Painful Aid

Source: AP
Written by Nik Soni

Has the donor world lost the plot? This is a question that most people I know who work in aid often ask themselves privately but few will raise publicly. Are the various contortions that those of us who work on the ground are forced to go through actually making the situation worse for people in developing countries or better?

It is true that the need for development assistance to help the most disadvantaged people is noble, sensible and smart. It is also true that more funds in this area would certainly help more people. But there is a growing concern amongst many practitioners in the field that the those in charge of development at the highest institutional levels have simply lost touch with reality.

Like with the eighties obsession with MBA’s coming in and telling experienced business hands how to run business they knew nothing about nor had any background in – some would argue that the world of development has become bloated with highly qualified dreamers and that as a result the development agenda has lost focus and become hi-jacked by simply following one fad after another.

It is hardly surprising that around the world the tough financial times are asking many Governments Treasuries to question why funds are being placed in development especially when the development agencies themselves seem incapable of providing anything other than pithy statements. I highlight below just some short term fads we have seen here in the Pacific in the past few years.

Aid as an industry that operates like any other in the private sector

In the private sector you are accountable to yourself so you are able to make decisions that are not questioned. In aid you are accountable to a host of external parties and so cannot make decisions[1].

In the private sector if you mess up you pay, but by the same token you can rebuild. In aid somebody else pays and so there is no learning curve as the wrong person feels the consequences of your failure.

In Government it is usually better to focus on process and not product. This is not to say the end product is not important – it is. But if we accept that the process by which we achieve a good outcome is more important that simply being presented with an outcome then we should not only be targeting outcomes and outputs. This is what the original debate on “governance” was all about – improving process. But somehow we seem to think the Government is about selling something – it is not – it is about delivering a public service and that is very different to selling a product.

In the private sector you sell your outputs – so usually it is measurable, often tangible. You worry about outcome in terms of profitability and return to shareholder. In aid we are adopting this thinking and so there are some who think we should worry more about the return to the tax payer and not the return to recipient. But that is not what development should be about and by pretending to monitor output we move away from the correct mandate which is ultimately to alleviate poverty and not to focussing on getting the greatest possible return to the Australian or New Zealand tax payer.

You cannot quantify the cost per unit of health or education and to do so is simply foolish. You can look at ways to deliver the same service cheaper and better but to do that you need to focus not on dreamed up targets – anybody can make up a random target – look at the MDG’s. But few people seem have the nous to explain why we failed to get there in the first place. Simply setting more pointless targets may seem like a great days work for those in their lovely colour matched, air conditioned offices but it really is quite pointless to those who are perhaps trying to actually help a school in a remote village educate children.

Zero tolerance

Zero tolerance – a big buzz word in development today. Zero tolerance is a good concept. It means we don’t aim to make errors. But it does not mean that errors will never occur and that any error no matter how small should be seen as indication of disaster. It does mean that there is a process by which errors are identified and action taken resulting, over time, in as few mistakes as possible. It does not mean there will never be any mistakes.

It can take the Australian Government years to deal with complex legal cases of fraud or mismanagement. In the developing world the fact that fraud exists is seen as a reason to begin Salem witch trials against civil servants and insist on parallel systems and lots of ex-patriot consultants to handle the money.

It is rare to see a donor look at what happens after the fraud has been discovered to see if there is a process and patiently wait for that process to occur. It is more normal to assume that any fraud is a sign of bad governance rather than see what the governance process is. Zero tolerance should not mean that there will never be fraud – if that was the case no agency in the Australian or New Zealand or any public body would ever receive funds as fraud happens – it is as simple as that. What matters is the processes in place to deal with it.

Misunderstanding and papering over important issues like gender, disability and climate change. These should not become or be treated as fads.

Climate change, disability and gender are important issues. This does not mean we add a paragraph in every report on gender and disability impacts or make sure that every funding application has the words ‘climate change’ in them. It does mean that we look at these challenges as discreet and work out how best to address them rather than insist everybody be aware of the problem and make pithy statements about them.

Right now we all know that to get funding you need to mention these words – I recently came across people doing a gender impact study on climate change. Not because they knew anything about the subject of gender – they were all climate change specialists – but because it was the only way to secure funds for their research.

This is a tragedy not only for the climate change research as lying is rarely a good idea but also for the gender research as it progresses little. The same is true for areas like disability.  I suspect disabled people don’t want pithy statements in reports that may one day result in ramp to a post office in a developed country with an AusAID badge on it – I suspect they do want to be able to show how they can contribute their skills to the challenges faced in many developing countries. But as long as we treat these issues like fashions – wearing them this season only because you look good by doing so – then we will never really come to grips with these issues.

