TransparencyGate: the end of the road

by Till Bruckner, PhD candidate at the University of Bristol and former Transparency International Georgia aid monitoring coordinator. Sixteen months after I first filed a Freedom of Information Act request with USAID for the budgets of American-financed NGO projects in Georgia, I have reached the end of the road. Rejecting my appeal, USAID has confirmed that it continues to regard NGO project budgets as “privileged or confidential” information, and will not release budgets without contractors’ permission.

The opacity of USAID’s subcontracting makes it impossible for researchers to get access to comprehensive and comparable data that could inform debates about the effectiveness of delivering aid through NGOs. For example, the issue of aid fragmentation within NGOs could only be raised because Oxfam GB voluntarily provided a researcher with a list of all its projects abroad.

USAID is on very thin ice when it tries to push developing country institutions to become more accountable. The next time USAID lectures an African official on the importance of transparency in public procurement, I hope she will pull out a list of blacked-out budgets and argue that her ministry is following American best practice when it treats all financial details of its subcontracting arrangements as “privileged or confidential.”

Financial opacity also remains the default position for most NGOs. CARE and Counterpart instructed USAID to release more information in response to this FOIA, and they deserve credit taking for this step. However, USAID’s latest information release suggests that no other NGO has given the green light for such information sharing.

The recent public statements by NGOs and other aid actors reveal wildly divergent understandings of what accountability should mean in practice. As InterAction points out, “the issue at hand is what constitutes relevant information, and to whom specific information should be disclosed.”

What information is relevant? Scott Gilmore argued that we should be interested in accountability for outcomes rather than for expenditures, and many commentators on this blog have questioned the desirability or utility of public access to NGOs’ salary figures or NICRA rates, and raised concerns about privacy, security and competitive disadvantages.

I continue to believe that project proposals, including uncensored budgets, are essential components of a meaningful rendering of account. Proposals spell out what an NGO plans to achieve, when, where, why and how, and at what cost. If we don’t even know what a project sets out to do, and with what resources, how can we hold it to account for its success or failure?

Equally, there is disagreement on who qualifies as a legitimate stakeholder. CNFA and Mercy Corps have both emphasized that they feel themselves obliged to render account to institutional donors and beneficiaries, but not necessarily to third parties. This line of argument glosses over the sad reality that NGOs do not reveal project budgets to their beneficiaries either. Also, as charities enjoy tax-exempt status and spend public money, we are all donors, like it or not. And we all care about the beneficiaries, so we are all “aid watchers”.

If project budgets are not particularly relevant, and scrutiny by ordinary citizens does not bolster accountability, why do international NGOs regularly make their local sub-grantees post project budgets in public places for all to see? As far as I know, no Northern NGO has worried that such excessive transparency may compromise the privacy, security or competitiveness of community-based NGOs in the South.

This FOIA journey has shown one thing above all: NGOs (save Oxfam GB) simply do not want outsiders to see their project budgets, full stop. Not a single NGO has used this forum to announce its willingness to give beneficiaries or other stakeholders access to its project proposals and budgets in the future, even though every country director has these documents on his hard drive and could attach them to an email within two minutes.

Project budgets are shown only to those stakeholders who have the power to force NGOs to open their books: donors, headquarters, and audit institutions. The poor and powerless have to be content with whatever information NGOs choose to provide.

Can NGOs be accountable without showing outsiders where the money goes? The Humanitarian Accountability Project thinks so. “Public disclosure of financial information is not a requirement for HAP membership,” HAP recently confirmed. InterAction concurs, stating that it “purposefully does not define in our standards specific mandates for disclosure.” InterAction also highlights “the request of some donors to keep their financial support private.”

Transparency International, drawing parallels to the oil and gas industry, strongly disagrees: “Competitive advantage or even privacy, are not acceptable exceptions. Only personal physical security suffices.” Aidinfo observes that “the burden of proof is shifting to those who would keep information secret.”

Donor-abetted secrecy jars with President Obama’s call at last week’s MDG summit: “Let’s resolve to put an end to hollow promises that are not kept.  Let’s commit to the same transparency that we expect of others.”

