Since the 2010 earthquake, $6 billion has been disbursed in official aid to help the people of Haiti. Nearly all of it has gone to intermediaries such as international non-governmental organizations (NGOs) and private contractors. Yet there has been a surprising lack of reporting on how the money has been spent.
CGD Policy Blogs
The January 2010 earthquake that devastated Haiti, killed over 220,000 people, displaced several million, and flattened much of the capital, Port Au Prince, also unleashed a tsunami of outside assistance. In the 28 months since the earthquake official donors have disbursed almost $6 billion in aid to help the people of Haiti, the equivalent of $600 per person for a country where per capita annual income is just $670. Where has all the money gone? On the second anniversary of the quake we set out to answer this question; our new CGD policy paper is the result. The short answer is that the vast majority of the money so-far disbursed has been paid to international non-governmental organizations (NGOs) and private contractors. And while many of these organizations do excellent work, there is shockingly little information on how they used the funds.
[Update, June 29, 2012. The authors of the study here blogged have retracted it.
In a recent working paper, Jacob Hughes, Walter Gwenigale and I describe Liberia’s unique experience in pooling donor funds for health in a post-conflict setting, with good results. We also describe a new and complementary agreement between Liberia and USAID, called the Fixed Amount Reimbursement Agreement (FARA). It’s been heartening to see USAID take this step towards implementing results-based aid in Liberia, but the process has also highlighted the problems that such aid faces in the ‘real world’.
This is a joint post with John Norris of the Center for American Progress.
Budget concerns will almost certainly put downward pressure on federal spending across a host of government programs for a number of years. Although some think it is almost heretical to point out the obvious, the international affairs budget will not be immune from this dynamic. In fact, international spending could take a disproportionate hit compared to domestic spending – despite the fact that discretionary international spending is a very small part of the overall budget puzzle.
International affairs, and more specifically foreign assistance, have rarely been popular budget items among the public or on Capitol Hill – despite consistently comprising only about 1 percent of the total federal budget. Even so, foreign aid and international engagement make good political targets for elected officials out on the stump. It is far easier to demonize foreign aid than to explain how relatively modest programs to improve living standards in the developing world have consistently proven to be in the national interest over the long-term.