Why Isn’t US Foreign Development More Effective? It’s Time ... · Why Isn’t US Foreign...
Transcript of Why Isn’t US Foreign Development More Effective? It’s Time ... · Why Isn’t US Foreign...
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Why Isn’t US Foreign Development Assistance More Effective? It’s Time to Ask Gina Yannitell Reinhardt
Bush School of Government and Public Service Texas A&M University
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Aid Effectiveness: By the Numbers Effectiveness defined as…
Yes No It depends on…
Sources: Compiled by “the author” from top-10 ranked Development, Growth, Economic, & Political Science journals, 1985-present
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Aid Effectiveness: By the Numbers Effectiveness defined as…
Yes No It depends on…
Economic growth (GDP per capita)
Sources: Compiled by “the author” from top-10 ranked Development, Growth, Economic, & Political Science journals, 1985-present
32 117
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Aid Effectiveness: By the Numbers Effectiveness defined as…
Yes No It depends on…
Economic growth (GDP per capita)
Development (literacy, food/water security, healthcare, infant mortality, … )
Sources: Compiled by “the author” from top-10 ranked Development, Growth, Economic, & Political Science journals, 1985-present
32
84 43
117
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Aid Effectiveness: By the Numbers Effectiveness defined as…
Yes No It depends on…
Economic growth (GDP per capita)
Development (literacy, food/water security, healthcare, infant mortality, … )
Strategy/ Diplomacy (UN votes, treaty membership, trade openness)
Sources: Compiled by “the author” from top-10 ranked Development, Growth, Economic, & Political Science journals, 1985-present
32
84 43
117
43 37
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Aid Effectiveness: By the Numbers Effectiveness defined as…
Yes No It depends on…
Economic growth (GDP per capita)
Development (literacy, food/water security, healthcare, infant mortality, … )
Strategy/ Diplomacy (UN votes, treaty membership, trade openness)
Sources: Compiled by “the author” from top-10 ranked Development, Growth, Economic, & Political Science journals, 1985-present
32
84 43
117
43 37
• Donor
• Time period
• Region
• Aid sector
• Model specification
• Were you standing on your head?
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Aid Effectiveness: The Traditional Story
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Aid Effectiveness: The Traditional Story The Market:
Asymmetric Information
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Aid Effectiveness: The Traditional Story The Market:
Asymmetric Information
The Actors: Principals Donor Governments Agents Recipient Governments
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Aid Effectiveness: The Traditional Story
The Market: Asymmetric Information
The Actors:
Principals Donor Governments Agents Recipient Governments
o The Pitfalls: o Moral Hazard o Rent-Seeking o Fungibility
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Aid Effectiveness: The Traditional Story
The Market: Asymmetric Information
The Actors:
Principals Donor Governments Agents Recipient Governments
o The Pitfalls: o Moral Hazard o Rent-Seeking o Fungibility
o The Solutions:
o Policy/Institutions o Conditionality o NGOs/Contractors
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Aid Effectiveness: The Traditional Story
The Market: Asymmetric Information
The Actors:
Principals Donor Governments Agents Recipient Governments
And yet… effectiveness is still up for debate
o The Pitfalls: o Moral Hazard o Rent-Seeking o Fungibility
o The Solutions:
o Policy/Institutions o Conditionality o NGOs/Contractors
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How do I settle it?
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How do I settle it? Contracts!
Contractors as implementers
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How do I settle it? Contracts!
Contractors as implementers Contractors are Agents
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How do I settle it? Contracts!
Contractors as implementers Contractors are Agents Moral hazard, rent-seeking, and
fungibility have different implications
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How do I settle it? Contracts!
Contractors as implementers Contractors are Agents Moral hazard, rent-seeking, and
fungibility have different implications A different set of solutions
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How do I settle it? Contracts!
Contractors as implementers Contractors are Agents Moral hazard, rent-seeking, and
fungibility have different implications A different set of solutions A different set of expectations
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How do I settle it? Contracts!
Contractors as implementers Contractors are Agents Moral hazard, rent-seeking, and
fungibility have different implications A different set of solutions A different set of expectations
o Greater complexity in effectiveness
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In other words…
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In other words… Contractors implement aid with:
lower levels of moral hazard
transferred rent-seeking
institutionally-strengthening fungibility
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In other words… Contractors implement aid with:
lower levels of moral hazard
transferred rent-seeking
institutionally-strengthening fungibility
Donors choose contractors v. government implementers based on the goals they wish to achieve.
