Monthly Archives: August 2011

Humanitarian needs and the way we fund the Horn of Africa

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Some important annual milestones for needs based humanitarian donor budgeting just passed: the publication of the 2011 Global Humanitarian Assistance Report and the Mid Year review of the OCHA Consolidated Appeals.

The GHA report analyses the available data on humanitarian funding. It informs you on the reality of funding, in contrast with the fluidity of donor declarations and promises. Donors with a high media visibility might turn out to have low commitments . As an operator in the field, it tells you who funds what where. Compared to other sectors, funding seems to move in a direction where, according to the GHD consensus, more efficient humanitarian assistance is possible. The mid year review gives a snapshot of the needs and funding shortfalls in the different crises, as it is reported through the UN-system.
One of the aims of both documents is to get a better allocation of resources, to have more predictability and better match the donor budgets with the needs.

Indeed, the unspoken consensus on humanitarian assistance is that humanitarian assistance is a moral imperative, a human right, stronger than the “human rights”. When the shit really hits the fan, we will come and help you out. You can count on it. Everywhere. Anywhere. You will get at least what is promised in the Sphere standards. We will not let you sink lower. Your life and dignity will be protected.

Therefore, humanitarian assistance should be organised more like an insurance than like a charity. What is the current mechanics of humanitarian funding, and how is the political economy now, and what should change to become more like an insurance?

The mechanics: The budget cycle
The donor budget cycle starts for most government donors in march of the year before. The first draft of annual (or rolling multi annual) budget is prepared before the mid-year review is received. The only data on needs available are those from the year before. The budget is approved around November in countries with a working government, meaning before Common Appeal is even shared. The input for the budget cycle comes from the common appeal for the year before the budget. Even the review comes too late. The budget cycle is conducive for stable, long term investment in an insurance like scheme, with stable funding.

The mechanics: sudden disasters: the additional funds delusion
When a sudden overwhelming disaster strikes funding of the humanitarian budget is redirected to this new need. Most donors provide with a reserve of 20 % of their budget for sudden onset disasters.
Calls will be placed to liberate “additional funds”. These funds will come in the first place of course from the budgets within the same programme: the allocations for flexible funding or for complex crisis response that was not yet paid in the same year.These other crises will be “forgotten”: all attention goes to the media hog.
If the situation is politically overwhelming, the head of the humanitarian department will have a good hand to fight for additional budgets from other programmes. These will normally be development budgets. Unspent development funds will be transferred to humanitarian assistance. It is extremely rare budgets from outside the development sphere (e.g. unemployment benefits) get transferred to the humanitarian budget for a crisis.

Political economy for budgeting based on sudden disaster spending
This approach leads to an incentive structure for the level of the humanitarian budget that runs against the consensus on humanitarian assistance as a right:
The visibility of complex crisis and predictable funding is limited
The politically experienced needs are mostly in sudden onset disasters.
When it comes to “important crises” the voted humanitarian budget is irrelevant. You could as well accept the need for flexibility, and scrape the money together when disaster strikes. It will make you look good.

The political economy of spending in sudden onset disasters pushes against the principles of Good Humanitarian Donorship and pushes the long term budget provisions down.
Why would you have a high humanitarian budget if you can have a cabinet meeting with media coverage and add from other budgets when there is a political need? In this reasoning, the humanitarian needs are secondary.
It is indeed remarkable that countries with a “presidential” approach to humanitarian spending have lower annual budgets, but also have troops on standby when CNN is filming.

It is normal that the public and even most politicians think humanitarian assistance happens meanly in natural disasters, while in reality 80 % of the funds is spent in complex crises, mostly in civil war zones.

However, something more is at work. I like to call it the incredible moral fibre of the humanitarian donor and agency administration. In some countries, the flexible funding of needs based allocation mechanisms is and stays well funded. Moreover, disaster preparedness and prevention get a good funding, inspite of the political economy.

An alternative approach? Funding instruments
The humanitarian operations by the main actors have moved fast towards an accountable system trying to deliver services according to standards.

Donors should fund instruments that build up reserves and allocate towards the most important needs today in the shifting humanitarian crises. These instruments should be accountable and look for efficiently delivered effectiveness.

