Life in the Aid World: Caught Red-Handed, No Consequences

Last week, a report in USA Today brought to light a story of aid funds going badly astray. In case you have not followed the story, it seems that back in 2003, USAID contracted with the UNDP and UNOPS to complete a series of “quick impact” infrastructure projects in Afghanistan, to build badly needed roads, bridges, and community buildings. A US government report on the project, sparked by a tip from an anonymous complainant, found that many of the projects reported as “complete” by the UN were in fact unfinished or had such “life-threatening oversights” that they could not be used. The USA Today reporter filed a Freedom of Information Act Request to access the government report, which he then published along with the article.

Here are a few highlights of the report:

• According to a former UNOPS employee, some $10 million of the USAID grant funds was diverted to projects outside of Afghanistan, in Sudan, Haiti, Sri Lanka and, most memorably, Dubai.
• The UNDP withdrew $6.7 million of project funds in 2007, after the project had ended and without USAID’s knowledge. The investigators could not pin down how those funds were spent.
• A bank was built for $375,000 without electricity, plumbing or proper drainage. The report found that the basement had flooded, destroying stacks of money, and the walls were rotting.
• A $250,000 bridge, reported as “completed,” was dangerous and unusable, having been designed too small for the site where it was built.
• An airstrip budgeted at $300,000 actually cost $729,000 to build. After a description of the major engineering flaws in the construction of the airstrip, the report concluded that military planes cannot safely land there and that “erosion rills or ruts will continue to expand until they reach the runway itself, destroying it completely.” In other words, USAID paid $729,000 for a patch of mud.
• There may be more to come: “questions remain unanswered” because several UN officials refused to be interviewed and the UN failed to provide requested documents during the investigation.

USAID is also to blame for choosing such a bad contracting arrangement, and for not having procedures to catch this earlier and seek full compensation. USA Today reported:

Federal prosecutors in New York City were forced to drop criminal and civil cases because the U.N. officials have immunity. USAID has scaled back its dealings with the U.N. and hired a collection agency to seek $7.6 million back, Deputy Administrator James Bever said. The aid agency hasn't heeded its inspector general's request to sever all ties.

"There are certain cases where working with the U.N. is the only option available," Bever said in an e-mail.

At a UN briefing last week, the UNDP spokesman said that “there have already been a number of meetings, including at the highest level of UNDP and USAID, to work through this matter.” He said that he expected that the UNDP would have to pay USAID no more than $1.5 million.

A disastrous aid outcome, exposure in the mass media -- so what were the consequences? A number of meetings, possibly some money back, USAID disregards its own Inspector General’s request to break off ties with the UN (some unspecified “scaling back” except in other unspecified “certain cases”), and yet more meetings “at the highest levels.”

Since the initial reports, there has been no further media coverage or commentary except for an editorial critical of USAID in the Las Vegas Sun on April 17th. The USAID web site accessed on Monday, April 20, 2009 still listed as implementing partners UNDP (who announces it “remains responsive to the changing needs of a nation still in transition from conflict to peace”) and UNOPS (“we help our clients turn ideas into reality.”)

The USA Today story broke the same day that a USAID rep presented at a meeting in Washington called "Open Innovation for Government: Answering President Obama's Call for More Open, Effective Public Service."

Response to "Does God Believe in Jeff Sachs"?

I invited Jay Lawlor, the head of Millennium Congregations, and Jonathan Denn, the head of CountingPrayers.Org to respond to the blog post. I have not heard yet from Mr. Lawlor, but Mr. Denn responded. His letter follows: Dear Professor Easterly,

Thank you for notifying me of your blog, and the invitation to respond. I was most sorry to hear of your severe crisis of faith, hopefully this will be of solace.

A couple corrections, I am the author of the The Counting Prayer {EDITOR INSERT: “The world now has the means to end extreme poverty, we pray we will have the will.”} As of this morning almost 1.5 million Counting Prayers have been offered in The Prayer Vigil to End Extreme Poverty and on the Billion Prayer March (endorsed by the United Religions Initiative, uri.org). I am not a clergy person but I have a deep and abiding spirituality about eliminating the suffering caused by abject poverty. I am, also, the author of the "sin against the Creator" quote. I believe we are unambiguously obligated to help our neighbors as evidenced by over 2000 mentions about alleviating poverty in the Bible. I also find common ground about poverty alleviation (if for slightly different reasons) with my secular humanist brothers and sisters.

I believe God believes in all of us, rich and poor, even economists with disagreements, and that God believes we will act to eliminate suffering. We may fail but we must not stop trying.

I live in a simple world. People trapped in poverty need a clinic so family members can stop dying prematurely of easily preventable causes. The next morning when they rise and illness is not crippling their family these folks can get on with making life better for themselves. To do that they need dependable access to fertilizer, seed, water, and then when they finally have something to trade, someone to do it with. Oh, and a road to get to market.

The world has long had the wealth and knowledge to lift up our disadvantaged brothers and sisters to clear this very low bar. We merely lack the will, and in the past the expertise.

In 2002, the United States entered into the Monterey Consensus to provide zero point seven percent of na tional household income to the poorest nations to help with developing these necessary infrastructures. Only Sweden, Luxembourg, Norway, Denmark, and the Netherlands have kept their promise, the U.S. is tied for a distant last place with Japan. Relief work is essential but without development it is unfortunately eternal. Without development there can be no self-sufficiency.

I believe that if every person of faith (or conviction) made up their pro-rata share of their countries' shortfall, what I call the Millennium Tithe, that we would indeed soon see an end to extreme poverty, at least in the countries with relatively stable governments. And, that would be an incentive for other countries to enact stabilizing policies. I believe this to be a communion of humanity, secular and religious working together to end easily preventable, extreme poverty (misery).

