Increasing funding to states recovering from conflict, disasters and poor governance has marked a major – and welcome – shift in the government’s approach to ending extreme poverty.
The Independent Commission for Aid Impact (ICAI) has published a report today, ‘Assessing the Impact of the Scale-up of DFID’s Support to Fragile States’, which finds evidence of good progress in many areas. The problems that the report identifies in terms of planning, implementation and evidence of impact are of course regrettable – but, as it stresses, the key thing is to address these problems, and not to see them as a reason to review the strategic decision to increase ODA to fragile states.
But one thing that does not find a mention in the report is the rise of “payment by results”. In the UK, it is government policy to increase the use of payment by results in the delivery of public services. Most experience of this to date has been on domestic issues, such as criminal justice, housing and welfare to work. The Department for International Development’s (DfID) June 2014 payment by results strategy commits them to considering the use of payment by results in all circumstances.
This practice of donors paying only when results are delivered lower an organisation’s ability to take the risks of working in fragile countries. In practice also, NGOs have found it so difficult to gather monitoring data at outcomes level in some conflict-affected fragile states (Afghanistan, Somalia) that DfID abandoned planned payment by results work in the Girls’ Education Challenge. It was also withdrawn from the Building resilience and adaptation to climate extremes and disasters programme.
Some of our member NGOs have also reported not being able to accept such funding in high-risk fragile states and also for more complex work (such as governance-related work). This is because the complexity and uncertainty of the work is not suited to the brute simplicity of payment by results approaches, which are still at an early stage of development.
When there are many factors outside a NGO’s control (conflict, weather etc), it is difficult to measure and verify results. Also when there are many people, organisations and factors contributing to the end goal the value of individual contributions is problematic to identify.
Until the approach can allocate risk between donor and implementing partner in more of a balanced way, its expansion threatens the “appropriate appetite for risk-taking at country office level” that Icai lauds in its report.
Simply put, Icai cannot have its cake and eat it too. It cannot ask on one hand for better value for money while on the other hand criticise lack of impact in fragile states. Working in fragile states is more costly and without guaranteed results and donors will need to recognise that.
As long as learning is being generated and “failures” lead to changes and adaptation in practice (rather than repeating mistakes), a lower than average level of impact in fragile states seems a necessary price to pay for working on more challenging contexts where needs are often greatest.
Ben Jackson is the CEO of Bond, the membership body for INGOs.
Join our community of development professionals and humanitarians. Follow@GuardianGDP on Twitter.