There is already an interlocking system with enough redundancy that does just this:
The CERF, DREF and ICRC core funding act as a global system of insurance for humanitarian needs. They can act in sudden disasters and fund forgotten long-term crises.
Most humanitarian agencies have a flexible fund for allocation according to needs. The UNICEF thematic fund for humanitarian assistance, IRA at WFP, SFERA at the FAO, etc.
ECHO acts like one giant needs based fund, with good management practices, oversight and quality control.
There are country level pooled funds and Emergency Response funds.

Apart from funding “needs based”instruments a donor will have to keep some hands on presence in crises that are perceived as important: human solidarity must be done and must be seen to be done. This should not obscure that working through insurance-like mechanisms is far superior when talking about efficiency and effectiveness.

However, there is little political gain in funding these instruments: when the list comes out of donor support for disaster relief, the budget will be spent, and there are no more funds available for bringing your country in the spotlight. Responsible donors and agencies manage however to keep up this kind of funding.

One fund or interlocking systems ?
Politically, the creation of one big fund seems interesting. . It would simplify the message and management for the donors. One check every year. However, in order to have an innovative, learning system, with enough redundancy to pick up the slag when one actor fails, a further development based on interlocking and sometimes competing mechanisms seems indicated.

Insurances need assurances: blank checks or value for money?
However, there is one issue with these instruments: most of them start from the hypothesis that all actors in humanitarian assistance deliver quality and value for money. Comparative evaluations and competitive bidding on value for money are rare. Most attention goes to effectiveness, not to efficiency within a certain quality standard for effectiveness. The instruments for creating instruments for assurance on value for money exist however: there are standards for service delivery and accountability, that could be used for diving prices down and quality delivery up.

These assurances will be the cornerstone towards an insurance-like system

Including preparedness and prevention
Like every insurance, there should be in-build incentives for preparedness and prevention spending, as one of the most efficient humanitarian approaches.

Pushing Good Humanitarian Donorship
The gatekeepers for information should brainwash the politicians and the general public by highlighting the positive contribution of flexible accountable and needs based instruments. The current practices by the main humanitarian actors are more geared towards monetising sudden onset crises, hoping it sticks into the general budget. This should be an active approach, worth a significant portion of the budget.

Some possibilities are obvious:
Ocha should, for every crisis, mention first the contributors to CERF; the same could be requested from ICRC for core and IFRC for DREF. There should be an effort also by teh EU to highlight the importance of flexible funding above ad hoc funding.
Pressure should be as little as possible on “additional funding” the pressure should be to increase the budget for needs based funds. Even pressure for flexible funding to agencies does not have the necessary flexibility to respond exactly to the needs.
The overall budget should be used in rankings. This is why GHA is so important. Rankings per crisis are important, but should be presented always with overall rankings.
To move to an insurance thinking, contributions could be presented preferably as a part of the GNP or per capita, instead of on an absolute basis.

What matters for increasing the humanitarian budget?
An increase in the humanitarian donor budget will not be directly caused by an increase in humanitarian needs. It will depend in the first place on the importance a donor country gives to humanitarian assistance in general. It will be based on the conviction that Humanitarian assistance is a right. It will depend on conviction of the politicians and the general public that assistance should be given more, and that the money is well spend.

This means that the moral case for assistance must be promoted until it becomes a consensus, first in each country, second globally.

It also means that vetting humanitarian partners is necessary. An insurance type of coverage is only possible with decent standards. Standards for service delivery, accountability and evaluation make it possible to compare the operations of the different actors, Multilaterals and INGOs. It does not mean that data or evaluations will convince anybody, it means that those advocating the moral case can do so from the high ground, knowing the tax payers’ money will be well spent.

The biggest enemy for this approach could be the NGO, or multilateral that can make a killing with ad hoc funding.

Markets in everything: 2021: the secondary market for development products.

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Francis Watanabe is project portfolio manager for the government. He acquires development interventions on the secondary market, to add to his portfolio on early child development. Innovators, like the Gates Foundation or Oxfam, or even local governments, start up their interventions, and after the first rated evaluation sell them off to the highest bidder on the secondary market. Interventions from a reliable provider, with a good results projection and long life span are in high demand. Buyers normally will pay for all the investments and overhead, and are prepared to pay the innovator for the further project management. The management fee for high yielding projects can be set quite high. Private sector innovators with a good success rate can earn a good living, and in some sectors, like micro-finance, most innovators are from the private sector. In early child development however, most innovators are former NGOs or foundations.

