The quantity fallacy of ineffective aid

Within an interesting article on returnee Sudanese diaspora, I spotted this nugget which falls victim to the John Quiggin quantity fallacy of ineffective aid:

Since the peace agreement, donor countries have pumped more than $1 billion in aid into South Sudan—to little noticeable effect outside the capital. This is a place where the nicest homes and office buildings are little more than prefabricated containers—most people live in mud huts with conical straw roofs or in single-story cinder-block buildings, and glass windows are still a luxury.

Wow a BILLION dollars! That's a lot right? Or is it? To paraphrase Penn is a billion a shedload or a motherfunking shedload? It basically may as well be quadrillion for all my little head can cope.

So how about we scale it down to something understandable. Not that the aid was handed out to actual people, but imagine for a second it was.

$1 billion divided by 8 million Southern Sudanese people = $125 each.

Over 5 years that is $25 a year each.

So, Mr. Deng, we've been giving you $25 a year for FIVE YEARS now and you still don't have anything to show for it. Clearly then aid doesn't work or it has all been wasted or stolen.

The Political Economy of Aid to Africa. In Poetry.

‘The Innumerate Ministry of Education’
by Stephen Partington (from the East African)

‘Here’s a little pocket money:
Buy yourself some books!’
A patronising-noble act,
But now it seems that crooks

Have stolen from DfID
And lost its billions.
Some have blamed the Minister,
And him, his minions.

Blame is being handed out
Like the British handed Pounds:
Seems no-one is responsible
For what’s lost and won’t be found.

Forgotten are the pupils, who
Lack books and dorms and desks
Or any hope of realising
Free Primary’s promises.

Now Britain wants its money back
And someone brought to book,
Wants government to hunt them down
Not let them off the hook.

But do our middle-classes
Or elites whose pampered young
Attend our rich Academies
Care if justice isn’t done?

My new (second) favourite charity

After IPA, obviously, is GiveDirectly, which allows you to, er, give, directly, to poor people in Kenya. The poor are identified as anyone living in a house made of mud or grass, and are then given a sim card so they can receive cash via SMS through M-PESA. 10% goes to admin and 90% into the hands of the poor. And because the CEO is Jeremy Shapiro, they are also doing an impact evaluation of the program with IPA.

Now I just need to decide how much I can afford and am willing to donate (the 1% of Peter Singer's campaign or the whopping 10% of Giving What We Can?). And how I should divide my giving between GiveDirectly, the Proven Impact Fund, and maybe also Pratham, and whether I should wait for the Givewell evaluation of GiveDirectly or the RCT results. I'm inclined to think though that when you are putting cash directly into the hands of poor people, and you are confident that those people are indeed poor, then evaluation is almost an irrelevance.

Tanzanian Budget Analysis

Or democracy in action. This makes me very happy.

The Chadema vision and the proposal to do away with MPs sitting allowances is just the start of our salvation. 

The Loliondo cure needs to be investigated carefully. 

Some MPs do not act in the Nation’s interests 

The National Budget 2011-12 is still fragile (hurts)

via Swahili Street

The Price of Peace for Southern Sudan

is $20-25 per barrel of oil transported, paid to Khartoum in oil pipeline fees, according to some back of an envelope calculations by Greg Snyders (or 30% of the value of Southern oil). Given that the North presently gets 50% of Southern oil, about half of that again would seem like a reasonable and easy to understand number to go for.

I have very little new to say about Southern Kordofan and Blue Nile. I continue to be an optimist about the prospect for peace between the North and the South, but just despair for those unfortunate enough to have opposed Bashir in the North. A no-fly zone seems to be totally off the table, which I think is a shame.

New rule - when indicted war criminals continue to flagrantly murder citizens within their own borders, they lose all of their military airforce privileges.

If you can bear the horror here is an anonymous eyewitness account of what is going on sent via Rebecca Hamilton. 

The new national anthem of South Sudan

South Sudan National Anthem by user9727461 (thanks Nick)

Why there are ODI Fellows

"Sh251 billion [~USD 2.5 billion] mathematical error in the 2011-2012 Kenyan Budget pointed out by Mars Group."
Daily Nation.

Kudos to the Mars Group for actually reading the budget.

