Results and Value-for-Money: from Results 1.0 to Results 2.0

By Simon Maxwell.

Walk into the lobby of DFID’s Headquarters in London and the focus on results is plain to see. A series of posters announces high-level outcomes: 11 million children educated, half of them girls; 10 million children less hungry; 10 million women provided with access to modern family planning; and 50 million people given the means to work their way out of poverty. Underpinning the public messaging is cultural and administrative change, designed to embed a focus on results and Value for Money in strategies, plans, projects and reporting. A new ‘business case’ framework has been introduced, which makes outcomes central. And it is no accident that the new, independent evaluation facility, funded by DFID but reporting directly to the International Development Select Committee in the House of Commons is called the Independent Commission on Aid Impact. No DFID official, no recipient government, no external stakeholder can be in any doubt that Andrew Mitchell, the Secretary of State, means business when he says that

We’re also fundamentally redesigning our aid programmes…  The focus will be on outputs and outcomes rather than inputs… donors have a double duty, a responsibility to achieve maximum Value for Money: not just results but results at the lowest possible cost.

It is not difficult to understand why Andrew Mitchell has set this agenda. In the end, an aid programme exists to deliver results and change people’s lives. In addition, however, Andrew Mitchell has a budget to defend and a case to make – not just to the Chancellor of the Exchequer, but to the wider public. When public expenditure is being reduced and services cut, many look askance at the ring-fencing of the aid programme, indeed at planned increases. The Daily Mail is one newspaper which has campaigned against the aid programme, with talk of aid money being ‘squandered’. So far, public support for aid has largely held up in the face of this kind of assault, but support for aid in the UK has always been fragile: broad, but relatively shallow.

Andrew Mitchell is not alone, of course. A focus on results is at the top of the agenda in most of the aid ministries of the world and was a key message from the High Level Forum on Aid Effectiveness, held at the end of November 2011 in Busan, South Korea. The new European Union development policy, Agenda for Change, published in October 2011 and to be approved by the European Council in May 2012, proposes the adoption of a common framework for measuring and communicating results.

Who could possibly disagree with a commitment to making the most of aid money to reduce poverty? Not me. A results focus is both substantively correct and politically essential.

However, there are some problems and risks with a very narrow approach to the results agenda. Andrew Mitchell is well aware of these and has developed a more sophisticated narrative. Some others have yet to catch up. I call the narrow approach Results 1.0 and the better alternative Results 2.0. Results 1.0 can:

  • Over-simplify the results chain and ignore the key role of institutions in development;
  • Privilege project-by-project analysis and leave out of account the overall impact of multiple donors, as well as the Government’s own efforts;
  • Over-simplify the economics, ignoring the fact that foreign exchange transfers to countries may or may not (and often do not) result in a 1:1 increase in Government spending; and
  • Encourage spending in relatively simple cases, where aid targets human development indicators directly, rather than spending in fragile states and other complex cases, where different kinds of investment may be needed, for example in peace-keeping or basic state-building.

To illustrate the difference between Results 1.0 and Results 2.0, imagine two rather different situations. The first concerns a relatively well-governed poor country, where the Government is committed to poverty reduction, has made a commitment to expand primary education, but is constrained by a shortage of resources, both domestic and foreign exchange. In this case, either general or sector-specific budget support might be appropriate, in a results-based framework with contractual overtones. A variety of donors might join together to support the Government’s effort. It might even be possible to roll out one of the new aid modalities, like cash-on-delivery. The line of sight between aid funding and educational outcomes should be relatively easy to track.

The second case is more difficult. The Government is weak, both in terms of leadership and capacity to deliver. The institutional environment is characterised by high levels of rent-seeking. Parts of the country are openly rebellious. Foreign exchange is badly needed to help stabilise the macro-economy, pay down debt and build foreign exchange reserves. And although everyone would like to see educational standards improve, it is not at all obvious that simply throwing money at the problem will succeed. In this case, donors need to work carefully on the institutional drivers of change, identify delivery partners among local governments and NGOs, support peace-building and civil service reform, and generally prepare for a long-term engagement. Primary school outcomes may well be visible at the end of the tunnel: but the pinpoint of light will take some time to grow larger, and there are many intermediate steps before the final objective can be attained.

None of this means that aid ministries can be excused the need to focus on results and demonstrate value-for-money. However, the right place to start may be with countries themselves, their own objectives and their own successes. The development ‘story’ then changes. It is no longer: ‘look what we have done with our aid’. It is rather ‘look how Country X has changed and what it has managed to achieve. We and many others helped. Isn’t that great?’.

Can we have a message like that in the lobby of DFID?

Simon Maxwell is a Senior Research Associate of the Overseas Development Institute, London. Email: sm@simonmaxwell.eu Website: www.simonmaxwell.eu

This piece first appeared in NORRAG NEWS, Value for Money in International Education: A New World of Results, Impacts and Outcomes, No.47, April 2012, pp. 52-54.

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