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In other words… Contractors implement aid with:
lower levels of moral hazard
transferred rent-seeking
institutionally-strengthening fungibility
Donors choose contractors v. government implementers based on the goals they wish to achieve.
Donors are getting what they want.
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In other words… Contractors implement aid with:
lower levels of moral hazard
transferred rent-seeking
institutionally-strengthening fungibility
Donors choose contractors v. government implementers based on the goals they wish to achieve.
Donors are getting what they want. Scholars are getting a murky picture of
effectiveness.
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In other words… Contractors implement aid with:
lower levels of moral hazard transferred rent-seeking institutionally-strengthening fungibility
Donors choose contractors v. government implementers based on the goals they wish to achieve.
Donors are getting what they want. Scholars are getting a murky picture of
effectiveness. Partially because donors are defining
effectiveness differently than we are.
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In other words… Contractors implement aid with:
lower levels of moral hazard transferred rent-seeking institutionally-strengthening fungibility
Donors choose contractors v. government implementers based on the goals they wish to achieve.
Donors are getting what they want. Scholars are getting a murky picture of
effectiveness. Partially because donors are defining
effectiveness differently than we are. Partially because we are expecting
effectiveness to look different.
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So what?
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So what? Recent surge in development contracting
USAID, AusAID, EuropeAid, DfID, MCC Society of International Development
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So what? Recent surge in development contracting
USAID, AusAID, EuropeAid, DfID, MCC Society of International Development
Implementation:
Mechanisms Effectiveness International relations Economic growth Human development
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So what? Recent surge in development contracting
USAID, AusAID, EuropeAid, DfID, MCC Society of International Development
Implementation:
Mechanisms Effectiveness International relations Economic growth Human development
o Solves puzzles about effectiveness: Different Sectors Different Measures Multiple Measures in Multiple Sectors
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Contracting: What Changes?
Contractors, vis-à-vis Governments
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Contracting: What Changes?
Moral Hazard
Fungibility
Rent-Seeking
Contractors, vis-à-vis Governments
Patterns of Allocation
Effectiveness Outcomes
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Contracting: What Changes?
Moral Hazard
Fungibility
Rent-Seeking
Contractors, vis-à-vis Governments
Patterns of Allocation
- Closer to Donor Goals
- Conditionality violations shift aid to new Contractor, not new Country
- Lower incentive, due to increased competition
Effectiveness Outcomes
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Contracting: What Changes?
Moral Hazard
Fungibility
Rent-Seeking
Contractors, vis-à-vis Governments
Patterns of Allocation
- Closer to Donor Goals
- Conditionality violations shift aid to new Contractor, not new Country
- Lower incentive, due to increased competition
Effectiveness Outcomes
- Aid not driving corruption
- Aid continuing despite corruption
- Shifts from Recipient Government to donor headquarters
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Contracting: What Changes?
Moral Hazard
Fungibility
Rent-Seeking
Contractors, vis-à-vis Governments
Patterns of Allocation
- Closer to Donor Goals
- Conditionality violations shift aid to new Contractor, not new Country
- Lower incentive, due to increased competition
Effectiveness Outcomes
- Service-related - Local Government
has no credit to claim - Strengthen/weaken
state
- Aid not driving corruption
- Aid continuing despite corruption
- Shifts from Recipient Government to donor headquarters
- Depends on state strength
- No Change
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Contracting: What Changes?
Moral Hazard
Fungibility
Rent-Seeking
Contractors, vis-à-vis Governments
Patterns of Allocation
- Closer to Donor Goals
- Conditionality violations shift aid to new Contractor, not new Country
- Lower incentive, due to increased competition
Effectiveness Outcomes
- Service-related - Local Government
has no credit to claim - Strengthen/weaken
state
- Aid not driving corruption
- Aid continuing despite corruption
- Shifts from Recipient Government to donor headquarters
- Depends on state strength
- No Change
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Three Questions: What are donors’ goals?
