11/21 Prep Exercise

In providing aid to developing nations, international development programs, especially from the West, suggest different forms of austerity and trade liberalization. However, institutions such as the International Monetary Fund (IMF) are often lenient when a recipient nation does not follow programs for development. Furthermore, the IMF’s founding mission is to provide short-term financial aid to countries that need assistance in times emergency crises or economic hardship. Being one of the largest aid institutions in the world, made up of an extensive bureaucracy that is essentially free from the burden of accountability. Their provision of funds has been variant at best, and a catalyst for state failure at worst.

Providing aid requires the investigation of the economic ailment of a country, and utilizing the appropriate “treatment.” To decide whether or not an aid program has worked, the outcome is an important factor. Was poverty alleviated? Did standards of living increase? Or did the poor suffer from the program, or political stability compromised? Finally, the biggest question that must be answered is whether the country progressed, as a prolonged use of the aid without advancement is a sign of a dysfunctional aid program. In the case of the IMF, many nations it aided caused them to develop another program for heavily indebted poor countries (HIPCs) that provided opportunity for loan forgiveness. The longer a country received aid from the IMF, the more likely it is to get a loan. This would suggest that their aid programs do not work, or at the very least do little to advance a substantial number of recipient countries with the conditions. While the money provided undoubtedly does some good, the lax enforcement of actual development programs, or the social unrest that comes when they are implemented, detracts from the positives of IMF intervention.

Another method of measuring the effectiveness of aid programs is looking at the broader region as a whole and comparing the advances of the areas aided to ones not participating in the program – I believe this rules out many arguments for saying an aid program worked. This is because there are countless non-governmental organizations, aid institutions, and countries providing aid and economic development programs (or suggestions) to developing countries. As Michael Clemens and Gabriel Demombynes said, basing the success of a program on the hypothetical impact of no aid is not reliable. The Millennial Village Project (MVP) sought to aid poor, rural villages of sub-Saharan Africa through a variety of infrastructural and medical interventions, as well as school construction. After the first three years of the program, their first report described improvements as “impacts” of MVP, when similar improvements occurred at similar rates in villages not involved with the program.

For this reason, I believe it is impossible to say whether an aid program “worked.” As a blanket mission for all aid programs, the goal is to alleviate (if not eliminate) poverty. Therefore, an aid program working goes beyond slight changes in living standards or mobile phone ownership – it requires analyzing whether or not the specific program solved any  of the “diseases” of a poor country. In the case of the IMF conditional aid programs and the MVP, I would say no, they did not work. Their “impact” has either been too variant or inconclusive based on other advancements being made in the region. However, I think with proper empirical evaluation, aid programs will eventually be able to say their programs truly “work.”

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Determining the Success of an Aid Project

When attempting to determine the success or failure of an aid project, one must first understand the context of the project. Some things to consider would be the scope of the project (was it targeting a large or small population?), the amount of funding put towards the project and how it was allocated, and the reason the project was started in the first place. Once we understand this background information, we can start looking at some of the finer details that determine success or failure: the commitment on both ends of seeing the project fully through, the effort put forth in executing the project on the ground, and the lasting impact (or lack thereof) of the project.

So what does it mean then to say a project worked? Though the goal of aid projects individually vary, we can say that there is one overarching goal that applies to every aid project, and that is to improve the lives of human beings in some way. But it isn’t enough to see that some aspect of live has improved to call the project a success. The thing about aid projects is that they aren’t the only thing going on in the communities where they’re implemented. Life still goes on, and that means there are immeasurable other factors in play that can determine if someone’s life gets better or worse. Correlation is not causation, and it is important to remember that even if we see improvements that coincide with the start of an aid project, that doesn’t mean that these improvements are because of the aid. The reverse is also true—if we see things getting worse, it may not be because of the aid project, though that would call for a more critical look over the project to attempt to determine whether or not it was problematic.

When we consider this, I personally don’t think it’s possible to prove that an aid project worked. There are too many other variables to consider in the lives of human beings to point out that one action taken to make things better was the actual catalyst for these changes. That being said, I do think that it is possible to determine that an aid project did not work. If we take structural adjustment as an example, we can pick out signs that show us that something does not work. Structural adjustment was created to be a transition phase, and in theory, if every actor cooperated how they were ‘supposed to’ under the program and it remained short term, it may have yielded some benefits. But the leaders of countries who got these loans wanted to enact the prescribed reforms as little as possible, and tried to stretch out the structural adjustment money for as long as they could. This conflict of interests between the World Bank and country leaders show us already that the possibility of enacting lasting change is low, especially if we accept that the main driver of long-term growth is good institutions.