Our Millennium Tithe would amount to about $15 per household per month (equal to two movie tickets), and I would suggest tithers find the highest yield development projects to fund, those with proven effectiveness and efficiencies and verifiable results. These are increasingly coming from secular NGOs, and there are most impressive results coming from the Millennium Village Project, of which I am a volunteer Ambassador. If I were to find an organization with a better poverty solution metric I would then volunteer my time to help them. If you have a better model, I would be happy to volunteer my time to you. For volunteer I must to the best action takers.

What is the theology of not vigilantly supporting and/or advocating the most effective poverty solutions available?

Sincerely,

Jonathan Denn

countingprayers.org

Does God Believe in Jeff Sachs?

I recently had a severe crisis of faith when I attended Trinity Episcopal Church in downtown Manhattan. Although I am an Episcopalian, there was one part of the liturgy the congregation was reciting in unison that caused me doubts. The problematic prayer in the liturgy was: “The world now has the means to end extreme poverty, we pray we will have the will.”

The first part is apparently meant as a statement of fact, which economists currently argue about (who is the world? Whose are the means? How does “the world” with those “means” actually end poverty?) The whole prayer seems to presume a particular approach to poverty: collective global action, which again economists argue about as being the right or the wrong approach to alleviate poverty. So why is God taking sides in a debate among economists?

This prayer was the brainchild of an Episcopal priest named Jay Lawlor, who prior to his ordination was an economist working for 10 years with – you guessed it – Professor Jeffrey Sachs. He now is the head of something called Millennium Congregations, which has an even stronger statement on its flyer:

At some point in the not too distant future benign neglect and callous disregard for the world’s extremely poor (living on under $1 a day) will become a crime against humanity and a sin against the Creator. This is the time to pray, advocate, and to take action. Promises have been made, and the time for debate is over because solutions now exist.

This is really bad news: having a debate with Jeff Sachs is now a sin against God.

Maybe this all happened after Jeff’s eloquent sermon at the Washington National Cathedral on September 11, 2005, where he was billed as “The Prophet of Economic Possibilities for the Poor.”

Is There Such a Thing as a Good Colonialist?

An ongoing exhibition at NYU’s Casa Italiana introduces American audiences to a new Romantic hero, the Italian explorer and conquerer Pietro di Brazza. In three small but fascinating rooms of photographs, maps and drawings, the exhibit lays out the argument that Africa would have been better off with more of the kinder, gentler colonialism of Pietro di Brazza, and less of the harsh colonialism of Henry Stanley, the Anglo-American explorer in the service of the notorious most ruthless imperialist ever, King Leopold of Belgium.

Pietro Savorgnan di Brazza, photographed by Felix Nadar in Paris, around 1882

Born in Rome and educated in France, Pietro di Brazza joined the French Navy at the age of 18. His early expeditions, up the Ogoué river (now in Gabon) and across the Batéké plain (now part of Congo-Brazzaville), laid the groundwork for the French colonial empire in Equatorial Africa.

On his expeditions, he carried with him French flags and bestowed them on tribal leaders as symbols of protection against other predatory colonial powers. He signed a treaty of friendship with the leader of the powerful Batéké tribe, Makoko Iloo I, which would eventually cede much of what is now Congo-Brazzaville to French control. As a reward for his successful explorations, France made Brazza the Commissioner General of French West Africa, where he governed for 15 years.

Examining the allegiances, writings and portraits of the two explorers, the exhibit draws a studied contrast between the humanist ideals of Brazza, who opposed slavery and fought to prevent France from granting concessions to commercial merchants in Africa, and the mercenary tactics of Henry Stanley, whose exploration of Lake Victoria and the Congo River led the way for King Leopold to establish an empire of unprecedented brutality and exploitation in what is now the DRC.

Brazza was a man ahead of his time, the curators contend, who understood the need for sustainable development, and treated the natives with tolerance and respect. “I believe that the future of Western Africa and the Congo basin depends on the rich indigenous culture and trade—not on colonization through European immigration,” he said in a speech to his admirers in Paris.

Still, the exhibit left us wondering: Do we really need a colonialist hero? Is the world short on idealized portraits of rugged white men in native gear, posing against romantic backdrops of sand and mountains? For all Brazza’s noble ideals, should we pass lightly over the fact that he was in fact the colonial governor of French Congo and Gabon? That his “gift” of Congo and Gabon to the Republic of France opened the door to decades of war and commercial exploitation? That his presence in the Congo robbed its inhabitants of their right to self-rule?

After all, Brazza could not control the massive tide of history that his explorations and his friendship treaty with the Batéké leader set in motion. He himself fell out of favor with the French government, was dismissed from his post, and died in Algiers a disillusioned man. His last report, decrying the abuses of power in the French West Africa that followed from evidence of Leopold’s enormous profits in the rubber trade, was suppressed and has still never been released.

Brazza may have truly believed that the French flags he gave to the tribal chiefs were peaceful offerings of protection, symbols of liberté, egalité, and fraternité. But from our vantage point today it’s hard to see them other than as the symbols of colonial domination that, in very real, enduring terms, they were.

True, some colonial empires were better than others. Some colonial rulers were more benevolent than others. But colonialism, stripped of all its “White Man’s Burden” justifications, is at its core a kind of violence. And any historian who ignores this is engaged in hagiography, not history.

You can still catch “Brazza in Congo: A Life and Legacy” which runs through April 17 at NYU’s Casa Italiana. You can also see a mural created by the Brazzaville artists from the Poto-Poto School of Painting to commemorate the meeting between Brazza and Makoko Iloo I, at the National Arts Club.

The 50th Anniversary of The Answer: Muddling Through

John Kay in the Financial Times today celebrates the 50th anniversary of a classic article by the American political scientist Charles Lindblom, column in the New York Times last week about agricultural aid (Sachs seems to have at least briefly returned to aid after a prolonged foray into global warming and commenting on rich country macroeconomic policy vis-à-vis the Crash). A bit of the “root” planning method seems evident:

The {aid} recipient countries should be invited to prepare plans and budgets that would be reviewed by independent experts. These plans would describe the inputs needed by the farmers, the expected increase in production, how the strategy would be put into place and how much money would be required.

