Building Markets

Back to all blogs
17

Transparent, yes. But transparent what?

UPDATE: I respond to critics of this post here (with some good examples, a little bit of mild sarcasm, and the Simpsons)

I find myself in the awkward position of disagreeing with Bill Easterly.  Awkward, because a) he is very smart, b) he is very popular in the aid world, and c) I am a big fan.

The issue is this.  Aid Watchers has a guest blog up today, by Till Bruckner of University of Bristol.  In it, he laments the unwillingness of USAID and some of its partner NGOs to release uncensored budget details from projects in Georgia.  What he got, after a lengthy wait, was a lot of this:

Yes, we have no transparency today.

So Till concludes:

“…NGOs have publicly committed themselves to transparency and accountability, but their actions show that their interpretations of what this entails in practice differ widely. For example, World Vision is a full member of the Humanitarian Accountability Partnership, but still asked USAID to hide all of its budget information apart from the bottom line. “

The commenters grab their pitchforks, too. Inayet H. wrote:

“Thank you for your investigation into NGO’s corruption and lack of transparency. I must say that in Afghanistan the situation of International NGO’s corruption & fraud is criminal. Another reason why the Taliban are winning.”

And in the pages of the Wall Street Journal, Prof. Easterly laments this stonewalling and links it to Afghan’s fading support for the international efforts there and the fact that a:

“U.N. survey taken in January found that 52% of Afghans believe aid organizations “are corrupt and are in the country just to get rich.”

I’ve got phone calls and meetings scheduled every 15 minutes today, so I’m going to keep this short.

[NOTE: After some raised eyebrows (see comments below) I would like to point out that point #1 uses the literary device "hyperbole". Used for comical, ironic or dramatic effect. For the more literal minded, replace that sentence with: "I am not concerned if World Vision spends 6.5% or 7.2% on staff overheads"]

  1. When people like me demand transparency and say “We want to know where the money went.”, I think we actually mean “We want to know what the money did.”  In this case, I really don’t care if World Vision blew 90% of their budget on strippers and Grey Goose vodka.  What I want to know is what did they deliver?  What changed on the ground? How many people were helped?  I want transparent impact.  I couldn’t care less about transparent budgets.
  2. Uncensored budgets aren’t going to help too much on corruption.  Even the best forensic accountant couldn’t look at that budget and tell you if the money was spent on what it says it was. Only an audit can do that, and even then the audit has to be damn good.  You want to keep everyone’s nose clean? Ask for the audit results, not the budgets.
  3. I can assure you that the Taliban are winning for reasons other than you don’t know how much an NGO spent on office rent and staff salaries.  Likewise, I am pretty sure that if  52% of Afghans believe aid is corrupt, it’s not because they haven’t seen the audited statements.  It’s because they haven’t seen the schools, roads, clinics, and irrigation ditches.  Again, they are upset about impact, not process.
  4. And finally, from someone who has been screwed over by more than one beltway bandit, those USAID budgets were for tendered and competitive contracts.  If those NGOs share them with the for-profit vultures who eat up most of the aid spending, it will pretty much ensure they get outbid on the next contract.

But other than that, I agree with everything Bill Easterly says.  I swear.

Tags , , , , , , , , , ,

17 Comments

  1. c-sez says:

    Scott, I’m pretty much in agreement with this response, however where you say

    When people like me demand transparency and say “We want to know where the money went.”, I think we actually mean “We want to know what the money did.” In this case, I really don’t care if World Vision blew 90% of their budget on strippers and Grey Goose vodka.

    I’m a little confused. Isn’t the raison d’etre of the PDT paying attention to the who/how/where of the money gets that gets spent in peacekeeping ops? Shouldn’t similar principles and benefits apply to humanitarian relief ops? Or if you do, do you feel that this particular kind of granular analysis is just wide of the target, and doesn’t contribute to that outcome?

  2. Scott Gilmore says:

    Cynan: Our local procurement projects are driven by a desire to give local entrepreneurs the same opportunity to bid on aid delivery contracts as the beltway bandits have. But we always insist that the ultimate decision by donors should be based on the value for dollar proposition. In other words, which contractor will be able to build the longest road, or the best school? So, I don’t think we are contradicting our overall mission, which is to make aid and peacekeeping missions more effective and efficient.

  3. Scott: Amen. I can’t think of a better plea for trying Cash on Delivery (COD) Aid! http://www.cgdev.org/section/initiatives/_active/codaid

  4. [...] This post was mentioned on Twitter by William Easterly, Penelope, Billy Williams, Jenn George, Ned Breslin and others. Ned Breslin said: Nice job @Scott_Gilmore. New blog post focused on hard questions of impact! http://2.ly/cn3n #SmartAid [...]