 

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Maybe in 20 years…

Foreign aid evaluation is made difficult by the number of variables in the global system. For example, in the Michael Clemens and Gabriel Demombynes report, the two researchers site cell-phone level ownership as one facet of the Millennium Villages Project. While the project’s initial findings suggested that the MVs were benefiting significantly from the project’s funds, further evaluation demonstrated that, “the true impact of the MVP intervention, averaged across all reported indicators and all sites, was roughly half of what the project had claimed based on the before-and-after comparison” (Clemens 5).

The difficulties associated with measuring aid effectiveness make it difficult to say whether an aid project has worked. In 2008 and 2009, Doucouliagos and Paldam concluded that it was possible to say that there was a small positive, yet insignificant, relationship between aid and growth. This report, and others like it, are discussed on the World Economic Forum website, where the necessity for repeated evaluation is emphasized. However, to the dismay of development strategists, no matter which way the data is parsed, results are inconclusive.

In order to determine whether an aid project has worked, several types of data could be used. Control villages or locations, unaffected by the mission of the project, can provide useful comparison data. It is through these forms of evaluation that we see the ineffectual nature of foreign aid. Data from these studies suggests that the impact of the market on a country makes a much larger difference that small aid projects does. Other types of data that could be used includes randomized evaluations, cost of living assessments, GDP growth reports, GNI growth reports, and inequality assessments. As was discussed at the beginning of the course, one statistic will never tell the full story behind development or standard of living within a country.

So it is possible to say that an aid project has worked? I think that it is. However, the aid projects that we have been developing since the 1980s suffer from a number of flaws. First, the money runs out or the project changes focus well before an impact can be expected. With chlorine pills or bug nets, short-term effects are limited by a society’s desire to use these tools. It could take up to three or four seasons before the society has accepted the new technology, fully implemented it, and noticed the results. For education goals, the deadline is even lengthier: one would expect that a full generation (20 years) should have to pass before the impact of a new system is discernible.

The international system does not have the willpower to stick with projects for this long. So while believe it is possible to say an aid project has worked, we would have to first see the impact of it, and not enough time has passed for that to have happened. I suggest choosing one project an ensuring 20 years of funding, then coming back to seek out data on the project’s effectiveness. (494 words)

Michael Clemens and Gabriel Demombynes (2013), “The New Transparency in Development Economics: Lessons from the Millennium Villages Controversy,” CGDEV Working Paper, #342

Abdul Lateef Jameel Poverty Action Lab, “Introduction to Evaluations”

https://www.weforum.org/agenda/2014/11/how-effective-is-foreign-aid/

What does it mean to say that an aid project has worked?

Paul Collier claims that aid has added only one percent of growth over that thirty years in developing countries, which seems very slow growth, but if there is not growth rate for them is zero percent. So providing aid to developing courtiers is helpful. However, there are a lot of ways that aid would not work for growth of developing countries. Moreover, first aid is more effective than the second time. Additionally, there are worse cases for developing countries.

A lot of poor countries depend on aid to solve problems, such as economic infrastructure and health issue, so these poor countries have become heavy aid user. Easterly mentioned heavily indebted poor developing countries will more debt. These countries received a lot of money from IMF, World Bank. So once developing countries start receiving a lot of money, they would stuck debt cycling. Countries received less than average IMF and World Bank borrowing became the Heavily indebted Poor Countries (HIPCs).

The way if aid has worked is we can check the GDP growth. For example, Bolivia. IMF anticipated that providing loans give more chances to encourage economic growth. However, IMF and World Bank repeated lending and failed to make growth that they expected. IMF programs in 1990s, IMF’s goal was 4 percent growth, but it was only 2 percent growth.

The center for Global Development has studied recently that if how much aid reaches percent of GDP, and they found out that if they reach 16 percent, it has good impacts on developing countries economy. However, problem is that government, which receives aid, chooses whatever way they want to use for. Therefore, even though countries where provided aid want developing country’s states to spend aid for health problems or other beneficial things, sometimes their states use aid for the military. On the other hand, we want to see how much they spend for the military is not easy, because military information is not reliable. As a result, it is difficult how aid has worked for these types of states where spend for military.

