.1 30,106,333 36.7 5.9
Total 88,301,595 100.0 82,052,026 100.0 7.6

Note: Data includes desk-based PCs and mobile PCs.
Source: Gartner (October 2010)

However, fragmentation in the development world seems not to deliver this kind of expected results. Why?

The humanitarian market: perceptions of fragmentation and of competition
Looking at Humanitarian Assistance funding , which is (imperfectly) documented through the FTS system managed by OCHA, we find for 2010 a total funding of USD 7 billion.

Appealing Organisation Funding 2010 (million USD) % of total funding
All others (636 organisations) 1.507 22 %
WHO 127 2 %
UNRWA 163 2 %
IOM 219 3 %
FAO 229 3 %
UNHCR 574 8 %
UNICEF 740 11 %
WFP 3.403 49 %
Total 6,963

100 %

Data: FTS, Summary of requirements and contributions – per Appealing Organisation in 2010, dd. 9/02/2011. Note: the data don’t show all the contributions to MSF nor ICRC, 2 important actors in the field. It is possible that some NGO-funding is not reported through FTS, however, at least donor government contributions are well reported, as donors want all their contributions to show for international forums.

On first sight, this distribution looks wrongly like a normal market, with some market leaders and a long tail. There would be some risks for monopoly abuse by WF. The top 7 organisations deliver 78 % of the assistance. The Herfindahl-Index (HHI) is 26.2, which hints to an extremely concentrated market. The PC-market has only a HHI of about 8.

  • A HHI index below 10 % indicates a highly competitive index.
  • A HHI index between 10 to 18 % (or 1,000 to 1,800) indicates moderate concentration.
  • A HHI index above 18 % indicates high concentration

On closer inspection however, the humanitarian system is not one market at all.

Indeed, WFP is dealing only with food security and logistics. UNICEF with water and Children, UNHCR with refugee camps. The next organisation dealing with food security (as only one of its activities) would be Oxfam UK recieving only 0.8 % of the total contributions. Less than 1/50th of WFP. The top 7 organisations are all UN-entities focusing on a UN-given mandate, in theory not competing with each other. For execution those UN-entities rely partly on the other actors at the bottom of the pile.

Fragmentation within the sector: on what basis are NGOs selected by donors?
Humanitarian aid is organised per sector, with a UN-agency (sometimes assisted by an NGO) as “cluster lead”. The cluster lead has “only” the power of its mandate, its financial means and capacity.

Within the main sectors dominated by the UN-agencies, there is little fragmentation. There is domination by the big players and not enough competition to have a real market. The humanitarian field the cluster leads, such as UNICEF, WFP and UNHCR, receive five to ten times the amount of funding of the main NGOs competing in the same field. In the food sector this phenomenon is the most striking, with 3/4 of the funding through WFP, and an extremely concentrated market with an HHI of 70. In the Water and Sanitation sector were actors in essence do the same job, there were 162 actors in 2010 (data of 09/02/2011), the cluster lead, UNICEF, gets 39% of the resources, followed on a distance by Oxfam GB (6.7%), Solidarités (2.9 %). This leads to a HHI of 16.4, still highly concentrated.

However, the cluster cannot be seen as one market: The UN-agencies get often their funding through core resources or separate funds. This means we should split the data in 2: The UN-agencies are a separate market from “the others”.
When excluding UNICEF from this health sector analysis, the HHI drops to an unheard of 2.98. This means the market is splintered. This is a sign of little return to size. The market does not reward any possible economies of scale. For the other sectors (health, protection, shelter, coordination) the relative weight of the UN-cluster lead is lower, but the NGO-field is as fragmented.

More analysis is needed to explain this phenomenon, as it is evident that there are economies of scale in the sector, but apparently they are not rewarded by the market.

Looking at the water-data per donor, the level where the market operates seems to be the donor level. For most donors, 4 sets of partners can be identified:

  1. the UN-agencies and the Red cross
  2. Some international NGOs probably with a local presence in the donor country.
  3. Donor country specific NGOs
  4. Possibly, some crisis specific NGOs.

Each donor has its own specific funding pattern. Sometimes there is a high weight of UN-agencies and i-NGOs, sometimes the sectors with most needs prevail, more often than not, at least part of the money is spread over donor country NGOs.

The water market for NGOs apparently is not a single market, but a set of unrelated markets per donor and per set of partners.

This means that the market push towards more quality and efficiency work only within the small donor specific markets. However, at this level, the “partnership” approach could lead to an approach where the allocation is rather spread on basis of negotiation than on selection. The market model would be a cartel.

The role of the UN-cluster leads
From the data, it seems that the NGO-funding and the UN must be considered as separate markets, even with different funding sources. Indeed, there is little evidence that the donors in general (except perhaps for some exceptions, like the CRF, or ECHO) have the wherewithal to allocate funds on basis of quality and results alone.

One hypothesis that the donor governments de facto consider the services delivered by the main UN-entities as a “utility”, a service that is part of “global governance”, a near natural monopoly. The reasons why they continue to fund the small fry are unclear from the data. It could be that they need the visibility possibly through national NGOs for internal reasons, or they might want to keep the UN-entities on their toes by providing some competition and variety of actors. If they want to deliver competition for results, the system does not seem to reward the better organisations by letting them grow. If they want to keep variety of actors, they would strengthen the hand of the NGOs better if they did not fragment them so much.
With the overwhelming part of the funding for the crucial sectors going to the UN-cluster leads, it is notable that coördination, the elimination of overlaps and filling of gaps, is still perceived as a major problem. The impact of other players in areas dominated by the big entities should be limited at best. Especially in the “life saving”sectors.

However, it is possible that the small outfits are many times as efficient as the UN-entities, showing an impact that is way more important than their share of the funding. It might also be possible that there is a perceived lack of coördination, as the visibility of the small NGOs tends to be bigger than the visibility per unit of funding of the juggernauts.

The selection of NGOs by the donors
A visit to the website of ECHO (the Humanitarian Office of the European Commission) on their partnerships is revealing. On the 8th of February 2011, ECHO worked with 191 partners. On first sight, this looks like a crowded field. However, looking per member state, there are only on average 7 partners per member state. The UK alone fields some 40 NGOs, but most member states have only a few ECHO-accredited NGOs.
Within the NGO-group a hopeful tendency shows up: Most national NGOs are local branches of international outfits, with a good reputation and internal quality control systems. This means that the perceived field fragmentation might be partly a ploy from the NGOs to deliver their quality work as one, while authorizing the individual donors to shine. They “game” the system by obtaining funds thanks to their national identity and results through their global organisation.

We conclude from the FTS data that the donors don’t base their selection procedures for NGOs only on the GHD indicators (needs based, capacity of executing agency, effectiveness), but add to it, sometimes even as a prerequisite, the nationality of the provider. Different choices of partners could be acceptable if each donor would focus on a different market: a sub-sector where it takes on its responsibility in the framework of division of labour. This seems not to be the case: donor nationality is not a result area in humanitarian assistance.

The fragmentation per nationality is a concern for the quality of the humanitarian assistance. Donors don’t play their role in the oversight of the funding, as they observe only a narrow slice of the market. If the prerequisite for the allocation of resources is the geographic location of the branch in the north, the importance of other parameters, such as services to the beneficiaries, quality, transparency and efficiency goes down.

The pressure for consolidation in order to get to optimum scale is stopped in favour of the pressure to stay fragmented to maximize national donor resources. Maintaining the status quo on the division of funding is an act of survival for the individual splinters: people can lose their job. In this environment a small NGO will rather seek rents and single sourced funding rather than risk its own survival by moving to a more competitive global environment. Results focus is not in the interest of most of the NGO-players in the sector.

When donors reserve 20 % to the NGO-sector, but every donor finances a different set of NGOs, while they finance the same group of UN-entities, Red cross and MSF, the NGO-sector will be too fragmented to play a relevant political role as it is difficult to project power as a splintered group.

The way forward
To improve the humanitarian results for the beneficiaries, the problem area is the NGO-sector.
The selection of NGOs should be aimed at the general principles for government spending: best value for money and transparency through competition. Selection should be rigorous on basis of criteria that are relevant for the beneficiaries. The market for NGOs must be widened, preferably to the global level, to make it possible for NGOs to reap economies of scale. The needs for national “visibility” could be addressed through the active promotion of national chapters of international NGOs. Such a system would not eliminate small, effective or specialized NGOs, but would lead to more consolidation where this would lead to more efficiency.

