The analysis points to possible improvements: Have aid agencies specialize more in solving particular problems in particular countries, rather than having each agency responsible for everything. Then hold each agency responsible for progress on its particular problem, which might encourage it to cut red tape. And give the poor Tanzanian Kathy Porter’s phone number.
No matter how hard you try, every once in a while, something is going right.
COROLLARY TO MURPHY’S LAW5
Success
Don’t abandon all hope. Even with all the possible bureaucratic pitfalls to making aid work, it sometimes does work. There are successful projects in the World Bank’s portfolio, for example. The World Bank in the early 1990s helped fund the Food for Education program to keep Bangladeshi girls in school by giving their parents cash payments in return for school attendance (this is the kind of program that could help Amaretch in Ethiopia). Female enrollment doubled in the areas covered by the program. Another World Bank project in Bangladesh helped reduce the percentage of malnourished children from 13 percent to 2 percent in the areas covered. The World Bank’s Peru Rural Roads Project helped Andean villagers get their crops to market in one tenth the time it used to take before the project.6
In 1991, the World Bank co-financed a ten-year $130 million project in China to control tuberculosis deaths. Local TB clinics tested 8 million people for TB during 1991–2000. Of these, 1.8 million tested positive. Doctors gave TB patients the proven regimen of streptomycin and other drugs. Because it is critical that patients take their medicine regularly (a weak point in many previous anti-TB programs), the project assigned health workers to watch patients do so. (This is the DOTS, “directly observed treatment, short course,” approach successfully pioneered by the World Health Organization.) Local units reported on caseload and treatment to provincial and central committees, which made possible continuous evaluation of whether the program was working. The program was a success: the cure rate for TB increased from 52 percent to 95 percent. Chapter 5 discusses other health success stories.
The WHO and UNICEF supported a child nutrition project in the Iringa region of Tanzania beginning in 1983. The project held community health days in which all the children got a weight-for-age calculation to identify which children were malnourished. The project also trained village health workers and traditional healers to recognize the signs of malnutrition. Feeding centers got food to undernourished children. In the five years of its operation, the program reduced severe malnutrition by 70 percent and moderate malnutrition by 32 percent. The World Bank and other donors started similar projects in other parts of Tanzania in the 1990s.7
Foreign aid likely contributed to some notable successes on a global scale, such as dramatic improvement in health and education indicators in poor countries. Life expectancy in the typical poor country has risen from forty-eight years to sixty-eight years over the past four decades. Forty years ago, 131 out of every 1,000 babies born in poor countries died before reaching their first birthday. Today, 36 out of every 1,000 babies die before their first birthday. Kids enrolled in primary school in the typical poor country went from 65 percent of their age group in 1960 to 100 percent today. (There are a number of countries below 100 percent enrollment, but more than half of poor countries have 100 percent enrollment—hence the “typical” poor country has 100 percent enrollment.) The corresponding ratios for secondary school were even more dramatic: only 9 percent in 1960, 70 percent today. Despite the zero-growth payoff to aid in Africa, there has been a fall in infant mortality and a rise in secondary enrollment (see figure20) in that most aid-intensive continent.
Fig. 20. Infant Mortality in Sub-Saharan Africa
Organizations such as the IMF and the World Bank do succeed in attracting professionals who are dedicated to the mission of poverty reduction. Employees with strong norms of professional conduct do perform better than suggested by the more cynical analysis of aid agency incentives to please the rich. Even if aid didn’t work well at the top, agents at the bottom sometimes made it work anyway. Professional fieldworkers can discover projects that do convey real benefits to poor people—e.g., better economic policy; better health, education, and sanitation; and better access to water, sanitation, and electric power.
Fig. 21. Secondary Enrollment Rate in Africa
Maybe aid even works on average in some sectors, such as health, education, and water and sanitation. For example, maybe aid agencies had something to do with the improvement in water and sanitation in Africa. From 1970 to 2000, the percentage of the population with access to clean water went from 20 percent to 60 percent, and the access to improved sanitation went from one sixth to two thirds in the typical African country. Attributing these successes to aid is conjectural because there has not been enough of a scientific attempt in aid agencies to evaluate the impact of aid projects, but at least it lends some suggestive hope that aid can sometimes work.
Predictions of Bureaucratic Behavior
The concepts discussed earlier suggest that we bureaucracies will devote effort more to activities that are more observable and less to activities that are less observable. By the same token, we bureaucrats will perform better when we have tangible, measurable goals, and less well when we have vague, ill-defined dreams. We will perform better when there is a clear link from effort to results, and less well when results reflect many factors besides effort. We will perform better when we have fewer objectives, and worse when we have many objectives. We will perform better when we specialize in particular solvable problems, and less well when we try to achieve utopian goals. We will perform better when there is more information about what the customers want, and less well when there is confusion about such wants. We will perform better when agents at the bottom are motivated and accountable, and less well when everything is up to the managers at the top.
