The development tortoise and the donor-fuelled hare

Now my blog has been going for a little while, one of the great pleasures is getting unexpected comments on posts several months old. (Comments on new posts are similarly gratifying – I love all commenters equally! – but not so unexpected.) Thus I’ve recently enjoyed my little debate with David on my post from May: The Scaling-up Fallacy. We touched on several issues related to project scale, but one seemed to need a fuller response, hence this post.

David suggested that small pilot projects that are not designed to be scaled should never happen on the assumption (my inference) that they will never represent value for money. He went on to say:

“I’ve seen a lot of projects that work really well with a ratio of 10 staff to 300 participants from communities of 10,000, without any suggestion that the delivering company can grow to be 100 people and deliver the same service to 100,000 people – and this is often in a country of 10,000,000 or more. It’s hard to see how that is ‘good development’ as opposed to advanced humanitarian relief.”

I think he’s got some pretty good points, and, as a general principle, I do think we should be looking to take things to scale. E.g. I fully support the ambition of Jeffrey Sachs et al. in the effort to make poverty history, I’m just sceptical about their proposed means. But, as I’ve blogged before, I do think there is a lot to be said for small projects that do not try to be something more than they are or can be. So how do we square this circle?

First I think it is worth noting that not every Western company grows into a world-conquering behemoth, sometimes this is not for lack of ambition of the directors, but many other companies stay small out of choice; less hassle for the boss. The same also applies to development, particularly amongst the smaller NGOs. If their donors are happy to keep the money flowing then they clearly represent value for money to someone.

Many small company bosses want to keep their companies small because of the challenges of managing staff. These challenges are multiplied in developing countries where the small pool of educated talent is often a major constraint. I suggest that might be what is stopping many of those projects with 10 staff serving 10,000 community members from growing further.

Unfortunately, albeit for the best of reasons, many donors, especially institutional donors, are not satisfied with this. They want to reach the 10 million. So they push the accelerator pedal as hard as they can … and then the wheels come off because capacity to deliver is just not there.

One response might be simply to invest in capacity development – e.g. focusing on education, but that turns out to be just as dependent on internal capacity. I think we need to be more pragmatic. If, as most do, donors want to achieve tangible results then they need to face up to the reality on the ground, rather than swinging wildly between over-optimistic up-scaling programmes, and white flag exit strategies. A project that is going just as big and as fast as it can is better than a car crash. As in so many other cases, it turns out that Aesop’s old fable is extremely relevant to conservation and development: nine times out of ten, the tortoise wins in the end.

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The Scaling-up Fallacy

Last month Justin Sandefur at CGD lamented the regrettable failure of the Kenyan government to sustain a successful school-based de-worming programme after donor funding was withdrawn due to corruption in the Education Ministry. This is another good example of the sustainability paradox: despite clear evidence that this programme was extremely cost-effective it was cut when the donor funding was withdrawn. I assume that this was as much a political act intended to hurt the donors – who lost something they cared about – but as such is clearly rather callous. But, more than anything, it is another example of the phenomenon that what the donors want and what the recipient country government want are often not the same thing.

This, however, is not exactly news around here. More interestingly Sandefur also suggests that this raises questions about “the feasibility of turning small NGO pilots into manageable national policies”, although he failed to elaborate much on that idea in the rest of his post. This is something I’ve been thinking about a bit recently, and I think there is an important additional argument to be made here.

Whether a pilot is being developed by an NGO or a bespoke, direct donor-funded project, it will have its own management structure. It will also have a significant investment of technical advice and support that is inevitably diluted when a project is transformed into a national programme. However, I can live with that; if we want aid to be cost efficient, then we need to be able to realise economies of scale on techniques that have been shown to work.*

My beef is with the management. Because, to the international aid industry, scaling up nearly always means launching a nationwide government programme. In doing so the donors discard the effective management that produced the initial successes in favour of a dysfunctional government bureaucracy. Not only do you lose some basic management nous, but you also lose the driving vision, the leadership that got the pilot project to where it did.

When Larry Page and Sergey Brin founded Google, they didn’t show some initial promise and then hand their genius idea over the government. Instead they secured some outside investment including big business management expertise (Eric Schmidt) – thus addressing their ‘absorptive capacity’ – and grew the company to the multinational search behemoth it is today. More to the point, Google isn’t just big; it continues to be incredibly successful.

I’ve blogged before (here and here) about the importance of the quality of management in delivering conservation and development results. The standard donor approach to scaling up suggests that donors remain stuck in a rut that emphasises technical barriers (leading to misdiagnoses of project failure) over management constraints, combined with the belief that all you need is a bit of capacity-building in profoundly dysfunctional institutions to turn it around.

The next time donors are seeking to scale up a successful programme, I hope they will remember the Google story, the Grameen Bank story, and the countless other examples of private sector efficacy in turning innovation into successful business models. After all, most donors are capitalist countries, not socialist ones, and there’s a reason that communism collapsed.

* There is another argument to be made here that many projects are scaled up before the jury has properly returned a verdict, leaving key issues still unresolved. But, conversely, if an approach does appear to be working, I can understand how funders, desperate for new solutions, may pile in prematurely.