Getting it wrong

A recurrent theme in international development is the issue of measuring and reporting aid effectiveness – this topic gets a lot of buzz, and rightly so. Especially in an age of fiscal constraints, it is ever more important to deploy funding to projects that work. There’s a lot of debate about whether official development aid is more effective than chanelling funding through small local NGOs, big international ones, or something in between. What I find baffling is that a lot of people are willing to say that one is the better alternative – personally, I think that there are some government agencies, some NGOs (large/small) that are good at handling aid money, and others that aren’t. Dismissing one model for the other doesn’t make any sense, given how heterogenous the group is. 

As the excellent blog Good Intentions are Not Enough points out, one of the main problems with aid agency/NGO reporting is the fact that negative findings are often swept under the rug, or spun into a positive narrative because these agencies are afraid of jeopardizing their sources of fuding. The problem is that funders often don’t have the capacity to closely monitor/evaluate the impact of their donation, and rely on reporting from their grantee… Which is obviously problematic, for a number of reasons. Even if the grantee outsources evaluation to a third party, the results that filter back to the donor aren’t always guaranteed to accurately reflect reality. There’s also the issue of overstating a crisis or situation to attract funding, another dangerous and unsustainable practice. Organizations and agencies that receive aid are all actually competing for resources – they are, after all, entities that employ staff etc. and whose own existence depends on the existence of a need, a crisis, a situation that has to be addressed. It’s no wonder that they tend to overstate, spin, or misreport the facts to their donors – for some, it is a matter of organizational survival. 

It makes it complicated to evaluate the effectiveness of aid in this context: not only do you generally have to contend with insufficient monitoring mechanisms at the project level, which make it difficult to know whether any quantifiable objectives are met, but there are also all these qualitative dimensions that come into play. The straightforward elements of evaluating aid effectiveness can sometimes be overshadowed by subjectivity – the reputation of an organization, who’s on the board,  its ability to serve beneficiaries at scale…etc. And let’s not forget the highly political nature of official development aid – the fact that Israel, Egypt, Colombia and Pakistan are the countries which receive the most American official development aid (ODA) is a telling fact (not counting Iraq and Afghanistan.) To genuinely evaluate the effectiveness of aid, we shouldn’t just be looking at the glossy quarterly and year end reports. For some well-entrenched organizations and agencies, the validity of their model, of their projects is barely questioned.

Interestingly, when it comes to ODA, there seems to be a correlation between the degree of aid dependency and lack of transparency and accountability on the part of the recipient government. (“The Open Budget Survey reveals that those countries performing least well in terms of budget transparency practices share certain characteristics, including lower income levels, dependence on foreign aid, reliance on revenues from hydrocarbon extraction, and weak democratic institutions.”) For a lot of these countries, ODA is their principal lifeline, and to stop the flow of funds would probably have catastrophic consequences for the population (actually, that is an assumption – would be interesting to find out what impact lower levels of ODA would have on a country like Liberia)

The whole “aid effectiveness” debate is rather obscured, in my opinion, by political and subjective factors – how can we effectively evaluate the impact of aid when aid disbursements themselves aren’t based on genuine levels of need, but rather on how well the agency, organization or government is able to convince donors of that need. Whether one looks at ODA, or funding for agencies/NGOs carrying out development activities in low income countries, we’re never going to be serious about “aid effectiveness” until we look at the full process, from needs assessment to expost evaluation.

Until we are able (willing?) to do so, we’ll have to accept a certain degree of inefficiency when it comes to aid. It’s not a perfect system, far from it, but the fact that such vigorous debate exists around development aid – in all of its forms – is a hopefully a sign that, as time goes by, we’ll be much more sophisticated when it comes to efficient aid allocation, monitoring and evaluation.

Apparently, World Vision in Liberia didn’t get that memo.

A disturbing example of large scale corruption within NGOs just emerged in Liberia. Astonishingly, 90% of World Vision’s aid to Liberia went missing – they lost $1mm as their project managers were selling food and using construction materials that were supposed to benefit Liberians (World Vision was a sub-grantee for food distribution and food-for-work projects.)

World Vision calculated that $884,681 worth of food was missing, with a total loss, including ocean freight expenses to ship the food to Liberia, of $1.45 million. 

The United States spent an additional $300,000 for construction materials, most of which were never used on the intended projects.

