Pressure to Improve UK Aid – How COD Aid Could Help

This is a joint post with William Savedoff and Ayah Mahgoub.Lawrence Haddad is the Director of the Institute for Development Studies at The University of Sussex in the UK.  In a recent blog post, he poses several challenges for the new UK government on development.Here’s my take on how Cash on Delivery Aid (COD Aid), an approach the UK Conservatives endorsed in their  international development green paper, might address some of Lawrence’s challenges to the new government (using his numbering):2. How to reconcile the learning and the accountability sides of the new emphasis on impact and value for money--they do not often work hand in hand?With COD Aid, funder and recipient agree on a measurable outcome, and COD funding is disbursed only after the recipient demonstrates measurable progress.  The recipient has full discretion in use of its own domestic budget and COD flow for maximizing progress on that agreed outcome (impact) at minimum cost (value for money – for the recipient, and it follows for the outside funder’s fungible contribution). Over 5 years, it is the recipient who “learns” how to maximize outcomes and minimize costs.3. How to make sure that the greater accountability of aid-dependent countries to donors does not detract from the accountability of those countries to their citizens?This is the key dilemma for all outside funders.  Cumbersome reporting and implementation requirements by donors have the potential to detract from the accountability of countries to their citizens.  COD Aid is designed to resolve this dilemma. With COD Aid the recipient agrees to make public to its own citizens the COD contract, its report of annual progress against the agreed outcome, and the independent audit.   There is no additional reporting to the funder.5. How to fix the broken feedback loop in development (citizens in aid-receiving countries cannot hold donors to account) --are there practical ways of doing this?See the answer to #3.  With COD Aid the citizens have simple information about what their government  has agreed to accomplish with foreign aid (e.g. educate children, reduce mortality) and information about progress with which to hold their own government to account for its use of outside funds. With such an arrangement, the accountability of donor governments becomes of secondary importance and only in terms of the outcome that they have agreed to pay for.7. How to communicate the case for aid in a more authentic and grown up way?Tell rich country taxpayers what their aid agency is paying for.  Hypothetically it might sound like this: “In 2012 the Government of Malawi reported to us that 30,000 additional children completed primary school and billed us $6 million in line with our agreement to pay them $200 for every additional child that finished primary school and took a competency test. Our independent audit verified their reported outcome. By the way the test result for all children who finished primary school rose slightly.”