Reflection: Development aid and how it actually “works”

Note: This post is my views and my views only. They do not necessarily reflect the views or the work of any of the organisations I have worked for or represented.

A post that has been a long time in the works (at least in my head), but has been good to leave until the end of my latest volunteering stint.

I’d like to make the point here, that what I’m about to say refers to development aid only, and NOT humanitarian aid. The two are significantly different, the later responding to emergency situations only. I don’t know a lot about the inner workings of Humanitarian Aid; I have heard it has its own set of issues, but is also plays a very important role and I want to be clear that it is not the topic here.

So to the subject of development aid, the pros and cons, highs and lows of which have touched my life every day for the past 18 months. It has often been heartbreaking; to have believed in something so much and see it fail more often than not, so miserably.

I have to be honest; when I came to Zambia I thought that working in development aid may be something I’d be interested in. I thought it would be “rewarding”, working but working to make a difference. I wasn’t completely ignorant, I knew that there were problems with development aid, that money didn’t always get to where it was supposed to go, that it was slow, etc. However development aid, in Zambia at least, was nothing like I expected. Some of the issues are cultural; many I suspect are uniform across the world.

  

Targets and measures

Probably the biggest issue I’ve seen with development aid is how it is measured. There are the Millennium Development Goals (MDGs) which most people are aware of, then there are the measures on the UN Human Development Index, the World Bank’s development indicators and country economic data, to name but a few. However on a day to day basis this is not really how things work.

The government targets that are set for Overseas Development Aid are a case in point. Once upon a time even I saw these as important, however I now view them as almost completely irrelevant. The success and need for aid should NEVER be based on some DOLLAR target (i.e. percentage of GDP). It doesn’t achieve outcomes and it doesn’t prove that aid is being successful. It is completely the wrong measure, referred to and relied upon far too much.

And it is the same at an organisational level; how much is given might sound nice, but it doesn’t mean that there has been any change to the people’s lives it is supposed to be benefiting. However and unfortunately, it is quite often the MAIN measure and to not spend 100% of one’s budget or close to, is regarded as some sort of failure. I have been told by aid practitioners in Zambia that their budget spend is one of their KEY performance measures. Of course when you apply for a grant and when you are lucky enough to receive it, you will get asked about the number of beneficiaries, changes to their situation, how many you have reached with communications, etc., which probably means that someone is thinking that these should be the outcomes. In reality however, as long as the money is spent according to how you said it would be, the outcomes really feel like a second thought.

Sub-granting

Sub granting is a tough one as in theory it allows smaller, “grassroots” organisations to aid local communities. And I guess it does this a little. However having worked for this type of organisation I have seen just how little of the money actually makes it to the beneficiaries it was originally intended for. So what happens?

First a cut is taken from the money by the first agency (usually government, sometimes a large NGO) who are required to cover the cost of the process for deciding who to allocate the money to. Then often it goes to a medium- large organisation that works throughout a large region, whole country, etc., and needs help with “localising” projects. And so they take a cut for their administration costs and again the costs of allocating the funds before seeing that the remaining money gets distributed to smaller NGOs left to run the projects. These smaller organisations also need to pay staff and run their office, so by the time this all happens only a fraction of the original sum of the money can be used for the projects it was intended for.

An alternative that is applied and often suggested as the only way to apply aid efficiently is via direct aid to governments, allowing them to designate money to the area’s most in need (e.g education, health, etc.) I actually do prefer this idea, however finding trustworthy governments in developing countries is difficult and donors like to have control of where their money is going.

I have seen sub-granting be relatively efficient, especially if the administrative cuts are small. However, it often the small organisation at the very end of the chain that loses and is expected to run projects for “free”, i.e. no administration money is allocated to the organisation. But all in all, sub granting from what I have experienced is a very inefficient process! 

Corruption and waste

Corruption or wasted funds is another area I can’t fathom in development aid. We all know it exists in aid, right? We’d be kidding ourselves to believe otherwise, however what is unforgivable is the extent of some of the corruption and misuse of aid. And what I struggle with probably the most is the “acceptable” forms of these; forms that are not considered corruption because aid agencies openly allow them to happen, hell, they even support them. What are they?

Allowances

First is allowances; sums of money paid to people within the industry for coming to workshops and meetings, or basically to do an already paid job. These allowances are often broken up for different things. You will most definitely get an allowance for transport, or “transport refund” as it is referred to. This one I have less of an issue with, PROVIDING the person is actually out of pocket because of the trip. Going to an office one block away does not constitute being out of pocket in my view.

Then you have meal allowances. Sometimes meals are just provided, but if not attendees are provided with money for any meals that are included during the time they are “engaged”. No need to pack your own lunch.

My very personal favourite is the “sitting” allowance. This one is just for the person’s presence and even then you may not get that if the attendee shows up for only half the meeting, ultimately to collect their allowance. I’m sure the idea behind this is or was, to drive attendance because apparently doing something because it is your job is not enough. Nonetheless, this allowance can get quite expensive if you wish to run a meeting, not to mention it often takes people away from the job they should be doing. On many occasions I have come across people who don’t really need to be at a meeting but are there anyway, often with very little to contribute. These allowances completely fly in the face of productivity and improving the development situation.

An example I can use to explain this is for a project that required large scale training for staff of a government organisation here in Zambia. Staff all around Zambia were to be trained on a system that they would be using for their jobs. No problem there. The problem that occurred was when staff from the head office decided they needed to also ALL be a part of this training, “attending” all three training sessions (each being a repeat of the first) and ALL paying themselves the “standard head office” organisational allowance rates. I point out that the rate was “standard head office” because the rate was significantly higher than the rest of the attendees who would be doing the actual work. Furthermore, these head office staff were not even present for a majority of the sessions. And to top it off, the donors, both large and well known multilateral institutions were aware of the budget and the proportion going towards allowances, including for the head office staff who didn’t really need to be present (well certainly not all). Disgraceful really.