Growth, Development, Diplomacy/Strategy
How do donors try to achieve them? Recipient Governments v. Contractors
Is development assistance effective at achieving these goals?
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Data and Methods 2003-2013
Documents, reports, press releases
132 Open-format Interviews 32 – 172 minutes (avg: 73 min.) In-person, telephone, internet (mode: in-person) US, Brazil, Nicaragua, Japan, Canada Recipient and Donor organizations
Regional and Global Directors USAID (US) AECID (Spain) EuropeAid (EU) CIDA (Canada)
DEZA(Switzerland) JICA / JBIC (Japan) IADB (Inter-American
Development Bank) NORAD (Norway)
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Data and Methods 2003-2013
Documents, reports, press releases
132 Open-format Interviews 32 – 172 minutes (avg: 73 min.) In-person, telephone, internet (mode: in-person) US, Brazil, Nicaragua, Japan, Canada Recipient and Donor organizations
Regional and Global Directors USAID (US) AECID (Spain) EuropeAid (EU) CIDA (Canada)
DEZA(Switzerland) JICA / JBIC (Japan) IADB (Inter-American
Development Bank) NORAD (Norway)
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What are AID’s goals?
USAID (2012). “Who We Are.” “Branding.”
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What are AID’s goals? US foreign assistance is the “3rd D” of US
foreign policy Defense Diplomacy Development
USAID (2012). “Who We Are.” “Branding.”
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What are AID’s goals? US foreign assistance is the “3rd D” of US
foreign policy Defense Diplomacy Development
US foreign assistance has a dual purpose:
Furthering US interests Improving lives in the developing world
USAID (2012). “Who We Are.” “Branding.”
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What are AID’s goals? US foreign assistance is the “3rd D” of US
foreign policy Defense Diplomacy Development
US foreign assistance has a dual purpose:
Furthering US interests Improving lives in the developing world
USAID carries out US foreign policy by:
Promoting broad-scale human progress Expanding stable, free societies Creating markets and trade partners for the US Fostering goodwill abroad
USAID (2012). “Who We Are.” “Branding.”
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What are AID’s goals? US foreign assistance is the “3rd D” of US
foreign policy Defense Diplomacy Development
US foreign assistance has a dual purpose:
Furthering US interests Improving lives in the developing world
USAID carries out US foreign policy by:
Promoting broad-scale human progress Expanding stable, free societies Creating markets and trade partners for the US Fostering goodwill abroad
USAID (2012). “Who We Are.” “Branding.”
![Page 45: Why Isn’t US Foreign Development More Effective? It’s Time ... · Why Isn’t US Foreign Development Assistance More Effective? It’s Time to Ask . Gina Yannitell Reinhardt .](https://reader030.fdocuments.us/reader030/viewer/2022040604/5ea5a80f3c1d742e2347a58d/html5/thumbnails/45.jpg)
How AID tries to achieve them: Implementation Partners
USAID (2012). “Partner with Us.” “In-Country Partners.”
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How AID tries to achieve them: Implementation Partners
USAID (2012). “Partner with Us.” “In-Country Partners.”
Corporations Faith-based/Community
Organizations NGOs Researchers, Scientists,
Innovators Small Business
Universities Diaspora US Government Agencies/
Military Humanitarian Responders In-Country Implementers
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How AID tries to achieve them: Implementation Partners
In-Country Implementers Host Country Governments Corporations Faith-based/Community
Organizations NGOs
Researchers, Scientists, Innovators Small Business Universities
USAID (2012). “Partner with Us.” “In-Country Partners.”
Corporations Faith-based/Community
Organizations NGOs Researchers, Scientists,
Innovators
Small Business Universities Diaspora US Government Agencies/
Military Humanitarian Responders
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0%
20%
40%
60%
80%
100%
2003 2004 2005 2006 2007 2008 2009 2010
Percent of U.S. ODA Going to Foreign Governments
How much of US ODA do Host Country Governments Implement?
Compiled from USAID Foreign Assistance Database (FADB) via http://gbk.eads.usaidallnet.gov/
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0
5
10
15
20
25
30
35
Aid
in U
SD B
illio
ns
U.S. ODA, in Billions of Dollars
Foreign Governments Other Recipients
How much money are we talking about?