So I guess Professor Lindblom’s battle is still not yet won. I salute the 92-year-old Professor Lindblom, and hope he is hearing about some of the 50th anniversary celebrations by his many fans.

Did “Save Darfur” Lose Darfur?

I have long been a fan of Mahmood Mamdani. His new book Saviors and Survivors: Darfur, Politics, and the War on Terror is very critical of the Western approach to Darfur. In brief, he accuses advocacy campaigns like Save Darfur of making the achievement of peace in Darfur more difficult by portraying the conflict simplistically between “bad Arabs” and “good Africans,” and by advocating foreign military intervention. I’ll repeat just a few points from Mamdani that stuck in my mind, but I encourage you strongly to pick up the book.

• The Save Darfur campaign repeatedly ignored and distorted the facts on the ground.
• Darfur is an insurgency and an extremely vicious counter-insurgency, but there was never the intent to eliminate any specific group and so the word “genocide” is inappropriate. But the word “genocide” gave the West and the UN a free hand to intervene.
• The prospect of foreign military intervention encouraged the rebels to hold out rather than agreeing to a peace deal, while hardening and attracting additional support for the position of the government to “defend national sovereignty.”
• There were also terrible atrocities on the “good African” side.
• The “good African” side includes one key player, the Justice and Equality Movement (JEM), that is an opposition Islamist movement that was previously on the “bad Arab” side in the North-South civil war between “bad Arabs” and “good Africans.”
• There was a sharp decrease in violence after 2005 just as the Save Darfur campaign picked up steam.
• The ICC is not credible to much of the non-Western world as a judge of war crimes since the US itself does not subject itself to the ICC, and since the ICC seems to selectively prosecute US enemies and turn a blind eye to war crimes by US allies.
• The Western pressure based on distorted facts has set back attempts within Sudan and within Africa to reach a peace settlement in Darfur, which is the only way the tragedy will end.

None of this is to deny the enormous human tragedy in Darfur. But Mamdani’s analysis makes one wonder: is it possible that ill-informed outsiders with the threat of military power on their side can make things worse rather than better?

The Answer to Development Ignorance: More Complicated Advice by Experts or More Freedom for Entrepreneurs?

by William Easterly in the Financial Times (extract of full review)

Alan Beattie’s new book False Economy accurately reflects the collapse in self-confidence among economists on our ability to usefully recommend how “developing” countries can rapidly develop. And he’s right about the reasons for this: both success and failure have often caught us by “surprise”, the key word in the book’s subtitle: A Surprising Economic History of the World.

Beattie’s supremely entertaining and informative book is a great reminder that the details of success are often impossible to predict or prescribe: no one can work out how to achieve each component. The best response is not to have increasingly convoluted advice by experts, but to let individuals with local knowledge roam free by trial and error to find their own successes.

So in the end, the economics profession does have more sensible things to say about achieving long-run success than Beattie allows: (relatively) free individuals, free markets, free trade, free thinking, and institutions that support all of the above.

The Secret to Successful Aid

…is that there is no secret. One approach to a successful aid project just is to immerse yourself in the local community, put local people in charge who are themselves highly motivated, be adaptive and flexible to respond to whatever the local people think about how they can help themselves, so that you customize the “standard project designs” to fit local circumstances. Most aid projects fail because there is nobody in the field making all these necessary adaptations and fixing unanticipated problems as they arise. The moral of the story is: be a Searcher and not a Planner.

All of these generalities came to mind when I visited the project Women’s Trust in Pokuase, Ghana yesterday, which I had also visited two years ago. I had a favorable impression then, and even more yesterday. An American, Dana Dakin, decided to start an NGO to help poor women on the occasion of her turning 60. The result, Women’s Trust, is a micro-credit initiative just for the medium-sized town of Pokuase on the outskirts of Accra. It seeks out female entrepreneurs and backs them with its small loans (the initial loan is less than $50, then increases with successive loans). The permanent staff is Ghanaian, led by the formidable Gertrude Ankrah, including accountants, loan officers, and computer whiz kids.

One success story is Sarah Ankrah (Ankrah is a very common name here), who received a 3000 Ghanaian cedi loan (at the time 1 cedi was equal to 1 dollar). Sarah now runs the largest bakery in Pokuase. Every day she gets up at 2am to go through 8 large bags of flour to have bread ready for her customers first thing in the morning. Women’s Trust microloans allowed her to grow by avoiding the extortionate rates charged by the flour suppliers (a 9% interest rate for a loan of only 2 weeks), which had previously eaten away most of her profits. Now she employs 8 women and 4 men. Her son Sammy became the first member of the family to go to college. Sarah perceives her market as “unlimited,” and is dreaming now of buying a delivery van to scatter her loaves far and wide. She repaid the 3000 loan and took out a new loan from Women’s Trust of 4000.

Sarah Ankrah and her workers cut up and shape the dough.

Similar success stories abound. Women’s Trust has diversified into new areas as opportunities arise. Bright kids from Pokuase whose school careers and life prospects would have ended prematurely get scholarships. Mothers bring in their babies to Women’s Trust to be weighed as a check on good nutrition. A handicraft operation crochets strips of plastic from recycled garbage bags into colorful handbags (two large orders from the US have already been received).

This kind of aid project is based on a lot of personal, face to face interaction, developing trust and a shared vision, so it is small scale, it has to let things proceed at their own pace, it can’t meet rigid pre-set output targets, it could never be judged by a rigorous “randomized controlled trial” methodology. In short, it involves the kind of tacit knowledge and individual adaptation that could never be converted into a routinized project implemented by the official aid bureaucracies. It breaks all the rules, and it works.