All of these positive factors shift power from Planners to Searchers. When aid efforts meet these criteria, Searchers offer the bureaucracy visible results that will burnish its external image, protecting it in a politically hostile environment.
Unfortunately there are large areas of aid efforts that do not meet the criteria for favorable opportunities for success, leaving power in the hands of Planners. We expect bureaucracies to do worse than private firms at matching their supply of services to their customers’ demands, since bureaucracies are less accountable to their intended customers—the poor. The lack of a scientific approach to evaluating actions in the bureaucracies may also reflect the same lack of accountability.
Aid agencies will perform better when they can recruit dedicated professionals, and less well when there are political pressures to hire staff based on other criteria. Professionals will be easier to attract when the achievement of well-defined specific tasks can bolster professional morale.
We can use these predictions to speculate how we got some of the success stories just noted. Perhaps health interventions are more successful because the outcomes are specifically defined and easily observable—you can keep track of deaths from disease. Particular diseases can be monitored; you get feedback from how well the agency is doing on a particular disease, and adjust accordingly. The health field may also benefit from having a large organization with the narrow goal of improving health—the World Health Organization (WHO). Where there are visible indicators of success, even top-down efforts can work. The WHO’s vaccination campaigns, which get part of the credit for the fall in infant mortality, involved a lot of top-down control, but there was feedback from the bottom through measures of vaccination coverage. Similarly, educational enrollment ratios can be monitored easily, and so effort at increasing enrollment gets rapid feedback. Likewise, nutrition projects can monitor the weight and height of children and thus get better feedback on whether their efforts are working. The prominence of the specific health, education, and nutrition goals for most of the history of foreign aid and the agreement of virtually all principals on these goals helped facilitate achievement here. Th
e successes of expanding access to clean water and sanitation reflect the aid agencies’ greater success at visible infrastructure projects than at more intangible (and less visible) goals.
Moving outside of projects, aid that promotes piecemeal reforms, in areas such as cutting red tape or ensuring better banking regulation, has visible results—such as the number of days to start a new business, the number of new businesses started, or the number of bank failures. We can hope for better results from piecemeal policy advice than from aid that promotes comprehensive reforms, where nobody can tell what is causing what.
The link from efforts and inputs—medicines, vaccination, food, construction of classrooms and water infrastructure, power generation, regulation simplification, etc.—to results is simpler and clearer in health, education, nutrition, water, electrification, and piecemeal policy reform than with other more general goals, such as how to achieve overall economic growth. It is easier to tell in these sectors what customers want—starving children obviously want food. Searchers have the inside track when there is the hope of visible results in these areas, in spite of bureaucracy above and around them.
Of course, it would be circular reasoning just to attribute any success in aid to Searchers and any failure to Planners. Instead, we have specific testable predictions based on how piecemeal an outcome is, how visible it is, and how much individual accountability is feasible. A piecemeal, visible, and individually accountable outcome, such as clean water for a village, is more likely to be addressed by Searchers, while a general, invisible, and unaccountable outcome, like a contribution to economic growth, is more likely to be addressed by Planners. The areas with piecemeal, visible, and individually accountable outcomes are more likely to experience success, while areas where objectives are general, efforts are invisible, and individual accountability is infeasible (or evaded) are more likely to experience failure.
This story is plausible but includes some speculation because the aid agencies didn’t have enough incentives to evaluate (independently) what was working and why.
Aid Volume
In other areas the emphasis on observable indicators was less productive. Given that the goal was the development and transformation of poor countries, the aid agency somehow had to show progress toward that millennial vision. When the contribution of the agency to development output is unobservable, the agency planners try to advertise the volume of their inputs to development. One visible indicator of input that foreign aid agencies advertise is the volume of money they disburse. What Judith Tendler wrote about foreign aid back in 1975 is equally true today:
A donor organization’s sense of mission, then, relates not necessarily to economic development but to the commitment of resources, the moving of money…. The estimates of total capital needs for development assistance in relation to supply seem to have been the implicit standard by which donor organizations have guided their behavior and judged their performance…the quantitative measure has gained its supremacy by default. Other definitions of success and failure of development assistance efforts have been hard to come by.
Longtime World Bank president Robert McNamara cut his teeth in a previous life on the combined military intervention and aid program in Vietnam. McNamara had an infamous penchant for using numbers to monitor success in the Vietnam War, such as the body counts. Once he got to the World Bank, his numerical measure of success was less gruesome—it was loan volume: “we proposed to double the Bank’s operations in the fiscal period 1969–73 compared to the previous 5-year period 1964–68. That objective has been met” (McNamara, 1973).
