The International Donor System: Uncovering Structural Flaws

Last summer while on assignment in Mozambique, I had the opportunity to visit the UNHCR Refugee camp in Nampula Province. The camp was set up in the mid-1990s to receive refugees from the conflicts in the Great Lakes Region. The majority of the camp’s 5,000 refugees hail from the Democratic Republic of the Congo (DRC), Rwanda, and Uganda; yet, in the past year camp coordinators have seen a surge of arrivals of refugees from Somalia and Ethiopia fleeing the famine brought on by one the worst droughts the region has seen in 60 years. Drought and the resulting famine in the Horn of Africa is not a new occurrence. As a child, I recall seeing images of malnourished children and arid lands on television as organizations pleaded for donations, celebrities hosted events like Live Aid and Live8 to raise awareness, and in addition to calls of solidarity and financial support for those starving in Africa. Twenty plus years later, the images, the message, and the conditions all remain the same.

I sat in the refugee camp and listened to stories of desperation. I could not help but question how in spite of billions of dollars in aid funding to help alleviate hunger in the Horn of Africa, people found themselves with no choice but to abandon everything for an existence in the refugee camps in order to survive. My encounter with the “famine refugees” forced me to reflect on my own experience working with international donors in an attempt to shed light on what I believe are some of the major challenges facing the donor system. How is it that a system capable of raising so much money and awareness has translated into so little progress and material change in the conditions of life for those who find themselves living such a precarious existence?

The international donor system suffers from structural problems that negatively affect its ability to have a positive impact on the lives of those it seeks to help. Unmet funding pledges, divergent priorities, unrealistic expectations of program impact and lack of engagement of recipients in the planning stages are some of the most obvious challenges that limit donors from making greater impact. This article will briefly discuss two major structural challenges within the system – program design, and effective monitoring and evaluation systems- and propose suggestions for how these aspects can be improved.

For the past few years I have worked for an International Non-Governmental Organization (INGO) managing community development programs in Southern Africa. I have been involved in all phases of programming, from the initial project design to its implementation on the ground and finally, the monitoring/evaluation during and at the conclusion of the program. The program design process and the monitoring and evaluation mechanisms are the key components of the donor structure. These phases are the considered the most important aspects to potential donors seeking to invest in local projects and it is essential to understand them within the context of their needs, not particularly in the needs of those people on the ground the donor organizations seek to assist. Therefore, it is the donor expectations of these two aspects that must be examined and improved upon in order for aid to be more effective. I make no claim that all donors operate based on one particular model, but after reviewing various processes for applying for funding, I found that the majority and the most powerful donors (USAID, US State Department and some of their European counterparts) employ a similar system. I am conscious that there are many other challenges facing the international donor system and in no way claim that the ones I have chosen to explore are exclusive. But I do believe that these are essential components of the system, which must be critiqued if we are to improve the donor system.

Program Design

Many donors identify a geographical area or a specific problem within an area and decide what they believe would be a good intervention to address this problem. In the case of the United States, investment in development is directly linked to national security and the advancement and protection of American interests. As stated in the 2011-1015 Policy Framework of The United States Agency for International Development (USAID), “International Development cooperation is a key component of American power, along with diplomacy and defense. It remains a potent and cost-effective tool that enables the United States to safeguard our security and prosperity while expressing and disseminating our fundamental values of freedom and opportunity.” (USAID Policy Framework 2011-1015, 2011) While not all donors determine where they will support development based on their own security needs, essentially, donors decide what projects they find to be the most pressing in a given location.

A “call for proposals” is issued by the donor in order to generate a competition among I/NGOs and/or Government Contracting firms, who can fill this need and who will be awarded a contract to implement the desired intervention if chosen. These call for proposals include a brief narrative of the problem, guidance on the donor’s desired intervention and targets, as well as a figure indicating the maximum funding available. Applicants respond to this call by writing a proposal detailing how they would implement the donor’s desired intervention. Applicants are only to address the problem identified by the donor and to explain how they would carry out the donor-desired intervention. There is no room for creativity or innovation. Those applicants who dare venture out of the specifics described in the call for proposal are often disqualified.