The Food’s Not Much, But the Lavatories Are Fabulous

I was startled during a meal at a non-luxury restaurant out in the boondocks in Ghana when my Ghanaian hostess suggested I check out the bathrooms. Lo and behold, they were indeed incredibly clean and hygienic. The reason seemed to be given by the following sign outside the lavatory. Apparently this private firm had won a lot of bathroom-cleaning contracts as a way to promote its own cleaning products for the homes of the Ghanaian middle class (I wish some entrepreneur in the US would think of this for our disgusting gas station bathrooms).

Now I’m not going to take a cheap shot and say this demonstrates the superiority of the private market to solve problems – especially when the private sector restaurant we were eating at was unable to supply most of the dishes that were listed on the menu (although those dishes that were available were fine). Maybe it’s a symptom of the information problems of a poor economy that the free market does well at supplying some goods (the frequently cited but still amazing penetration of cell phones and the internet into Ghana is another one), but misses out on others.

Of course, the “aid economy” is still much worse. Lacking any market or democratic mechanism to get feedback from the customers on what they want, there are even more extreme disparities between hits and misses on aid-supplied goods. One lightly used aid-financed road is a 4-lane highway in perfect condition, while the major Accra to Kumasi thoroughfare is a two-lane road riddled with potholes. Aid-financed buildings are always abundant, but some of the little things that make the buildings fully functional are missing. I saw a health clinic that was missing beds for the patients and tables for the nurse to work on (which was still much better than the well-documented problem of health clinics lacking medicines or health workers). The nurse’s solution was inventive – she kept moving one bed back and forth between the maternity ward, the post-natal recovery room, and the regular patient room, and she hijacked a table from the local aid-financed kindergarten. I am reminded of the old Soviet factory managers that creatively adapted to the perennial shortages in a centrally planned economy – much like the chronic shortages in an aid-financed economy.

It goes on. Food storage rooms are missing enough pallets to keep the food off the floor so it doesn’t rot. Some villages got a mass bed net distribution two years ago, but now some nets are torn, have been washed too many times because the village is so dusty, or some villagers missed getting nets altogether because they were absent on bed net distribution day. Moreover, the bed net villagers in an informal chat indicated other needs that seemed even more pressing to them than nets – they lack any reliable form of transport – to the capital, Accra, which is vital to them for business. Their only hope is to wait hours and hours by the road for some form of transport to come along. And more than anything they wanted – guess what – clean lavatories. There was not a single functioning lavatory in the village, and the villagers seemed well aware of the adverse health consequences of not having lavatories.

This is not to take away from the valiant aid efforts that did supply some critical goods, but it is clear the aid economy is a non-market system that has the same chaotic mixture of over-supply of some goods and shortages of others, common to other non-market systems. As the restaurant example above indicates, however, the free market is also uneven in supplying goods in poor economies. The difference is that we know in the long run, from the historical experiences of other countries, markets get more reliable and get wider and deeper coverage as a country develops (i.e. as transaction and information costs fall, and as markets get thicker with rising consumer demand). And for public goods, increasingly democratic systems with an active citizenry demanding services from their government create a kind of “political market” for public goods that does eventually succeed in creating better and more public services.

Unfortunately, history equally suggests that the non-market systems like the aid economy never do resolve their allocation problems of feast-or-famine. Aid may be a short-term expedient for some critical needs, but already in Ghana far more people are getting their needs met through private markets. Every visitor to Ghana or any other poor society has to be struck by the amazing number and diversity of small producers and retailers visible at every turn of the road – the “Royal Metal Works,” the “God is Able Provisions Store,” the “Urban Fashion and Business Center,” or the simple bald advertisement “Cement is Sold Here.” There is a lot more hope for the villagers and urbanites of Ghana from improved functioning of markets and of democratically-accountable public services than from the aid system. I’m willing to bet that the market will eventually compel the restaurant with the clean lavatories to have most of the items on the menu.

Skepticism Takes the Day Off

When you see men voluntarily breaking rocks in the hot sun to build their village’s community center, you think they must really want it. I saw this on a visit to a project by The Hunger Project in the Eastern Region of Ghana. The Hunger Project believes in people helping themselves.

Sure the skeptic would naturally seek more systematic and rigorous evaluation, and could think of plenty of things that can go wrong in any aid project. But let’s give skepticism the day off and salute the people who work so hard to help themselves and those who help them do so, against tough odds.

A salute to Dr. Naana Agyemang-Mensah, the hard-driving Director of the Hunger Project-Ghana, who works long hours to mobilize communities to help themselves. To the midwife in the birthing room in the completed community center, who lowers the mortality risk for mother and baby. To the microcredit bank in the community center, who gives loans to the members and makes sure they repay. To the food bank volunteers, who store food for the hungry season until the harvest.

Another salute to Professor George Ayiteey, whose Free Africa Foundation distributes insecticide-treated bed nets to the dusty remote villages I visited today. To G.B.K. Owusu, the local coordinator, who follows up with the chiefs and residents of each village to make sure the nets are reaching them (see net in use below).

And finally, once again to the men at work in the hot sun to build their own community center – a better image for aid than the stereotypical helpless child.

Do You Have To Be Pro-Aid To Be An Authentic African?

The always provocative and insightful Chris Blattman asks:

How come all the Africans getting press on the aid debate are conservatives and libertarians? Moyo, Mwenda, Hirsi Ali. The list is getting longer. All make good points (well, at least Mwenda does) but these hardly strike me as indigenous voices. Most seem to be channeling Milton Friedman. There's nothing wrong with a little Friedman in your thinking, but is this "authentic Africa" or the product of elite education in the West?

I see two hypotheses: (1) Africans hate aid; and (2) it is easier to get on camera if you are African and hate aid.

I'm going to lean towards... um... number 2.

Where are the Africans on camera with something different to say? Reader suggestions welcome.

Why wasn’t anyone complaining all those years when most African economists were employed by or consulting for the aid agencies, and thus automatically could not criticize aid? And why isn’t anybody complaining about “elite education in the West” for Latin Americans, Turks, Indians, Indonesians, Koreans, or Chinese, some of whom also borrow ideas from Milton Friedman? Is there a double standard for Africans?

