Two posts recently have brought to my attention how far donors still have to go in designing a more adaptable and hence effective and efficient aid system.
Half Measures
First, Lindsay Morgan (of Dispatches) wrote a piece about performance-based contracting for health services in Southern Sudan. Those with a serious interest should read the whole piece yourself, but in essence it appears that a coalition of donors is trying to inject a little discipline of the market into healthcare provision in one of the most under-developed soon-to-be-countries of the world. Except that they still don’t seem to entirely get some of the most important aspects of how the private sector works. So NGOs are getting performance-based contracts, but have to work with GOSS staff, over whom, presumably, they have pretty low influence (no hire or fire, no disciplinary measures), which to my mind rather diminishes the level of achievement you can expect from management. The NGOs also had to work through some kind of central procurement system, which apparently caused no end of problems.
Whilst the GOSS health ministry staff may perhaps have learned something from this kind of system (NGO working practices and the like), I fail to see how just putting in a team of technical advisers couldn’t have just achieved the same thing. On the other hand if the donors want to get private sector / market-based practices embedded in healthcare provision in Southern Sudan, then they need to act a bit more like ordinary customers and stop making silly restrictions as to how their contractors work.
Contradictory Aims
Then Madeleine Bunting wrote about DfID’s new contradictory policies (HT: Matt @ Aid Thoughts). I am with many of the commenters in having little sympathy for the worries of DfID staff about Daily Mail journalists digging through the data and trashing one or more aid projects. The Daily Mail may be more than a little bit biased, but a good dose of daylight is the best prescription in my opinion, and, very probably, there are one or two aid projects which deserve a good trashing.
But I do think that the plan to axe up to half the work force is crazy, and even crazier when one considers the anticipated large increases in DfID’s budget. (Disclosure: I have a friend who works there.) Openness and transparency requires more effort to put documents into the necessary formats, especially if the data is to be made available in a manner actually useful for general analysis. These kinds of overheads cannot be just wished away. Moreover the relentless focus on minimising transaction costs is, in my opinion, mostly illusory: someone is bearing these costs, if not DfID then someone they are funding. I know of at least two international consulting firms currently doing very well out of managing DfID grants round where I work.
Not a good week
If anybody out there reading this works for DfID and/or with healthcare in Southern Sudan can correct me or at least give a better picture, then please do. But, unless I’m completely barking up the wrong tree, all in all it doesn’t look a good week for donors.
Bottom Up Thinking 
Posted by Swahili Street on November 24, 2010 at 6:09 pm
Without reading Lindsay’ Morgan’s piece (not sure if being unable to open it is due to blocking by the Ethiopian ISP or some other reason) I certainly hope that the Southern Sudan Civil Service isn’t looking to NGOs for management practices to emulate. What would they learn? Pay way over market rates? Introduce a range of benefits not typical in either the civil service or the private sector? Pay over the odds in order to factor in the kick back? Pay over the odds anyway coz they can’t be bothered to get a good price anyway?
I provide services to a range of organisations. The only ones with obvious management challenges have been NGOs. And I was no management whizz when I was an NGO manager myself. You are right to point to incentives but we shouldn’t make assumptions that somehow civil service practice is automatically bad and NGO practice automatically innovative, sincere in intent and to be emulated.
Posted by Lee on November 25, 2010 at 12:14 am
Fiona Davies wrote a great article on contracting services to NGOs in Southern Sudan: http://www.oecdbookshop.org/oecd/display.asp?lang=en&sf1=DI&st1=5KSF09SV5WBX
Posted by c-sez on November 25, 2010 at 6:39 pm
Do you really mean “discipline of the market?” I couldn’t see anything in the linked article at RBF about a market mechanism involved – just payment contingent upon, or as a bonus for, independently measured results. Was there also a tendering or competitive grant mechanism for the NGOs or GOSS outside the usual?
It sounds more like you’re talking about straight up “discipline of management” and as you say an iffy one at that, straight out of an align-the-incentives-for-senior-executives MBA tutorial. You do wonder what the strength of analysis behind it was. For example, what would ‘incentivize’ lower level GOSS staff to find solutions?
Posted by MJ on November 25, 2010 at 9:24 pm
@Banditman Lee: thanks for the link. Note for others: the url might not work but just input your own search and you’ll find the doc. Be warned: it is a whole book! (173pp). I have only read the Exec Summary.
@Swahili Street: Good point re management of NGOs. The Davies book Lee recommends says: “Strong management of both purchaser and provider is essential.” And I would agree with you that it is lazy to assume NGOs have good management; plenty do not! But that actually strengthens my argument; under a proper market-based system, those with good management will prosper, those without will fall by the way side. But that does mean being prepared to pull the plug on non-performers, something which I think the development industry is notoriously bad at.
@C-sez: I don’t know the details of what was done in Southern Sudan. You might be better of commenting on the RBF post, or maybe Lindsay can clarify for us here … As with regards “discipline of [the market / management]” you are right that this is my assumption as to what were their aims. Maybe the donors simply saw this as the only way to get anything to happen? Either way, from Lindsay’s description, it doesn’t sound like it was a roaring success.
How do you ‘incentivize’ lower level staff in any organisation to find workable solutions? You reward the good ones, fire the bad ones, and give everyone plenty of good management support. Tinkering at the margins of a big dysfunctional bureaucracy is not going to change very much.