Unfortunately for World Vision, it means that their fundraising will suffer as a result – while this is obviously too bad for them and the beneficiaries of their other, functional projects, there is no reason why donors should not sanction World Vision for its lack of oversight. World Vision apparently employs 250 people in Liberia, which is quite significant – besides other international organizations or the government, there are few employers of this size in Liberia (hence the 85% unemployment rate…) and they’ve been operating there since the early 80s – it’s quite unbelievable and unacceptable that it took them 2 years  to uncover this massive fraud. 

I honestly have no idea how something of this scale could have occured – how is it possible that no one realized that 34 of the towns intended to benefit from this project didn’t exist? It really says a lot about WV’s management capacity and how (un)rigorous their internal monitoring mechanisms are. In addition, in a context of poverty, how could over a million dollars disappear discreetly? 

Quite apart from the fact that their Community Resettlement and Rehabilitation Project ended up being a massive failure because of this fraud, it’s also worth noting that their model of importing food from the United States for aid is a flawed approach – why not purchase locally and support the Liberian agricultural sector and its small-holder farmers? Owen Barder recently wrote  that instead of importing food aid to Ethiopia, cash transfers would be more effective in combating hunger (which makes a lot of sense, by the way: in doing so, you would reduce the cost of providing food aid). I suppose the risk here is that people may not use the cash for its intended purpose – but the counter-argument is that if the person would naturally use the cash for whatever is their greatest need, which hopefully doesn’t involve getting drunk at the local bar…(more about purchasing food aid locally here, and more about untying food aid here)

I have serious beef with this World Vision drama: not only did they fail the people of Liberia by botching the design and execution of its CRRP, but this is also going to contribute to increasing the distrust for organizations doing similar work. The “public relations disaster” mentioned by Kleinman is not limited to WV, but will have repercussions for other NGOs. Shame. 

Warning: shameless plug

As for The Niapele Project’s School Nutrition Initiative in Liberia, we just received a small grant from the GO Campaign to cover the start-up costs of the project. While we certainly don’t have the ability to operate at a scale quite like a large INGO, we’re still planning on feeding 600 kids/day during the upcoming school year. And we take monitoring seriously – in addition to having trustworthy program coordinators, we track the impact of the program through regular medical assessments. We’ll also be sourcing food items for the project from an agricultural co-op in Central Liberia which is run by a local grassroots organization, Malaya. While we don’t have the enormous budget, staff and long standing experience of World Vision in Liberia, Niapele’s work in Liberia is guided by an honest assessment of needs at the community level, and we believe that our small-scale impact will be long lasting. 

Dead Aid Bandwagon

If you are a development nerd, you have probably read ad nauseam about Dambisa Moyo’s new book, Dead Aid. In the last few months, there has been an interesting debate happening between different schools of thought. Essentially, Moyo argues that foreign aid to African countries is one of the preeminent root causes of Africa’s underdevelopment (for lack of a better word), and that instead of throwing billions of (wasted) dollars into the hands of dicators, African governments should instead be given access to more private finance. 


Having worked at the World Bank and Goldman Sachs, Moyo – who hails from Zambia – offers a refreshing perspective on the aid debate (which is typically dominated by white males… no surprises there, right?)


Her book unleashed an outpouring of commentary – some condemning her views, others wholeheartedly agreeing, and everything in between. I have been tempted to throw in my two cents, but the more I read about it, the more convinced I am that a) everything that could be said, has been said and, b) the debate over whether aid should be stopped or not is such a macro discussion that, ultimately, we’re getting stuck at the “50,000 foot” view – and that doesn’t really help move the debate forward constructively. Because, as we all know, foreign aid will NOT end – even if you were able to show by a+b=c that aid caused most of Africa’s problems, Official Development Aid (ODA) is still a critical foreign policy tool, and to call for its halt is unrealistic.

Anyway.  

Most recently, Francis Fukuyama voiced his opinion on the matter in Slate. He compares Moyo’s argument with another prominent African scholar’s views, Wangari Maatai. His piece, I thought, actually touches on a couple of really key issues, which most commentary on “Dead Aid” have failed to focus on. Excerpt:

Both women see sub-Saharan Africa’s fundamental problem not as one of resources, human or natural, or as a matter of geography, but, rather, as one of bad government. Far too many regimes in Africa have become patronage machines in which political power is sought by “big men” for the sole purpose of acquiring resources—resources that are funneled either back to the networks of supporters who helped a particular leader come to power or else into the proverbial Swiss bank account. There is no concept of public good; politics has devolved instead into a zero-sum struggle to appropriate the state and whatever assets it can control.