I think Blattman’s hypothesis (2) may be partly correct. I would add corollary (2b): Africans working for aid agencies and repeating their platitudes are just as boring as all other aid officials, few of whom show up on camera. How about hypothesis (3): there are a variety of African opinions on aid, and it is healthy to have an aid debate taking place within Africa.

USAID: Don’t Ask, Don’t Tell

USAID says on its web site: “The effective functioning of our constitutional democracy depends upon the participation in public life of a citizenry that is well informed.” USAID also has signed onto an inspirational document signed by all aid agencies around the world promising full disclosure of information. Anything else would be hypocrisy when the aid donors are constantly preaching to poor country governments that they should be “transparent.” Which is why we were wondering: why have we still not gotten an answer to questions on USAID reporting on aid tying we first asked USAID five weeks ago? This was in response to our blog on USAID aid tying information on February 24th. We had been having trouble getting ANY response at all from the USAID press office ever since, despite sending no less than nine polite emails (and one slightly less polite email) and equally numerous voicemail messages their way. Our hopes flickered briefly when the USAID press office left us a voice mail on March 13, promising to get back to us right away. Since then, not a word, more emails from us, and … silence.

Bending over backwards, we thought we’d give them another shot, looking for data on USAID assistance broken down by country and by sector (which we easily got in five minutes with one phone call to the British aid agency DFID – see below).

USAID has a general inquiry line, which is supposed to connect you to a “team of knowledgeable information specialists [who] can point you to the sources that have the information that you need.” Thank goodness, a live person answered the phone. But from there, things went downhill. No one whom we were able to speak with in three hours of phone calls and research on the USAID website seemed to really understand our question, and only after many tries did we reach someone who could make a credible guess about which office to direct our questions to.

At one point we were referred to the Congressional Budget Justification, an 873-page document created to request funds from Congress. At another point, we were told that we would need to gather the data from each country desk separately. This would be difficult, since the data provided on each country webpage does not always seem to be uniform or comparable, and most often just refers you back to the mammoth CBJ. USAID’s random aid numbers are so confusing and so scattered that the USAID staff themselves apparently can’t make sense of them, judging by their inability to answer simple questions.

Is it just intrinsically impossible for aid agencies to be responsive to questions and data requests? A few weeks ago, we happened to be looking for data on how much the UK aid agency DFID spends on the type of aid known as budget support, across several African countries. After a few minutes of trying to manipulate some unwieldy OECD data sets, we clicked over to the DFID website. They also had a public inquiry line listed right on the ‘Contact Us’ page. When we dialed the UK number, a live person answered the phone. This person clearly understood the question, and transferred the call directly to another knowledgeable, live person who also understood exactly what we were looking for. She told us where the data was located on the DFID website, and then actually guided us to it in exactly five mouse clicks. We had clear, user-friendly data and a precise answer to our question in less than five minutes.

(We were tough on DFID on their budget support practices, but we praise them to the skies for opening themselves up to public scrutiny so we could discuss the issue at all.)

Why does this matter? Well USAID was right that “a citizenry that is well informed” is one of the only hopes to hold public agencies accountable, and thus improve the likelihood that USAID dollars actually reach some real poor people.

President Obama has inspired great hope by promising improved US government transparency, but maybe USAID ignores the President as much as they ignore the citizens.

Update: USAID has since emailed us back about our sectoral data request! Unfortunately the analyst at the USAID Knowledge Services Center who responded did not point us to any better data sources than those we had already found in our fruitless three-hour quest the day before. On the bright side, though, the email does vastly improve USAID’s track record on answering emails.

Can We Trust the World Bank to be a Knowledge Bank?

Unfortunately, not really, according to Brown University Professor Ross Levine’s presentation at the Aid Watch conference “What would the poor say?” on February 6, 2009. Professor Levine argues that the Bank’s incentives to keep the lending money flowing trumps any incentive to get the advice right on important issues.

The World Bank acted to suppress data collection on bank regulation because it didn’t like the findings that were emerging (not that an obscure topic like financial regulation is that important). (2 minutes, 6 seconds):

Ross Levine on a Bank Regulation Study at the World Bank from DRI on Vimeo.

Was it that the Bank could not afford to spend $50,000 to collect data on what works in bank regulation? Well they did manage to spend $4 million on a “Growth Report” whose usefulness Professor Levine regards as somewhere between that of a pet rock and a clueless bank regulator (54 seconds):

Ross Levine on How Much is A Lot of Money for the World Bank? from DRI on Vimeo.

ONE Responds to Bono vs. Moyo, Round Two

By Edith Jibunoh, Africa Outreach Manager at ONE At ONE, we agree a vigorous public debate is needed on how best to combat extreme poverty in Africa, but your post suggesting ONE is trying to “discredit” and “misrepresent” Ms. Moyo is untrue and not particularly constructive. As anyone who goes to our website site can see, we aren’t trying to discredit her, we are responding, substantively, to her arguments. You suggest we aren’t addressing the merits of her proposals, but the first item we posted on our site was a seven page point-counter-point addressing the merits of her proposals. This document clearly lays out where we disagree with the arguments she is making.

In terms of the emails you refer to, yes, we emailed people in Africa who we work with to see what they thought, as many are involved directly with aid-funded initiatives. Their experience is very relevant in thinking through the impact of Ms. Moyo’s claims. So it wasn’t an attempt to shut a conversation down, but an effort to open one up. And it’s succeeded! We’ve also been in a direct and ongoing conversation with Ms. Moyo, before and after the book’s release. Our concerns are no surprise to her. We agree with your concerns about aid transparency and, as you know, we recently helped launch “publish what you fund”, an aid transparency effort. We share the goal of “asking that aid benefit the poor” (as you write on your website) and we campaign to ensure that it does.

Mr. Easterly, there is another thing we agree on: let’s make this a thoughtful and constructive discussion about the best policy for Africa. In that spirit, it would be good to know if you join Ms. Moyo in her belief that all aid to Africa (with the exception of humanitarian aid following emergencies) should be cut off in five years, and that Africans would not suffer as a result. As just one example, what do you think would happen to the 2 million Africans now on ARVs, funded by aid?