Watanabe is expected to reach a very good results/cost ratio for his portfolio, better than the average from the donor group, so he cannot just rely on market data. He also has to research on the latest scientific findings and try to identify upcoming new techniques or new innovators. He can also improve his ratings by identifying local champions in difficult environments. Real bargains can be concluded when other countries decide to switch to other priorities, and they offload their old portfolio.

Thanks to the secondary market approach, most donors have managed to improve the development results of their work with a factor two or even three, all on a stable budget.

It seems like this market approach just had to happen when the different building blocks for the system were available:

  • In order to have a functional market, knowledge asymmetry should be solved as much as possible. The transparency drive in development funding provided the information needed. The International Aid Transparency Initiative lead to the availability of data on every intervention by every actor in a comparable way. IATI started just did this.
  • The results based approach lead to a system where interventions should deliver on the promised results.
  • Standards in results reporting and impact evaluations led to the rating of projects for a specific development outcome. Independent rating agencies emerged from evaluation and audit consultancies.

The acceptance of the Sphere standard as the absolute poverty line set a baseline and brought it all together.

The real breakthrough came with the sphere standards, setting concrete lines for absolute poverty. Donors wanted to spend the bulk of their money on palpable morality & evidence based interventions for the poor, instead of for vague institutional goals or long term elusive economical growth.

Inevitably once the results based approach was accepted, coördination and partnership moved from the agenda. Indeed, as ownership and the “do no harm principle”were part of the basic set of principles, debating coördination and partnership was not necessary any more. Any intervention bypassing ownership issues would get a bad rating for sustainability. Partnerships and coördination became more organic: it had to serve the development goals. Pragmatically the operators moved from partnership to competition and back again, according to the needs of the beneficiaries.

However, still a hefty 30 % of the interventions happen outside of the system. This is normal, as most of the interventions that don’t cover basic services are more difficult to assess on their results potential and their value would be too difficult to estimate. Indeed: important work still happens in the rule of law, security, democracy, governance and economic development. However, a secondary market for this type of projects still seems a few decades away.

The Black Rabbit and Permaculture

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I have been very quiet on my blog lately, as I was totally absorbed by my garden. It is the first time in many years I am living in a home with a real garden where I can grow my produce and I enjoy every minute of it. As I vaguely remember being an agricultural engineer, with some solid experience with small-scale farming systems in Latin America and Africa, I was excited to get on with it. although I must admit that there has been a lot of sowing and growing, but not yet a bountiful harvest.Apparently, the thinking in agriculture from those traditional smallholders has seeped into me. Central is the quest for maximize the use of available resources (land, harvest residue, water) instead of just keeping them organised. .As leeks will be far apart for most of their growing season, why not growing radish, cress or even carrots in between them? Can I diminish the evaporation from the beans by growing a row of corn around them? Mulching with lawn clippings or with wood chippings? What about damage of blackbirds, snails, slugs, Cabbage whites?
Why should I grow dwarf beans when I can have beanstalks? I am also trying just to accept my loss when plague strikes, and apply some tricks to save water. The limits of my environment show starkly, and I should get some pesticides or fertilizer if I want to get really impressive results. But why should I.  I enjoy the constant experimentation, without a trace of RCT.Just now I learned that there seems to be a movement applying these central-African approaches: permaculture.

However, this kind of thinking doesn’t go down well in my more traditionally minded environment. My chaotic patches of multiple-layered inter-cropping systems are just not done. Uniform plots wit mono-cultures and straight lines are the rule.

On top of this new obsession with gardening, I started to sport again, as my tendonitis finally abated. No marathons for me any more, but I am building up to do some “sprint triathlons”. OK, that is only one eighth. This morning I was biking on a lonely bike-path along the canal, when I was surprised to see the rabbits lost all their fear for cyclists. It was there I saw the Black Rabbit. Just one black rabbit among its grey brothers and sisters. It might be the one who got away. Perhaps the group has lost the “wild”factor through interbreeding with tame animals. I wonder what will happen when the hunting season arrives. Although, I guess humans don’t hunt from bicycles.

The Sphere Project: Minimum Standards in Humanitarian Response and the Poverty Line.