Compiled from USAID Foreign Assistance Database (FADB) via http://gbk.eads.usaidallnet.gov/
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How AID tries to achieve them: Tactics Promoting broad-scale human progress
Further education Improve global health Safeguard water and sanitation Advance food security and agriculture
Expanding stable, free societies
Strengthen and protect democracy, human rights, and governance Further gender equality and women’s empowerment Help prevent and recover from crises and conflict
Creating markets/trade partners for the US
Promote economic growth and trade Promote science, technology, and innovation
Fostering goodwill abroad
Require branding and marking on behalf of AID, the American people, and contributors
USAID (2012). “Who We Are.” “What We Do.”
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How AID tries to achieve them: Tactics Promoting broad-scale human progress
Further education Improve global health Safeguard water and sanitation Advance food security and agriculture
Expanding stable, free societies
Strengthen and protect democracy, human rights, and governance Further gender equality and women’s empowerment Help prevent and recover from crises and conflict
Creating markets/trade partners for the US
Promote economic growth and trade Promote science, technology, and innovation
Fostering goodwill abroad
Require branding and marking on behalf of AID, the American people, and contributors
USAID (2012). “Who We Are.” “What We Do.”
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Achieving Goodwill: Branding and Marking
USAID (2009). Automated Directives System “Chapter 320: Branding and Marking”
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Achieving Goodwill: Branding and Marking
AID-funded programs, projects, activities, public communications, and commodities
USAID (2009). Automated Directives System “Chapter 320: Branding and Marking”
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Achieving Goodwill: Branding and Marking
AID-funded programs, projects, activities, public communications, and commodities
Must be branded and marked with the “USAID Identity”
USAID (2009). Automated Directives System “Chapter 320: Branding and Marking”
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Achieving Goodwill: Branding and Marking
AID-funded programs, projects, activities, public communications, and commodities
Must be branded and marked with the “USAID Identity”
Branding Identifies who the program is from; the sponsor of the
work
USAID (2009). Automated Directives System “Chapter 320: Branding and Marking”
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Achieving Goodwill: Branding and Marking
AID-funded programs, projects, activities, public communications, and commodities
Must be branded and marked with the “USAID Identity”
Branding Identifies who the program is from; the sponsor of the
work
Marking Acknowledges contributors Identifies organizations supporting the work
USAID (2009). Automated Directives System “Chapter 320: Branding and Marking”
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Achieving Goodwill: Branding and Marking
USAID (2009). Automated Directives System “Chapter 320: Branding and Marking”
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Achieving Goodwill: Branding and Marking
Branding Strategy (BS) has to be a part of every contract/grant/partnership agreement Publicity campaign Branding/marking materials
USAID (2009). Automated Directives System “Chapter 320: Branding and Marking”
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Achieving Goodwill: Branding and Marking
Branding Strategy (BS) has to be a part of every contract/grant/partnership agreement Publicity campaign Branding/marking materials
Portion of contract/grant can apply to Branding
USAID (2009). Automated Directives System “Chapter 320: Branding and Marking”
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Achieving Goodwill: Branding and Marking
Branding Strategy (BS) has to be a part of every contract/grant/partnership agreement Publicity campaign Branding/marking materials
Portion of contract/grant can apply to Branding
Can apply for exemption
USAID (2009). Automated Directives System “Chapter 320: Branding and Marking”
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LOGO
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TAGLINE
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BRAND NAME
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Achieving Goodwill: Results
USAID (2009). Automated Directives System “Chapter 320: Branding and Marking”
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Achieving Goodwill: Results
State Department: - Favorability of the US was 37% in Indonesia, pre-
Tsunami - Rose to 66%, post-Tsunami - Water bottles with AID brand
USAID (2009). Automated Directives System “Chapter 320: Branding and Marking”
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Achieving Goodwill: Results
State Department: - Favorability of the US was 37% in Indonesia, pre-
Tsunami - Rose to 66%, post-Tsunami - Water bottles with AID brand
Pew:
- In 2003, only 15% of Indonesians had a positive opinion of US.
- Post-Tsunami, 79% of Indonesians had a more favorable view of the US “as a result of the relief efforts.”