Some possible action points:

  • Assure that the funding to NGOs is based on criteria of efficiency, quality and value for money.
    1. Make projects, reports, data, evaluations comparable across donors by using standard forms and data.
    2. Consider support to national NGOs without competition from iNGOs as tied aid for OCDE/DAC
    3. Fund only interventions  you can actually monitor as a donor. with a minimal size, and leave it to flexible funds, or strong actors to fill the gaps. (Correction: some small interventions by niche specialists are crucial. I would not want to cause them to lose funding).
  • Abandon direct funding to NGOs by donor governments, and fund them only through needs based allocation systems, such as thematic funds, CERF or ERF.

In the short term, dealing with the UN-system seems to need rather an evolutionary approach than a revolutionary approach. In the long run, if NGOs become more competitive, the system will have to be reformed completely.

Possible ways forward for UN-funding :

  1. Accept the role of the UN-entities as humanitarian utilities and regulate them as such. Allocate them the near monopoly they already enjoy now, but assure the drive for more efficiency by e.g. a outcome and impact evaluation, outsourcing functions for more results at a lower cost.
  2. Separate the UN-monopoly from their operations outside of their UN-monopoly; fund the monopoly as an utility, and open the rest to global competition with the NGOs.
  3. Introduce competition on basis of quality and efficiency of the organisations. This should lead to a more diverse market, with less monopoly power of the UN-entities. Levers for maintaining coördination should be build in this system.
  4. Continue the same system, with a near monopoly of the cluster lead and limited direct funding to NGOs, but assure that the choice of the NGOs is based on criteria of efficiency and quality. This would lead to more innovation while keeping a good overall coördination through the UN.

In general, when funding a specific crisis, the best results for the beneficiaries should be obtained by considering the 4 sets of partners as one market. In the light of the limited donor capacity in most countries, it can be argued that the direct funding of local partners is not feasible for each donor.

Conclusion : the collapse of complex systems
The organisation of humanitarian assistance is for the moment not based on a global market. the market is fragmented on the donor level and per set of partners: UN-system, national NGOs, International NGOs, crisis specific partners.

Within sectors calls for better regulation and a recognition of the role of the UN-entity as a “utility”delivering humanitarian assistance.

The funding of NGOs is problematic. There is a place for a competent NGO-sector, but the donor incentives create a lot of dead wood in this sector. The current system stands in the way of an evolution towards better learning, quality and efficiency. It is the funding by the donors, that leads to the current fragmentation in NGO-resources. The donors will have to reassess their funding model completely to work towards more efficiency and better results instead of against it. Otherwise the fragmentation of the NGO-sector can only increase, while the efficiency of the NGO-sector will diminish. The legitimacy of humanitarian aid itself will be under fire. Funding outside the UN-coordinated system, for ICRC and MSF as a more accountable option, could counterbalance this trend.

In order to move away from the current equilibrium, Donors should select their partners on basis of their results and not on basis of their nationality. They should be able to compare different actors with the same yardstick. A first step would be to introduce a level playing field for accepting, assessing, monitoring and evaluating interventions.

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Energy efficiency is the way to go.

A new article in the New Scientist claims that efficiency gains alone could cut world energy demands by three-quarters.

This is, of course extremely relevant for everybody in the development sector, as we tend to be cought in the maelstrom of environmental innovation, while savings are probably the more efficient way forward. Especially for the poor we like to use as guinea pigs for technology that fails in the rich world.

It seems to me that the sectors with strong commercial interests, such as wind energy, or construction, do get a lot of airtime, while other techniques don’t get any airtime at all.

Bringing down the energy bill with about 20 % of an old house in an area with harsh winters can be done by any of the following investments:

  • New triple glazing and suppression of draughts
  • Roof or ceiling insulation
  • Wearing warm underwear (lowering the room temperature with 3 degrees)
  • Wall insulation
  • Heating only the rooms where you need higher temperature.
  • Getting rid of the draughts

I did not hear about a subsidy for underwear yet. However, this intervention is by large the most economical one.

We will not run out of oil, it will get more expensive as it runs scarce. Progressively more alternatives will become economical, but to overall the price of using energy will become higher. This upward trend will be slower than wat could be expected with only oil as a source, as new energy sources become available.

As the prices go up, we will not only have to consider using better technology, we will also have to consider to just stop doing the activity we were going to do, when other pathways are open to us.

Like putting on underwear when the temperature drops or not installing a heated jacuzzi in the bathroom.

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Mainstreaming revisited

Bottom Up Thinking blogs about a “development effectiveness officer“, a person who walks around to incite people to do what they should do if they would be doing their job.
It is a recurrent problem with all “mainstreaming” issues. It is “a job well done” to taken environment, women , equity, drr, into account every time when it is relevant. NOT doing so is bad work. Taking it into account when it is NOT relevant is lack of focus and bad work. If there would be some weeding out of bad programs based on the results they get, people would learn fast to integrate everything that is needed to have a successful outcome .

When mainstreaming an issue, the focus moves from the success for the main goal of the project, to success in mainstreaming. The selection of successful interventions is not made based on the expected results for the objectives, but on “making the right noises”. A mainstreaming agenda is developed, with mainstreaming experts. This has a tendency to lead to “best practices” based on confirmation bias, and one size fits all projects.

However, mainstreaming issues are often serious problems needing attention. Just stopping the current approach will not make them go away. I don’t really have an answer to how to approach it, but like Bottom Up Thinking, I don’t feel comfortable by the steamroller political correctness the current approach seems to imply.

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The Armdroids are coming

There is an interesting article at the Harvard Business review on ” The fall of Wintel and the rise of the Armdroids” .

It is interesting how history repeats itself. Only a few years ago, at the start of the PC-era, the Intel processor was not the only game in town, neither was the Microsoft Operating system. The Wintel combination won the PC wars, because they delivered a platform for innovation. They provided a reliable backdrop of operating system and processor, around which an evolving ecosystem of peripheral hardware and useful programs could be built.

Bad programs don’t get a chance, because someone else will come up with an alternative fast.

Now the same is happening in the Mobile and tablet world: the platform combining the ARM processor and the Android operating system poised to win the mobile platform war because it leaves most room for innovation on hardware and software. This is the strength of standards and platforms: the platform itself might be static, but only when there is a level playing field you can compete of quality and cost. Without a platform and standards, there is a confusopoly. In a confusopoly, innovation is not necessary, because products cannot be compared. The market is shared, not competed for.

In development and humanitarian assistance, the lack of a common platform for evaluating results and impact is notorious. This is why fragmentation doesn’t lead to evolution and  division of labour, because the competition for resources is not based on measurable indicators such as the quality and cost/benefit analysis, but instead on “other” criteria, such as the nationality of the NGO, the domestic sensitivities of the donor, etc.

The more the focus moves to common platforms and results measurement, the more results and learning can be expected.

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Data warehouse for project proposals in humanitarian assistance

I posted the following at Opendata, please, if you are a programmer, contribute:

Proof of concept: Data warehouse for project proposals in humanitarian assistance:

For the moment nearly every donor and every UN-agency requires project forms to be filled according to their own template. They are quite strict on this, and non-compliance leads to delays in approval or even refusal.

When analysing the requirements however, it is obvious that the content in most forms is for 90 % the same. It should be possible to use a common database, with 90 % common data, and the additional data depending on the needs of the donor.

The application would be a website, where the applicant chooses first the donor he wishes to apply for. The webpage will let him fill in the form for this donor, but save the data in a common database. In an official version, it would be possible to submit from the site electronically to the donor.

If the application is unsuccessful, the applicant would be able to choose in a new donor, and fill in only the missing fields, without the need to reformat everything.

When this application would be accepted by the donors and NGOs alike, the project data would authorize learning to a very high degree: most open data efforts only make metadata available, like budgets, and project title. With this data warehouse coördination and comparative evaluation would be much facilitated, as all data are in the same format.

The proof of concept would bring together the forms of the major humanitarian donors: ECHO (European Commission), USAID, DFID, Sida, Germany.

Cheers, Samwise.gardner@gmail.com

This effort could provide the ” hardware” (ok, technically software) of the “new accountability paradigm to reflect the reality of the Aid Industrial Complex“, and links up with the IATI effort for transparency.

