Linking aid to results: why are some development workers anxious?

The Center for Global Development is working on an idea which they call Cash on Delivery aid, in which donors make a binding commitment to developing country governments to provide aid according to the outputs that the government delivers. I think this is a good idea in principle, and hope that it can be tested to see whether and how it could work in practice.  The UK Conservative party have said in their Green Paper that if they are elected they will use Cash on Delivery to link aid to results.

Linking aid more closely to results is attractive from many different perspectives.  My own view is that linking aid directly to results will help to change the politics of aid for donors. Many of the most egregiously ineffective behaviours in aid are a direct result of donors’ (very proper) need to show to their taxpayers how money has been used.  Because traditional aid is not directly linked to results, donors end up focusing on inputs and micromanaging how aid is spent instead, with all the obvious consequences for transactions costs, poor alignment with developing countries systems and priorities and lack of harmonisation.  If we could link aid more directly to results, I think donors will be freed from many of the political pressures they currently face to deliver aid badly; and it would be politically easier to defend large increases in aid budgets.

Other people support Cash on Delivery aid for other reasons.  Ministers and officials of developing country governments see it as a way to access more money without the attendant costs of conditionality and foreign interference in domestic policy.  Some people see results-based aid as a way to restore the accountability of developing country governments to their own citizens, a social contract in which aid donors too often inadvertently interfere.  Especially in the US, some people believe that linking aid to results can create stronger incentives for developing country governments to deliver high quality public services.  Others support Cash on Delivery because it will improve the allocation of aid resources, since money flows to the places where services are being delivered and away from the places where money is being wasted. With all these complementary reasons there appears to be the possibility of a broad coalition of people in favour of moving ahead with testing whether Cash on Delivery aid can work in practice.

But there is one group of people for whom these ideas seem to be quite unsettling: development professionals in aid agencies and NGOs.

I recently wrote a response to a brief by CAFOD about some possible concerns about Cash on Delivery aid.  As I was doing so I realised that the questions asked by some development professionals reveal some discomfort about the possible impact of results-based aid on the quality and content of their jobs.  The “risks” identified in the CAFOD brief are not primarily about the consequences for development but rather risks to the privileged position enjoyed by professional staff in aid agencies and NGOs.

You can judge for yourself whether I am caricaturing the risks set out in the CAFOD paper, but they essentially amount to this: under Cash on Delivery aid money would flow to those governments best able to make use of it; governments would have freedom to decide which services to provide and to whom; governments would be able to decide how to use resources; governments would be accountable for their choices and the results; and progress would be measured according to internationally-agreed targets for impact rather than inputs and intermediate targets negotiated behind closed doors.

All these are necessary steps towards the internationally-agreed agenda for more effective aid set out in Paris and Accra, and necessary for the emergence of capable, accountable and responsive states.  Yet when a mechanism is proposed that tries to organise the aid system in a way that means these things could start to come about, these consequences are described as “risks”.

At the heart of these anxieties, it seems to me, is a question about what sectoral advisers in aid agencies are meant to be doing.  Take education advisers, for example (I am not picking on this group in particular, but it happens that the current proposals for Cash on Delivery aid are being developed looking specifically at education.)  Many people who work for aid agencies managing aid programmes for education are themselves education professionals, often former teachers.  Deep down (sometimes also on the surface) many of them want to be educators, not managers of aid programmes.  They want to be involved designing the curriculum, reforming the pedagogic approach, training the teachers, buying textbooks, or improving the education management information systems.  But it is the job of a community to educate its young, not foreigners.  As managers of aid programmes the staff of aid agencies should be ensuring that aid is delivered in ways that increase the accountability of central and local government to the nation’s citizens, keeping transactions costs to a minimum, delivering aid in ways which support the evolution of country systems and priorities, ensuring that the money is used for the purposes intended by the funders, and showing what results have been achieved.

In short, managers of aid programmes should be focusing on the effectiveness of aid, not education policy.  If governments need technical advice on education, they can procure that separately, and get advice from people who are more trained to build capacity and who are properly accountable for doing so, not get it as a bundled free offer-that-they-cannot-refuse from the people managing their aid.  If it works as intended, Cash on Delivery aid would change the relationship between donors and governments and would turn development professionals back into aid managers instead of would-be educators.  And it is this consequence which, I believe, some people find unsettling.

Many of my best friends are development professionals, and I know that everyone who works in development (well, nearly everyone) has the interests of the poor at heart. They often genuinely believe that they need to retain a degree of  influence to ensure that developing countries make the kind of progress towards development that they (and I) want to see.  There is quite a close parallel with the evolution of the attitudes of politicians, some of whom I also know well and have known since they were young, idealistic students.  Nearly all politicians enter politics for the noblest of motives: to contribute to the improvement of the society in which they live.  To a very large extent they retain those values through their political career. But over time there can be a gradual erosion of the distinction in their minds between their own interests and the service they give to others: some politicians gradually come to think that increasing their own power is the service of others, because they believe that they will exercise that power better than anyone else.