Lest you think we are misrepresenting Ms. Moyo's point of view on what aid should be exempted, see her own words below to Australian Broadcasting Corporation.

ABC News Foreign Correspondent: Is Aid Killing Africa?

Reporter: Philip Williams

Broadcast: 17/03/2009

WILLIAMS: And you're absolutely confident that removing that aid is not going to leave at least some people without food and medicine?

MOYO: I think the ones that will be effected most will probably be the African elite as opposed to the broader population.

WILLIAMS: What will they lose?

MOYO: I think they will lose possibly their bank accounts in Geneva in the worst-case scenario. But, I think beyond that they would also lose the ability to have leisure time and they'll be required to actually go out and start to work hard to find money to support their social programs in Africa.

WILLIAMS: If you cut off aid within 5 years, surely that's going to leave millions of people without the support they are now dependent on - food aid, medical aid - aid that really keeps people alive.

MOYO: I don't believe that's the case. Most Africans do not see any of the aid that you are alluding to. It's.... again, their best case scenario on some projects is 20 cents in the dollar that actually makes it to an African - and that's best case. Effectively, if we continue down this path, we will have many more Africans living in poverty in many... in a few years to come, and that is really the problem - that there are no jobs coming out of an aid model.

Bono vs. Moyo, Round Two

Last week, ONE, the advocacy organization founded by Bono, apparently sent out an email to some of the Africans in their address book. The subject: Dambisa Moyo’s new book Dead Aid, recently released in the US. The plan: to persuade some high profile Africans to provide quotes in support of ONE’s position that Moyo’s ideas are dangerously mistaken. The vigorous and public debate that has greeted the release of Dead Aid is a good thing for transparency and effectiveness in aid, no matter what you think of Moyo’s book. ONE apparently doesn't agree. There are two things wrong with ONE’s campaign to discredit Moyo.

First of all, ONE misrepresents Moyo’s ideas to better tear them down. For example, ONE characterizes Moyo’s plan as a call to “shut off all aid in 5 years,” when Moyo is very clear about excluding humanitarian aid and NGO/ charitable aid from her discussion.

Second, rounding up some Africans who happen to disagree with Zambian-born Moyo doesn’t alter the quality of her proposals, which deserve to be debated on their own merits. (We’ve blogged about the intellectually dishonest technique of the “authenticity trump card” before.) When the ONE campaign says in its email “We are collecting quotes from Africans who might disagree with her…”, it seems to be saying we will not trust or allow Africans to have this debate on its merits on their own.

The people at ONE seem to implicitly justify this campaign by portraying themselves as the only small voice bold enough to speak out against Moyo. An article on their website claims that “while Dead Aid has been getting a lot of buzz, it hasn't been getting much, if any, scrutiny.” Even a cursory scan of Moyo’s press shows that Dead Aid has gotten reviews from all sides, plenty of them vociferously critical.

Do Bono and ONE yet understand that aid to the poor is not just a matter a celebrity fund-raising, but a difficult challenge that needs a vigorous debate on what works and what doesn’t?

The Unbearable Lightness of Summits

“International action” is something that everyone wants to resolve any major global problem. How well does it work in practice? We gleaned one small insight from Chris Giles’ brilliant article in the FT on the international finance ministers’ get together in advance of the April G 20 summit. The resulting joint communiqué was a meaningless piece of diplomatic doublespeak, he said, which failed the “five tests of relevance and importance.”

These included the rigorous “not test,” the “new test” and the “was it worth it?” test. We wondered how some recent aid summit documents would fare when put to some of these same tests.

Many of the documents we examined failed Giles’ “not test.” This test checks whether it is possible to negate the statement and create a sentence that any sane person would utter in public. We apply it here by giving the NOT statement for each statement that we review. Apply it to a sentence from last year’s UN summit declaration on food security, at a time when there was a major hunger crisis:

We urge national governments, all financial institutions, donors and the entire international community to NOT have a people-centred policy framework supportive of the poor in rural, peri-urban and urban areas and people’s livelihoods in developing countries.

This same document, which was agreed upon only “after hours of bickering over language” according to press reports, has a conclusion to which we give the NOT equivalent:

We firmly resolve to NOT alleviate the suffering caused by the current crisis, to NOT stimulate food production and to NOT increase investment in agriculture, to NOT address obstacles to food access and to NOT use the planet’s resources sustainably, for present and future generations.

This likely also flunks the "was it worth it" test: the outcome was roundly condemned for failing to require concrete action on any of the most pressing issues.

This is far from being water under the bridge, as today’s FT reports that the hunger crisis continues to worsen, with the chronically hungry worldwide passing 1 billion. In response to the farce of the previous summit, the head of UN Food and Agriculture Organization Jacques Diouf calls for another summit in November 2009.

Another example was the UN conference on drugs concluded six days ago in Vienna, but apparently the final declaration was so contentious that it still has not been released in final form. The UNODC did give a statement. Here it is in NOT form:

[The declaration] recognizes that countries do NOT have a shared responsibility for solving the world drugs problem, that a ‘balanced and comprehensive approach’ is NOT called for and that human rights do NOT need to be recognized.

That one does poorly on the “new test” to boot: the director of the Open Society Institute’s Global Drug Policy Program called it a “watered-down political declaration” that “fails to acknowledge crucial lessons that have been learned over the last decade,” and an article on openDemocracy.net complained that “government representatives at the United Nations's Commission on Narcotic Drugs (CND) have once again decided that the effluent empire of crime must be fought as it has always been.”

Just imagine how different these documents could be if they had to pass these simple tests. What if every “summit declaration” made an unambiguous statement that somebody could actually disagree with? And what if each “joint communiqué” had to require at least one of the parties to actually change their behavior in a concrete, measurable way?