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A new year, a new donor budget and the fallacy of additional resources

Donor budgets are annual and modular. The legislation ruling these budgets covers normally all expenditures in all departments. This means expectations on donor flexibility are often unrealistic. While the role of parliaments in poor countries might be taken into account, often the role of donor legislation, parliaments in the donor countries and the limited importance of development in donor country political priority setting are often forgotten.

A budget in most countries is annual. This means a budget starting in January is normally proposed by the desk officer in March, April, balanced for priorities within the hierarchy and government and finally discussed, amended and approved by the parliament around November. The actual calendar depends on the donor. From that moment on, the allocation for departments, programmes, budget lines and even individual allocations is fixed for the rest of the year. Changes are still possible. However, the procedures can be difficult. In most countries, the legislation supports limiting expenditure and makes additional expenditure difficult. At the higher levels, there is a need to go back to the parliament, at the intermediate level, it might be necessary to go to the Chancellor of the Exchequer. At the lower levels, changes might be allowed within the department or even at the level of the desk officer.

Lessons learned:

  1. On the cabinet level, a government decides on the broad strokes. So the only cabinet level decision might be on the total Official Development Assistance budget for the year (allocation is annual, spending might be multi-annual). Within this budget, it is mostly the preserve of the Minister for development coöperation to make allocations.
  2. As most governments don’t allow the printing of money, additional funding for a development issue normally means savings within the same department. “Additional funding” for development is only possible if there is a disaster or other major event that convinces the parliament and the public to change its priorities, by reallocating e.g. national health service budget to disaster relief. There might be a constituency of potential health service clients who would oppose this move. International conferences, resolutions or best practices normally don’t qualify for getting this treatment. Real additional funding would e.g. mean that a government moves its benchmark for development spending up (e.g. from 0.7 % to 0.75 %).
  3. For all practical purposes, “Additional funding” for one development item, like climate change adaptation means to diminish the funding for less sexy development priorities, like primary education, health systems or democratic governance between elections. The call for additional funding is a call to diminish the funding for other development issues. The choices for savings are seldom explicit. How many people should we stop feeding to increase the funding for coördination?
  4. Who pays the piper calls it tune: If it is not on the budget, it is not important. If an item is recognized as a budget line or a programme in the official budget, it is ingrained in the DNA of the donor. Continuity is near guaranteed, even over the years. If there is only an agreement signed to give the item top priority, but there is no dedicated budget, allocation of scarce funding will be difficult. It will depend on the priority the desk officer can impose on his minister for actually paying up. However, being buried in the budget on a lower level might be useful to stay under the radar, e.g. when supporting innovative interventions with low political backing and public appeal.
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Sunday Paper – New Years’ edition

  • “Sunshine: at the IMF, of all Places”Economist’s View; A new paper argues that the best solution to a financial crisis like the one we just experienced is to increase the share of income going to labor: Sunshine: at the IMF, of all places, by Alex…
  • Where Does Hate Come From?Economist’s View; Daniel Little has a question: Hate as a social demographic : Every democracy I can think of has a meaningful (though usually small) proportion of citizens who fall on the extreme right by any standard: racist, White supremacist, hateful, anti-immigrant, anti-Semitic, anti-Muslim, nativist, nationalist, or violently anti-government individuals and groups. In the United States we have many, man…
  • Palestinians Must Be Free – By Ambassador Maen Rashid AreikatForeign Policy; Ignore the smoke screen thrown up by Israel and its apologists. The real reason for the lack of an enduring Mideast peace deal is the Israeli occupation.
  • The march of freedomAid Watch; All men are created equal. Except blacks. Except women. Except gays. American history shows the erosion of the Excepts, although never complete. Yesterday’s repeal of Don’t Ask, Don’t Tell was another small victory for freedom. Let’s celebrate, while never losing resolve to keep moving towards complete equality and liberty for All. Why even homophobes should celebrate gay rights victoriesAid Watch; One of my favorite Abraham Lincoln quotes: As I would not be a slave, so I would not be a master. This expresses my idea of democracy.If I claim the right to deny you rights, that sets the precedent…
  • Freedom from fear: Protecting people from one of the world’s most brutal rebel groupsFrom Poverty to Power by Duncan Green; Maya Mailer, Humanitarian and Conflict Policy Advisor Across central Africa, men, women and children live in fear of the Lord’s Resistance Army. This predatory group attacks women as they perform their daily tasks – fetching water or tending to their fields – and children returning from school. It abducts, mutilates, rapes and kills, using extreme violence against the most vulnerable. Surviv…
  • Assessing Humanitarian AidGlobal Development: Views from the Center; A lot can be said against the methodology DARA uses, and even against the results they publish (honestly, New Zealand doing better than the Netherlands?). However, the index is necessary and useful. Subscribing to principles, without creating a cost to the non-compliance is moot. DARA makes it worthwhile for a donor to comply, as non-compliance leads to dismal scores. Countries should get more detailed feedback, as they need to be able to explain the problems caused by the methodological issues, and address those that are caused by the lack of motivation to comply with the undersigned principles.
  • Local politics a tough nut to crackChris Blattman; Donors push “community driven development” programs largely to strengthen local institutional capacity, democracy, and inclusiveness. (Sometimes overlooking the fact that these three goals are not…
  • Development Policy Review, Theme Issue: Aid, Institutions and Governance – What Have We Learned – Resources – Overseas Development Institute (ODI)www.odi.org.uk; As part of ODI’s 50th anniversary celebrations, DPR has republished nine key articles in the field of aid, institutions and governance, with an introductory essay by former Editor David Booth.
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Darwin awards for international organisations and treaties

Chatting with a friend over lunch on what is real work and what is just unproductive time-filler, we touched upon the Food Aid Convention. If this international treaty would just vaporise without leaving a trace, the overall effect on food security would probably be positive, as this treaty promotes a one-size-fits-all supply driven approach to food assistance, and its renegotiating takes up a lot of time of food security professionals.

Wouldn’t a “Darwin Award for Development Treaties and Organisations” be useful, to bestow an award on those development organisations and treaties who, by simply obliterating themselves, would contribute more to the development goals they promote then by dragging on. Different from the Darwin award for humans, where the prize is only awarded posthumously, the prize will honor the laureates with the best potential for improvement of the development gene-pool, as, you know, international organisation never die.

When assessing the list of international treaties and organisations however, most of them seem, at least on first sight, to have a potential contribution to development. However, it is only as an insider you notice the disfunctionality of an institution. Probably some more informal get-togethers qualify, like the MOPAN group. The multilateral aid effectiveness exercise by the new government in the UK happening for the moment at DFID might provide some good data for awarding the price.

For my part, I would grant the Food Aid Convention this prize, any more takers?

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Results in HIV/AIDS interventions: Considerations on the need for a vertical approach in an horizontal world, and vice versa

Aids day
During Aids-day, the blogs proved that the debate between the believers in a vertical approach and the believers in a geographical approach rages on. I did not write on it before, because it is an issue with ramifications in all directions, and wonderful opportunities for tangents and meandering digressions. Most thinking is black and white: HIV/AIDS needs advocacy and a vertical approach otherwise it does not get the priority it deserves, or all development must be locally generated, and advocates should stay out.
I will try to be brief and as provocative as I can to highlight the need for a more instinctive and competitive approach on this divisive issue.
Conferences
I was working in the HIV/AIDS sector in South Africa, before Mbeki got internet-shavvy, and before the Global Fund For AIDS, TB and Malaria existed. It was a very frustrating experience. The South African government was hailed as one of the few Sub-Saharan governments with a decent policy, but rates of HIV-positive cases kept going up. Donors and the government were subsidizing mostly advocacy and awareness programs, and the responsible officials were often found in international conferences. In short, everything was politically correct, and nothing worked. Until GFATM was created. They had exotic ideas such as “evidence based” interventions. Things were falling into place when the price for drugs dropped too. Alternative reading: until Brazil and MSF got their way and cheap drugs.

Lesson 1: If there is an internationally recognized crisis, focused forceful global action can be useful.
Lesson 2: “Evidence based” interventions might have a bigger chance for success than doing whatever seems right when you are at it.
Lesson 3: Advocates can make a difference. Sometimes for the better.

Reform
Since the UN was created, there have been calls for reform, but here I am talking about 2004, with a donor drive for more streamlining amongst agencies. Smaller agencies should be integrated in the bigger ones. This would lead to more efficiency, as we all know that big bureaucracies, thanks to economies of scale, are more efficient than nimble organisations fighting for their survival. One of the agencies under fire was UNIFEM, The organisation that “provides financial and technical assistance to innovative programmes and strategies that promote women’s human rights, political participation and economic security.” It should have been merged with UNDP. One of the delegates of the G77 berated: all UN-agencies have been created because there was a good reason. So good a reason, that all MS in unanimity decided to create this organisation. Are you really sure that the situation of women has changed to such a degree that we don need this organisation any more?