Lant Pritchett on what Obama got right about development

by Lant Pritchett, Kennedy School of Government, Harvard University Obama's speech at the MDG conference and the announced US Global Development Policy are the result of long preparation and internal discussions within the administration as part of the Presidential Study Directive, lead out of the NSC, announced a year ago, and the QDDR, prepared by State, both processes having been watched over by the Washington think tanks and advocacy groups.

While one could immediately focus on the "architecture" part of the speech and read the Beltway tea leaves of who is up, who is down, and what that means for this organization or that, it is worth at least first stepping back and asking where this first official US development policy came down on the big debates on development, where, I think it comes out a big winner on four big ideas.

First, the speech and policy put economic growth front and center as objectives of development and development policy.  It might seem obvious that economic growth that increases people's command over resources is the single most powerful force to improve nearly any indicator of well-being -- from poverty to food security to health to education -- but, surprisingly, that point can get lost.  The "development is about more than growth" backlash, which had important elements of truth, easily got carried away into "development isn't at all about growth" and it is good to see economic growth back front and center of development objectives.

Of course growth these day must carry some adjectives as baggage -- "sustainable" and "broad based" can never be too far away -- but both of those are perfectly legitimate qualifiers and a small price to pay for the primacy of growth.

Second, the speech came down hard, and right, on the debate between improving systemic capability and programmatic action.  This was of course not easy to do in the context of a speech on the MDGs, which lend themselves to a programmatic vision of development.  Functioning systems of education have multiple and complex objectives -- spreading a common socialization, improving learning of the basics, identifying and promoting excellence.  The goal of development is that a country can have an education system that, as a natural part of its operation as a system composed of many actors and pressures, sets and achieves goals, some of which are then mapped into particular programs.  The same is true of all other spheres of social and governmental action -- infrastructure, law and order, health, economic policy.  The speech clearly identified building this capability as a central (and difficult) part of development.

This resists a very powerful tendency to reduce development to a series of specific targets, each of which can be addressed by the implementation of sufficiently resourced programs (programs which can be cocooned or stove piped around systemic dysfunction), which can be crudely caricatured as the "show me the money" approach.

The MDGs are correctly interpreted as what will be accomplished when there has been development -- not vice versa.

Third, the speech gets right the need for innovation, with rigorous evaluation as an important component of an environment for innovation.  The endeavor of "development" as a conscious acceleration of the progress of nation-states is now at least 50 years old.  If it were easy and obvious then as a social movement it would have disappeared under the weight of its own success and be a historical curiosity, like abolitionists.

The paradox of the external organizations that attempt to support development is that people tell them "we'll give you your budget if you tell us for sure what you are doing will work."  This leads to a powerful culture of pretending that much more is known about the "theory of change" that leads to development that really is known.  The fact that the wealthiest and most powerful country in the world has just spent eight years devoting fantastically high level of resources to "develop" Afghanistan (with security as one element of that) with results that range from mixed to shambolic should make it obvious that we need much greater openness within the development community to an approach of structured experimentation -- on all fronts.

The same skepticism about "one size fits all" that made "Washington Consensus" two dirty words should be taken to the range of "expert" advice in sectors from education to health to public sector governance to "institution building." All of which is mostly just repeating the conventional wisdom and closing off, rather than opening up, space for novelty and innovation.

Fourth, one thing the speech gets right it does so by omission.  There is no dollar figure.  The message "lets do more" is always popular because it also means "business as usual" for what is already going on.  "Let's do better at what we are doing" is a tough internal sell, but one that is useful -- including, I believe, to people who are actually on the ground, doing the work.  Anyone who has actually worked inside the development industry knows how much better things, at least potentially, could be, but also how tough achieving that will be given the inertia of massive organizations.  So while tackling policy and "architecture" might seem arcane relative to the apparent obvious gain of spending more money.  More is better, but better is better too and more is even better after better is better.

As to whether the proposed changes can advance the correct development agenda of growth, expanded public capability, innovation with evaluation, and improved assistance...well, that's a topic for another day.