How can we measure is that we can look at how much income level improve. Also, as Collier states government can use for any projects they want to, so we have to see how much this program had an impact and effect on the country.To evaluate how projects worked accurately requires transparency. Also, it has to have counterfactual, which has a relationship with definition of impact. Lastly, it requires a process of external critique. All three of these goals were used by trends in development economics.

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Measuring the Impact of Aid Project

Paul Collier’s The Bottom Billion states that “a recent study by the Center for Global Development think tank, came up with an estimate of diminishing returns implying that when aid reaches about 16 percent of GDP, it more or less ceases to be effective” (2007, P. 100). It is one thing to say development project has worked, and another to measure if it really does work. Knowing whether the project has worked or not depend on the goals of that particular project. If the project is designed to tackle malaria in a neighboring community and the follow-up survey may be after 5 years shows that there is a decrease in death rate caused by malaria, then we will say okay let’s find out whether it is the impact of the project or not. Sometimes, less than 5 percent increase in GDP as a result of a particular developmental project can rate the project as a successful one, while more than 10 percent as unsuccessful. This is how complex it is. Therefore, to measure the impact, both funders and implementers have to ask a certain question. The funders question should be what impact can a project achieve with a certain amount of resources? While the implementers should ask which projects make the most impact?
First of all, in measuring the impact of a particular project there must be transparency, counterfactual and external critique. Finding the accurate data is where the problem lies. Most of the government officials tend not to keep the accurate records of these kinds of project, sometimes the data from the NGO officials are not reliable too. It is important for researchers to leave their data open for studies by other researchers for accuracy and to avoid repeating the same project. This is because, once a particular project is repeated by a different or similar organization, it is hard to measure which project worked especially if the time between the two is short.
The counterfactual and external critique are very important in measuring project’s impact. Sometimes is hard to conclude that the project has worked, just because people standard of living has increased. It might be because of a different reason. This can be noticed in a number of ways, one is by conducting a follow-up survey on both participant and non-participant of the project. For example, if Mr. A received $10 loan and Mr. B received $0. If there is an improvement in Mr. A’s life due to the project, we can say the project has worked. However, if Mr. B’s life without a loan is equivalent to Mr. A with a loan, then the project has not worked. Therefore, both Mr. A & B’s conditions are both improving due to some reasons other than the loan. However, using Mr. B who has no loan in the first place to measure Mr. A’s success or failure is simply hypothetical. It is imprudent to measure success or otherwise base on imagination.

Did your aid project really “work”?

To be able to say that an aid project has “worked” you must first define what the end result or purpose is of the project that you are doing. Is the purpose happier people, economic growth, better access to resources, etc. Regardless of what the intended purpose is of a project—you then need to be able to measure the success through data. Michael Clemens and Gabriel Demombynes walk us through some ways to measure data that lead to the most accurate results.

 

To determine if a project has worked, one must find the difference between the change the project brings about for people who have gone through the program and the change they would experience if they had not gone through the program. This is necessary because a lot of different factors could go into what causes the change that you want to see as a result of your program. For instance, if the result you want is for income change in a rural community—an income rise could either be caused as a result of your program or as a result of other factors (say this year they were able to sell more rice than in previous years due to an increase in rain levels).

 

However, you cannot observe what would have happened if a person did not go through a specific program—because it is a hypothetical construct. It’s a “what-if” situation—so in order to include the availability for your results to be influenced by other factors—you need a control group to compare against your data. The most accurate results will abound out of a control group that is similar to the community receiving the program—a city with similar problems concerning poverty, similar economic situations, similar geographies and terrain and possibly even similar kinds of people. Once you compare your data to a control group—your data collection becomes more accurate as it considers other factors that could have led to development.

 

The problem with being able to answer “yes” to the question of whether an aid project has “worked” is that you may only be satisfying the micro-problem rather than the macro-problem. For example, a project designed to providing clean water to a rural village in Ghana might be successful—so you can say that your aid project “worked” for that village. But increasing the production of this project to a macro-level and being able to make it work in a lot of other places might not be possible—so we would not be able to say that it worked on the macro-level. The same goes for the purpose of aid projects—a lot of the projects have a micro-goal and a macro-goal of getting rid of poverty all-together. So if a project helps alleviate poverty—it worked on a micro level. But if the macro goal of getting rid of poverty isn’t solved by your project—then it didn’t “work” on the macro level.