Indeed only 6 years later, the same donors managed to create a bigger UN-women organisation, that should strengthen the original mandate of UNIFEM, and bring it to a larger scale.

Lesson 4: never thrust a donor (or anyone) that is sure about the next silver bullet
Lesson 5: Sometimes, if something is very important, you need to create a special tasks force to make it happen.
Lesson 6: Development fads come in tides, tides rolling in and out, a new tide rolling in…

Localizing
In the early years when I was working on HIV/AIDS in South Africa, it was amazing how many of the “good practices” were just copy paste from the interventions that were used in the HIV/AIDS communities on the West Coast. A group threatened by exclusion dominated by homosexuality and intravenous drug use, while in Africa victims were often heterosexual middle class. It was only when results were required that the programs got adapted.

Lesson 7: local actors seeking locally adapted solutions based on global knowledge works better than local solutions transplanted to a different ecosystem. Without good knowledge to start with, chances are good nothing will happen at all.
Lesson 8: never thrust donors or iNGOs that they are open for local input. If they think they have a silver bullet, they will push it, claiming it is localised.

Conclusions:

Lesson 9: global institutions should offer global knowledge and try to adapt catalytic operations to local circumstances. Acceptance and rolling out should be up to the local owners of the problem (if they find it is a problem).
Lesson 10: vertical and localized horizontal programs must coexist, and fight for attention. Having a dynamic of competition, where global, vertical programs must prove their mettle, and local horizontal programs are constantly challenged is a good thing.

Lesson 11: as a donor, you invest your money best where it delivers the most. Depending of the situation and the “maturity” of the issue, this can be a global vertical program, or a local operation, or anything in between. You should have thematic and geographical programmes with different goals competing for resources and attention.

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Sunday paper

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Should Multilateral aid have results?

Multilateral resource allocation: best practice approaches (Article – ODI Project Briefings 51, November 2010)

When DFID changes track on development, it is important to notice as DFID is one of the thought leaders among donor agencies. If ODI writes about it, it is important to notice, because ODI is one of the voices DFID is likely to follow. This is why the ODI project briefing “Multilateral resource allocation: best practice approaches for Multilateral resource allocation” is important. This is why the central thesis of the report, that multilateral results are difficult to quantify and we could settle for now for a transparent, quantifiable , auditable system, makes me uncomfortable. It seems an effort to plead for status quo. It outlines a superficially quantified and auditable system, but under the hood the data are subjective and debatable. More importantly, it sidelines the more important issue of results and effectiveness, because “objective measurement is difficult”.

Will this “best practice approach” lock the donors in a transparent system, taking away the pressure to move to better results? Will process and tools drive the donors for the foreseeable future instead of outcomes and results?

Governments have judged their private sector partners on their results and cost efficiency for years in a transparent way. Why would this be impossible for Multilateral Organisations (MO)? Choosing to fund organisations of which it is difficult to measure the results and effectiveness seems not a best practice. Perhaps we could measure the results by assessing the difference without funding? Is there another way? I think so.

The central problem with the thinking expressed in the briefing is the partnership approach, where an organisation is funded because of its institutional setup and not for its results. The funding becomes an entitlement that is not questioned. In a partnership approach, the UN-organisation has a role within the wider UN-system. This “ UN-system” however is a misconception: the UN-ecosystem is not a coherent system. To the contrary, each individual Multilateral Organisation was created by all member states because a certain distinct value, e.g. child care, or health standards, had to be addressed in its own sector, separately from the others. Those values stand on their own, and serve the global public needs only in this sector. In a sectoral approach or results based approach , the UN-organisation has a role within a certain sector (e.g. global public goods in health). You should assess the role of the organisation within this sector, and compare it to the alternatives in the sector. In a sectoral approach you are not expected to compare the performance across multilateral organisations, as there should be only one organisation in the sector fulfilling this role. You should not compare allocations among MOs, because they are in different sectors.

This choice between a partnership approach and a results based approach has important budgetary implications: in a results based approach there will be a funding balance sought among the different actors in the same sector, according to their contribution to the results. In the partnership approach the different UN-agencies will be funded from the UN-budget, and essentially compete with each other for funding. Within a partnership approach it is difficult to measure up which organisation is the most efficient; in a sectoral approach it is clear to most actors what global public good is needed and provided by the multilateral organisation.

For instance in the health sector, WHO is responsible for the global public goods such as the standard health procedures, but will also compete for operations with national governments, NGOs, the World Bank, and other UN-organisations such as UNICEF. Should we fund WHO for its “efficiency of procedures compared to the FAO” or should we fund them for the work they do in the sector?

Most Multilateral agencies have a creative approach to fundraising. While they pay lip-service to the UN-principles on funding, their fundraising is businesslike, and takes the reality of development funding into account. They try to cover all the markets:

  • Core funding is the bedrock of the organisation. This money mostly comes from multilateral budgets. Core budgets are supervised by the boards, and fund the administration, core responsibilities and whatever the board finds fit to approve.
  • Thematic funding gives flexibility within a sector. This money comes mostly from thematic funds from donors.
  • Project money can come from a myriad of donor budgets: multilateral budgets, thematic budgets, geographical budgets. The big money is in this line. A lot of small projects is together a lot of money. As administration is automated, the overhead per project is limited. The proof of this being that all organisations accept nearly all projects offered.

The objective is to maximise funding for the organisation. The board looks mostly into the core budget. Thematic spending is accounted for to the donor group that feeds this fund. Projects are on one by one accounted for. Most boards have no complete picture of what is happening. This gives management a lot of freedom.

The board members meanwhile, have seldom any management experience. The oversight happens mostly by diplomats who first defend the policy positions of their country and not by economists asking for efficient organisational management.

Another “best practice” approach

A results based approach to oversight on the multilateral organisations would start from a sector approach and define the role of the organisation within the sector.

Where the organisation really provides a global public good, the oversight should happen fully by the board. The funding allocation is very much like the funding for a government department in the home country: efficiency is a necessity, bud political priority and needs decide on the level of funding. Professionalisation of the board is necessary.

Where the organisation has a competitive edge for operations, they compete with other actors for funds. The picture is of course more blurred than this: they compete with the program country administration for direct funding through bilateral funds, but on the other hand coöperate with them too. The same happens with NGOs or the civil society.

It is in operations where the big money is. In operations results are measurable and can be compared with the results obtained by the other actors. Operations that can be done directly by other actors should not be single sourced to the multilateral agencies. By abandoning the push to form consortia and cartels in all areas, and stimulate competition instead, value for money would result, just like in all other government spending areas.

Compound indicators for meaningless conclusions

The five lenses approach, although it claims to be auditable, fails to be accountable as it fails to give “best value for money” being the measuring stick for government funding.

The five lenses measure clusters of related indicators in five different areas and bring them together in one evaluation framework. Eliminating competition and results from the framework means that funding will depend the quantification of often crowd-sourced assessments. Crowd sourcing can be useful, but is dangerous in areas where group think tends to occur, with development among government officials being certainly one of these areas.

The congruence with donor’s objectives is the first lens, and difficult to argue with. All donor funding should happen in line with the donor policy. If a donor funds against his own policy, well.

It seems incredible to find in the second lens, development effectiveness, only excuses for NOT measuring effectiveness. The lens is limited to process indicators like MEFF ( rule one of the logical framework: never make your means an objective) or MOPAN (crowd sourcing amongst donor diplomats). It could be seen as an insult by all the MOs who did work hard to get their indicators right and measure them.

What would be the outcome of the measurements in the third lens “role in the international architecture”? How do you distill an auditable number from these measures? It is remarkable how the role of “global public good provider” (appropriateness of the mandate) is mixed with the competitive role in the marked “alignment of activities with comparative advantage”. You would expect the board (with the donor included, and having a veto over all the decisions) to assure that the activities are aligned with the core mandate (I could expand on this one). These core activities should be well done, but without comparative advantage, because they fulfil a natural monopoly for the global public good. Comparative advantage is only relevant in sectors where there is competition, and not in the area where the organisation has a natural monopoly. Where there is comparative advantage, competition should play, and the funding should probably not be multilateral.