This view actually echoes what one of the most prominent French African scholars, Jean Francois Bayart, writes in his book “L’Etat en Afrique: La politique du ventre“. In this book, he writes that the “politics of the belly” – which is to say the political culture that is prevalent in Africa whereby rulers seek to accumulate power and possessions –  is not only the fundamental issue that has been plaguing the continent, but also a product of its very particular social, political and economic history. In his book (which I unfortunately don’t think has been translated into English), he describes how complex social and political networks arose in the context of colonial and post colonial sub-Saharan Africa, and how the polity that emerged is defined by an intricate interplay between foreign dependency, reliance on local (and often socially constructed) tribal or ethnic identities and leaders’ destructive desire to selfishly accumulate resources. 

Of course, given that we’re talking about a whole continent, generalizations are very hard to make – so while one can certainly find counter points to Bayart and Fukuyama’s argument, there is an element of truth to it, which to me captures the most powerful criticism of Moyo’s book: it’s not aid per se that’s the problem – it’s what’s being done with it, and how it’s being managed. And of course, Moyo knows this. But, as Owen Barder notes:

It seems to me that Dambisa Moyo has set up a false dichotomy between aid and entrepreneurship. Many of the things Moyo would like to see – better access to financial services, a better business environment, lower tariffs – can be (and are) supported by aid. 

It’s been frustrating to read Bono’s response to Moyo, as well as the reactions from a lot of people “shocked” that Moyo would call for an end to foreign aid. But, if (like me…) you subscribe to the Easterly school of thought that holds that most ODA ends up being horribly wasted and that an entirely new ODA regime needs to come about, then her argument, while virulent and, frankly, aggressive, makes sense. 

Just recently, from (of all places) USA Today:

Two United Nations agencies spent millions in U.S. money on substandard Afghanistan construction projects, including a central bank without electricity and a bridge at risk of “life threatening” collapse. 

In the current context, I think it’s great to debate the virtues (or lack thereof) of ODA – however, focusing on that macro question shouldn’t be a reason to turn our focus away from the real issue: today, there are millions of aid dollars at work – how do we actually make them work, with a view to incrementally decrease countries’ dependence on foreign assistance? 

Oh, aid effectiveness… You are hella elusive. 

Ellen and Nicky Chime in

Here is an amazing article from the IHT. Amazing because you’ll notice that it’s written by Ellen Johnson-Sirleaf, the President of Liberia, and Nicky Oppenheimer, the Chairman of DeBeers (HT: Chris Blattman)

I subscribe – mostly – to the views expressed in this piece. The caveat is that for all the lofty rhetoric, the empirical evidence points to the fact that attempts at promoting private sector initiatives in Sub-Saharan Africa are met with a lot of resistance, both in-country and by the development industry.

The opinions put forward in the IHT article rest on the assumption that capitalism = good. I’m not going to challenge this notion, first of all because I think that debate has been taken up a few too many times, but mostly because whether or not we like or agree with this idea, it is the defining paradigm of the way the world works.

Of course, the way the world works is not always the way it should be working. But haven’t we learned that this is a useless point to make in this day and age? Enough futile attempts to dethrone capitalism as the dominant operating paradigm of our time – let’s work within it, make it work for those who need to be lifted out of poverty.

The problem is that if we are going to be functioning with this mindset, the way in which the entire aid/development industry operates needs to be reconsidered. And as my current hero, Elizabeth Pisani, has expressed, this type of industry is not reactive to changes and evolutions in the real world. A mere look at the Millenium Development Goals gives us a pretty good understanding of how aid agencies construe their work. As Andrew Natsios famously pointed out, arguing against the MDGs is like arguing against “motherhood and apple pie” – you simply can’t, because in and of themselves, these goals are desirable and ultimately good. But they do nothing to make developing nations – and particularly the LDCs of this world – become self-sustainable.

