A few years ago, Nancy Birdsall and I proposed that donors might consider a scheme to give aid to developing countries based on the services they actually deliver. For example, donors could promise to pay $100 for each additional child who completes primary school and takes a standardized competency test. The Center for Global Development has worked further on this idea, and rebranded it as “Cash on Delivery aid“. CGD will soon be publishing a book setting out how the idea might work in practice.
The Conservative Party have said in their Green Paper on international development that they will pursue this approach if they form the next government in the UK. They say:
We will link aid directly to independently-audited evidence of real progress on the ground. Increasingly, we will pay ‘cash on delivery’: giving an agreed amount to a recipient government for every extra child they get into school or every extra person who receives decent healthcare. This will give British taxpayers confidence that their aid money is buying specific successful outcomes.
In October, CAFOD published a briefing note about Cash on Delivery aid which is a helpful summary of the proposal, and is also a useful compilation of some questions that have been raised about the idea. It lists nine “risks” of Cash on Delivery aid which it says should be addressed.
I have written a response to the CAFOD brief which addresses each of the nine risks in turn. I regard nearly all of the issues raised by CAFOD as features, rather than risks, of Cash on Delivery aid.