Alexandria Pauluhn

Date : February 23, 2010 16:09

After reading more about the ‘Cash-on-Delivery’ (COD) program on CGD’s site, I understand how promising of an idea this could be. Country ownership is an important part of aid. Countries need to be trusted to implement aid independently and effectively. If a country cannot eventually “go it alone,” then aid will be part of a never-ending cycle of slow progress and ultimate failure. The COD approach also makes aid more about achieving results than spending money. If a way to measure the desired progress – for example in schools – is devised along with a way to conduct the independent audit, this could actually work. The program has the potential to encourage countries to become more proactive in implementing programs and also help them focus on achieving very measurable success.
The problem with Cash-on-Delivery mentioned in this post could definitely become an obstacle to the program. Countries receive funds and resources after they have implemented a program and seen positive results. As the author mentions, if governments were capable of doing this in the first place, they would not need a cash incentive to do so. Complimentary existing funding programs are necessary. A country needs funds in advance to help them kick-start some of their domestic programs. Then, when the programs see success, the COD will allow the government to cash in on even more aid. In my opinion, this is a plan worth pursuing, although I agree with Mr. Severino and Ms. Birdsall that it should be implemented moderately. The most significant aspect of COD is that it encourages but does not require action by the recipient country. Some countries, those that cannot or are not willing to pilot projects for Cash-on-Delivery, will be left out. Unlike the author, I do not see this as a negative. Aid for countries unable to participate in the program will probably not be affected. However, we will certainly see new levels of initiative and higher levels of progress in those countries that can and are willing to participate.

Emeline Hekpazo, Alice Lukacs

Date : November 25, 2009 17:43

L’efficacité de l’Aide Publique au Développement (APD) demeure l’une des préoccupations constantes des acteurs du développement. Suite à la crise de légitimité de l’APD et la baisse importante de ses montants survenue dans les années 90, le concept a connu plusieurs théories destinées à renforcer la confiance mutuelle entre les bailleurs de fonds et les pays bénéficiaires. Le concept de « cash on delivery » (COD) retranscrit en partie les préoccupations de la Déclaration de Paris (2005) mettant l’accent sur le leadership, l’identification de bonnes pratiques afin de respecter les priorités des pays bénéficiaires et une gestion du processus de développement basée sur les résultats. Cependant, le COD énoncé comme véritable solution alternative d’aide au développement, présente nombre de limites tant sur le plan stratégique qu’opérationnel.

Outre les limites soulevées par J.M. Severino, l’application du COD impliquerait des pays bénéficiaires de disposer de capacités institutionnelles efficientes. L’engagement contractuel du COD exige une continuité administrative et des mécanismes opérationnels de coordination de l’aide pour faire du COD un véritable outil stratégique de développement. Le gouvernement bénéficiaire doit offrir une vision stratégique et coordonnée à long terme de son processus de développement pour tirer substantiellement profit des bénéfices du COD et engager des effets synergiques dans le choix de ses interventions.

Par ailleurs, le principe de COD basé sur la gestion du risque, se réduirait implicitement à certains secteurs de développement disposant d’objectifs quantifiables et affichant des performances avérées pour obtenir les retombées financières escomptées. Il en va de même quant à l’étendue des programmes et projets conditionnés par le COD, sachant que les marges de risques et de faisabilité sont souvent proportionnelles à l’échelle d’intervention. Or, un processus de développement global, tel qu’énoncé par les Objectifs du Millénaire pour le Développement (OMD), implique une complémentarité et une simultanéité d’interventions dans des secteurs clés en vue d’optimiser et d’assurer la pérennité des résultats. Une démarche dans laquelle les pays les plus nécessiteux, tels que les PMA ayant de faibles capacités d’investissement et souvent démunis de dispositifs statistiques et de mécanismes de suivi et d’évaluation performants, ne pourront de toute évidence pas s’inscrire.