Incentives

In aid we never allow spanner monkeys (who are usually grumpy old men and women soured from years in the field) any input into process as we are dominated by “big picture economists” who do not know the mechanics. It’s the difference between getting advice from a kid with an MBA and no practical experience and a seasoned mechanic on how to fix your car. In aid we loved the Masters in Development or PHD kids and discount the mechanics and front line people.

In the private sector if you do that you go out of business – in aid you cannot go out of business. And therein lay the dichotomy of trying to use business models for public spending.

In the private sector you either make a profit and survive or you make a loss and eventually go broke. In Government you can never go broke and there is no little loss from messing up.

As a result the incentive in Government is to cover up your losses – this is why no aid project is ever deemed a failure, this is also why donors almost never learn from their mistakes as they deny making them in the first place and it is also why they also are always chasing the next rainbow – as doing that is more likely to yield extra money than admitting you did something wrong and trying to fix it.

Return of the mechnics?

It is hardly surprising that around the world (including Australia) Ministry’s of Finances are questioning the increases in the aid budget. As long as donors continue to respond with fads, dreams and pithy statements you cannot be surprised when the reaction from Governments is to reconsider giving extra money. If aid agencies cannot show direction, understanding of their business, real understanding of the practical things that are needed to address a problem then I am afraid to say that the most likely outcome will be that eventually Governments around the world will renege on their aid funding pledges and they would be right to. It will be a disastrous but inevitable outcome caused by the fact there are few people heading aid agencies these days who know anything about the mechanics of government or poverty or aid. This fact is now painfully evident not just to seasoned “front line process mechanics” like myself but also many others. It is no wonder that public opinion and many civil servants are beginning to rebel against the generally held notion that all development spending is implicitly good.

If aid spending is to survive the current financial crisis those leading the aid agencies – be they multilateral or bilateral will have to start listening to those people trying to deliver services on the ground. If they don’t they may well find that both they and those trying to deliver services all lose.

Nik Soni is the Chairman of the Pacific Institute of Public Policy and a Research Associate of the Development Policy Centre 


[1] This may be why many folk in development often dream about and try and behave like benign dictators.

Nik Soni

Nikunj Soni is a Co-Founder and Chair of the Pacific Institute of Public Policy (PiPP). He has held a range of senior positions in the Pacific region and Timor-Leste.

9 Comments

  • hi … interesting blogs and perspectives .. just wanted to add re importance of context, particulary when aid donors are funding reform programs – need to be realistic about how long it takes to achieve expected outcomes and also the signifcant challenges and issues that needs to be addressed .. ..

    also ongoing costs and maintanence of various initiatives introduced through aid programs and its implications on Goverment’s recurrent budget needs to be considered particularly before procurement of expensive equipment and other big ticket items .. as well as maintanence costs of infrastructure, etc funded through aid funds ..perhaps ‘affordability’ of aid interventions particularly for the recipient country also needs to be part of the discussions on aid efficiency and effectiveness … welcome other’s views on the issue

    thanks

  • Many thanks for the comments. Interestingly I got very similar comments on the PiPP facebook site where we also posted the blog and also to me personally so clearly there are many who think the emperor may be rather scantily clad.

    I think Robert has it correct when he says that there are too many “objectives”. I think you all touch on this issue about being clear about what we intend to achieve and then focusing on just that. I think one problem has been that it is all too easy to criticize aid. Why are we helping starving Ethiopians when if we had solved the water problem ….. the problem with this type of argument is then you end up by designing “all inclusive” plans that are “holistic” and “sustainable”. These are words to win the argument but lose the debate as ultimately nothing is ever sustainable or holistic.

    We (in the aid industry) should try and avoid the easy route – we are not going to “heal the world” a-la Michael Jackson. We are going to identify a problem on the ground and try and fix it. Donors should try and avoid the easy explanation of what they do – we will not eradicate poverty, we will help people in need where we can identify what their need is and have the resources to help them.

    This sort of covers the point raised above about simply asking people what they want.

    On the facebook site I mention that had I not written this piece I would have written a mock blog about what would have happened in 1960 if JFK had told the donors he wanted to go to the moon? I suspect a team of consultants would have come to first define what he meant by “go to” and “moon”. More consultants would have come to devise a medium term strategic plan that would have eradicated communism, hunger and taken us to the moon in a holistic and sustainable way for the whole world (forget swap this is glop – global policy !!) – this would have taken three years to complete due to arguments – then we would have to design a medium term fiscal framework which would take another three years. The project would then be reviewed and the priorities changed to going to mars. We would fill in project completion forms about the impact of the work on HIV, gender and disability. An audit would be done which would take another year, exhaust everybody’s patience and in the end find we accidentally bought red paint. Since we have a zero tolerance policy for commies the whole program would have been outsourced to GRM etc etc etc

    and we would never have got the moon and I would not be able to use the internet.