Allow me to introduce the world's latest aid skeptic: Barack Obama

If the international community just keeps doing the same things the same way, we will miss many development goals. For too long, we've measured our efforts by the dollars we spent … But aid alone is not development.

Our focus on assistance has saved lives in the short term, but it hasn't always improved those societies over the long term. Consider the millions of people who have relied on food assistance for decades. That's not development, that's dependence....

let's move beyond the old, narrow debate over how much money we're spending and let's instead focus on results-whether we're actually making improvements in people's lives

From the prepared text of President Obama's speech yesterday to the UN Millennium Development Goals summit.

The worst-kept secret in aid: aid-receiving governments run the aid agencies

see UPDATE at end of this post

Thomas Friedman had a good NYT column about Karzai yesterday. {{1}} His column cleared up the puzzlement created by a Dallas News editorial and other very similar stories about how Obama’s visit to Afghanistan to get Karzai to clean up corruption was great for “seizing Karzai’s attention.” Now we know why there’s corruption in Afghanistan: Hamid Karzai just FORGOT to deal with it. Could one of our army doctors give him A.D.D. medication?

Friedman is more realistic about a phenomenon that has been long known in donor-government /recipient-government relationships:  the recipient is the one who runs the donor government’s policies towards the recipient government. The same happens in multilateral aid agencies. We saw this all the time at the World Bank, where the corrupt autocrats receiving our loans would let us know what conditions we should put on the loans to them.

Friedman has a pithy rule that donors routinely break:

Never want it more than they do.

Of course, when the donors want something more than the recipient, and the donors know they MUST continue the aid relationship, the recipient is in a strong bargaining position to ignore that something, and no amount of attention-seizing is going to work. As Friedman says:

If we want good governance in Afghanistan more than Karzai, he will sell us that carpet over and over. How many U.S. officials have flown to Kabul — the latest being President Obama himself — to lecture Karzai on the need to root out corruption in his administration? …. he believes he has us over a barrel and, in the end, he can and will do whatever serves his personal power needs because he believes that we believe that he is indispensable for confronting Al Qaeda…

Even in less fraught situations than Afghanistan, the donors have an extremely poor record enforcing conditions on recipients. Not only do they break the Friedman Rule, but the department for Country X in the aid agency MUST disburse its budget for Country X this fiscal year (or else it won’t get any budget next year). The recipient knows this and so can ignore the conditions. (For a more careful and technical development of this argument, see the classic paper on why aid conditions don’t work by Jakob Svensson).

The solution to the problem is as logically simple as it is politically difficult: give aid only to country governments who want IT more than we do.

UPDATE (4/1, 12:14PM): Karzai says to luncheon guests  that America is an obstacle to peace in Afghanistan. Well, THAT would really simplify the problem -- just remove the obstacle! 

[[1]]Just for the record, I usually think that whatever Friedman writes about economics is nonsense while what he writes about Middle Eastern/Central Asian politics is good. This may be because I know something about the former and nothing about the latter.[[1]]

The best way nobody’s talking about to help Haitians

The following post is by Michael Clemens, a research fellow at the Center for Global Development in Washington, DC, and an affiliated associate professor of public policy at Georgetown University.

The earthquake two weeks ago hit Haiti hard because Haiti is poor. The rich U.S. had similar earthquakes with far less carnage. So, what would do the most to lift Haitians out of poverty?

Start here: What has done the most, to date, to lift Haitians out of poverty? That answer is easy. Leaving Haiti brought more Haitians out of poverty than anything else that has ever been tried: any aid project in Haiti, or any trade preference for Haiti. See my note and video posted the day before Haiti’s catastrophe.

Of all the Haitians who live either in the United States or Haiti, and who live on more than $10 per day—at U.S. prices, adjusted for the fact that things are cheaper in Haiti—how many live in the U.S.? (That’s a barebones poverty standard, just one third of the U.S. “poverty line” for a single adult.)

