Comments

Dear Takashi, Thank you for this analysis. As the person who runs the <a href="http://www.cgdev.org/cdi" rel="nofollow">Commitment to Development Index</a>, I would like to make several corrections: 1. The post says that "since many donor countries tend to focus their aid allocation in their prioritized regions or countries, it is more appropriate to estimate selectivity in the aid allocations of a donor by region than to estimate it world-wide." But the text does not explain why. If a donor gives all its aid to relatively rich countries, why should we ignore that in measuring selectivity? Are poor people in Africa less deserving of aid because they are farther away? 2. Your results on selectivity do not contradict those in the CDI. The <a href="http://www.cgdev.org/section/initiatives/_active/cdi/?country=JPN&component=&w=0" rel="nofollow">Japan page of the CDI</a> decribes selectivity as a "Japan Strength" and ranks Japan #4 overall on selectivity. 3. The discussion of proliferation confuses two different concepts. The CDI measures <em>project proliferation</em>---the tendency to fund small projects---while the analysis you cite measures <em>country-level proliferation</em>---the tendency to give aid to many countries. There is no contradiction in saying that Japan funds smaller projects in fewer countries. 4. It is not surprising that Japan's aid recipients, predominantly in Asia, have grown faster. But that does not prove that Japanese aid <em>caused</em> faster growth. The cross-country statistical approach to assessing the impact of aid on growth is no longer taken that seriously. 5. The post rightly points out that Japan (like the United States) gives very little aid for the size of its economy. I think it is worth emphasizing that <em>this</em> is the major reason that Japan scores low on the aid component of the CDI, not the selectivity and proliferation issues focused on in the post. And, along with high barriers to foreign rice and foreign workers, this is why Japan scores low on the CDI overall. --David

Hi Andrew, Your comment “what will be left behind (hopefully) will be the necessary knowledge and skills, not money” goes straight to the heart of the question of overseas aid. The correlation between the cost of providing overseas aid and the benefits accruing therefrom should be the nub of the debate. Unfortunately, this is rarely the case. Providing significant overseas aid budgets seem to have become an end in itself and not a means to achieve an end. Successive Australian governments appear to have been very conscious of their ability to devote significant amounts of taxpayer funds each year without any subsequent evaluation of the results achieved. Each financial year, hundreds of millions of dollars are pumped into an amorphous and open ended bucket which apparently suffices to stifle any further debate on what Australia is doing to help other less fortunate countries. If the average Australian is either apparently unconcerned or disinterested enough to be able to discern any problem in this equation, one might think those countries that are supposed to be benefiting from these large amounts of money might want to know the details of what results are actually being achieved. The silence on this issue alone is deafening apart from a few who cast some vague aspersions about so called ‘boomerang aid’ as if the value of the aid money should in fact just be merely just handed over as a once off payment to the recipient country each year without any further accountable result or feedback loop. The launching of high profile aid projects is one beloved by both the donors and recipients. Much publicised media events on the ‘splash’ of the metaphoric ship’s launch and any associated and garnered prestige are to be milked to their limit. Yet when it comes time to consider ongoing maintenance, fuel and the crewing of the ship, no one at the launch apparently wants to know. So what is the obvious end result? Neither the donor country nor the receiving country apparently wants to challenge the process. Inevitably that creates a ‘black hole’ that each successive year of overseas aid budgets are dumped into where everything goes in but nothing apparently discernible comes out? That brings me back to my first point. The real question that should be asked is; ‘What tangible and permanent results are left behind after aid money is spent?’ The second obvious point must then surely be; ‘How can you effectively manage something not being realistically measured?’ For some reason, everyone associated with the so called ‘aid programs’ seem to be eggbound on these two crucial issues. Perhaps the real issue is that most governments seem to be unable to comprehend which end of the microscope you are supposed to look through.