The fourth lens is also rather strange, as the potential for improvement is a reward for past bad management. Normally you would think past behaviour is seen as a proxy for the future. Those who reformed before have little scope for improvement. Moreover, it would also reward the organisations that can easily be instrumentalised by one donor, while the reform dynamic should mostly happen in the oversight bodies.

I am still wondering how scale made it as fifth lens. Indeed, it is more efficient for a donor to write 1 check of 1 billion than to write 1000 checks of a million, but the relationship with results is unclear to me. It is definitely easier to transform a small organisation than a big one. I wonder whether there is any link – all other parameters like professionalism and organisation the same – between size and efficiency. A small organisation with a focused mandate will probably be a lot more efficient than an unfocused sprawling dinosaur. However, a machine like WFP might be more efficient then an amateuristic outfit.

The total absence of the role of the oversight bodies in the document is worrying, and the prominent role given to informal donor gangs is a bad sign for the future of the multilateral system. The 5 lenses, without an assessment of the role in the boards, mean in practice that the donor and board member does not take responsibility for the management imposed on the organisation in the board.

Conclusion

The Multilateral Organisations have gone through important reforms, and some of them are more efficient than ever. Some Multilateral Organisations fulfil a central role in the development of the sector where they provide operations and global public goods. It is a disgrace not to reward them with funding in line with their results.

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Sunday Paper

Some articles to remember:

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It seemed like a good idea while we were at it: coordination instead of competition

A few months ago, Owen Barder wrote a ground-breaking article: Beyond Planning, Markets and Networks for Better Aid. As a development practitioner, being confronted with the latest ideas on best practices from ODI and the daily chores of coördination, there seems to be little movement towards a more market based approach. Does the following story seems familiar?

Programming for success:
A country has retrenched its administration heavily, and when the country gets clogged up with traffic jams, mostly because of the potholes, it finds no engineers left to advise it. Something must be done.
The first step is to bring the construction firms together and ask them to propose the legal standards for road construction.The second step is to ask the same industry to prepare an annual investment plan for road construction, to be proposed to the government. An industry commission is created to prioritize when the government budget is not enough. However, if the traffic jams don’t diminish, budget will rise.
In order to keep the road building effective the following measures will be taken:

  • All companies in the industry should get a piece of the pie. No exceptions made. No strong companies sidelining weaker ones.
  • Companies should have their own technical or geographical niche. As overlap is inefficient it will be eliminated, coördination at all levels will be needed to make sure there are no gaps nor overlaps.
  • In order to be sure everything runs smoothly, all planning decisions are taking in consensus among all companies involved. Work should be coördinated at all levels.

As there could be some questions on accountability, it is agreed that the different regions of the country will be represented in the respective boards of the companies, and the same governments can delegate politicians to sit in the management.

What is illegal in business is a good idea in development

The practices described above have been used in different sectors, the energy sector and arms industry most notably.

However, it is only in the development and humanitarian sector these practices are seen as conventional wisdom. In a business environment this approach would be illegal.
An overview:

  • The government has the obligation to follow up on the expenses made, to assure the products were delivered. This cannot be done without a minimum of technical capacity.
  • An industry writing its own legal standards or its own investment plan is a clear conflict of interest. Sitting on the board and on being part of the management equally.
  • A cartel is created to cut the pie, competition is eliminated
  • Within specific niches, monopolies are created.

Perhaps we should be more active in searching for alternative approaches to the current partnerships in development.

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The Sunday paper

  • The Climate Catastrophe Trail Leads to Our Doorstep – Believe It | David Wheeler | Global Development: Views from the Center
  • Promises promises: When politicians don’t deliverThe Essential Read Every politician knows that the key to winning elections is to make great promises. Campaigners promise to cure the ills of society including taxes, war, government corruption, and pollution. Instead, if elected, they will bring about vast improvements in education, employment, infrastructure, and the economy. The size of the elected office seems almost correlated with the size of the promise….
  • Why Have Mobile Phones Succeeded Where Other Technologies Have Not?Global Development: Views from the Center By Jenny Aker – A few weeks ago, I was sitting on a panel for a conference on Information and Communications Technology and Development.  The debate on my panel was a lively one, and came down to one issue:  Can information technology (by itself) lead to development?  Obviously there has been a lot of buzz about this topic
  • Succeed in Kindergarten, and You’re Set for LifeAid Watch. Horizontal axis: Kindergarten test scores; Vertical Axis: Earnings of Same Individuals at Ages 25-27 This blog has discussed how ancient history of countries and peoples affects development today. Now a new paper shows that your own ancient history also matters: your scores on Kindergarten tests are a good predictor of your earnings as an adult, along with other good adult outcomes. Raj Chett…
  • QuODA Moving ForwardGlobal Development: Views from the Center. By Rita Perakis – We’ve been getting a lot of feedback on the Quality of ODA (QuODA) assessment.  This post from the Development Policy blog shows how donor agencies can use our web tools to compare themselves against their peers and identify strengths and weaknesses. We hope readers will continue to use QuODA to learn about what constitutes “quality” [...]
  • The impact of house demolitions on Palestine suicide bombingChris Blattman. This paper examines whether house demolitions are an effective counterterrorism tactic against suicide terrorism. We link original longitudinal micro-level data on houses demolished by the Israeli…
  • Will the real bottom billion please stand up?Aid Thoughts. Count the poor. They are the ones dressed like Waldo A few years ago, Paul Collier used the term the bottom billion, to describe those living in poor, mostly African countries which had dim prospects for future growth. Thanks to the successful of the titular book, the term became ubiquitous in the development lingo, although it eventually morphed into a descriptor for the poorest billion in th…
  • Voting, misunderstoodSeth’s Blog. This year, fewer than 40% of voting age Americans will actually vote. A serious glitch in self-marketing, I think. If you don’t vote because you’re trying to teach politicians a lesson, you’re…
  • The Illusion Of ExpertiseThe Essential Read. When I was (much) younger, I believed that large multimillion and multibillion dollar companies were engines of discipline, efficiency, organization, and quality. How could they not be and still be as powerful and successful as they were? Then I went to work for one. And then I married someone who went to work for an even bigger one. And we discovered together that most businesses, in fact, suc…
  • Professional!Tales From the Hood. Required Background Reading: 1) New York Times online edition article by Nicholas Kristof, entitled “D.I.Y. Foreign Aid Revolution.” 2) Foreign Policy online response by Dave Algoso entitled “Don’t…
  • Postscript to “How Useful is Humanitarian Crowdsourcing”humanitarian.info. My article on crowdsourcing in emergencies, published on MobileActive last week, received a good number of intelligent comments. I’d like to thank all the commenters, who all raised valuable points that filled in gaps in my critique and helped to focus my thinking. My only regret is that nobody from Ushahidi had the time or [...]
  • It Is Not Too Late: Preparing for Asia’s Next Big Earthquake

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Development policy and evolution: does the donor public request impact or action?

Owen posted a very good presentation on evolution and development on his blog. Indeed, evolution, like the market, is an efficient way to find solutions to complex problems or to optimize resource allocation.

The subsequent discussion on his blog raised a few issues I would like to expand on, in addition to what I wrote before on evolution in development.

  • The evolutionary pressure is being steered by the public perception. Public perception evolves too. However, I do think this pressure is for the moment rather away from long-term results and towards short-term visible activity. Sorry.
  • Evolution works with selection of the fittest, not by coordinating, clustering and evolving the un-fit. The inclusive narrative for better aid might have to make room for an exclusive selection process. (see also “what don’t make sense in trade don’t make sense in aid”).
  • The path dependency of evolution can easily lead to sub-optimal results.
  • Every evolutionary process creates dinosaurs: creatures fit for the world of yesteryear. Who is your favorite development dinosaur?

This  entry is on public support for development results.

Is the public interested in results? I would not think so: for the donor public the perception of activity is more important than results. Indeed, it is easier to look professional than to be professional. If the donor public doesn’t experience the quality of the services you deliver, it is not economical at all to invest in real expertise and real results when you can invest in faking expertise and fake results. Most NGOs manage to look trustworthy enough to part people from their money. Not all of them are sufficiently accountable.

When disaster struck in Haiti on January the 12th 2010, it took less than 24 hours for donor countries to decide to send their rapid response teams to Haiti for search and rescue. This led to major congestion at the airport, and some spectacular saves by white knights in shining armour that were documented live on television. There were more than 222.000 death and 211 lives were saved by the international and national search and rescue teams. This would be 1 per thousand. There are no data available to me about people saved by their neighbours, as the efforts of Haitians were very much underreported on during this crisis. Would Haiti have been better off it they used the airspace for bringing in shelter, food, water?

