On both sides of the Atlantic budgets are under severe pressure. Governments are seeking to improve the effectiveness of development resources. Last week, the State Department and the U.S. Agency for International Development unveiled the Quadrennial Diplomacy and Development Review, which seeks to bring a more unified, focused and results-based approach to U.S. civilian power. Starting in January 2011, under the Lisbon Treaty, the European Union will launch a new European External Action Service to strengthen policy coherence in areas such as development. Such initiatives could lead to better planning and management of scarce resources with a stronger focus on results. This could help boost legislative oversight as well as evaluation by development agencies. But, there are perils involved with this trend. The following blog posts by Transatlantic Taskforce members Andrew Natsios and Richard Manning offer some insightful perspectives on this subject (http://blog.gmfus.org/2010/12/20/can-results-based-approaches-escape-obsessive-measurement-disorder/).
Donor governments and international institutions are placing renewed emphasis on proving measurable results from aid programs, increasing oversight, and designing more and more metrics to track implementation. In the United States a discussion of these practices has become even more relevant because of the debate over aid reform and now with the mid-term U.S. elections, the shift in popular sentiment against increased public spending, and the potential for cuts in aid.
Although well intended, this excessive focus on results could potentially exacerbate the negative impact from what I call an “obsessive measurement disorder” – the intellectual disorder of focusing too much attention on quantitative indicators. This disorder has collapsed the time horizon of programs because oversight agencies want evidence of more immediate results when the most sustainable development programs require much longer time frames to be successful. I published an essay with some thoughts on these subjects called the “Clash of the Counter-Bureaucracy and Development” in July 2010.
Accountability and performance measurements in foreign aid programs are not new. Because aid money is spent in countries with weak, failing or non-existent institutions, program failure rates are higher, accountability problems more frequent, and public and thus parliamentary or congressional demands for greater oversight more aggressive than for domestic programs managed in developed countries.
In the U.S. system pressure from regulators charged with the oversight of all federal departments – such as the Inspector General (IG), the Government Accountability Office (GAO), the Office of Management and the Budget (OMB), and the Director of Foreign Aid programs at the State Department – have forced USAID, the PEPFAR (the U.S. government’s HIV/AIDS program), and the Millennium Challenge Corporation (MCC) to design hundreds of metrics to track program performance and improve management, at least theoretically. These kinds of entities and their command and control systems make up what political scientists call the counter-bureaucracy—federal agencies created to oversee the federal bureaucracy.
This obsessive measurement disorder has now spread across the international system. The Gates Foundation uses metrics-based approach to manage its vast grant portfolio, a management tool borrowed from private industry. The UN Millennium Development Goals have now been translated into a set of metrics. The World Bank now has five independent oversight systems over its programs.
These command and control systems have developmental consequences—many with perverse results—and sometimes clash with good development theory and traditional aid practice. For example, what is easily measured is more likely to get funded by aid agencies, budget offices, and legislative bodies, even if the measurements are not particularly significant to the transformation of a poor country.
The excessive focus on these systems ensures that larger, more established institutions—contractors, large universities, advanced developing countries, and major non-governmental organizations—with a mastery of the labyrinth of regulations and law get contracts or grants to carry out programs (or get budget support through local governments). Aid agencies are increasingly risk adverse because they do not want to get bad audits, miss program deadlines, or experiment with new approaches that might fail. Compliance managers running these systems are now more powerful than development experts; they make up a greater and greater proportion of aid career staffing rather than the development practitioners that do the actual technical work.
This elaborate oversight apparatus is not free: oversight costs money for developing countries running programs, and contractors and NGOs producing the reports, audits, and assessments required. It is sucking up a larger and larger portion of aid program funds. The greatest intellectual fallacy of the architects of this monolith is that it is making development better: the least measureable programs are often the most developmentally significant (such as democracy and governance programs) and the most easily measured are sometimes those with the least significance.
Measurability has little to do with transformational development; numbers are often misleading indicators of performance. How does an aid manager measure the impact of the new constitution written with technical assistance, or an anti-corruption program, or support for an indigenous think tank or research center? Most bilateral and multilateral aid agencies are instead judged using very shallow indicators such as how fast they disburse (or loan) public funds (an easily quantifiable measurement) rather whether they are producing deep impact in the field.
The Millennium Development Corporation (MCC), President Bush’s signature foreign aid program the Obama Administration has continued to strongly support, faced heavy criticism from Congress, the IG, OMB, and the GAO for its slow disbursement rates. More than anything else, this was a function of weak institutions in poor countries, not a failure of the MCC.
Rolling back this massive over-regulated system will not be easy. Given the current fiscal environment, it’s a growing problem for European and other leading donors as well. In the case of the U.S., it will require the Congress and the Executive to come to a better understanding on results for aid programs based on sound development practice. Otherwise U.S. foreign assistance will become increasingly the by product of a dysfunctional bureaucracy that has little to do with development.
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