The original post and the many comments have raised several interesting and complex issues. Before responding to some of them, it may be worth revealing that my comments are based on 35 years in development, covering periods as a staff member of both the ADB and WB, an employee in a commercial consulting firm in a developing country, a resident consultant on a long term advisory program in a small island and, more recently, a freelance consultant. What level of salary and conditions are appropriate? I think we need to remember that market mechanisms operate in the development aid sector as they do elsewhere. So, while some professionals may be happy to take on contracts in developing countries at less than comparable salaries than they could earn in their home country, placing a high value on the satisfaction they get from doing such work to replace the cash deficit, many will not, particularly if they have families. And the conditions provided, such and housing and transport, are an equally important part of the decision a potential contractor takes. While the excitement of living in a new culture and environment is real (and has a value) in the early years, the many disadvantages which are often present – damage to partners’ career development, limited health and education facilities, adverse security conditions, widespread petty corruption, unreliable utilities and consumer services, etc – also have a value. The longer the professional’s career in developing countries extends, the more weight is given to these issues, i.e., a young couple may take on such an appointment for a limited number of years but will be less likely to stay in the field unless the total compensation is adequate. Yet, from a development perspective, greater experience embodied in the expatriate professional is normally a desirable trait for a funding agency. “Boomerang aid”. A long career in development has left me convinced that the greatest need by developing countries is not a transfer of money or other financial resources. Rather the principal need is for knowledge and skills – across a wide range of areas: technical, policy, governance etc. So, to the extent that funding agencies recognise this and focus on advisory services, “boomerang aid” will exist: the principal costs will be for the advisors and what will be left behind (hopefully) will be the necessary knowledge and skills, not money. Relative salaries and local resentment. I believe this to be largely a non-issue, as good working relationships are about mutual respect not relative salaries. Expatriates who make no attempt to understand local cultures and make friends with those with whom they work or who adopt a superior attitude are unlikely to generate the respect necessary to be effective in their roles. At the same time, their local colleagues will be well aware that the expatriate has been hired to bring to their country knowledge or skills which are not available within the local community. If, indeed, the expatriate and the local employee are doing equivalent work and taking similar responsibility (which would justify similar remuneration), the question should be asked why the expatriate has been employed when local resources are available.

Two questions raised by Richard in his article leads to the core of the Aid dilemma. His deep understanding on the region and youth has placed him in a position to critically analyze the issue. The aid dependency and the inability to revive economies of the recipient countries is a common issue in the 'ever' developing world. The poor countries have failed miserably over generations. In my opinion two factors mainly lead to this situation. Firstly absence of a Vision for the country concerned. The leadership of the country has to formulate it and a proper SWOT analysis has to be done in designing one. Secondly not having a genuine desire among the leadership to achieve the vision. Why do donors provide aid? People believe that there are strings attached to them. Do donors have a genuine interest for the citizenry of another country [of which their own leaders have no regard for their own people]? Why some aid are given only to government institutes when donors very well know they are corrupt? Why don't they go through small NGOs [who are less corrupt] and the private sector? Is this because donors cannot benefit through them? If the donors really want and if their monitoring and evaluations are effective they can always see early warning signs before it's late. Donors should avoid the social elite and go to the beneficiary direct and gather unbiased information. And most importantly - they should respect local knowledge and expertise.

Foreign Aid – Why have it? Hi Terence, your post raises some interesting discussion points. As one who in my younger days spent some time at the grass roots (or kunai) level in PNG, my experiences of those times may well be dated. However for a number of years when I was younger, I mostly lived in a house built of local materials. I did have a stout pair of boots and a bike and I did eat canned bully beef and fish more often than those in neighbouring villages but not a lot else was different. Together we achieved a lot. Yet a basic human tenant of behaviour has not changed, so perhaps I could offer my twopenneth worth. Firstly, the question of whether there should be overseas aid is really axiomatic. Most people feel a genuine need to help those who are less fortunate than themselves. In Australia, many people recently gave generously of their time and resources after a number of natural disasters. This generosity was not meant to create any long term obligation or reciprocity but merely to genuinely help those who have suffered loss. That same inherent desire to help others translates into efforts to help those in other nations in circumstances clearly less fortunate than ourselves. Politicians in so called western countries try to capitalise on this basic human trait and promise large amounts of overseas aid funding to garner public support. A cynic might reflect however that it’s not their money after all and it doesn’t affect their salaries. How politicians in the so called developing world see the opportunities provided by foreign aid money from elsewhere is questionable in many cases. The experience in many ‘developing’ countries seems to be that if their nation is seen as poor then it will attract more overseas aid. If overseas aid is available to pay for services usually provided by the government, then those same politicians from developing countries can get on with acquiring their own fortunes at the expense of those in their country less fortunate than themselves. In these cases, overseas aid can be therefore seen as essential to try to provide the desperately needed services that in reality, should be provided by the country’s own resources. These resources are instead, reputedly being accumulated in foreign bank accounts and property. So maybe the real question that should be asked is not why have foreign aid but how should it be managed? Therein I suspect, lies the nub of the problem. There has been constant criticism about Australia’s so called ‘boomerang aid’ programs that never seem to achieve much except line the pockets of consultants and aid workers. The solution is unfortunately in the eye of the beholder. Everyone seems to have a different idea and this unfortunately clouds the real issue. I believe the benchmark for successful foreign aid programs aught to be a pre set achievement outcome for each program that must be transparently signed off and reported on and independently audited. Can everyone see why this isn’t acceptable to government?