  5. c-sez says:

    OK, but in a thought experiment where two bids com in, and all else being equal, one is from a local company in Afg and one is from a US company, wouldn’t your preference be for the Afghan company, based on the anticipated better impact for the local economy? If I read your mission statement right you don’t want *just* more cost effective PK ops, you want to ‘reinforce peacebuilding by jumpstarting economic recovery’

    I’m not making a huge point here, just that I think your approach does require taking an interest in certain aspects of the process of how the PK sausage gets made, to improve the end result. On the surface, the interest by Til & Bill in USAID/NGO budgets in hum relief, is also essentially taking an interest in the sausage-making, putatively to improve the end result (a logical step which in their case I think is far less demonstrable).

  6. [...] Scott Gilmore posted this response, pointing out that transparency isn’t everything.  I think he has some good points, but he [...]

  7. Scott Gilmore says:

    c-sez: Yes, all things being equal, there is no argument that choosing a local vendor has considerably larger economic impact (and overall impact) on aid delivery.

    On the sausage metaphor, I agree there should be some interest in the process. But that can also be improved through the application of market forces to an extent. ViewFromTheCave uses the effective metaphor of the iPod. People buy iPods because it’s a great mp3 player, not because Apple has low overheads. Likewise, donors should fund projects because they have great results, not because they have low overheads. And, in the case of the iPod, they can produce a good iPod partly because they have good processes. Similarly, NGOs with lousy and inefficient processes simply won’t be able to deliver good impact. Voila, the (theoretical) beauty of Adam Smith’s invisible hand! What can’t it do!

  8. [...] Peace Dividend Trust Blog « Transparent, yes. But transparent what? [...]

  9. Max says:

    So you’re willing to agree with Till Bruckner’s conclusion: “NGOs have publicly committed themselves to transparency and accountability, but their actions show that their interpretations of what this entails in practice differ widely”, but not with how other people have interpreted his conclusion?

    The original piece never once alleged that any of the NGOs were corrupt (that was Inayet H), and presented the approach as a novel way of seeing how organisations deal with transparency when there is a common standard to be judged against (i.e. the same USAID contract in the same country). Therefore, some NGOs were more transparent than others, and given how this is a real issue in the sector at the moment surely this is a welcome addition to the debate.

  10. Carla Murphy says:

    I don’t understand. You have a post that says that less than on-third of 1% of aid to Haiti has flowed through the Haitian gov’t… which means it’s flowing through the World Visions, the CAREs, the Concerns, etc. — but you don’t care if they blow it on strippers and Grey Goose? NGOs are a de facto “government” in Haiti as they provide the country’s social services. Why wouldn’t you want to know how that “government” spends its money?

    And regarding strippers and Grey Goose… it’s an interesting thing when you’ve walked from seeing children begging on the corner outside into the bar/resto where typically white NGO workers are picking up black prostitutes and drinking expensive drinks. I know race wasn’t a part of your post nor your intent but out there in the developing country, it is. It’s the most visible thing you see: white people who’re supposed to help, enjoying all the fruits of your country. NGOs worry so much about their image back home but devote scant attention to the image they present while in the developing country. The people there are watching NGOs too. They are forming impressions of which NGOs are good, which are just there for the strippers and Grey Goose.

  11. Scott Gilmore says:

    Carla (and the several others who have fixated on the Grey Goose sentence). Hyperbole. Used for comical, ironic or dramatic effect. For the more literal minded, replace that sentence with:

    “I am not concerned if World Vision spends 6.5% or 7.2% on staff overheads”

  12. Carla Murphy says:

    Scott, I get that it was hyperbole and not literal. My goodness, I’d die if I were that dense or self-righteous. My point: the request for transparency looks different depending on where you’re writing from. If you’re in a country looking at my stripper/GG example, yeah, you care very much about the fine print in those budgets. That’s all. In my appropriation of your hyperbole I wasn’t clear that I understood it to be so and unrelated to the new point I was adding. Apologies.

  13. [...] That Day Scott Gilmore of Peace Dividend Trust writes a response post questioning Bruckner’s conclusions by making four [...]

  14. Chris says:

    I think it is particularly important if an otherwise effective program blows 90 percent of its budget. The opportunity cost of wastage for an effective organization is much higher than for an ineffective one.

  15. [...] led Scott Gilmore at the Peace Dividend Trust to ask what information it is reasonable to expect NGOs to publish. In his view, we shouldn’t [...]

  16. [...] posted a series of replies from the NGOs involved, and Scott Gilmore jumped in with his two cents. Caveman Tom summarised the whole to and fro here and then subsequently added his [...]

  17. Atenas says:

    Scott, I get that it was hyperbole and not literal. My goodness, I’d die if I were that dense or self-righteous. My point: the request for transparency looks different depending on where you’re writing from. If you’re in a country looking at my stripper/GG example, yeah, you care very much about the fine print in those budgets. That’s all. In my appropriation of your hyperbole I wasn’t clear that I understood it to be so and unrelated to the new point I was adding. Apologies.


Rss Feed Tweeter button Facebook button Youtube button