Politicians are, of course, at their most dangerous when they can no longer distinguish their own interests from the interests of the people they are meant to serve.  Similarly we should be concerned when we hear development professionals identifying themselves as speaking for the poor, and arguing that they must retain influence (i.e. power) – purchased by the relative wealth of their country – to promote strategies which the country would not pursue on its own.

To be fair, I also know some development advisers who are focused on improving the effectiveness of aid, who are rightly aghast when they are asked to double up by providing advice on how to manage an education or health system.   If I may be permitted a partisan aside, my observation is that DFID sectoral advisers tend to be more respectful of the need to promote effective country systems for policy-making and accountability than professionals from some other donor organisations (both NGOs and official aid agencies), and they are less likely to interfere in the country’s policies and strategies.

This may seem like an elaborate point to build from an innocuous and fairly sensible CAFOD brief about Cash on Delivery aid.  But the risks identified by CAFOD, and the questions that have been raised elsewhere, would apply to any system of results-based aid that makes substantive progress towards giving governments more freedom to choose how to deliver their development programmes and making them more accountable to their own citizens for their own success and failure.   I think these concerns actually reveal a deep-seated tension between the internationally-agreed agenda for improving aid effectiveness, and the views and interests of development professionals charged with designing and implementing those reforms in practice.

11 comments on “Linking aid to results: why are some development workers anxious?”

  1. Great blog!

    Who can oppose rewarding outcomes? BUT measurement is tricky/dodgy even in the UK & reliable measurement requires democratic accountability and feedback and a lot of transparency. Not always 😉 present in developing countries. This is not mentioned in your blog, neither by CAFOD -I think.

    I feel like a reactionary and it does not feel good. However, my long and tedious work on performance management (including UK govt. targets) and on data (as a little boy in the Central Bank of Peru) leave me no option but to be a bit skeptic of cash on aid delivery without democratic accountability.

  2. Owen, thank you for your interesting and full response to the CAFOD briefing on Cash on Delivery Aid (COD) in your previous post. This provides some interesting points for the debate. However I am a bit confused by your assertion that the risks identified in our briefing “are not primarily about the consequences for development but rather risks to the privileged position enjoyed by professional staff in aid agencies and NGOs”.

    Your post raises some interesting points about why COD may be seen as a threat to a few people who work in government donor agencies and raises important points about incentives for such staff. However, to suggest that individuals within CAFOD are feeling these threats is to misunderstand the work of CAFOD.

    We are a partnership agency. We do not implement programmes directly but work with local civil society, particularly agencies of the Catholic Church. A large part of the work we do is to help these groups hold their governments to account so a move to COD aid, if it works as you say, could help support this work. I don’t think that roles within CAFOD would change significantly if this system was adopted.

    A discussion on incentives is a valid dimension but CAFOD’s arguments should be taken as a contribution to the debate rather than seen as motivated by this.

    Thanks Amy. I did not mean to imply that you personally, or anyone at CAFOD, felt threatened by results-based aid. I have never discussed results-based aid with you or anyone else at CAFOD so I would have no basis for thinking that. But the issues raised in your paper – which are consistent with some of the concerns expressed by other people in other forums – mainly boil down to the question of whether developing countries should be able to decide for themselves how to deliver services and to whom, and be accountable for that; or whether donors should continue to try to intervene in that process. Those are concerns that I hear raised by development professionals whose work might be affected by moving to results based aid in the way I describe. (They are people in NGOs as well as government agencies. I have heard several people in NGOs oppose results-based aid because the government, given a choice, might not choose to deliver services through them.) It is the motives and interests of these people that I am talking about, not yours. And, as I hope I made clear in the post, I think very highly of people who work in development, and there are many people who would take a very different view from the generalisation that I have presented here.

  3. Great blog post Owen.
    I definitely think COD aid merits piloting and studying. It has great potential to change aid relations for the better.
    Still, I have a nagging worry that comes from my familiarity with some negative repercussions of enhanced results focus in some health programs. What I’ve seen is that often an enhanced-results focus (with results measured in the most common and feasible ways – usually from household surveys) can lead to applying less systemic and less sustainable approaches to health problems. System-strengthening efforts that may benefit many health problems at once (say, improving drug supplies management and distribution systems; or changing the rules so that health workers with less training can do a broader range of tasks; or increasing the formation of health workers) won’t show up very easily in most of the results we monitor (since we rely mainly on household surveys, our results tend to be stuff like incidence of specific symptoms, or stated ownership and use of bednets, and services utilization). Because of this, an intense results focus often leads to focusing on more vertical and less sustainable approaches (e.g. campaign style immunization programs vs strengthening immunization within routine services; bednet handouts vs working to generate demand and use, as well as supply systems).
    Perhaps COD aid will generate pressure to come up with better results metrics and measures – though there is much effort already, and I’m not aware of any great strides forward.
    One important thing that needs to happen for us to do better in this regard is starting something like DHS surveys but for the health service/ product provision system. The info that you can get on systems functioning from households will never allow us to really reward sustainable health systems strengthening.

  4. Thank you for an interesting post and the comments. I wholeheartedly agree that we should be looking for more effective approaches to aid and that we should also examine the consequences – intended and unintended – of the new approaches.