Advocates for the world’s poor throughout the decades have focused on increasing the volume of foreign aid. The recommended increase displays a strange fixation on double: “the current flow of ODA [Official Development Assistance]…is only half the modest target prescribed by the internationally accepted United Nations Strategy for the Second Development Decade” (McNamara, 1973). “A cut of just 10 percent in military spending by the countries of the North Atlantic Treaty Organization would pay for a doubling of aid” (World Bank, World Development Report, 1990). “If we are serious about ensuring a beneficial globalization and meeting multilateral development goals we have all signed on to, we must double ODA from its current level of about $50 billion a year” (World Bank president James Wolfensohn, 2001). A World Bank technical study on the cost of meeting the Millennium Development Goals concurred on doubling: “An increase in foreign aid of an amount equal to current foreign aid…is about the right order of magnitude for achieving the development goals” (World Bank, 2002). Aid mounted throughout the period when agencies were emphasizing volume (see figure 22).
British prime minister Tony Blair and the chancellor of the exchequer Gordon Brown placed an increase in foreign aid, especially to Africa, high on the agenda of the G8 meetings in 2005. The recommended increase: double. In his 2005 book, The End of Poverty, Jeffrey Sachs called for a doubling of aid in 2006, then nearly a doubling again by 2015.
Aid had declined in the first half of the 1990s, perhaps explained by the end of the cold war and a weariness with meager results. However, a new wave of aid expansion commenced in the new millennium and shows no sign of abating under the international war on terrorism.8 The G8 did indeed agree in July 2005 to double aid to Africa.
The only problem is that foreign aid volume is an input to development, not an output. It seems strange that bureaucrats and politicians would focus on the input—total aid dollars spent. The Hollywood producers of Cat-woman, which won an award for being the worst movie of 2004, would not dare to argue with moviegoers that the movie wasn’t so bad because they had spent $100 million on making it. We can understand the emphasis on aid volume only as reflecting the pathology that in aid, the rich people who pay for the tickets are not the ones who see the movie.
Fig. 22. Foreign Aid 1960–2003
This particular pathology has a solution, at least in theory. The rich-country monitors of aid agencies should disqualify aid disbursements (and the spending they finance) as a measure of success. The aid agencies have tried to deemphasize aid disbursements themselves, but in vain, given the political payoff to advertising disbursements. Aid critics have to persuade the rich-country public and politicians not to reward agencies for how much money is mobilized; what matters is results.
Yosemite Sam in the Tropics
The managers at the top of aid agencies had the incentive to show observable effort to the rich-country public. This caused them to produce many visible frameworks, task forces, reports, and meetings of statesmen. The World Bank evaluation of its activities in 1997 cited “the Interagency Task Force on an Enabling Environment for Social and Economic Development” that “followed up on two key conferences held during 1994–1995: the Copenhagen Social Summit (March 1994) and the Fourth World Conference on Women (September 1995).” During 1994–1996, the World Bank “chaired ninety formal meetings and provided substantial input to thirty-eight formal meetings chaired by other donors.” Likewise, the United Nations Development Program (UNDP) discussed in a report its success at arranging meetings:
Trust Fund resources have been used to support the preparation and dissemination of social sector expenditure reviews in seven African countries…. Five of these reports have already been finalized and a workshop has been or will be held to discuss their findings and recommendations. Preliminary findings of these studies were shared in three regional meetings, co-sponsored by UNDP and UNICEF, which served to sensitize policy-makers about the 20/20 initiative and prepare them for the international meeting which took place in Hanoi in October 1998..9
In 2005, the UN Millennium Project issued its report, summarizing the meetings of ten different task forces, which in turn built upon a previous task force on poverty and development that had issued a report in 2004, summarizing meetings hosted by the UN Economic Commission for Africa (with the assistance of UNDP Ethiopia) and the UN Economic and Social Commision for Asia and the Pacific (with the
assistance of UNDP Thailand).
Likewise, the aid agencies put a lot of effort into writing reports. They write reports for each other and for the rich-country media. The World Bank and the IMF noted in a 256-page joint report on meeting the Millennium Development Goals in April 2005 that the report drew upon: “Evidence from an OECD DAC Working Party on Aid Effectiveness and Donor Practices (WP-EFF) survey, Strategic Partnership for Africa (SPA) surveys, and the United Nations Economic Commission for Africa (UNECA)—DAC Mutual Review of Development Effectiveness in the Context of the New Partnership for Africa’s Development (NEPAD).10
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