True enough, but the consultants act as agents for Western governments who, through the tools of aid programmes, are imposing privatisation.

Owen replies: Justin – some donors are. I am pleased to say that the UK Government is moving away from this sort of conditionality. In the March 2005 policy document, the Government says:

The lesson of experience is that, even if you believe in a particular policy reform, conditionality is not an effective way to get it implemented.

I think you are right, Paddy: there are two separate issues here that have been conflated and which can usefully be separated. The vast bulk of DFID spending on consultants (which Justin quotes as £270m) is “teach a man to fish” technical assistance. I don’t know how much of it is on DFID’s own management and systems (DFID does have that information) but I would wager the figure is very small.

Justin has followed up with two questions:

a. How can we know we are getting value for money from spending on consultants?

b. Should we be using consultants to advise on privatisation at all – should services be delivered by the private sector?

On the question of value for money: DFID does measure we are getting value for money for each activity, whether it is an aid program (eg supporting legal reform in Nigeria) or an internal reform (eg computerising expenses claims). But as I read Hilary Benn’s answer, it is not possible to separate out the specific contribution made by management consultants.

Consider an example from the small minority of the spending which is on DFID’s own systems. DFID recently introduced a computerised human resource system that allows staff to update their own records (eg address, bank account details, etc) through the intranet – greatly reducing the need for central data entry. This will bring very substantial savings for the taxpayer – it pays for itself in less than a year. Consultants were hired to help design and implement the system, and they worked alongside DFID’s HR and IT staff. DFID does know how much the project as a whole cost, and how much it will save. But we do not know exactly how big the savings are as a result of the consultants. They were an essential component of a project that makes considerable savings in total, but it would be a total waste of time and money to try to separate out the savings attributable to consultants. That is why Hilary Benn says in the answer you quote: “DFID do not maintain central records of expenditure saved as a result of implementing recommendations from management consultants.”

The second question, about the value of privatisation, is rather bigger than can be addressed here. A new book, edited by Birdsall and Nellis at the Center for Global Development, finds that privatisation has been good for the poor, but perhaps not as tranformational as its proponents might have expected. But for this discussion, I just want to point out that privatisation programs are complex and hard to get right (including ensuring that the interests of the poor and marginalized are properly reflected in the design) and that it is good that if a country embarks on a privatisation program, that they should have advice from experienced and expert advisers. Consultants do not, however, impose privatisation programs on countries that do not want to implement them.

Owen

this:

http://www.eldis.org/cf/search/disp/docdisplay.cfm?doc=DOC15809&resource=f1

… ask the Secretary of State for International Development what estimate he has made of the total expenditure saved in each of the last three years as a result of implementing recommendations by management consultancies within his Department.

I suppose there might be expenditure saved from employing private sector technical experts as opposed to internal staff (which is what you’re talking about isn’t it Owen) but those savings can hardly be described as “a result of implementing recommendations by managment consultants” – or have I misread things?

Owen replies: There were two questions, the first of which was “which five management consultancies received the highest value of contracts awarded by his Department in each of the last three years; and what the total value was of the contracts awarded to each.” That was where the £270m comes from. DFID does not spend £270m on management consultants providing advice on DFID.

Owen wrote an excellent rebuttal to my piece about how much the Department for International Development is spending on consultancy. I wrote a rather lame comment at the end of his piece which fortunately hasn’t appeared on his site (Owen, is your blo…

I agree. I think we have a long way to go on improving the way we give technical assistance, and better evaluation is an essential component of any strategy.

Owen

Chicken Yoghurt and Owen debate. I’m with Owen: there’s nothing wrong with knowledge transfer and there’s nothing wrong with using consultants to do it. My usual caveat, of course: evaluation, evaluation, evaluation.