    I have seen issues with the measurement, as mentioned in the first comment. For example, GAVI takes a performance-based measurement approach and I’ve seen countries falsely inflate their numbers so as to secure more GAVI support. My personal observations are backed up by a Lancet study (http://www.aegis.com/news/ap/2008/AP081240.html). I’ve also seen countries falsely deflate their numbers to maintain eligibility for GAVI funds. I’m not blaming GAVI for this; they are well aware of the limitations of the funding approach.

    I think April also makes a good point. If we look at education reform in the US, we see a good example of what she’s talking about. The Bush administration instituted a pay-for-performance approach by funding public schools based on standardized test performance. The result is that teachers teach to the test rather than teaching students to be critical thinkers. Another result is that courses that don’t directly affect test scores (e.g. music, health) are the first courses to be cut, despite their importance to developing well-rounded, productive members of society.

    I’m not saying that performance-based aid is a bad idea. I am saying that we should think about how the mechanisms provide incentives and what they provide incentive for.

  5. Any sense of whether donors will pay for governments to experiment with different approaches? Paying for results is a good thing, but nobody knows how to get to these results, so presumably some trial-and-error will be required. Yet even without the measurement costs, just changing the way business is done isn’t cheap. Is there startup money in this proposal?

  6. O

    This reminds me of the debate in the UK voluntary sector when NCVO (National Council for Voluntary Organisations) published a book on “Outcome Funding” from the US-based Rensselaerville Institute and invited the authors over to the UK.

    Not sure what came of it all, but it certainly provoked strong views on both sides of the debate.

    Looks from their website like it is still available:

    http://www.rinstitute.org/publication_detail.php?prodid=2

    James

  7. I think I’ve mentioned this before, but it seems relevant here and I was reminded of it after attending a conference on ‘public service behaviour’ (PSB). PSB is something that workers in the public sector are thought to possess, often by people who object to private sector style financial incentives coming in an obliterating all the nice PSB. But what is PSB? One answer is that you care about helping people, but if you cared about helping people you could choose to earn a lot of money and then donate to charitable organisations, or pay lots of taxes, rather than working trying to help people yourself. So maybe there’s something about what motivates people in ‘doing good’ jobs that has to do with wanting to do it themselves.

    I’m not sure this is terribly insightful, it’s just another way of describing/explaining the resistance to cash on delivery aid you report. I’m not sure whether one would say this tendency is so strong that you ought to give up on cash on delivery aid and go home, because the donors are never going to wear it, for this reason, or whether it simply explains how you have some barriers to over come, which can nonetheless be overcome.

    There now follows a cheap point – what would your CoD education donors do if it turned out the recipients were effectively educating their young citizens in creationism, and that homosexuals ought to be executed? It’s not so easy to focus on effectiveness and leave policy to recipients, when policy is what you are being effective at.

  8. I’m an experienced development worker who would love to see pay for performance/cash on delivery implemented and effective. Many of us are sick of all the undue focus on processes and to little focus on results.

    But let’s be clear. This is still mostly an untested concept. There are lots of devils in lots of details yet to be discovered. The key area is how you define and measure results. If not defined properly you still end up paying for processes (redefined as results) and not getting outcomes that matter. Reread your own blog on Targets, Owen, and all of those issues you rightly raise describe the risks involved in pay for performance.

    There are other issues of attribution. Will donors feel good about paying for results when there is evidence that it had nothing to do with what the government or implementing agency did, but was just good luck? And the opposite case– what if the implementing agency made a serious, best practice effort but didn’t get the desired results due to factors beyond its control– war, environmental disaster, etc.

    Jeff – I agree with this – especially that it is untested and that the devil is in the detail. I think we should test it. (Some of the points you raise are partly addressed in my response to the CAFOD brief.

  9. Isn’t there a questionable logic to this – if you are targeting aid towards the governments that produce the best results, doesn’t that miss out those most in need?

    Owen replies:

    Kate – CAFOD made a similar point in their brief on Cash on Delivery aid. Take a look at their brief, and my response, here.

    My view is that we need a simple mechanism (like Cash on Delivery, though it needs to be tested) that funnels aid to governments that can use it well, with the minimum of hassle and interference from outside; and a different funding mechanism for governments that cannot, or will not, provide services to the poor. In the latter case, it is unlikely that providing them with a lot of money will do the trick – that’s rather like pushing on a piece of string. For them, the interventions might not involve a lot of money, but some combination of support for civil society and capacity building (though done well, unlike most capacity building in development). Giving a lot of money to governments that don’t deliver deprives the citizens of countries that could use the money of services, while doing little if anything for the citizens of the country that can’t or won’t deliver.

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Owen Barder

Owen is Senior Fellow and Director for Europe at the Center for Global Development and a Visiting Professor in Practice at the London School of Economics. Owen was a civil servant for a quarter of a century, working in Number 10, the Treasury and the Department for International Development. Owen hosts the Development Drums podcast, and is the author Running for Fitness, the book and website. Owen is on Twitter and