Liberty Land Amusement Park

Individual liberty is a precise concept and a powerful ideal. It has an enormous moral appeal – “all men are created equal, and are endowed by their creator with certain inalienable rights, that among these are life, liberty, and the pursuit of happiness.” Jefferson wrote these words even though there was only liberty for propertied white males at the time in the US, but these words would serve as a beacon through American history, which Lincoln would invoke to motivate the Emancipation Proclamation, and which Martin Luther King would invoke to end Jim Crow and get de-facto voting rights for blacks.

Freedom also has pragmatic appeal. I think the case is strong that many of the accomplishments of economic development are due to liberty – such as the cornucopia of consumer goods through economic freedom, technological innovation through scientific freedom, and holding states accountable for a minimum quality of public goods through political freedom.

Yet the word “liberty” is also much abused and used as cover for many less glorious causes – like promoting an amusement park in the example above (maybe next year’s Davos could have participants go first to “Refugee Run” and then to “Liberty Land.”) Bush used “liberty” as a cover for invading Iraq. To many others, individual liberty is a code word to promote selfish greed or right-wing ideology. We have to rescue the inspiring ideal of “liberty” from these abuses.

Liberty just means the individual’s right to choose his or her own course as long as they do not harm others. The invasion of Iraq obviously does not fit this definition – it didn’t respect liberty for Iraqi individuals. And there is no presumption that the individual’s own course has to be selfish greed -- individuals could also choose altruism towards the poor, or sacrificing themselves on behalf of some larger group.

Nor is “liberty” automatically associated with the Left or Right, because neither ideology really accepts it. The Left tends to restrict your economic choices, while the Right tends to restrict your moral choices. (The Left won’t leave you alone in the marketplace, the Right won’t leave you alone in the bedroom.)

In development, liberty is spreading de facto (as the share of nations that have either political or economic freedom or both keeps rising steadily) but is still not really recognized as a guiding ideal. This is a shame, when our generation has already seen the greatest expansion in liberty in human history, at the same time as the greatest decline in the global poverty rate in human history. Obviously, correlation is not causation, and both trends could be driven by some third factor, but I think there is plenty of other research that would suggest the rise in liberty and the gradual ending of poverty are closely related.

Maybe Liberty Land could add a development ride called “Free the Poor!”

Did U2 Have Africa Celebrate U2?

Not sure what to make of this, so I just state the facts: an African-American record producer arranged to have well-known African singers do U2 songs for this album. U2 obviously had to sign off on an album in which Africa thanks U2 with U2 songs, due to copyright laws, and in fact the producer thanks U2 band members.

One African who is not celebrating U2 these days is Dambisa Moyo (who is speaking at NYU tomorrow night), author of the new book Dead Aid, in which she says:

Scarcely does one see Africa’s (elected) officials or … African policymakers… offer an opinion on what should be done, or what might actually work to save the continent from its regression. This very important responsibility has, for all intents and purposes, and to the bewilderment of many an African, been left to musicians who reside outside Africa.

What do you think?

Response to Owen Barder on UK Budget Support

Owen, thanks for responding to our piece. Open debate is an important way to clarify issues and hold us all accountable for the integrity of our intellectual positions. First off, you criticize us for getting our facts wrong on Ethiopia’s elections. We said:

Ethiopia’s autocratic government, which is inexplicably the largest recipient of UK budget support in Africa, won 99% of the vote in the last ‘election’.

And you say:

Nice point, except: a. according to the official results of the 2005 election, the ruling party won 59.8% of the votes…it is nonsense to say that the government received 99% of the vote.

I guess we really left you with a poor impression if you think we can’t even count votes! We were referring to the local elections of April 2008 (the more recent, and hence ‘last’). Human Rights Watch (the source of our original assertion) found, during two weeks of field research in the lead up to the elections, “systemic patterns of repression and abuse that have rendered the elections meaningless in many areas.

HRW concluded that the 2008 elections “provided a stark illustration of the extent to which the government has successfully crippled organized opposition of any kind—the ruling party and its affiliates won more than 99 percent of all constituencies, and the vast majority of seats were uncontested.” An Associated Press article from April 20, 2008 told the same story: “opposition parties said a systematic campaign of beatings, arrests and intimidation forced out more than 17,000 of their candidates.”

You also challenge us on another fact:

The UK does not give budget support to the Federal Government of Ethiopia… the UK Government provides finance to local government (albeit through the existing financial transfer mechanism via central government).

But wait, aren’t those the same local governments that just had the rigged elections? A recent article by Aalen and Tronvoll in the journal African Affairs points out that one of the reasons why the ruling party bothered to fix the local elections so thoroughly was precisely because international donors had cut off budget support to the federal government (in the political mayhem following the 2005 elections) and started channeling it to local government bodies instead. (Anyway, we never made any assertion about which level of government received budget support.)

You don’t think we developed our case enough that budget transfers to corrupt autocrats are bad. Fair enough, cases should always be developed more. But for now, which is more intuitive: your claim that aid to kleptocrats is “a way to make the government more accountable to its own citizens,” or our claim that aid money given directly to corrupt dictators is unlikely to reach poor people?

You continue:

The British Government's approach of giving some aid in the form of budget support (too little, in my view) is motivated by evidence that in some circumstances this is an important way of building more effective, responsive and accountable institutions.

“Effective, responsive and accountable institutions”—wouldn’t that include democracy and freedom from corruption? The “evidence” you cite in your post is from a report commissioned by the donors to evaluate themselves. While self-evaluation raises suspicions of bias, even so the support for your claims from this report is a tad on the weak side: “Where a separate governance matrix has been developed, progress is slow…or donors are not satisfied with quality of dialogue…or implementation is weak.”

As for corruption, the same study said that “corruption, and anti-corruption measures, have featured explicitly in the performance matrices and prior actions linked to PGBS. Most often, prior actions related to legal measures, policy development and administrative actions, but, even when formally complied with, such measures have not been conspicuously effective.” Not too surprising—isn’t giving aid to corrupt officials for anti-corruption strategies kind of like giving aid to burglars to install burglar alarms?

