Show your working (international aid edition)

A computer generated graphic with calculator, pie chart, bar chart

In maths and science exams at school there were as many marks for showing your working as there were for coming up with the right answer. We learned to set out the steps we used to reach our answer, and discovered that this discipline sometimes stopped us from making silly mistakes.  My best friend at school – now the Chief Scientific Adviser in a major government department – would often come to the same answer as me by a different route, and we learned that there is often more than one way to think about problem.

“Show your working” is a principle that DFID should adopt for the allocation of aid.

DFID’s Bilateral Aid Review in 2010-11 was an important step forward towards a sensible allocation of the aid budget.  Each country office was asked to present “results offers” of what they could achieve between April 2011 and March 2015; what this would cost; the value for money this would represent; and an assessment of the evidence for their offer. The offers came to over £18 billion, exceeding the amount of money available. These offers were then given internal anonymous peer review by DFID technical advisers; and the assessments were scrutinised by a panel including some external experts. The panel provided reflections to country teams and to Ministers. Ministers then held meetings with each country office, assisted by the panel’s recommendations. In the light of all this, Ministers decided which results offers they wanted to take up.

This process was a vast improvement on the old system, under which each country was given an allocation based on a (conceptually and technically flawed) model for resource allocation between countries; and each country office then made suggestions for how they would divide up the country budget to different priorities.  The BAR is much close to how a large foundation would allocate resources, in which choices are made about where money will be most effectively used.

DFID has not yet announced how it plans to allocate the £10.6bn budget for 2015-16 that it has been given in the Spending Review announced in June. Some of that will go to multilateral organisations, for which there is a separate process.  But most of it will go on bilateral aid.

Here is my recommendation: DFID should repeat the Bilateral Aid Review process but with some important additional improvements (“show your working”):

  1. country offices should be given more time to construct their “results offers”, including an opportunity to discuss priorities with governments, parliamentarians and other national stakeholders.
  2. the “results offers” proposed by each country office should all be published
  3. There should be anonymous internal peer review by technical experts, as before; these assessments should also be published.
  4. Both UK citizens and the citizens of the developing countries concerned should have the opportunity to comment online on each results offer.  They should have a chance to provide narrative commentary about whether the proposal is well conceived and well evidenced.  Country offices should have the opportunity to explain and defend their proposals in the face of any criticism.
  5. If there is to be an expert panel again, it should consider the “results offers” alongside the advice and opinions expressed through this process of open consultation. It could comment on the reliability of the advice as well as on the results offers.
  6. As before, the final decision should rest with Ministers in the light of this advice from a wide range of sources, and the assessment made of it by the expert panel.

Letter to GandhiThe “show your working” principle does not in any way undermine Ministers’ right to make final decisions about how their departmental resources are allocated.  But as in maths exams, it reduces the risks of making silly mistakes.  It will help demonstrate to everyone how difficult these resource decisions really are, and the large number of worthwhile activities which cannot be afforded. It will make some programmes less politically attractive if the evidence of cost effectiveness is less compelling, helping to align political incentives with the evidence base. It will increase the technical quality of results offers, since nothing concentrates the mind like knowing your analysis will be available for immediate public scrutiny. It will strengthen the technical assessment of the offers by broadening the scrutiny from in-house colleagues to a wider range of experts in those specific sectors and countries.  It will increase opportunities for people in developing countries to help identify priorities and shape the allocation of resources (something which was almost completely missing from the last BAR).  And it will increase the accountability and transparency of DFID resource allocation, so helping to build public engagement and trust.

This process will take a little longer than the first BAR, which happened in something of a rush. But time is on DFID’s side if it starts the process soon.

Finally, it won’t surprise anyone to know that I would eventually like to see a further evolution of this approach, in which “results offers” can come from a wider range of people than DFID country offices, such as developing country governments, international organisations, other aid agencies, civil society organisations and businesses.  But introducing that degree of contestability from the outset might be too big a step to take at once.

1 thought on “Show your working (international aid edition)”

  1. When reading the review process, and the subsequent allocation decisions, it looked very much gnome socks economics to me. 
    In the end, it seemed to me that the text in the review was creatively used to push political decisions that would have been taken in any case (typical DFID, as we say). 
    I am always afraid if the ” coherent story bias” (I forgot the official name, see Kahnemann). People have confidence in a decision if the underlying story is coherent. If the story is coherent, it means that vital parts of the story have been omitted, as in real life, stories are never linear. 
    This means that the results offers which get most traction are the simplistic ones. 
    I agree with you on the results offers, but I am afraid for this effect. 

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