I should add that its not just developing countries that need economists/numerate people. I once had to review a report prepared by a British civil society organisation whose careful analysis revealed that as many as half(!) of the British population earn less than median income.

DFID Multilateral Aid Review

Everybody loves a good league table. Via Owen Barder, I just came across DFID's recent review of funding for multilaterals, and its value-for-money ranking. Specially for my Jubafriends at the Church of UNDP-tology, I'll quote their actually pretty reasonable review in full:

United Nations Development Programme (UNDP) has a leading role in reaching the MDGs, particularly in fragile and conlict-affected countries. It has a distinct comparative advantage in democratic governance and crisis-prevention and recovery. It has an important role managing the Resident Coordinator system and multi-donor trust funds on behalf of the wider UN development system. UNDP has many strengths, but we also want to see urgent progress in several important areas over the next two years. Top priority is:

• Improving the consistency of UNDP’s delivery at country level, particularly in fragile and conflict-affected countries. 

• UNDP to focus more of its efforts on its areas of comparative advantage, especially around crisis prevention and recovery. 

• Evidence of how UNDP is controlling costs and achieving greater eficiency in its operations and much better reporting of results. 

We will continue to fund UNDP at 2010 levels, closely monitor performance and review progress within two years, when we may increase or decrease our core funding.

 And congrats to Ian.

Bloody Foreigners

Apparently fish and chips were invented by the Portugese and the Mini by a Greek. Next they'll be telling us that we didn't invent tea.

It's refugee week in the UK. Hurray for curry and cappucinos.

Tony Blair on improving African Governance

People often say to me “you’ve got to train the civil service of the country in order to be able to do the things they need to do.” I personally think you can spend literally hundreds of millions of dollars doing that and nothing much come out of it (Barder: and we do). What we do is different in 3 crucial respects, the first is we combine a political interaction … the second is we prioritize, this is about delivering programs … people have this view that if you train up the civil service then they can deliver the programs. My view is that if you work on delivering  specific prioritised programs, you will get out of that the capacity that you require and can work on for delivering other things, and that its in the practical prioritization and doing things that makes the difference. The third thing is that our teams live in the country, they work alongside their counterparts in the country, there is a very strong interaction.

[Roughly transcribed] From the essential Development Drums. An interesting hypothesis forcefully made. And the Sierra Leone health service case study provides pretty compelling evidence of success.

Tony Blair. I remember walking to school in the sun on May 2 1997, for the first time in my life in a country with a left-wing government. It was mildly euphoric. And by and large you didn’t disappoint. Except for Iraq. Just one blemish. But oh what a blemish. I still don’t understand it and it still saddens me deeply. I felt almost personally betrayed for having placed so much faith in a politician. Oh Tony. I’m just not sure it is forgivable.

More on a Division of Labour for Aid, and Violence in Sudan

Thinking about division of labour depends on comparative advantage - who is (relatively) best at doing what. If there is something which only one organization can do, then they are likely to have a pretty strong comparative advantage in that area, and a pretty weak comparative advantage in any other areas.

So for example when Owen Barder makes recommendations about aid transparency, he suggests that the creators of data focus first on simply releasing the raw data and forget about doing fancy visualizations, because they are the only people who can do that part. Similarly more generally, there are good reasons for governments to focus first on providing public goods (and private goods that have large positive externalities), because the private sector will tend to underprovide those goods. Eventually the government might also want to get into providing some private goods, but there are strong arguments for it to first focus on those things that only the government can do.

When Nemat Shafik proposes a division of labour for aid, she says that 

"No other organisation has the legitimacy that comes from universal membership. This makes the UN uniquely placed to be the leading agency on politically sensitive issues like conflict, peace and security, humanitarian matters, peacekeeping and peace-building ... The UN has many able competitors in the delivery of more conventional development programmes."

 This doesn't mean that the UN should necessarily not do education or capacity-building programs within countries, just that to the extent that the UN is uniquely placed to do certain activities, it should focus on those activities first, before it gets to the other stuff. So a bit more competition in education is fine, but as there is not much competition in peace-keeping that should be a higher priority.

Finally, when citizens are being slaughtered in Sudan right now and UN peacekeepers are standing by idly, it gives this whole theoretical debate a rather real and immediate urgency.