In November 2010 a cholera epidemic struck, making more than 1000 victims, while there was clearly no adequate health services or humanitarian workers around. Oh yes, this one struck in West Africa, after the flooding there. The epidemic in Haiti, at the same time, with a few hundred victims got international coverage and full assistance of the international community.

“The public is genuinely moved by the suffering and wants to support poverty reduction” writes Owen in his post. However, as they don’t experience the services for poverty reduction , they are tending to ask for the second best: visible action. In this context, as the situation is still catastrophic, after years of aid, the current “professionals” are clearly not up to the job. Support for hands on volunteers or stars is a normal way out. As is the loathing of the aid establishment. While serious evaluations of the Haiti humanitarian intervention are rather positive (for a once in decades type of event), the public perception is negative. The concern of the public that the money is lining the pockets of agencies and governments, is a valid concern, but also a typical populist issue. In domestic politics this concern is seldom alleviated by information on audits or results. You don’t establish long-term trust with the public on basis of bureaucratic requirements, but on basis of  a long-term open communication strategy, or on basis of a charismatic communicator.

A logical response to the search for public approval is to deliver activity: approve more projects, do more field visits as a minister, or create high level events,  where the stars and politicians from all stripes come together to vow action. This is exactly what is often seen as the problem with Aid. In this context, the plans themselves decided on at the high level events are not relevant, as nobody will wait for the results on the hot topic of today anyway. Activity is also about moving on to the next big thing.

While populism on domestic issues runs sooner or later into the reality of undelivered services, this feedback loop is nonexistent in development, as the taxpayer pays for services for people far away.

If I am right about the political economy of the incentives for a short-term or top down approach, than the development community must start changing some parameters of the equation in order to work towards impact instead of the perception of activity. Change the environment to create evolutionary pressure in the other direction.

However the current reality is not as bleak as we could expect, so some things must be happening that work in favour of the support for a long-term impact geared approach.

The different actors are no blind victims to the incentives before them. Apparently, a lot of them are moral actors. Elected politicians can inform themselves and translate the short-term populist concern in a long-term commitment for results. The same is true about the activist journalists and stars with a long-term commitment, e.g. as UN-agency Ambassadors.

Like piloted by some of the more successful NGOs or agencies, there is a need for a professional outreach to the public. It seems to me that only approaches with this kind of outreach might have a long-term survival chance in the political arena. Even policies that are hugely successful, if they don’t communicate well, might be doomed.
This outreach should put the ad hoc issues and in a wider context. The approach of UNICEF or MSF comes to mind as successful to put a broad results based vision on the agenda. Meanwhile the donor governments seem to be hugely inefficient in explaining their policies to the wider public. The whole Paris agenda seems to be mostly ignored by the public, what seems to be a bad basis for long-term planning.

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Brooks’ law in aid plans : is more always merrier? gain goes down the drain.

Definition

Brooks’ law on software development says : “adding manpower to a late software project makes it later”. Brooks adds to his law that “Nine women can not make a baby in one month”. Is there a similar law for development?

I could propose two options:

  1. If results are elusive, adding an extra partner to an existing  coordination mechanism only detracts attention more from getting results.
  2. Adding untied development money to an acute conflict area makes the conflict more chronic.

While option 2 is tempting, I fear it would be difficult to prove this option in a way it would stand scrutiny; Option 1 is an  open door I want to walk through.

Of course, as Brooks himself states, the law is an “outrageous simplification”, and further points to two main factors that explain why his law works all too often (wikipedia) :

  1. It takes some time for the people added to a project to become productive. Brooks calls this the “ramp up” time. Software projects are complex engineering endeavors, and new workers on the project must first become educated about the work that has preceded them; this education requires diverting resources already working on the project, temporarily diminishing their productivity while the new workers are not yet contributing meaningfully. Each new worker also needs to integrate with a team composed of multiple engineers who must educate the new worker in their area of expertise in the code base, day by day. In addition to reducing the contribution of experienced workers (because of the need to train), new workers may even have negative contributions – for example, if they introduce bugs that move the project further from completion.
  2. Communication overheads increase as the number of people increases. The number of different communication channels increases along with the square of the number of people; doubling the number of people results in four times as many different conversations. Everyone working on the same task needs to keep in sync, so as more people are added they spend more time trying to find out what everyone else is doing.

The picture is easy to recognize : the 2 or three main players in a development field know each other so well they don need to meet except for a beer. Indeed: it is a jungle out there, and the fight for funding is harsh: you must know your competitors. The odd outsider claims there is a need for coordination and what used to be a working, informal process must be reported on and formalised.
The Lilliput  partner brings his “important” expertise and money on board, but must be consulted in all important matters. Everybody gets bogged down in coordination meetings.

Lilliput partners at the table

Just look at a typical picture concerning humanitarian assistance in 2009 to a country in Africa, Niger (FTS).The total recorded humanitarian aid was  57.83 million USD:

  1. Central Emergency Response Fund: 20.23 %
  2. USA: 17.07 %
  3. ECHO + other Commission (Europe) 20.76 %
  4. Japan:  6.92 %
  5. Belgium:  5.27 %
  6. France:  3.61 %
  7. Less then 1 %: Germany, Sweden, Switserland, UK
  8. Unearmarked allocation WFP:  3.14 %
  9. Carry over : 19.76 %

There is a good case for involving donors 1 to 3 in a coordination effort from the start. But what is the added value for the humanitarian results to invite one of the group 4 to 6? Sure they might have some specialised insights, but shouldn’t they be invited more punctually? And why invite the donors grouped under 7? Their contributions are close to the margin of error in the calculations of the others.

On the other hand, donors 4 to 6 have a very strong case to want to be involved, as they can free ride on the work done by the strong partners: studies, needs assessments, feedback from the field. Pure gold for the free rider. We might hope the donors grouped under 7 wouldn’t even bother.
Taking into account all coordination costs, it is probably better to keep the contribution of the fringe donors outside than to have them inside.

The picture for data per “appealing organisation” is as interesting:

  1. World Food Programme: 41.93
  2. UNICEF 17.83
  3. MSF: France, Switserland, Luxemburg, etc.  9.50
  4. Save the Children – UK  7.14
  5. Mercy corps  4.97
  6. Food & Agriculture Organization of the UN  4.38
  7. WHO  4.15
  8. Cooperative League of the USA  2.40
  9. Concern Worldwide  1.33
  10. Action contre la faim  1.13
  11. Less then 1 %: Luxemburg red cross, Oxfam UK, Medicins du monde france, French Red Cross, care international, Africare,

In the area of direct food assistance, USD 24.1  million has been contributed, of which USD 22.8 million was going to WFP, some 94 %. It seems coordination on food assistance is just a waste of time. For the overall effectiveness of food aid, the internal management of WFP activities is much more relevant than the effects coordination could have. Why is WFP a reluctant UN-reformer? Perhaps because they want to have results with the group they are supposed to help, hungry people, and not just with any nobody that might show up in the field claiming they distribute food.

I am not saying that the small agencies or small NGOs are irrelevant: far from that: they are the ones innovating, reaching the victims most difficult to reach, challenging the effectiveness and efficiency standards of the juggernauts (and dinosaurs). A coordination effort draws them in the mush that general consensus is, with a risk of conforming to the mainstream. It might even be a prerequisite for coordination to comply with what is generally accepted.  To get a share of the pie distributed at the coordination table, you have to pay the dues.  They could end up selling their soul for being allowed to play with the big boys.

Political economy of institutional coordination

It is not safe to assume that participants in a coordination mechanism share a common development goal. Indeed, sometimes one organisation is interested to push local ownership, while the other one pushes its own valuable and unique expertise. Coordination is more and more seen as an objective to aim for, not just as a means for better delivery

In our example, food assistance to Niger, the goal might be shared.
The different actors have some leeway to take decisions in country, but if push comes to shove, they are executing what their headquarters decide, sometimes in detail, sometimes only the general principles.