You conclude your post by stating:

If Aid Watch wants to be taken seriously as an aid watchdog, then … they need to do some proper analysis of the costs and benefits of different choices for aid delivery in different contexts, rather than simply asserting that it is wrong to give aid to and through governments of which they disapprove.

Thanks for your helpful suggestions on how to ingratiate ourselves with the aid establishment by toning down our criticism of bad aid-receiving governments. However, what really matters to us is not whether WE disapprove of a country’s government but whether the CITIZENS of that country disapprove of their own government—and have the right to express it. Judging from recent election practices by the government of Ethiopia, most Ethiopians don’t have that right.

Response to "Why Does British Aid Favor Poor Governments over Poor People"?

By Owen Barder, the Addis Ababa-based director of aidinfo.org, an initiative to accelerate poverty reduction by making aid more transparent. Aidinfo is part of Development Initiatives, a UK-based development consultancy. Bill Easterly and Laura Freschi at Aid Watch lay in to British Government aid for giving financial support directly to governments:

In 2007, the UK gave 20 percent of their total bilateral ODA in the form of budget support to 13 countries: Tanzania, Ethiopia, Pakistan, Ghana, Uganda, Mozambique, Vietnam, Malawi, Zambia, India, Sierra Leone, Nepal, and Nicaragua. Of this list, only Ghana and India were classified as “free” by the annual Freedom House ratings on democracy (according to either the 2007 or 2008 rating). For the 11 other countries that did get British budget support, how much is there “country ownership” when the government is not democratically accountable to the “country”? ... There is nothing that says you have to give aid meant for the poorest peoples directly to their governments, if the latter are tyrannical and corrupt. With the examples above, which side are UK aid officials on, on the side of poor people or on the side of the governments that oppress them?

With all due respect to Aid Watch, I don't think they have got this right. For example, they say:

Ethiopia’s autocratic government, which is inexplicably the largest recipient of UK budget support in Africa, won 99% of the vote in the last "election".

Nice point, except:

a. according to the official results of the 2005 election, the ruling party won 59.8% of the votes; the Coalition for Unity and Democracy got 19.9% and the United Ethiopian Democratic Forces got 9.5%. I have no idea if those accurately reflect how people voted, but it is nonsense to say that the government received 99% of the vote;

b. the UK does not give budget support to the Federal Government of Ethiopia. Through the Protection of Basic Services scheme, which was introduced after worries about the election, the UK Government provides finance to local government (albeit through the existing financial transfer mechanism via central government). As well as funding health and education, the project includes significant components to increase transparency and accountability of federal and regional parliaments.

Aside from getting the facts wrong, Aid Watch seem to be criticising this form of aid by slinging mud rather than by way of a proper analysis of the advantages and disadvanges. We should be asking what benefits arise from giving aid through government, and what harm may come from it. Aid Watch acknowledge the possible benefits: lower transaction costs, more coherence in development policies, building capacity of government. There is another crucial possible benefit: putting money through government budgets is also a way to make the government more accountable to its own citizens, rather than to a bunch of foreign donors.

But Aid Watch don't try to spell out what the harm might be if aid is given to governments with unpleasant records on human rights or corruption. I personally think there is a case to be made against giving money to many governments, for example if there is reason to believe that the money will not be spent on poverty reduction, or if it will sustain in power a government which might otherwise be booted out of office. But let's set out these reasons coherently, and let's try to assess their importance relative to the possible benefits. Aid Watch seems to suggest that guilt-by-association is enough to damn the whole enterprise.

As it happens, the governments mentioned in this piece (Ethiopia, Vietnam and Malawi) all make demonstrably good use of the money they have received. Here in Ethiopia the expansion of public services such as free education and publich health workers financed by Protection of Basic Services is transforming the quality of lives across the country; and Vietnam has made quite staggering progress in bringing down poverty. Personally I think there are important questions to be answered about the quality of democracy in both countries: but that doesn't mean I want to kill some of the citizens of those countries, or deprive them of basic services, by giving less effective aid. The British Government's approach of giving some aid in the form of budget support (too little, in my view) is motivated by evidence that in some circumstances this is an important way of building more effective, responsive and accountable institutions.

Developing countries don't want to receive aid forever, any more than industrialised countries want to give it forever. Building effective and accountable public services is a way of financing the delivery of public services in the short run, while at the same time making it more likely that countries have an exit strategy from aid in the long run. That is not preferring governments to poor people: it is preferring poor people to giving aid in a way which maximises the publicity you get and covering your back but doing little to build accountable and sustainable public services. Giving aid as budget support should not be promoted ideologically: it should be used where the advantages (in terms of better service delivery and the long term benefit to accountability and institutions) outweigh the disadvantages (such as the risk of sustaining a bad government in power). Equally it should not be opposed ideologically. Budget support has not been shown to be at any greater risk of corruption or of fungibility than other forms of aid (these are the two main arguments that are offered against budget support). It should be assessed case-by-case. Where it can be used, it represents a very powerful mechanism for both the short term benefits of service delivery and the long term benefits of institutional development. Where it cannot be used, donors should be focusing on what they can do to help create an environment where it can be used in future.

If Aid Watch want to be taken seriously as an aid watchdog, then (a) they'd better get their facts straight and (b) they need to do some proper analysis of the costs and benefits of different choices for aid delivery in different contexts, rather than simply asserting that it is wrong to give aid to and through governments of which they disapprove. Incidentally, last year Easterly and Pfutze ("Where Does the Money Go? Best and Worst Practices in Foreign Aid.") ranked the UK as the best bilateral donor. That doesn't mean that the UK is perfect, by any means, and it doesn't mean that they get every judgement right; but it does suggest that UK aid officials might not deserve the allegation in this blog entry that they prefer poor governments to poor people.

Declaration of interest: I used to work for the UK Department of International Development.