In the case of the Horn of Africa, a large percentage of donor funding is reserved for Food Aid. In the United States, Food Aid- or Food for Peace Program-began in 1954 when President Eisenhower established the program to “lay the basis for a permanent expansion of our exports of agricultural products with lasting benefits to ourselves and peoples of other lands.” (US Food Aid and Security, 2010) Essentially, donor countries export food to countries in need. The Horn of Africa has for decades suffered from droughts and wars that have led it to be one of the most fragile and food insecure regions in the world and one of the largest recipient of food aid. Practitioners on the ground argue that pouring such a large percentage of available funding into food aid is counter-productive and unsustainable. They claim that the import of food for aid distorts local markets, and that those farmers who have managed to produce a surplus find their crop is virtually worthless. They also claim that aid can create culture of dependence and stunt potential local growth (Greste, 2006).

Here lies the first problem. Most donor and donor agencies have little to no experience implementing interventions. Their involvement is limited to funding and monitoring, not implementation; donors do not have actual experience carrying out activities on the ground and working with local populations. Implementers are often more familiar with the intimate realities of daily life and are thus more capable of actually judging the strengths and weaknesses of the program design as it relates to their institutional capacity. They are rarely consulted by donors who design the call for proposals with a vague sense of the actual situation. Additionally, the application process is so precise and inflexible that even if implementers applying for funds identify any nuances on the ground not included in the call for proposal and attempt to address it in their application they are likely to be disqualified from the process for not having “responded to the request” as prescribed.

The program design process also suffers from a lack of engagement of local actors who are not consulted prior to the call for proposal’s release. This leads to the creation and funding of programs that do not address real local needs nor take current local context into account. While donors do conduct some research, often in the form of short-term consultants hired to conduct studies or through in-house experts on regions or specific technical areas, the active engagement of local actors from the problem identification phase to the program design would minimize the likelihood of a problem being misinterpreted or a null intervention being funded and implemented.

Donors should seek the active participation of implementers and local actors in the program design phase. Implementers can help identify potential issues that directly affect the identified problem that the donor may have missed when designing the intervention and/or present alternative interventions that are more likely to be effective in addressing the identified problem. While increasing the participation of local actors and implementers in creating the call for proposals seems obvious, the continued fact that they are excluded from this process asks a larger question about the real interests of donors and highlights why Western-led projects are not meeting the needs of both donors and the local population.

Monitoring and Evaluation

If the call for proposals is developed in relative isolation from the actual situation, it is of little wonder that the monitoring and evaluation of these projects is contested waters. Both donors and recipients are failing to have their expectations met and we should remember, that in many cases, this is an issue of life and death for the recipients. Donors need to invest resources to improve Monitoring and Evaluation (M&E) systems to ensure that the collection and analysis of data is done at the beginning, continuously during and at the conclusion of a project.

I recently had a conversation with a colleague who works for a major donor and who shared with me that during project review meetings donors rarely discuss a project’s progress in reaching its targets. He said that the emphasis was always on identifying which organizations were (or in some cases, were not) meeting their “burn rates”. A burn rate is the rate at which an implementer spends the funds granted. If an organization’s burn rate is low it means they are not spending money quick enough. If the burn rate is high, they are spending at a fast rate. If the burn rate is on target, the donor assumes that the project is going as planned and thus all targets are being met. How one determines the relationship between a burn rate and actual progress in a given community is anyone’s guess.

Donors must place less emphasis on getting the cash out the door and focus more on the quality and impact of the work they are funding. One way to do this is by incorporating tools to measure project impact beyond donor-set targets within the M&E systems. Improving the M&E systems can lead to three positive outcomes: better program design as impact data can be used to create and or alter interventions according to need; an end of funding of programs that do not have a positive impact on their target communities and an increase in funding of programs that do; and lastly a better educated donor community who will have comprehensive data at their disposal to analyze the impact of the implementer’s work, and thus their investment.

Implementers and observers of the donor system have been critical of current M&E processes for years. “Donors are excellent at tracking inputs, such as dollars spent and buildings constructed. But they have been far less successful in measuring project’s ability to achieve outcomes, like improved education or better public health, upon which long-term development spending and oversight are dependent. What is more, the link between these outcomes and sustainable security and stability, most appropriately measured in the cycle of growth, jobs and social inclusion, is rarely given due consideration” (Kilcullen, Mills, & Oppenheimer, 2011, p. 102).