USAID (2009). Automated Directives System “Chapter 320: Branding and Marking”
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Achieving Goodwill: Results State Department:
- Favorability of the US was 37% in Indonesia, pre-Tsunami - Rose to 66%, post-Tsunami - Water bottles with AID brand
Pew:
- In 2003, only 15% of Indonesians had a positive opinion of US. - Post-Tsunami, 79% of Indonesians had a more favorable view
of the US “as a result of the relief efforts.”
o Conclusion: o Branding campaign is effective at promoting goodwill toward
America and, at spreading the knowledge of USAID and its efforts.
USAID (2009). Automated Directives System “Chapter 320: Branding and Marking”
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Achieving Goodwill: Results State Department:
- Favorability of the US was 37% in Indonesia, pre-Tsunami - Rose to 66%, post-Tsunami - Water bottles with AID brand
Pew:
- In 2003, only 15% of Indonesians had a positive opinion of US. - Post-Tsunami, 79% of Indonesians had a more favorable view
of the US “as a result of the relief efforts.”
o Conclusion: o Branding campaign is effective at promoting goodwill toward
America and, at spreading the knowledge of USAID and its efforts.
USAID (2009). Automated Directives System “Chapter 320: Branding and Marking”
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Conclusions
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Conclusions Goals are multi-dimensional
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Conclusions Goals are multi-dimensional
Donors choose contractors v. government
implementers based on the goals they wish to achieve.
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Conclusions Goals are multi-dimensional
Donors choose contractors v. government
implementers based on the goals they wish to achieve.
Multi-faceted goals multitude effectiveness outcomes
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Conclusions Goals are multi-dimensional
Donors choose contractors v. government
implementers based on the goals they wish to achieve.
Multi-faceted goals multitude effectiveness outcomes Conflicting goals can negate or mitigate
Publicity campaigns and branding enhance awareness of US and “good news stories”
Ubiquitous donor references can undermine local ownership and struggling governance structures
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Conclusions Goals are multi-dimensional
Donors choose contractors v. government implementers
based on the goals they wish to achieve.
Multi-faceted goals multitude effectiveness outcomes Conflicting goals can negate or mitigate
Publicity campaigns and branding enhance awareness of US and “good news stories”
Ubiquitous donor references can undermine local ownership and struggling governance structures
Murky picture of effectiveness
Varying donor definitions Varying scholar preconceptions
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Conclusions Goals are multi-dimensional
Donors choose contractors v. government implementers based on the goals
they wish to achieve.
Multi-faceted goals multitude effectiveness outcomes Conflicting goals can negate or mitigate
Publicity campaigns and branding enhance awareness of US and “good news stories”
Ubiquitous donor references can undermine local ownership and struggling governance structures
Murky picture of effectiveness
Varying donor definitions Varying scholar preconceptions
Measure of “effectiveness”
Consider multiple facets; multiple Y variables Data Envelopment Analysis (DEA) Distance Function
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Thank you!
Gina Yannitell Reinhardt, Ph.D. Bush School of Government and Public Service
Texas A&M University www.ginareinhardt.com
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0
0.2
0.4
0.6
0.8
1
US Australia EU (via EuropeAid)
Proportion of ODA Going to Foreign Governments
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$0
$5
$10
$15
$20
$25
$30
$35
US Australia EU (via EuropeAid)
Aid
in U
SD B
illio
ns
ODA, in Billions of Dollars
Foreign Governments Other Recipients
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This project is financed by the EUROPEAN UNION Implementing partner: CONTRACTOR
Start of the works: xx.xx.xxxx End of the works: xx.xx.xxxx
EuropeAid
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Moral Hazard • USAID grants, contracts, and partnerships are known as the most onerous to
maintain and conform to, of all foreign development assistance.
• Regardless of the implementing partner, AID rules and procedures are designed to combat moral hazard
• All Host Government agencies have to report, just as contractors, NGOs, and other implementers do
• Measurement and reporting requirements must be structured to capture
actual growth, development, and strategy goals • If not, meeting requirements is only about meeting requirements, rather
than growing or developing
(AECID’s are the most tedious: “Why do they need everything in triplicate? Can’t they just print 3 copies when it gets there?”)
Rents • Foreign interest lobbying in Washington DC is active. • Development organizations petition AID and Congress to direct development
initiatives toward their sectors: AIDS, environment, democratization, water security, etc.