    Finally, whoever said the problem is more acute in the Pacific is kind of correct – it occurs everywhere but it is more visible and has more impact in our tiny region.

    Anybody want to help me write the mock blog? I think it needs to be written.

    • Mr. Nik Soni,

      It is very interesting blog

      Your blog is touch with the reality of foreign aid projects. I am doing a Ph.D. research about the Local knowledge Syndrome and donors-prompted public sector reforms with special attention to the case of Yemen. I think it is very important to focus on process. If we have an effective process, we will have an effective aid project. I think my Ph.D. research covers this subject in good way.

  • Hi Wesley. Some good suggestions. I’d maybe add the need to hold people, firms and donors accountable for development programmes or initiatives, and the requirement to revise ideas if things go wrong. The problem is that donors could pay lip-service to these proposals without any practical change. Somehow these need to be programmed into the approach via institutions and even theory.

    I actually don’t think adherents to the Washington Consensus paid any attention to context. John Williamson, who coined the phrase in a 1989 article, called it ‘akin to proof the earth is not flat’, listing 10 policy points (inflation targeting, privatisation, current-account liberalisation, etc.) which he thought would always lead to development. There’s been a bit of softening with the so-called ‘post-WC’ over the last decade, but it’s still univeralist and largely context-insensitive.

    There’s no need to resort to extreme relativism, where we end up with analytical paralysis. We’re nowhere near that end of the spectrum at the moment. In my book Reflexivity and Development Economics (sorry for the plug) I discuss at length the need to strive for a position between full postmodern ‘anything goes’ approaches and the kind of mechanical one-size-fits-all universalism of the Washington Consensus. There’s lots of room between these two extremes.

    Matthew, you’re right that there can be different levels of context-sensitivity. Not everything requires deep-rooted attention to context and consultation, otherwise not much would get done.

    It’s good that the discussions happening at all; that the debate has switched toward the importance of context, because we’ve just come out of three decades of one-fits-fits-all policymaking which had limited success.

    I do think that more attention needs to be paid to the whole underlying methodology of conventional economics, which very strongly influences development policy. The global crisis has prompted a rethink. This is happening at the Institute for New Economic Thinking, for example. Some of the more prominent economists are beginning to revise their views, and previously peripheralised economists are being heard (like Steve Keen).

    Cheers,

    Dan

  • Wesley/Dan

    Yes, context is important. I think even the most hardened Washington Consensus ideologue would agree, or at least pay lip service, to such a statement. That said, I think we need to be careful with how far we take the argument. At its extreme, we end up with what Brian Levy calls “analytical defeatism” (see this excellent blog of his). That is, the idea that theory is completely useless in development because every context is different. I think a more useful approach is one that recognises that context is important, but that its importance differs according to context (!). So for example, context is likely to be very important for land administration in Vanuatu. It will be less important for determining the appropriate electricity tariff charged by UNELCO, where the best approach will closely resemble that used in other countries.

    Lastly, I couldn’t agree more about the problems of high turnover among donors and its adverse implications for aid in the region. Wesley’s four points are spot on.

  • I’m in furious agreement with your sentiment Dan – ‘Why not just ask people what they want?’

    Context is so important! Yet it often seems that importing the latest prescriptions for development and economic growth (as developed elsewhere) is easier than a ‘ground-up’ approach that builds on the social, cultural, economic and geographic circumstances of Pacific island countries themselves. This seems an inevitable outcome of the claims to unversality made by some brands of economic theory… Who needs to listen to people, or even take into account obvious geographic factors like massive oceans and small land masses, when you can listen to development economists (who have universal answers)?

    I think you’re right that donors need to listen if they are to ‘get back in touch with reality’. But (importantly) they need to be capable of listening. I imagine this requires change at an institutional level. I guess we could draw some recommendations out of this discussion:

    – Employ more locals in positions of responsibility
    – Encourage open, and collaborative, policy discussions
    – Focus on building ‘institutional memory’ (including by listening to sour old spanner monkeys)
    – Admit mistakes (and learn from them)

    Any others?

  • Hi Nic. Interesting blog.

    I would suggest that the phenomenon Robert also refers to, of development workers as ‘highly qualified dreamers who have no interest in understanding or in building on experience’ may be more prevalent in the Pacific than elsewhere. I would be interested to see what others think, but perhaps it is due to a relative dearth of ‘institutional memory’ … While there may be some ‘soured and grumpy older men and women from the field’ their valuable experience in addressing development challenges is often hard to tap into.

    It seems to me further that ‘the Pacific’ is a wildly complicated region, with divergent cultures, experiences of colonialism, resource endowments, political structures, trading histories etc. And each Pacific island country faces wholly unique domestic challenges. I think this complexity is often glossed over. To understand the key policy challenges of countries of the region takes a considerable investment of time and energy. Yet, many aid workers are transient. New advisers/consultants/volunteers have a high rate of turnover, and each new aid worker needs to learn the issues anew (and are surely more susceptible to the latest ‘fad’…).