How Sierra Leone provided Free Health Care

On April 27, 2010, Sierra Leone started free health care for pregnant women, new mothers, and young children. John Donnelly takes an in-depth look at how the war-torn nation managed it.

There is even a brief cameo by Juba's finest payroll consultants;

A consultant from Booz & Company did an extensive analysis of the ministry's payroll of more than 7000 workers, which included all employees, even those who worked in remote health posts throughout the country. The analysis found more than 850 phantom workers, who were mostly retirees still receiving their salaries, however paltry. Those people were removed from the payroll, allowing the ministry to add 1000 new workers.

Stirring stuff - well worth reading the rest in full at the Lancet (although that Booz consultant does describe this as the "Hollyoaks version" of the story).

Capacity Building and Soccer

via Alan Hudson - Matt Andrews has a new blog.

Matt is the author of my favorite capacity-building as soccer metaphor, which crudely paraphrased goes something like this:

Much development capacity-building is a bit like sending Arsene Wenger to work with Accrington Stanley. A bottom league team with part-time players needs help with the basics - like making sure the players get to the game on time and maintain a basic level of fitness and organization. Bringing in the nutritionist, sports psychologist, and sophisticated data analysis used by the likes of Arsenal is kind of not really always appropriate.

A division of labour for aid

Outgoing DFID Permanent Secretary Nemat Shafik proposes a division of labour for the major actors in foreign assistance; sounds pretty sensible to me.

United Nations: No other organisation has the legitimacy that comes from universal membership.  This makes the UN uniquely placed to be the leading agency on politically sensitive issues like conflict, peace and security, humanitarian matters, peacekeeping and peace-building.  In those contexts where national governments are often weak, the UN has to play an important role in coordinating the activities of international actors (such as through the cluster system in humanitarian crises). Its universal membership also makes it an ideal place to agree many global norms and standards (maritime rules, global health standards, etc.).   The UN has many able competitors in the delivery of more conventional development programmes. 

World Bank and the Regional Development Banks: The international financial institutions are best positioned to lead on large scale development finance in states that can afford to borrow and have the capacity to manage programmes on their own.  They could be the major source (along with private capital markets) of funding for middle income countries with major poverty issues (such as India, Brazil, Indonesia) as well as well-performing low-income countries (Ghana, Vietnam, Tanzania).  The regional banks have a unique role to play on regional integration issues. 

Bilateral Agencies: Grant financing will remain important to supporting delivery of basic social services in many low income countries for many years ahead.  Bilateral donors who face strong taxpayer pressure to deliver tangible results have a comparative advantage in funding education and health services in the poorest countries, particularly in fragile states where they can work alongside the UN.  For now, new bilateral donors are likely to focus on aid financing facilitation of commercial links and  technical assistance (such as China’s tradition of sending doctors to Africa or Brazil’s sharing of its experience on treating HIV or managing cash transfers) where their recent experience is often more relevant to their partners.  Most bilateral agencies will be the repository of national support for global problem solving such as funding for climate finance, global health or conflict prevention, reconstruction and stabilisation. 

Foundations: Private philanthropists can afford to take risks that public funders cannot. They have a huge comparative advantage in being the “venture capitalists” who invest in development innovation.  This can include technology (such as the Gates Foundation’s investments in new vaccines) but can also include innovations in delivery mechanisms, accountability, and programme design. 

Civil Society: In all countries, civil society groups have a unique role to play in holding governments and, increasingly, the private sector to account.  In many contexts they empower disadvantaged groups to demand and exercise their rights.  They also deliver essential services where states cannot operate or where governments choose to deliver services through them. 

Aid as a moral duty

Living in the US really makes me appreciate British right-wingers for their sanity and reasonableness. So do statements like this from Andrew Mitchell:

"It is a stain on all our consciences that a girl born in South Sudan today is more likely to die having a baby than to complete primary school.

"When we know what life – and death – is like for over a billion people living on less than 80p a day, and we have the wherewithal to do something about it, then, yes, I do believe we have a moral imperative to do so."

Still with the Brain Drain thing?

There is a great back-and-forth in the comments over at the World Bank's All About Finance blog between David McKenzie, Daniel Altman, and Michael Clemens. I'm pretty squarely in the McKenzie-Clemens-open-border-liberal-camp, but Daniel Altman is still worried about Brain Drain.