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Measuring the successes or otherwise of aid projects

Development projects (aid projects) are projects or interventions carried out in developing countries to reduce or minimize the poverty rate in those countries. Most of these projects usually take place in East Asia and sub-Saharan Africa. The projects could either be funded through Official Development Assistant/aid (ODA) funding or by a Non-Governmental Organization (NGO).

For an aid project to be considered successful or having “worked”, some factors have to be looked at. There may be different projects in different areas or communities depending on needs. As Sachs suggests for aid specialists to get to the root to figure out the “real” needs of the communities that projects need to be implemented. Within the time frame of the project, these questions have to be asked.

At the end of each aid projects, there must be what development experts call program evaluation.
Clemens and Gabriel Demombynes note that, during this stage is when outcomes are going to be measured. What are the project outcomes? The measurement or evaluation accesses the impact of the project on the community members. How have their lives changed for the better? What is their standard of living now? Has it taken a positive turn? Did the project generally achieve the goal it sought to achieve? Did the project have a positive impact on the community members?

Using the Millennium Villages Projects (MVP) as a case, we take a look at the project outcome in Bonsaaso, a predominantly farming community in the Amansie-West district of the Ashanti region in Ghana. This community benefited from the MVP intervention which targeted some communities in sub-Saharan Africa regarding poverty alleviation. Though some write-ups indicate the project was ineffective in achieving its purpose in some communities, the case in Bonsaaso was different. Through the MVP, number of farmers contributing to the school meals programs increased tenfold, allowing nearly 60% of primary school pupils to receive a daily meal, up from less than 1%.

In my opinion, the project impacted positively on many people; farmers got good yields, the support to the government of Ghana’s School Feeding Program was massive. As children were motivated to go to school by way of food supplement, parents were poised to work hard to support with school uniforms and other necessities without having to worry about feeding the children in school.
This is a clear indication of an aid project that “worked”. It’s a pity the program was not rewed when the time frame elapsed.

It is really easy to find many aid projects not “working”. The causal agents are enormous. Ranging from structural adjustment reforms to funding disbursements, and an equal failure on the part of development experts (Sachs 2008) to approach projects through clinical economics, it presents a difficult situation to see aid projects that actually “work”.

To conclude, I would say that due to several factors, we might not have many “yes” answers when it comes to finding out if a project worked. But guess what, it is possible to get some positive vibes. This then presents development advocates like myself to holistically review our approach to aid projects in our areas of operation for optimum results.

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Source:
Clemens, M. A., & Demombynes, G. (2013). The new transparency in development economics: Lessons from the millennium villages controversy. Center for Global Development Working Paper, (342).
Sachs, J. (2008). The end of poverty: economic possibilities for our time. European Journal of Dental Education, 12(s1), 17-21
Millennium Villages | Bonsaaso, Ghana. (2016). Millenniumvillages.org. Retrieved 21 November 2016, from http://millenniumvillages.org/the-villages/bons aaso-ghana/

Does Aid Work?: Evaluating the Effectiveness of Aid

Successful evaluation of whether or not aid “works” must start with the purpose or goal of the aid. To know if something is working, we must first know what this thing- in this case aid- is aimed at addressing or fixing. If aid is intended for singular purposes such as economic growth or feeding the poor, it is perhaps a bit easier to evaluate the effectiveness of the aid. However, the interconnectedness that exists in development makes it challenging to isolate what exactly aid will have an impact on, it also means that aid used in one sector or area in a developing country is likely to have ripple effects in other sectors or areas.

Generally, we look at whether particular projects have been completed, or whether some short term solution has been arrived at. While this probably looks great on paper and has proven to be an excellent way to ensure continued aid, it does not prove that aid works. Aid should not be a continuous handout, or continuous projects with no end in sight. As such, we ought to measure or evaluate whether or not aid works by assessing whether it meets the needs of the people it is intended to “aid”, whether this aid has a positive impact on the economy and society of the developing country it is given to and whether the amount of aid going forward reduces or is likely to reduce because growth and progress is occurring.

Do aid-driven projects and programs adequately address the challenges being faced by citizens in developing countries? Are the projects stand-alone projects that, once completed are essentially forgotten? Do these programs and projects address the contextual issues and challenges that are hindering economic growth and development or are they bandaids for bullet holes?

