Thursday, September 30, 2010

Smarter Aid Spending

A recent report from the Center for Global Development laid out a concise plan for how the U.S. should be spending the $7.5 billion of economic assistance to Pakistan over the next five years. It was a dense and policy-focused document, but we can take a few good points from it that are broadly applicable to the disbursement of U.S. development aid.

1. Aid needs to be a long-term policy tool. "A smart development approach takes patience." For example, if the U.S. wants to improve the Pakistani education system, a quick fix would be to build schools and fund students. A long term investment involves these steps, but also ensures that there are qualified teachers when these new schools are built. This is looking at development as an investment. This way Pakistanis are not disenchanted with America or worried that once terrorism shifts to a different country, the U.S. will leave.

2. Decide on shared development indicators. Similarly to the MDGs, this would be a list of mutually agreed upon goals that are easy to measure (90% of children completing primary school and passing a standardized test in five years, for example). The process of deciding these is important to creating a shared idea of development between the U.S. and the country, giving clear goals which the constituents can hold their government accountable to, and emphasize real development in U.S. Congress evaluations.

3. Give incentives for success. The paper recommends that funds are given, no strings attached, to the provincial education center for example, for each child who passes the standardized test. This will give the in-country partners incentive to be innovative in solving the issues. It would also empower reform-minded government officials with some political leverage to garner support for their efforts.

4. Learn from what other organizations are doing in the country successfully, and where they have failed.

5. Spend some money on transparency efforts. This means sharing information about the quality of public service delivery, for example a list about how money was spent in the schools (on desks, on chalk, on computers, etc). Even better, this encourages the citizens to hold their government accountable, growing democracy, and increasing trust in government which breeds peace. All that with a list of how money was spent!

So there you have it, five ways to make aid more effective in the long-term.

-Erica Stetz