Cash on Delivery … without the Aid?

July 31, 2015

Over the last five years, our newsletter “Cash on Delivery Aid Update” has begun to cover more than just Cash on Delivery Aid (COD Aid). So we’ve decided to rename the newsletter, but what shall we call it?

I discussed this simple question with colleagues at the Center, where it quickly turned into a strange journey through the language – and substance – of performance payments. In particular, what is being delivered? And is the cash always aid?

What Is Being Delivered?

You may know that our work on COD Aid has primarily focused on aid payments to a government in proportion to achieving development outcomes. Two examples that come close to this idea: the UK has made bilateral transfers to Ethiopia for about ₤100 per child completing secondary school; GAVI, for a time, paid governments US$20 per vaccinated child; Norway contributes $5 per ton of avoided carbon emissions from deforestation in the Amazon.

But our newsletter also considered other aid programs that looked similar because they paid for a “result” of some kind. A partial list might look like an odd alphabet song – RBF and RBA; PBI and OBA; DIB and SIB; PforR and P4P – but they do share a common focus on paying for results. (If someone would like to compose a melody, the rhyming couplets are intentional).

The odd thing is that people designing these programs define “results” in very strange ways. Some of these programs pay for writing a plan, instituting a new procedure, or delivering supplies. This is far from the results we envision for COD Aid agreements – results like children who know how to read and write, fewer deaths from preventable illnesses, or lower greenhouse gas emissions from deforestation. It also differs from the common understanding of results; after all, one dictionary synonym for results is “effect.” In practice, performance agreements tend to pay more often for things which are thought to be causes than for verified effects. I think that’s a problem. Others don’t. Subject matter for more debate.

Is the Cash Always Aid?

Over time, we also noticed that some of the programs we wrote about in our Update aren’t really foreign aid at all. In particular, Norway’s agreements with BrazilGuyana, and Indonesia pay to reduce greenhouse gas emissions from deforestation. These aren’t charity or redistributive programs in any sense. They are payments that compensate tropical forest countries for an important service – slowing the pace of climate change – that benefits rich countries. Other programs we’ve written about, like Social Impact Bonds for reduced recidivism or fiscal transfers for health, have nothing to do with aid and everything to do with improving domestic public policy. It is pretty clear that this newsletter is not about aid and that aid is too narrow a window.

Cash on Delivery without the Aid?

So I came away from these conversations with a desire to be specific about paying for “effects” and to stress the responsibility of funders to pay what they owe for public goods, externalities, distributional justice, and cost-savings. Yet somehow “The Paying for Effects which are Public Goods, Externalities, Matters of Distributional Justice, or Cost-Saving Update” just didn’t have the right ring to it. Don’t you agree?

I might just rename it: “The Cash on Delivery Update.” That would leave open the debate over what is being delivered and get rid of the narrow focus on aid.

COD without the Aid.

What do you think?

[And after posting your ideas, please subscribe to the Update here so you’ll know the “result”!]


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.