82 Percent of Haitians above this poverty line are here in the United States. (I calculate this with Lant Pritchett here, ungated version here.) Only the top 1.4 percent of people in Haiti had that living standard even before the quake, and there is no evidence that Haitian emigrants come primarily from the extreme tip-top of the income distribution. So for most of Haitians who left, leaving Haiti was the cause of leaving poverty.

The Obama administration decided that for the next 18 months it will not deport any Haitian. But the U.S. has only been deporting about 1,000 Haitians per year recently. More importantly, the U.S. has forcibly stopped and repatriated about 5,000 Haitians per year for the past 20 years—people who never made it to the U.S. And this policy surely deterred thousands more each year from even trying. When Gallup asked people in Haiti last year if they would leave permanently if given the opportunity, 52 percent said yes. The U.S. is actively blocking the most effective poverty reduction strategy for Haitians.

When I talk about leaving Haiti as a development strategy for Haitians, some thoughtful people argue that this “can’t be the solution for Haiti.” Compared to what we all wish for in Haiti—rapid emergence from poverty for everyone there, in their homeland—leaving Haiti is a terrible solution. But compared to what is actually likely to happen in Haiti, continued poverty for decades at least, leaving Haiti is the principal solution to poverty. This is the right comparison, not the comparison to a prosperous Haiti that must remain a fantasy for now.

The best thing the United States could do for Haitians would be to let them in, either temporarily or permanently. We are now accepting about 21,000 permanent Haitian immigrants per year, and just a few hundred temporary workers per year. If we really wanted to raise Haitians out of destitution, we could absorb many times more than this. To say that we shouldn’t because it wouldn’t be the end-all solution is like saying that a lifeboat shouldn’t fill its ten empty seats just because there are 100 people in the water.

Madagascar textile workers ask President Obama to keep their jobs for Christmas, but nobody is listening

Here's an excerpt from an ad that appeared in the print edition of Politico today, paid for by the owners of apparel factories in Madagascar and one of their American investor partners. We have blogged about this seemingly obscure issue already many more times than you, our patient readers, may have wanted, but we see this as one of those rare, clear opportunities for the US to do good by first doing no harm. And yet US leadership seems blithely set on a course of action that will punish vulnerable textile workers and their families without touching the fortunes of the political elite responsible for Madagascar's current predicament.

President Obama: Please don’t harm one half million of the poorest people in Africa.

Your advisors have recommended that you decertify Madagascar as a beneficiary country for benefits under the Africa Growth and Opportunity Act (AGOA). This action will revoke the duty free treatment for products such as trousers, t-shirts and sweaters produced in Madagascar next year—re-imposing steep US import taxes as high as 32% on a polyester t-shirt. This action will make garments produced in Madagascar uncompetitive with similar products made in China — which already produces 100 times more apparel for the US market compared to Madagascar.

We ask you to consider the human tragedy of an action that will wipe out 100,000 good jobs in the Madagascar apparel sector created under AGOA. Surely there is a way to send a strong message to feuding politicians in Madagascar — without punishing innocent workers and their families who have nothing to do with the disputed control of Government. Your advisors will tell you that they are doing this to help people in Africa.

We respectfully disagree.

While we hope that the continued destabilized situation in the Government of Madagascar is hopefully only temporary, we know that the exit that results from AGOA decertification from the country of our American retail customers will be permanent.

Over 28,000 of our employees signed a petition to President Obama asking him to save their jobs. A copy of that letter can be viewed at www.gefp.com.

Day of mourning for military Development

News sources say that President Obama will choose “escalate” with additional troops for Afghanistan in his speech at West Point tonight. I and many like-minded individuals find this disastrous. “Like-minded” means that critics of top-down state plans for economic development are also not fans of top-down state plans for military development. If the Left likes the first, and the Right likes the second, that just shows you how incoherent Left and Right are.

Will Wilkinson has a great column mocking the anti-PC Conservatives for mindless Conservative PC on militarism:

The public praise of martial virtue encourages a martial culture in which war is seen not as a gruesome tragedy but as a stage for the performance of righteous valor. … applause only reinforces a deeply ingrained American habit of easy patriotism so mindless and self-satisfied that we cannot see the brazen moral relativism of it. This is our war, so it is just.