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The Sphere standards and humanitarian efficiency.

The latest edition of the Sphere Handbook was presented on the 23rd of June, and the more I read it and think about it, the more relevant I find this standard.

“The Sphere Handbook is a voluntary code and self-regulatory tool for quality and accountability[…] The Handbook does not offer practical guidance on how to provide certain services […] it explains what needs to be in place in order to ensure a life with dignity for the affected population.”

The standard is based on the experiences in the field of some of the main actors in Humanitarian assistance, and prefers localization above rigid compliance. It sets practical service levels on everything from protection, coördination, water, sanitation and hygiene, food security and nutrition to shelter and health services, but it leaves it open to the actors to decide how to reach these service levels, leaving room for innovation and improvisation. The “do no harm”principle refers explicitly to the strengthening of local institutions.

Although it is a voluntary code, a generally accepted standard is a god-send for evaluators. Suddenly interventions of different organisation can be compared against the same standard. While in the past evaluations were rarely comparing the efficiency and effectivity of different actors, this becomes feasible. Although the Sphere standards are voluntary, they will become the yardstick against which to measure outcomes.

It is difficult to underestimate the potential effect of having a common standard for evaluating outcomes in driving the quality and efficiency of humanitarian interventions. NGOs will be able to prove how much better their cost/benefit ratio is when compared to multilateral agencies. iNGOs will be able to prove the need for international staff to reach the required quality. Where efficiency and quality gains are possible, the policy for outsourcing and in-sourcing will be scrutinized.

The Sphere standard will be a “living” standard, but it should be rigid enough to drive the accountability an innovation processes.

Looking at the past months, I am surprised to find only limited enthusiasm with the results-based crowd for the Sphere standards.

The Sphere standards and the development paradigm

The sphere standards belong squarely in the humanitarian paradigm. Humanitarian assistance is a moral imperative. The aid is aimed at saving lives, alleviate suffering and preserve human dignity. The support should be given in a neutral and impartial way.

Mentioning the Sphere standards in relation to the development paradigm is not considered appropriate. Indeed: development is seldom framed as only a moral imperative. It rests on the crossroads of different values. The definition of development aid is vague and mixes values (gender equality, human rights,…) with economical development (poverty reduction, infrastructure,…) and governance. Often, in the presentation of development cooperation, poverty alleviation is linked to economic results and even to direct interests for the population in the North, such as getting rich by having more markets or the need to limit immigration. By definition, the actual development interventions are not the result of a single moral imperative, but the result of a political compromise between the needs of the population, the needs of the different local institutions and political powers, and the needs of the international actors.

Within the development paradigm, as there is always an interplay of factors, it is difficult to focus the intervention every actor on its comparative advantage. Institution building is particularly difficult, and national governments are supposed to deliver sophisticated services before they even can deliver the basic functions of the state, like security and the rule of law. Foreign donors try their hand at poverty alleviation, institution building, governance and economic growth, sometimes with little to show for.

In some failed states, this means that the only basic services available are those provided by the humanitarian actors, while development assistance focuses on elusive institution building goals. The poorest of the poor, living with less than Sphere standard level services, are out in the cold. However, the moral imperative to help these poor still stands. The moral imperative ruling humanitarian assistance, should protect everybody in a situation that normally leads to humanitarian interventions, even if the state would like to build institutions one day.

The necessity to assure that the poor receive this basic level of services is recognised by Paul Collier in the Bottom Billion, where he advocates for alternative service delivery mechanisms, and the added value for focusing aid on the poor is highlighted by Owen Barder in his presentation to the British House of Lords.

With the Sphere standards, there exists a framework to prioritize assistance according to the needs to the poorest, based on a moral imperative. Once the conditions improve, the more complex development priority setting could take over.

The Sphere standard as an absolute poverty line

The current international poverty line (was it US$1.25 or 2?) is only used as an indicator for poverty. If you are below this line, it doesn’t really help you. Being poor is not leading to any specific action of the international community. On the other hand, there are also the Millennium Development Goals that set benchmarks for overall government action, but little that tells a poor what he could expect as services.

Moving to the Sphere standard for service delivery to the poor, would create instantly a well defined program. It would also solve the moral issue concerning the pockets of poverty in middle income.

Is it necessary to put the Sphere standard on the agenda in Busan? I think so.