Now I should point out here that there are many within the industry who are not paid, or at least not regularly, and allowances are probably a key source of income for them. However, I stand by my thoughts on the premise that development aid is there to make a difference to the wider community and can only do that if its properly directed, rather than given as “handouts” to a few people.

Workshops and training

Workshops and training sessions are another large misuse of funds. The answer to every problem in development aid is to provide a workshop or training. It doesn’t matter if the attendees have already completed 4 other sessions on Monitoring and Evaluation (M&E) or project management, more than likely they will get another one. The workshop or training will offer incredible allowances and if it’s in another location, a cosy hotel room on top of everything else. It doesn’t matter that the person undergoing training will probably not use that fifth training session on M&E, because it’s unlikely that anyone will follow up or check. One of my own personal favourite stories is of the “capacity building” organisation that was almost 100% USAID funded, offering week long training sessions to my colleagues (including for subjects they’d already had trainings on) and putting them up in Lusaka’s finest hotels. Think just how much it costs for 20+ attendees in a five star hotel, all expenses paid, sitting and travelling allowances for a week? Imagine what it could do if used to assist a local community. And what’s funny is that when sending a proposal to USAID via email, my organisation was asked to print the hardcopy and courier it to them, using resources and money that a small organisation really doesn’t have. Where are the priorities here?

Use of organisational resources

Then there is the use of organisational resources, particularly vehicles, for personal needs. Again, a tricky one as making a quick trip in the organisational vehicle to the local market is probably not the end of the world. However these vehicles, which are provided by foreign donors, are often seen speeding around town on Saturday nights; or on weekends with a staff member’s family twice removed, in the back; or parked outside of the local hotel. I’ve seen it all and does it really matter? Well I think yes. Vehicles use fuel and even if the person “borrowing” the vehicle replaces the fuel, who pays for the maintenance of the vehicle, the tyres, the registration? If the vehicles become damaged or are not maintained and need to be replaced, who is going to replace the vehicle? Most likely foreign donors and the taxpayers that support them, that’s who!

Outright corruption

There is of course straight forward corruption where someone intently steals money or resources from aid for their own gain and I’ve heard these stories too (fortunately I haven’t seen it first hand). And while the general population does not want to see offenders get away with it (which unfortunately they quite often do), many still think that this should not dissuade foreign donors from continuing to give. I was attending a workshop here in Zambia where all attendees were asked if a donor should stop giving money if their money is being stolen. The unbelievably strong response to this was that the donors should not. As the only person in the entire room (and non-Zambian) opposed to this view, I asked shouldn’t the money be re-directed somewhere else, to where it will be used properly? Isn’t the money not doing what it’s supposed to anyway? But no one saw it except me. I was simply told that “the poor people will suffer”. Hmm, and I thought they already were!

Crowding out private investment

Something I also believe is that aid, particularly from what I’ve seen in Zambia, is “crowding out” private investment and entrepreneurship. I have met many smart people, people who have ideas for businesses and good business instincts, but never go there, or only dabble, because they’re doing so well on the aid “gravy train”. And it does make sense. For reduced risk and effort you can make quite a good living off a job in aid; not everyone does, but many do. However, what if these same people were to go into business? They would be producing items and services for the local economy, probably using local materials and produce. And overtime many would start to hire workers, people from their country, providing them with employment and income to support both them and their families.

False Economy

Following on a little from my previous argument is the “false economy” that aid creates. In most cities in Zambia you can nearly guarantee some sort of lodge or hotel on nearly every street. And no, tourism in Zambia is not that busy!

These businesses exist purely to take advantage of aid and the many, many workshops, trainings, conferences, etc that take place here. And some of them charge ridiculous prices which they can charge because there is demand and organisations pay!

Aid in my mind has also contributed to the value of rents in Lusaka, Zambia’s capital. I can’t of course prove this, or at least not without doing further empirical work. All I know is that based on my own observations there are a lot of aid workers based in Lusaka, most live in pretty nice houses/ apartments and many organisations also use houses as their administrative offices and this time there is more than one to each street on average. Economics is all about supply and demand and there is large demand for housing from aid!

The impact of all this is that it pushes real businesses out to make way for those operating from aid; it also forces people with lower incomes to the outskirts of the city because they can’t afford to be in it.

What to make of all of this development aid “stuff”

I know that by writing this post that there are likely to be people who will use it as an excuse for not giving or volunteering for anyone. I guess that if that’s all someone gets out of all of this, then they were probably already in that frame of mind to begin with. However what my biggest learning from this whole volunteering and development aid experience is, is to do your research and ASK QUESTIONS!

There are some good organisations and projects working hard to make things better, that use talented, well intentioned people and try to ensure that as much money as possible makes it to the end beneficiary. But you have to find them and then you have to ask questions: What are they doing? What are they trying to change? How are they making change? Where are they making change? Who are they working with? What evidence do they have of change? Are they audited by an external party? Do they sub-grant? Where does most of their funding come from? You get the point! Some sites go a long way to doing this for you; a couple I know of are Charity Navigator and Givewell, but still ask questions!

Sadly I can’t see development aid changing any time soon. Many of the people in the industry, as well as intentioned as they are, are not business people driving outcomes. Too many see small changes for only a few as enough evidence that aid is working, despite the large sums of money going into it.

My time in Zambia has in many ways made me extremely cynical, however I know in time I will again prioritise the positives of development aid over the negatives and learn to focus again on the people it should be benefiting, but ALWAYS guarded on the outcomes presented to me.