According to the report by the Center for American Progress titled “Twenty Years of Collapse and Counting; The Cost of Failure in Somalia”, since 1991 Somalia has been the recipient of $13 billion USD of Humanitarian and Development aid. As aid funding continues to pour into the country, the question remains, what has been the impact of billions of dollars of aid of the past 20 years? Norris and Bruton state, “…in many ways the pattern of international intervention in Somalia has long remained in the unhappy middle: insufficiently robust or well designed to resolve the country’s conflicts but far too heavy handed and frequent to allow the country to resolve its own problems. Many of the interventions in Somalia were so badly planned and implemented that they made the overall situation far worse in the long run” (Norris & Bruton, 2011, p. 4).

In their article, “Quiet Professionals; The Art of Post-Conflict Economic Recovery and Reconstruction”, Kilcullen, Mills and Oppenheimer (2011) conclude that, “it is important to get the metrics right. Outcomes, rather than just inputs or outputs, must be measured. Assistance is about far more than just the volume dedicated and spent, even though this is usually the easiest metric.” I couldn’t agree more.

Conclusion

In October 2011, the United Nations announced an estimated need of 2.5 billion US Dollars for the humanitarian crisis which resulted from the drought in the Horn of Africa. (Update: Aid for the food crisis in the Horn of Africa, 2011) While humanitarian aid will provide short-term relief, international donors should look at lessons learned from the past 20 years of aid to the region and begin to think about the long-term impact of their assistance. In the course of the past 50 years more than donor countries have provided more than $2 trillion USD of aid assistance. It is estimated that sub-Saharan Africa has received $300 billion USD in development assistance since 1970, yet issues of hunger, poverty, and disease are as prevalent now as they ever were: “…while the number of the world’s population and proportion of the world’s extreme poverty level fell after 1980, the proportion of people in Sub-Saharan Africa living in abject poverty increased to almost 50 percent.” (Moyo, 2009, p. 5)

While political alliances, corporate interests, internal and external conflict, and environmental issues have all played a role in the lack of progress made by developing countries, I believe that the structural problems with the donor system have also contributed to the lack of progress made by aid recipient.
In the case of the Horn of Africa, programs that help stabilize the region and foster agricultural production for local consumption should be prioritized. After decades of assistance and millions of dollars spent, the question must be asked- is foreign assistance working? In the case of the Horn of Africa, I’d venture to say no as we find ourselves in yet another humanitarian crisis. Shipping food into the region will alleviate the immediate crisis, but it does not help address the core issues that have led to this crisis nor prevent it from reoccurring again in the future.

For decades, foreign aid assistance funds have been awarded to poor countries in an effort to alleviate poverty, establish health and education systems, promote good governance and strengthen economies. Many experts would agree as evidence shows that many aid recipient countries fare worse today than they did 50 years ago. (Moyo, 2009, p. 5)

There is no question that international aid has the ability to do good- and it has in many parts of the world. But in order to have more, true, and meaningful impact the structure of the donor system must change. Local actors must be engaged in the problem identification and program design process. Metrics that really capture program impact must be set, collected, and analyzed. Using data collected, programs must be allowed the flexibility to shift course according to the changing circumstances and needs of recipients. Donors must look beyond their own political and economic interests and really support programs that address the true needs of recipients. When they begin to look beyond how much and who they disburse their money to and focus more on the why and how they do it, the system will begin to improve and more impact will be achieved on the ground.

Works Cited:

US Food Aid and Security . Food Aid. 2010. http://foodaid.org/ (accessed March 4, 2012).

USAID Policy Framework 2011-1015. Washington, DC : United States Agency for International Development, 2011.

Easterly, W. (2006). The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done so Much Ill and So Little Good. New York: Penguin Books.

Government, U. S. (n.d.). Foreign Assistance Database. Retrieved October 8, 2011, from http://foreignassistance.gov/aboutthedata.aspx

Greste, P. (2006, February 2). Ethiopia’s food aid addiction. Retrieved January 10, 2012, from BBC News: http://news.bbc.co.uk/2/hi/africa/4671690.stm

Kilcullen, D., Mills, G., & Oppenheimer, J. (2011). Quiet Professionals: The Art of Post-Conflict Economic Recovery and Reconstruction. The Rusi Journal , 100-107.

Moyo, D. (2009). Dead Aid: Why aid is not working and how there is a better way for Africa. New York : Farrar, Straus, Giroux.

Norris, J., & Bruton, B. (2011). Twenty Years of Collapse and Counting: The Cost of Failure in Somalia . Washington, DC : Center for American Progress.

Update: Aid for the food crisis in the Horn of Africa. (2011, October 24). Retrieved January 10, 2012, from The Guardian: http://www.guardian.co.uk/global-development/poverty-matters/2011/aug/01...