As Blattman and Niehaus argue, while aid-driven programs and projects accomplish some things, they are often inefficiently and expensively executed. Further, there is, more often than not, a lack of adequate and appropriate measures put in place to ensure that the program or project functions as it ought to in order to yield the desired benefits. For instance, good institutions are a key factor for development, so building a school is a project that can be viewed as beneficial to a developing country, but without ensuring good, well trained teacher, government willingness and ability to upkeep the infrastructure and pay staff, students ability to get to the school, availability of books and resources. The school is really just another building.

Many development scholars and practitioners have a set criteria for assessing aid-driven programs and projects and Easterly affirms that an independent evaluator should be used. While important, is this enough? I believe Aid programs or projects should be assessed by asking:

Is it holistic? Addressing economy, society, poverty and other challenges of developing countries?

Will it have long-term positive outcomes?

Are the stakeholders on board? Has the human factor been considered?

Is it what is needed?

Are there measures in place to ensure continuity or continued benefits? If not, what measures can be implemented?

Does it equip the country and citizens with the tools or skills needed to do more for themselves and reduce the amount of aid needed (if not holistically then at least in a particular area or sector)?

I am not at all convinced the above criteria is one that is stuck to with regard to aid-driven projects and programs perhaps one or two of them among others not listed here but I do think this is one way of ensuring aid is effective and impactful. There’s no denying aid projects and programs have had successes however they have also pitfalls and shortcomings.

 

William Easterly (2006), The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good, Chapters 3-5

Jeffrey Sachs, The End of Poverty: Economic Possibilities for Our Time, Chapter 16

Christopher Blattman and Paul Niehaus (2014), “Show them the Money: Why Giving Cash Helps Alleviate Poverty,” Foreign Affairs, 93:3, pp. 117-26

Evaluate the success or failure of development policies or aid programs

In the beginning of the course we learnt about what beyond the development programs like MDG and the important to have achievement measurement, which through the decades was not easy. The complexity and the overlapping effect of the development programs make it very hard for the aid agencies and the beneficiary to identify the direct impact of certain intervention. For that we need to use a collective set of clear and easy indicator like the HDI to evaluate the efficiency of the providing aid and to hold direct evaluation or observation to the poor communities even if it may take a lot effort and time ( It is like sharpen your tree’s saw before continue working). In the reading Sach and Easterly provide many explanations why evaluation is not easy and what program criteria could lead to tangible results. And Christopher Blattman and Paul Niehaus examine a new approach that may show better impact in the gross level.  I believe that projects which fulfill the proposed merit is not necessary be 100% successful but at least the percentage of success will be higher than before.

In Sach book he mention that  senior human right official said poverty is man made because poverty is the result of policy option that have been taken that improvise some and enrich others . Sach argue that good governance has high relation with the economic growth despite the geographical, ecological factors and deficit in the infrastructure which shows influence in the project’s success.  He emphasis in planning the programs in clear, unbiased, specific objective because some incorrect aid-agencies perception lead to poor planning for development policy such as Cultural-based predictions of social change which are usually made on the basis of prejudice rather than measurable evidence, The need of economic freedom which it index was not reflective or representative the real results e.g china economic freedom low and economic growth high.

The evaluations of the aid should be done by independent evaluator as Easterly proposed and those could be independent academic researcher or independent business man. However, first we need to shift power from the planner to searcher as criteria of favorable opportunity for success. And the projects should be planned in a measurable way and in specific criteria. Some of the suggested criteria are to have tangible and measurable goals, link from effort to result, fewer objective, specialized in particular solvable problem, more information about what consumer want, to have people in bottom motivated and accountable. Also Aid agencies will perform better when they recruit dedicated professional rather than hire staff due to political pressure.

Considering the proposed criteria which I believe it is promising, projects meet it have chance of success and it was mostly clear and obvious in the health, education, sanitation, infrastructure projects to reach the planned objectives. And also some tried new approach to find a more effective way of the aid providing as per Blattman and Paul Niehaus evaluation for the direct cash transfer project to the poor for education or health purpose. The evidence from countries that already use cash transfers on a massive scale is promising (programs in India, pension funds in South Africa, or welfare schemes in Brazil).

So the transparence and effective evaluation could be hold if the successful factors existence such as the Aid-Agency real good intention, well designed program and the targeted community or country involvement

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