Transparency in the Aid process
An interesting debate about transparency in the aid process is developing, started by this guest post on Bill Easterly’s Aidwatchers blog.
There is a lot of concern about aid. It’s an industry in itself; a lot of aid money doesn’t go to the needy, but to aid professionals – paid at Western consultancy rates, plus per diems – to write reports explaining how well the aid money is being spent. Aid that goes straight to governments in developing countries is often lost in corruption, and aid agencies often have to pay bribes just to get the real aid through to the needy. If they didn’t, the aid would stay on the wrong side of the checkpoint and would rot or be looted, so the bribe is the lesser of two evils.
Transparency is touted as a solution to these problems, and more and more the donor countries are insisting on transparency as a condition of aid. The article on Aid Watchers points out that the donors, and the aid agencies, don’t always play by the same rules.
Then Scott Gilmore posted this response, pointing out that transparency isn’t everything. I think he has some good points, but he is wrong. Not surprisingly, I think the problem is still that there isn’t enough transparency.
“1. When people like me demand transparency and say “We want to know where the money went.”, I think we actually mean “We want to know what the money did.” In this case, I really don’t care if World Vision blew 90% of their budget on strippers and Grey Goose vodka. What I want to know is what did they deliver? What changed on the ground? How many people were helped? I want transparent impact. I couldn’t care less about transparent budgets.”
Knowing what the money did is obviously the most important part, and he’s clearly right to argue that we should see results. But that money came from us (or rather, the US taxpayer). If the taxpayer has been funding strippers and vodka for WorldVision (it hasn’t), it would still be a drop in the ocean of corruption they have funded – in Iraq and in the US; but everything the taxpayer funds should be transparent. Just because Halliburton are up to it, doesn’t mean that WorldVision should be able to get away with it. They should be showing that they aren’t Halliburton.
“2. Uncensored budgets aren’t going to help too much on corruption. Even the best forensic accountant couldn’t look at that budget and tell you if the money was spent on what it says it was. Only an audit can do that, and even then the audit has to be damn good. You want to keep everyone’s nose clean? Ask for the audit results, not the budgets”.
Here, he’s almost on the money. Budgets aren’t the meat; what we need to see are the actuals. And not just the agency’s actuals, but also those of the aid recipients. If we could see both, we wouldn’t need the audits.
“3. I can assure you that the Taliban are winning for reasons other than you don’t know how much an NGO spent on office rent and staff salaries. Likewise, I am pretty sure that if 52% of Afghans believe aid is corrupt, it’s not because they haven’t seen the audited statements. It’s because they haven’t seen the schools, roads, clinics, and irrigation ditches. Again, they are upset about impact, not process.”
Right again: but the aim of transparency in the process is to help ensure that we do get the impact. Lack of transparency isn’t the only thing stopping the schools being built, but it’s one of them.
“4. And finally, from someone who has been screwed over by more than one beltway bandit, those USAID budgets were for tendered and competitive contracts. If those NGOs share them with the for-profit vultures who eat up most of the aid spending, it will pretty much ensure they get outbid on the next contract.”
Which is why transparency must be universal and compulsory. It’s not enough for a few high-minded NGOs to open their books, if the competition doesn’t. This isn’t about WorldVision, it’s about USAID – which should make it a condition of every contract that the budgets and the actuals are published. Not an aspiration, but a condition. Not released under an FOI request, but published.
The Transparency Extremist view, of course, is that all the bids should be published, not just the successful ones. FOI is a feeble instrument for transparency, because it opens up only that which someone inquisitive chooses to snoop around. Compulsory, searchable online publication, so that you only need to google what you want to find out, rather than going through the whole bureaucratic FOI process.