At the coordination table the organisations will do what they are supposed to do:

  • Pushing the mandate: Each NGO has a different political view on how society should work. This view will be different from the view of an international agency, guided by the General Assembly. Even within the UN, you might have a different focus between UNICEF and WFP on how to proceed. The goal is more to “trick” the others to your line of thought, as each partner has little authority to divert from their own mandate.
  • Dividing the loot: Coordination mechanisms are all about deciding what is important, and giving a place to each partner. In countries where there is an Emergency Response Fund or a pooled fund, the importance of getting the money becomes a matter of life and death for the organisation. If your specialised expertise is recognised as crucial to the strategy, it is like single sourcing a project.
  • There is no leadership that can enforce any compliance. You can say what you want, you don’t have to comply, the only pressure is peer pressure. This can be used to occupy a field before you are sure to have the capacity to deliver.

Moreover, the individual participants will have their own private agendas, priorities. Some might want to stay in the country for another year, others just want to leave. Alliances between institutions and friends are struck.

All these elements will be at play and deflect attention away from getting the results for the beneficiaries. In normal circumstances, the moral fibre of the humanitarian or development workers and institutions will limit the damage. With more partners, the risk to have somebody at the table who speaks only out of organisational self interest increases.

Cost of communication

In a typical humanitarian crisis, the UN classifies the aid in 11 sectors. Most organisations are active in more than one sector, so they must go to the different meetings. Agencies with a wide scope complain that up to 30 % of their in country management time is spent in coordination meetings (no hard data, no impact nor efficiency evaluations I know of). Smaller organisations could just stop working.  In an important humanitarian crisis, the number of international actors in a well funded crisis is important:  22 in Niger, more than 100 in the DRC. The number of permutations becomes infinite.
Jean-Michel Severino and Olivier Ray present this equation in a telling graph in their publication “The End of ODA (II): The Birth of Hypercollective Action”:

Conclusion

Should we coordinate?  Of course we must coordinate, but the objective must be more efficient aid, not coordination in itself. I would beg for more attention to levelling the playing field for all actors in the market by opening up all information, instead of trying to coordinate with everybody. Standardising information and have a transparent system for sharing is necessary for accountability purposes anyway, and could fulfil a lot of the needs that people wish to satisfy with coordination.  On the push for coordination at all costs, II would like to quote W.  Easterly in his immortal piece “Tower of Babble”:

“Coordination” and “partnership” are the equivalent in foreign aid of U.N. resolutions for world peace. Every different national donor, U.S. government bureaucracy, or private business has its own agenda, will not voluntarily sacrifice its own interests for some other organization, and there are no binding contracts to enforce any such sacrifices.

It seems Brooks’ law for development, including the caveat (“it is a gross simplification”) stands for development:

If developments results are elusive, adding an extra partner to an existing  coordination mechanism only detracts attention from getting results.

Moreover, the explanations stand in principle. In development there is also a third clause:

  1. It takes some time for the partner added to a coordination to become productive. This is is the “ramp up” time. Development programmes are complex endeavors, and new partners must first become educated about the work that has preceded them; this education requires diverting resources already working on the programme, temporarily diminishing their productivity while the new partners are not yet contributing meaningfully. Each new partner also needs to integrate with a team composed of multiple institutions who must educate the new partner  in their area of expertise in the sector, day by day. In addition to reducing the contribution of experienced partners (because of the need to train), new partners may even have negative contributions – for example, if they want to divert funding to their own organisations, or have a different viewpoint on development that move the programme further from completion.
  2. Communication overheads increase as the number of people increases. The number of different communication channels increases along with the square of the number of people; doubling the number of people results in four times as many different conversations. Everyone working on the same task needs to keep in sync, so as more people are added they spend more time trying to find out what everyone else is doing.
  3. The expected contribution of a partner to the totality – as much in expertise as in financial contributions, can be negligible, increasing the risk that point 1 and 2 outweigh the benefits of the extra partner.
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Donor projects: is money a placebo, attention the drug?

In development, local self reliance is often seen as the main long term objective, while the delivered “hardware”, bridges, roads, schooling, are just seen as stepping stones to the road of self reliance.

I would like to raise the following issue: when working with a local partner in a structured way, the donor attention sometimes has more impact than the money. This means the current indicators to measure development value, based on money spent, might be of little merit.

A classical logical framework approach, or even better, a participatory German ZOPP procedure, helps the local partner to analyse his own problems, and search for solutions. It means that in the startup phase of a project, the partner creates himself a project he fully identifies with and can believe in. Further down the line, external attention helps to keep the partner focused to reach the benchmarks of the project.
In my limited experience, the effect of the external attention to the problem at hand, has an important effect on the success of the programme, where the spending of donor money could sometimes rather distract than focus the minds.
Indeed, a limited project to address one issue in the health system, e.g. introducing a new approach to TB treatment, needs different inputs from the different actors in the health department. The donor money itself for this project is only a very limited contribution, compared to the need for focus of the higher management, the time the staff must spend on training, the cost of maintenance and use of health department buildings, etc. The mobilisation of these inputs does not depend on donor money, but on stakeholder motivation on all levels.
In a developing country the problem is often how to bring everything together and motivate the understaffed and underpaid stakeholders. One way to do it is to give recognition. The old fashioned way: doing site visits, meeting officials, holding joint events, bringing overseas visitors to a rural backwater.
Exactly these elements are, in the post Paris declaration world, classified as “transaction costs”. However, the field visits of the donor might for structural multi-stakeholder change processes be the most efficient input, while the money itself is mostly the grease to keep the machine running.
Of course, when the main problem is debt relief, or the need for a concrete bridge over a river, just paying attention will not solve much, but as social programs are more and more central in development, I just wonder whether anybody has more than anecdotal evidence on this effect, or whether I am just  a development romantic?
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Aid evolution: a system beyond planning, markets and networks

Local units obeying local incentives and rules1

I remember the bleak look of the supermarkets in Nicaragua in 1992. Only a few products were available, nearly all from the same low quality brands. So where should we buy diapers, baby toys?  I am speaking about the everyday things you need to run a household with two small kids. On the black market of course: the Mercado Oriental, where you ventured only with enough money to buy what you wanted. A market bustling with activity and offering products from all over the world. The government, which controlled a big chunk of the economy, trade, the borders, could not deliver simple products like diapers to the consumers, while the rough and bustling smugglers could.

Central in the concept of evolution is the principle that the result is not planned, but is obtained by local units obeying local rules and incentives, and each optimize their behavior to get for themselves optimal result, within the limits set by the rules. This is the secret of natural evolution, but also the way the Mercado Oriental could sell my kids a Korean bicycle.

The concept of evolution is interesting to apply to development processes, as it would turn the current paradigm on its head: a lot of proclaimed principles  work against the grain of the self interest of the actors, and by striving to commonly defined goals, the actors flock towards one-size fits all fads instead of trying to optimize the results of their own efforts. An evolutionary approach would make donors flock to high result areas, but also reward higher benefits when specializing in a less crowded area.

Beyond planning, markets and networks

Owen Barder wrote a thoughtful paper explaining exactly why it is important to move away from the current planning paradigm. In essence, the planning paradigm tries to ignore the political economy, the different interests at play in the aid environment. While a consensus is created at a higher level, the incentives to get low-level results are scant. Owen argues that instead of imposing a new plan, we should change the evolutionary pressures in order to get results where it matters, unleashing the powers of evolution by harnessing the potential of a market and network approach.

Perverse effects of joint agendas: the lemming effect.

Admitting that coordination problems are insoluble could point in a more fruitful direction, such as specializing more and then you won’t have to coordinate

As only a few aid agencies have the wherewithal for good research, the research of the World Bank and DFID is dominating the discourse on development. It is not surprising that the best course of action for a whale like the World bank is probably not the best course of action for a mountain goat like Luxembourg or Switzerland. Under the current paradigm, the Paris Declaration, this is largely ignored. All should invest more in basket funds and budget aid2. If a small donor would strive to get some expert knowledge in only a niche, like in land management in mountain areas, their credibility and added value would probable be way beyond their monetary contribution, while the value of money in a basket fund is never much beyond the nominal value. What is the best course of action for the World bank might not be the best for the recipients, nor the individual contributing donor. As the consensus tries to cover all aspects af development, it pushes the donor countries to spread their support thinly, towards all good causes. This is something where the World bank might strive for, but for a small donor it leads to a ridiculous number of small contributions.

At the same time, the current consensus leads donors to select the same donor darling countries, or the same sexy themes of gender and development. In the current paradigm, where the budget and not prior evaluation is the tool for deciding on an intervention, the donor has no incentives to search for his own niche.

