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Thursday, 24 June 2010

A word on the "aid freeze"

I fully welcome this line from the recent Global Fund press release on the aid freeze to Zambia:

Further investigations by the Global Fund showed that the Ministry of Health was not able to safely manage grants. The organization has demanded the return of US$8 million in unspent funds from the Ministry of Health. 
The reason I am happy that the Global Fund has demanded this money back is because of a previous exchange. A while back I wrote a post on the wasted British tax payers money on the Task Force on Plunder. A friend replied privately and assured me that the Task Force was all funded by donors so poor value for money was irrelevant. Apparently, his view was that we can waste donor aid because it was not "our money". I am being harsh, what he was actually trying to tell me was that the appraisal had to be done from the "Zambian perspective" not the "world perspective". I assured him that I was indeed doing the "theoretical appraisal" from the Zambian perspective, but crucially unlike him, I fully believed the Task Force was being bankrolled by GRZ. Anyway proof emerged later that I was right, but the mentality that aid money is considered free stuck in my mind. That is the  single most challenging aspect of aid. How you ensure that something that looks free, actually has a bite?

Actions like those taken by the Global Fund  go some way in signalling, but in the long term they do nothing to change behaviour largely due to the government cycle (new ministers, new government, old problems etc). I believe to ensure greater aid effectiveness it is vital that methods are found that radically alter incentives for citizens.  A good start is to make ordinary citizens residual claimants against the government. For example, giving aid in form of  municipal bonds for important projects is a good idea. It would certainly make the locals ensure the Council was well run! There are other examples e.g. public sector pensions related bond arrangements.  Basically the challenge is to turn what is evidently a largely docile population into a caring one, especially where aid is concerned.

1 comment:

  1. "Actions like those taken by the Global Fund go some way in signalling, but in the long term they do nothing to change behaviour largely due to the government cycle (new ministers, new government, old problems etc)."

    Oh, how true. When Global Fund 'punished' Uganda a few years ago, sure there was a lot of media attention and ministers were made to 'pay' for their crimes. However far from being reviled, the government officials were heralded as heroes for managing to escape unscathed. Indeed many of them are planning to run for public office next year, their profiles boosted thanks to the Global Fund inquiry.



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