And when you military claim the sanction of some development economists for armed intervention, I think other development economists have a right to fight back. If you military are going to do development, then we will do military. If you think you can impose conditions on Karzai for military aid, why don’t you read some of our articles on the failure of conditions for economic aid.

The somewhat clumsy words of George Kennan during the Vietnam War have seemed eerily appropriate to many reviewers recently:

If we can find nothing better to do than embark upon a further open-ended increase in the level of our commitment simply because the alternatives seem humiliating and frustrating, one will have to ask whether we have not become enslaved to the dynamics of a single unmanageable situation - to the point where we have lost much of the power of initiative and control over our own policy, not just locally but on a world scale.

And lastly the masterful essay by Garry Wills in a recent New York Review of Books:

We sink deeper into blood, with no foreseeable end in sight…Some leader has to break the spell before costs mount further while our wars are passed from President to President…Barack Obama said he would rather be a one-term president than give up on his goals. Here is a goal no other president we can imagine would have a possibility of reaching. Presidents who just kick the can down the road are easy to come by. Lost lives and limbs are not.

Africans already got the idea: “Africa does not need strong men, it needs strong institutions”

A reaction to President Obama’s speech in Ghana by Leonard Wantchekon, NYU Professor of Politics Overall, I like the theme of the President Obama’s speech in Ghana. Africans must own their future by strengthening democratic institutions and the rule of law in their countries, and by becoming less reliant on assistance. I also like the idea of a real partnership between Africa and other developed countries based on trade. It is very much in line with what most of us would think. He said:

America can also do more to promote trade and investment. Wealthy nations must open our doors to goods and services from Africa in a meaningful way.

As Africans reach for this promise, America will be more responsible in extending our hand. By cutting costs that go to Western consultants and administration, we want to put more resources in the hands of those who need it, while training people to do more for themselves.

What I find a bit questionable is this:

Africa is not the crude caricature of a continent at perpetual war. But if we are honest, for far too many Africans, conflict is a part of life, as constant as the sun ... These conflicts are a millstone around Africa's neck.

My sense is that in saying this he has helped to perpetuate, perhaps unwittingly, the very caricature that he questions. Conflict is NOT as constant as the sun in Africa. While this may have been the reality of the 1970s and the 1980s, it is certainly no longer the case. He forgot to add that many of these conflicts were proxy wars between the US and the former Soviet Union (such as that in Angola), or were manufactured by France (such as that in Congo Brazzaville).

The average African country is at peace. Moreover, it is a democracy, albeit one with relatively weak state capacity, such as Liberia, and Mali. Zimbabwe is the exception, not the rule. And even in Zimbabwe, where there is 90% unemployment, incredible hardships and repression, most people want democracy, not another war.

Freedom, especially freedom of the press, has also drastically improved in the majority of African countries, to the point where Reporters Without Borders have ranked several African nations above developed countries such as Italy and Japan.

Of course, democracy is—as Obama put it—“more than holding elections - it's also about what happens between them”: good governance, human rights, etc. But I see no path to good governance, human rights, and even conflict resolution in Africa unless elections are held regularly. In addition, elections are intrinsically valuable, beyond their potential effect on governance. I am sure Nelson Mandela would agree with that. In fact, various Afrobarometer surveys from 1999 to 2009 suggest that nearly 70% define democracy purely in terms of political rights, not in terms of governance. Perhaps surprisingly, there is no significant difference between rural and urban citizens, or between more educated and less educated citizens.

In terms of the strongman syndrome, things have changed for the better. All across Africa courts and unions have tried (most of the time successfully) to block and prevent constitutional changes that would allow the sitting president to run for an additional term (African presidents have therefore been less successful than the Mayor of New York City in this regard!). Afrobarometer surveys suggest that 75% of Africans reject military rule, 73% reject a one-party system, and 79% reject strongman rule.

I would like the President to acknowledge more clearly that Africans have already got the idea that “Africa doesn’t not need strong men, it needs strong institutions.”