The planning response to the lemming effect, where all donors fund the same interventions, is to create a trust fund, to support “underfunded” causes. A common complaint is indeed that some actors and causes are just not enough taken on board. The disadvantage of this kind of approach is its tendency to spread the money amongst all stakeholders (“more democratic than strategic”). It is just not done to judge the quality of the participating executing agencies. The possibility that nobody funds a project because of quality issues with the evidence base or the partner organisation is never really taken on board.

The social economy of incentives, rules and indicators

The current paradigm : an amount is a result; everybody using the same instruments and partners

A number is simple and authorises everybody to judge whether it is much or not. However, in development the amount invested is seldom related to the results. The drive for higher project amounts is not based on economies of scale, but rather on the capacity of donors to manage transactions. The difference in efficiency between interventions rank from micro-interventions with huge payback (e.g. the Sant’Egidio community succeeding peace negotiations in Mozambique) to huge interventions with catastrophic results (the US intervention in Vietnam?) with combination in between.

The current incentives are very much skewed to a lemming – like approach to development. A mono-culture of approaches and priorities. If an approach is “hot”, everybody wants to be in the picture and rushes to join the stampede. The incentives are important to do so. Indeed, as the electoral cycle of 4 years coincides with the rotation cycle of development staff, success is not in results, but in announcements, commitments and project start ups, in line with the issues the international seminar circuit agrees upon. You shine today, not in 4 years’ time. Everybody moved on by then. The rules on “good” donor behavior will stimulate the donors to walk jointly the same paths. The current rules that donors abide with are more about how do we do what, than what should we get to. Indeed, if the MDGs would be taken seriously as a basis, the interventions would fight child mortality directly, not basket funds based on long term comprehensive plans.

The current approach, is geared to joint photo-opportunities at coordinating events and funding complex “innovative financial products” such as pooled thrust funds, Cerfs and Errfs, with overall unclear oversight structures.This approach seems to contain risks for an elected official, as all politics are eventually local.

Like buying a government bond as an investment, following the crowd isn’t exactly a bad investment: the results will be dependable, but average. However, development needs bold initiatives, where high returns and failure are the two sides of the same coin, with evaluation as a way to flip it

From identity to added value

In development, like in business, an added investment should never be decided on the average return of the investment, but on the marginal return. What will be the real added value of a small donor topping up a World Bank effort and contribute 0.3 % to a trust fund for basket funding?  Wat is the benefit for a skilled plumber to start an Internet company, because the internet is where the money is? Would taking out a loan to invest in the internet startup be really the best the plumber can do?

What if a donor stopped caring about the effectiveness of the system as a whole, but looked at the results of his own money instead? Deciding on real evidence based results for the beneficiaries.

The main question should not be “what do the others do? ” but “where can I make a difference”. The Easterly post “Do what you are actually good at, or what you should be good at?“makes an eloquent case on New Zealand. But other examples abound: an analysis of the Netherlands development cooperation “less pretention, more ambition” advocates concentrating on what the Netherlands are actually good at, like water management, instead of just supporting the World Bank ideology of the day.

A focus on measuring and expected impact and evaluating results on a case by case basis should be central, in order to determine exactly how high the added value of the marginal investment is. The evidence base of effectiveness should replace the current set of proxy indicators for donor effectiveness, as they are contained in the Paris declaration or the Accra agenda for action.

For a donor politician, this seems an easy sell towards his voters: Our contribution to develpment will be linked to our national identity, like the Dutch building dykes, the New Zealanders training pacific students and helping sheep farming. We are our own man. And where we cannot help, yes, we just abstain or support whoever can do best.

notes

1 The greatest Show on earth, Richard Dawkins, 2009, p 218

2 Let alone the Paris declaration is mostly based on in house World Bank research that has been found inconclusive in subsequent World Bank research reviews.

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Civil society, or perhaps mercenaries. What are NGOs?

A Grimm fairy tale

While reading the Haiti Earthquake Flash Appeal 2010, I was surprised, after all these years of talk about local ownership, to find only a few local civil society organisations mentioned in the whole document. What is wrong here? Have the poor become less empowered over the years?

In the seventies and eighties, the rural areas of Central America were stirring. There were farmers’ unions creating savings and credit unions and mutual health insurance was starting up. The organisations of the poor professionalized, and linked up on national level. With economical self reliance came more political cloud.  This was hailed as the coming of a social democratic movement, comparable to how the poor were uplifted in Europe long time ago.

In the nineties however, these membership based service organisations were in decline. The treasurer ran off with the money, or some insolvent members took the whole system down. Meanwhile, (is correlation causation?) the Credit-NGOs took off on a large scale. NGOs, led by a professional board, and hiring experts for the field work, created credit systems all over the place with donor money, not limited by the savings they could gather. As the risk in taking credit is rather limited (it is another guy his money anyway) and the risk in depositing savings in a community managed structure is high, the creditworhty poor moved to the better option, leaving the cooperatives with heaps of bad credit and angry savers.
The same happened with farmers unions. Being part of a union for legal support spreads the risk amongst the members, but using a legal support NGO is without any risk for the individual poor. The outcome is simple: bye bye empowerment. The rural client-patron relationship between landlord and sharecropper moves towards a triangle, where the landlord and the legal NGO become the patron of the sharecropper. Is he better off now? yes, without any doubt. Did the poor become more self reliant and  powerful to negotiate his rights with the landlord and the other powers surrounding him? Doubtful.
While self organizing poor can be a threat for the powers that be, NGOs seldom are, although the NGOs might speak out forcefully.
A black and white picture, and the reality has a lot of shades of gray. However, if there is even some truth in it, NGOs can be counterproductive if self reliance is the goal of aid, as they make the self-organisation of the powerless more difficult. This leads to less accountable governance, a prerequisite for a more equitable society.

Legitimacy comes in different stripes

For the sake of this article, I would narrow down the definition of NGO to the typical organisation that receives donor aid: an organisation governed by a board that is self contained and not directly responding to the beneficiaries of the services the NGO offers.
Most civil society organisation are accountable to the (paying) membership. The chamber of commerce, the church, the union, even Greenpeace lives and dies with its active membership. It are also the members who receive the benefits provided by the organisation, such as an entry to heaven, business related information and lobbying or defense of the employee. NGOs are contractually accountable only to the donor providing the funding. I would like to define civil society, for this article, as such a membership based organisation. Although the press and the academia definitively are civil society, they are not captured by this definition.
In essence, if the organisation would die without donor funding (funding by a foreign power), it is not civil society, but it is still classified as an NGO.
A third important group active in development  is the private sector as such, and we might wondeer whether the typical NGO is not rather part of the private sector.
From the governance structure you know who will call the tune: “if you ask them to paint your bathroom, they will” claimed somebody about a competing NGO in South Africa. NGOs will be more popular with donors as they can focus on delivering on their project documents: no internal democracy, no unruly membership, no delays discussing project arrangements with the membership, just flawless execution, at a transparent price.
NGOs have no democratic legitimacy as they represent only themselves, however, their legitimacy can be very strong on other aspects. They can have strong financial systems and deliver the required results. Some NGOs, like e.g. Transparency International1 and many other local and international NGOs have a very strong moral legitimacy.
Community Based Organisations can be Civil Society or NGOs, depending on the governance structure. However, when local groups are serviced by national organisations, it is only when this larger organisation can qualify as civil society (with the local CBOs as members) there will be a counter-power holding  the national government accountable. If the servicing organisation is just a NGO, there is no democratic legitimacy, and no counter-power. Supporting efficient NGOs can cause the civil society to wither and will consequently strengthen the powers that be.

The problem is that taking a shortcut, bypassing international NGOs and supporting immediately the local NGOs, will not solve the legitimacy question.

The goal of development aid: self reliance

If the goal of development aid is to support the self reliance and self development of the poor, it is important to use NGOs for their skills, expertise and moral legitimacy for strengthening the civil society, and not just for the services they deliver. Even if this civil society is less than perfect in delivering themselves. Supporting NGOs in roles that compete with the role civil society normally plays should be shunned. NGOs are important, but only to a degree. Strengthening the NGO-sector is not a valid development goal, while strengthening a democratic civil society is.
Of course, the central problem is, that accountability to the beneficiaries is mostly an aftertought, and beneficiaries might not like the donor priorities.

notes

1 Amnesty International and the Red Cross movement are rather civil society organisations, as they are very much membership based.

See also on the goal of development and civil society: Global Dashboard: Aid: what is it good for?

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