    Perhaps the challenge is building more ‘institutional memory’, and better linking those ‘sour and grumpy men and women in the field’ to new, would-be, dreamers. Open, and collaborative, policy discussions seem a great place to start.

    • Nik, you sour and grumpy old man! 😉

      No, I reckon you’re quite right. First, government isn’t business. Incentives are different, the processes aren’t the same and the objectives are far more difficult to quantify. ‘Managerialism’ — the endless focus on targets, indicators and evaluation — has come under criticism in developed country governments. I don’t see why developing countries should be any different. All that management mumbo-jumbo just gets in the way of doing things. School pupils or the sick aren’t ‘customers’. They’re people.

      And I think Wesley hits on an important area, too. As a person with experience in several Pacific islands myself, one thing that didn’t happen half as often as it should was true consultation. I don’t mean the occasional Powerpoint presentation at a workshop, but carefully-designed procedures to work out what people actually want, or even – shock-horror – actually putting locals in positions of responsibility. Too often a short-term outside technical assistant would come and do what ‘economic theory’ or textbooks said. As we all know, in consensual, non-conflicting cultures, where people often communicate verbally rather than in writing, it can be difficult to confront the view of outsiders. Unsurprisingly, people in many of the Pacific island countries don’t make their views known in quite the same way as urban Australians. There are few incentives for the deliverers of aid to actually listen to people want; either to design consultations procedures well enough to reflect people’s views, or to actually do what people say on the few occasions that their views do get heard. To repeat, why not just ask people what they want?

      One of the culprits for both this and the wider problem that you discuss — the influx of starry-eyed idealogues — is the universalism of economic theory. Mainstream, neoclassical economics underlies a lot of aid intervention. This sort of economics imagines that people are self-interested, individualistic utility-maximisers who respond primarily only to material incentives. Economists, particularly academic ones, tend to imagine that on this basis they’ve broadly solved many of the problems of development, and all that needs to be done is to drop in to developing countries and tell governments what to do. But in much of the world, and especially the Pacific, this type of economics couldn’t be more inappropriate. People tend to be communally-minded and social and often to do things for intrinsic reasons rather than material gain. The economic answers haven’t been found (and the global crisis proves that the ‘answers’ don’t even work in the rich world); they depend on context. And knowledge comes in many forms, some of it tacit and non-formal. What works in Washington may not work in South Tarawa.

      And in the end, yes, we need to listen very hard to the experienced people who’ve been ‘in the field’ (I don’t much like that expression as it suggests that the field is different to normal reality). Spanner monkeys like you probably know much more than the grand academic theorists. It also means that we should listen much more to what local people actually want. As you imply, there’s probably no need for fancy big ideas. There’s definitely a big need to get back in touch with reality.

  • I have never met Nik Soni but I think I would like him very much, judging by the sensible and honest views he presents here.

    It is perfectly understandable why so few voices are raised publicly on the issues Nik discusses as this is a sure way to ruin one’s career. People who challenge policy directions and decisions or deign to question a donor’s or project management company’s competence are not welcome.

    Perhaps the loss of focus of much development activity is not only because of fads but also because development assistance is drowning in a sea of confusing goals relating to aid effectiveness and to implementation activities on the ground – the Millennium Development Goals, Education For All Goals, Thematic Strategies, the Paris Declaration, the Jakarta Commitment, project goals and objectives – to name only six. Time and energy are required to address these, as well as the fads Nik refers to. Let me add to his short list by including sector-wide approaches and donor harmonization. Both of these are great topics for a retreat in an expensive hotel rather than getting out into the field to understand where practical help is needed.

    One thing puzzles me, however, and perhaps Nik can provide an answer. In my heart I know that more aid funds might help more people. And I have no intention of standing in the way of that help. But what puzzles me is why we continue to plan to ‘supply’ ever larger sums of money for aid generally and to certain countries in particular, when we are not really at all clear about what the actual ‘demand’ is on the ground, apart from the assurances of ‘government officials’ than more and more of X and Y is certainly needed. Is not the supply creating the demand, or am I missing something? Help!

    The only matter on which I disagree with Nik is his reference to ‘soured’ and grumpy old men and women from the field. I suggest that what makes people really grumpy is the years in the field of seeing what works and how it works, and then to watch this valuable local knowledge buried by the arrival of Nik’s highly qualified dreamers who have no interest in understanding or in building on that experience. This, I suspect, is especially prevalent in the field of education where everyone is an expert. After all, a higher degree in politics or chemistry or any field other than education is OK as clearly the holder has been in the education system a long time and knows a lot about education. Or do they?

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