I will start with a confession: I believe in development aid. I like that governments and institutions are committed to help those less fortunate than me and the way that this is formalised in overseas development aid (ODA). I have the privilege of working for Integrity Action, an organisation that works in developing and fragile countries. As a result, I have seen first-hand the benefit that development aid can have for people – they live healthier lives, they live longer and they are able to move out of poverty, often as a direct result of foreign aid. Broadly speaking, aid is a fantastic investment, it saves and improves lives and lays a solid foundation for economic progress (Gates, 2014). So why if I believe so strongly in it, do I think that aid needs reinventing?
“To see a transformation in aid, we need to design out corruption and build integrity into delivery mechanisms”
Well the problem with aid is that not all of it reaches the intended beneficiaries, in fact a substantial amount of aid is lost due to corruption, fraud and mismanagement. Conservative estimates state that worldwide corruption costs more than USD $1 trillion a year (BMZ, 2011). This affects vital public services such as access to education, clean and safe drinking water, health care provision, quality roads and social services but also basic human rights and democracy. We know that this impacts poor people the most (Ki-Moon, 2009) (Corruption Watch, 2014).
To see a transformation in aid, we need to design out corruption and build integrity into delivery mechanisms so that donated money not only reaches the intended beneficiaries but is spent on the most needed services and delivers effective development outcomes.
A key way to do this is by integrating feedback from citizens – those who understand the local context and needs better than anyone else – into the development process. This feedback has the potential to radically improve aid delivery. Without it, development partners and governments often fail to deliver public services effectively and the result is that services often end up substandard (Saunders, 2013).
“A key way to do this is by integrating feedback from citizens – those who understand the local context and needs better than anyone else – into the development process.”
In the UK, companies like TripAdvisor and Amazon have transformed the way we do business by prioritising the on-going process of giving feedback and responding to that feedback. As a result we have seen the quality of hotels and services improve. These feedback loops empower customers and encourage innovation so that companies can provide better products and meet customers’ needs or wants. These businesses have proved that there is a competitive advantage to meeting customers’ needs based on their on-going feedback (Christopherson & Whittle, 2013). Feedback is not only considered important, it is vital for progression and competitive advantage.
But in development aid, there are huge gaps, the systems in place to engage citizens are patchy, sometimes non-existent and definitely incomplete. As a result, development projects miss out on opportunities to iterate and improve based on evidence-informed feedback and development projects waste money, and sometimes even fail. Why do we not learn from businesses to improve development aid?
“Why do we not learn from businesses to improve development aid?”
The United Kingdom spends approximately GBP 11 billion in ODA to developing countries, (Provost & Tran, 2013), the same amount of money that a large multi-national company might make in revenue. But unlike a multi-national, the beneficiaries of aid, do not normally have a direct mechanism to provide feedback on the services they are receiving. The UK government, and the Department for International Development (DFID) is actually very committed to increasing transparency, accountability and responsiveness to beneficiaries when delivering aid. They have projects dedicated to this purpose and publish project documents online through their development tracker. However, development programmes are led by “experts” from developed countries and often have very little input from communities they are meant to be assisting. I doubt if most British citizens know that aid projects are published online let alone the communities in developing countries that these projects are meant to benefit. Furthermore, there is no mechanism for communities in developing countries to provide feedback directly to DFID on what is working or could be improved. To use a great example from (Christopherson & Whittle, 2013) this is like Apple engineers trying to develop the new iPhone with little sales data about what consumers liked or did not like about previous models. We can be sure that the iPhone 5s would not be in existence if customer feedback had not been a vital component of Apple’s business model.
Closing feedback loops is not just about reducing fraud, corruption and mismanagement. There are many other benefits as well with communities engaged, empowered and enlightened to ensure that policies are appropriate, information can be trusted, and that the money goes where it should. In my opinion, it is an investment that just has to be made. My suggestion is that aid should be reinvented so that feedback loops are the new norm, citizens are empowered to interact constructively and collaboratively with aid agencies, foundations and governments in such a way that it triggers an intelligent response. In fact, I would even go a step further, aid agencies should proactively seek feedback from beneficiaries to improve aid projects, make processes more effective and efficient and ultimately deliver better development outcomes.
Many thanks to Joy from Integrity Action for her contribution. Find more about Integrity Action be sure to visit their website, or follow them on Twitter at @Act4Integrity. Follow Joy at @Integrity_Joy
Asian Development Bank. (2004). Convention against corruption. Retrieved from United Nations: http://www.un.org/News/Press/docs/2004/soccp301.doc.htm
BMZ. (2011). Retrieved from BMZ: http://www.bmz.de/en/publications/topics/good_governance/FlyerKorruption.pdf
Christopherson, E., & Whittle, D. (2013, October 28). What’s your feedback loop? Retrieved from Forbes: http://www.forbes.com/sites/ashoka/2013/10/28/whats-your-feedback-loop/
Corruption Watch. (2014, April 23). Retrieved from Corruption Watch: http://www.corruptionwatch.com/content/who-affected
Gates, B. a. (2014). Annual Letter 2014. Bill and Melinda Gates.
Ki-Moon, B. (2009). UN Secretary General.
Provost, C., & Tran, M. (2013, March 20). Aid: how much does the UK spend, why it’s important and how it works. Retrieved from The Guardian: http://www.theguardian.com/global-development/2013/mar/20/uk-aid-spend-important-works
Saunders, J. (2013, December 19). Citizen Action For Improving Government Accountability. Retrieved from Forbes: http://www.forbes.com/sites/ashoka/2013/12/19/feedback-loops-prevent-corruption-and-improve-aid/
 According to the OECD, Overseas Development Aid (ODA) needs to be provided by official agencies, including state and local governments, or by their executive agencies; and is administered with the promotion of the economic development and welfare of developing countries as its main objective; and is concessional in character and conveys a grant element of at least 25%. See here: http://www.oecd.org/investment/stats/34086975.pdf
II acknowledge that aid is only one method of fighting poverty and disease; governments have a responsibility to their citizens to build quality infrastructure and invest in vital public services, policies need to be effective to make markets competitive and foreign direct investment can also be key to drive development.
 Not all of this loss relates to aid, it is very hard to get an official figure of ODA lost to fraud and corruption because it is hard to estimate, secretive in nature and there are limited incentives for development partners to disclose such figures.
 It’s not just aid that is lost due to corruption, up to 17% of Gross Domestic Product (GDP) in developing countries is lost due to corruption, fraud and mismanagement (Asian Development Bank, 2004),
 For example see: http://devtracker.dfid.gov.uk/projects/GB-1-203316/