Natsios says:

The MDGs are also heavily weighted towards social services… In overemphasising these particular goals, we risk underemphasising the importance of equitable economic growth, good governance, and democracy, without which, we cannot produce the tax revenue to sustain the social services that the MDGs embrace. What is needed is a proper emphasis on economic growth as a necessary condition for social services, instead of vice versa.

One of my biggest issues with the MDGs is the emphasis placed on universal primary education. It did not take countries, schools, and NGOs very long to realize that this goal is essentially pointless if no proposition concerning the quality of education is associated with it. Furthermore, which countries have been able to raise its population out of absolute poverty by having its citizens educated at the 5th grade level? None. And the MDGs make no provision for university education – something which could really spur development.

This is Goal 2:

Goal 2 of the Millennium Development Goals sets out by the year 2015 to:

  • Ensure that all boys and girls complete a full course of primary schooling

I’d like to use this opportunity to invite you to think about a completely different way of approaching aid – one of my favorite topics these days is bottom of the pyramid social entrepreneurship. That’s not the panacea either, but it certainly challenges a lot of dusty misconceptions about what development should be.

Edit:

Just read this relevant piece from The Washington Post:

Shikwati and others cautiously suggest that the current situation is different. Enormous gaps between rich and poor persist in most sub-Saharan African countries, but there has been a slow trickle-down effect from the growing private sector, as jobs have been created in the cellphone industry, for instance, or tourism or banking.

Maggie Kigozi, executive director of the Uganda Investment Authority, attributes about 63,000 new jobs created in that country this year to growth in the private sector. Uganda has cut extreme poverty in half over the past decade — down to 30 percent of the population living on less than $1 a day — a fact that Kigozi also chalks up to private sector activity.

“We owe our success to that,” she said. “Not to the World Bank, and not to nongovernmental organizations,” she said, referring to aid groups.

They Come in the Name of Helping, reloaded

This article popped up in my Google Reader – 3 times.

The article itself, from The Washington Post, casts a critical eye on the affluence that foreigners live in while working in Liberia.

As this impoverished country climbs its way back from 13 years of civil war with the tiniest of steps, a boom is underway in the industries that cater to the rarified tastes of thousands of mostly European and U.S. expatriates who have come to help since peace arrived in 2003. The increasingly visible splendors available to this relatively wealthy group have left some Liberians wondering whether the foreigners are here to serve the nation or themselves.

I blogged about this topic a couple of months ago, after watching Peter Brock’s “They Come in the Name of Helping” – if you haven’t yet watched it, please do.

This story about sushi in Liberia popped up twice more in my reader – Chris Blattman and Rupert Simon both reacted to it (and, according to Blattman, it seems that a LOT of people picked up on this story)

Simon seems to side with the opinion expressed in the article:

… If only the sushi were made from local fish (fresh and delicious), I wouldn’t mind. But importing tuna and salmon to serve to aid workers, when the rest of the population can barely get enough rice (let alone fish), seems a little absurd.

Blattman, on the other hand, says – what’s the problem with a couple good restaurants?

My opinion is somewhere in the middle – I still believe that, in general, to have such a discrepancy between the way foreign aid workers and locals live is a problem – it distances the foreigners from the realities that they’re supposed to work on, and from the people they are supposed to assist. But that’s essentially the problem with development work that isn’t grassroots based.

On the other hand, I appreciate Blattman’s straight forwardness in the matter. Because when you work in difficult settings, far from your family and the comforts of home, sometimes, it’s nice to take a break. And that’s just the reality of it – aid workers are not super heros, they are human beings with needs and desires, and some people in Liberia know what those are, and are taking advantage of it – how entrepreneurial! (This is only half sarcastic)

In a lot of post-conflict settings and generally poor places where NGOs and IOs are active, aid workers always inject cash into the local economy. Some say it’s good (it boosts local economy, creates jobs, etc.), some say it’s bad (unsustainable). Whatever the case may be, it’s definitely a reality that needs to be contended with. Perhaps the negative effects of foreign affluence juxtaposed to local poverty can be mitigated by developing an approach where locals would benefit from in a sustainable manner – through job creation, using local resources (think local instead of imported fish for the now (in)famous Monrovia sushi restaurant mentioned above), etc.

If I end up traveling to Liberia this summer for The Niapele Project (fingers crossed), it will be interesting to see the reality of this juxtaposition.