COD Aid Called Radical and Refreshing

In a refreshing discussion of COD Aid that’s what Andrew Rogerson calls our idea.  Rogerson is an experienced player in aid delivery, having been at DfID and the OECD/Development Assistance Committee.  His smart summary covers the latest news, including a pilot of COD Aid for Ethiopia being planned at DfID.  It is smartly presented (as in COD implies for the recipient “no free lunch”), with an eye on the practical questions sponsors of COD Aid face.Here are a couple of issues we are being asked about that Andrew doesn’t cover:

1. What if a country has no real capacity to measure the outcome to be paid for? Bill Savedoff and I discuss that in the preface to the second edition of our book.
2. How can a funder do COD Aid in a fragile state?  There are different kinds of fragility; COD Aid is worth trying where there is reasonably responsible leadership but weak implementation capacity, as we discuss in our book (pp. 26). Ben Leo reports substantial progress on MDGs in the last two decades in several fragile states with low CPIA ratings (World Bank Country Policy and Institutional Assessment) including Cambodia, Laos, Ethiopia, Malawi, Burkina Faso, and Uganda.
3. How decide the payment per unit of progress?   We think this is the toughest question.  The funder has to make an offer but based on what? I don’t think any elaborate studies of unit or marginal costs are needed – but I also think the payment should be below average costs.  We are working on this issue and welcome your views.