What a fantastic, well-balanced post. It describes the uncomfortable feelings I've had about 'moving up' in salary and perks, and the one-upmanship of "which expat aid workers lives in the most badass rough conditions". >>>>And there is a risk that if they are paid a lot more, aid might end up distorting local job markets, meaning that the most talented local staff strive to be aid agency employees rather than working for their own governments or private sectors, which do desperately need their skills. I think that's already the situation in Zambia, and probably other countries too 🙂

Papua New Guineans like Andrew Mako and myself are a major part of the problem. At this point, the only group that our politicians could possibly become accountable to are honest, caring and determined Papua New Guinean urban activists who take to the streets in percentage numbers at least as high as what has occurred in Egypt, various European countries, including the UK over the past several years. Civil disobedience, always a powerful tool of the public, needs to become the rule, not the exception in PNG because the politicians themselves would be the last ones to pass laws that restrict their current limitless cowboy activities. Only a concerned, possbly dangerous public would scare the pollies enough to step down as necessary, and pass the necessasry reforms under the guidance of learned Papua New Guineans who absolutely refuse to work within the system but put pressure and ideas from outside. Sadly, none of this occurs and people like Andrew and myself will continue basking in the illusion that there is gain with no pain, that the tepid Transparency International marches achieve anything but displaying more evidence of public weakness, and that think tanks such as NRI are listened to by anyone other than head nodders. Andrew may not pray for it but I pray for a true leader who will be of honest soul and sound ethics, and will be a true muckraker and troublemaker. Nothing less will cause our current corrupt politicians to take pause. But in my praying for such a person I realise that I'm just like all the rest of us middle class or upper middle class urban Papua New Guineans - afraid to do anything activist myself. We reap what we sow.

Thanks a lot for the comment, Melanie. I’d say it’s the job of researchers to try to understand the world a little better, which is what we try to do. We don’t say that economic factors are all there is to consider.

Thanks Chris for your detailed comments. I agree that ODE forms only part of the evaluation team and indeed the article is directed to AusAID and not specifically ODE. I also agree that evaluation has to be tailored to methodologies that are suitable to those needs (and RCTs are not suitable in many cases). That said, where practical and cost-effective, an RCT is generally considered the most rigorous quantitative technique. The key way any other quantitative approach would be superior to an RCT is if available observable data is very highly correlated with unobservable characteristics (of units in the sample) or if unobservable characteristics are unlikely to influence outcomes or participation – both which don’t seem to happen widely in practice. Apart from the above point, the debate focuses largely on the disadvantages of RCTs (which certainly exist), and less on the disadvantages of RCTs relative to other quantitative techniques. In the large majority of cases where practical and where the benefits outweigh the costs, RCTs represent the most appropriate quantitative approach. Combine that with the most appropriate qualitative component, and it would provide a strong basis for causal inference – hence the term platinum standard. Unfortunately only a small percentage of projects will lend them to this type of scrutiny and hence other evaluation approaches to provide rigour, quality and validity are more practical. I am encouraged that AusAID are looking at an array of ex-ante evaluation approaches which can only improve on the good steps AusAID has taken to make performance standards stronger. As to your last point, I can only hope that development effectiveness is measuring value for money and feeding into new programs and projects.

I think this kind of research (produced by male economists, I notice) treads a potentially counter-productive path, it really worries me. I don’t think we should be trying to argue for women’s representation in economic terms. It paves the way for people to then produce research showing the opposite (of which there is some) and then argue over the numbers, losing the point that women are half the population therefore they ought to be half the decision-makers. It also essentialises and limits women who do gain positions of power. They end up being disproportionately punished for not living up to the superior standards expected of them.

Some of these issues were considered about 20 years ago, under the heading of the "peace dividend" after the end of the Cold War. During the 1990s, there seemed a strong movement to support the UN peacekeeping efforts through the "Blue Berets" - note "Berets", not "Helmets". If we are to spend money on the Australian Defence Forces, then their use in supporting the UN peacekeeping missions would be welcome. As we did after the first Gulf War in northern Iraq ("Operation Habitat"), in Cambodia, Somalia, partially in Rwanda and could do elsewhere. Still. Recognising that the ADF is on a war-footing at the moment, then there are military skills in medicine and building clean water wells that can still be utilised to protect civilians in times of civil unrest and armed conflicts. Especially, if you happen to believe in the following obligations of the Convention on the Rights of the Child (signed by Australia) and CROC's Article 38(4): "4. In accordance with their obligations under international humanitarian law to protect the civilian population in armed conflicts, States Parties shall take all feasible measures to ensure protection and care of children who are affected by an armed conflict".

Thank you Jonathan. It's interesting: in terms of welfare implications Dinuk and Paul's post on the growth impacts of women in parliament is much more significant than this post here. And yet it's my post that has attracted more attention. The reason for this I think is probably, as you suggest, a mixture of guilt and the fact that the story is a personal one that most development folks can related to. While it is the big things and big trends that really matter for development, at the end of the day we are all individuals caught up for the most part in our own lives and dilemmas (or, at least, I know I am), and I guess that's why it has resonated.