Il convient également de noter qu’un processus de développement résulte d’une synergie de facteurs, tant quantitatifs que qualitatifs. Or, la définition d’une aide basée sur l’offre n’évince pas nécessairement les inégalités structurelles de la société de quelque nature qu’elles soient : ethnique, culturelle, sociale ou économique ... L’atteinte des résultats basés sur la gestion du risque, nécessitera de recourir à des partenaires d’exécution performants, munis au préalable de capacités probantes en la matière. Si cela s’avère positif dans le jeu de la concurrence, le processus dicté par la performance s’effectuera au détriment de la valorisation de certaines ressources humaines et risque de creuser les inégalités déjà existantes. Ainsi, la définition d’un résultat de développement « fair » implique de définir des conditionnalités permettant de baliser l’objectif à atteindre. La nécessité d’identifier dans les clauses contractuelles de l’offre une série d’indicateurs constituant une grille d’évaluation précise et permettant d’assurer la cohérence du programme ou projet visé apparaît alors clairement. Cette approche entrave la liberté supposée des pays bénéficiaires à définir leur propre solution de développement et remet en considération les postulats du COD, où les principes de leadership et d’appropriation semblent primer.

Ainsi, le concept de COD ne s’appliquerait qu’aux pays affichant d’ores et déjà des principes de « bonne gouvernance », faisant preuve de transparence dans la gestion et la divulgation publique des transferts d’APD. Des pays pour lesquels le COD ne présenterait non pas les caractéristiques d’une aide au développement impulsant une dynamique, mais davantage un outil servant d’accompagnement et de politique incitative pour certains programmes. Toutefois, l’exiguïté des interventions, la lourdeur administrative alliée à l’exigence du processus d’évaluation et au manque de lisibilité à long terme sur la disponibilité des fonds, font du COD une offre véritablement peu attrayante pour les pays bénéficiaires. Les modalités d’exécution contractuelles vont à l’encontre de la confiance mutuelle recherchée par l’efficacité de l’aide entre les bailleurs de fonds et les pays bénéficiaires. Se pose également le problème de conciliation en cas de contestation des résultats d’un audit et des incidences relationnelles que cela engendrerait.

Néanmoins, le concept reste attrayant si le gouvernement endosse le rôle de bailleur de fonds à l’égard de ses partenaires d’exécution et applique cette solution en interne. Selon les mêmes principes que le COD, les fonds seraient décaissés conformément à l’exécution de résultats convenus dans un plan de travail et sur une période agréés par les parties prenantes. Cette démarche permettrait de prendre en considération les capacités effectives de ses partenaires d’exécution tout en valorisant la gestion basée sur les résultats. Elle favoriserait un processus itératif au cours de l’exécution permettant d’assurer le transfert de compétences, une des plus-values essentielles à tout processus de développement.


Emeline Hekpazo et Alice Lukacs
Etudiantes du Master "Coopération Internationale, Action Humanitaire et Politiques de Développement" de l'Université Paris 1 Panthéon-Sorbonne

Boye Jallo Jamboria

Date : October 11, 2009 13:49

As an African born and bred in the continent I have a mixed feeling about this COD policy.One the one hand it may be good for the enhancement of good ,transparent and accountable governance but it can also be a set back for those governments that are cash strapped.However,COD can serve well if it is directed to governments who had received assistance before but are known to have misappropraited those funds.
Also,though it may not be connected to the topic but COD I believe can be used to help African states with poor public accounts to enhance and sustain their revenue colections if they so demand assistance in this area of public sector reforms.

saurabh pandey

Date : March 18, 2009 13:38

cash on delivery or output based aid is a promising concept for developing countries. it surely will give professional and accountable outcomes.

Carmen Nonay

Date : February 3, 2009 02:53

COD is a very promising approach and we look forward to seeing how it would be piloted in developing countries. I would agree that it is conceptually close to output-based aid (OBA) but there are some differences.

OBA in education uses explicit output- or performance-based subsidies to complement or replace school fees for poor students. This involves the contracting out of education services to a third party (service provider), with subsidy payment tied to the delivery of previously specified learning outputs. This implies that the service provider assumes the risk of pre-financing the achievement of the agreed outputs.

The main differences between OBA and COD are that OBA pays for outputs while COD pays for progress towards outcomes; and OBA usually either disburses funds directly to service providers or passes money through national governments based on an existing contract between governments and service providers. Also, OBA usually is explicitly used to bridge a pre-existing funding gap that prevents the poor from accessing basic services in education . As I understand it, COD would pay mainly to the governments and would be "hands off" in the sense that the government only has to demonstrate what it has achieved and does not have to document to donors how it used their money.

The Global Partnership on Output-Based Aid (GPOBA) has identified a handful of OBA schemes in the education sector (plus some conditional cash transfers which are not OBA but can be complementary to OBA). The challenge of introducing OBA in this sector has often been defining the appropriate "output" which balances achievement of results with reasonable performance risk transfer. GPOBA is looking at ways to develop more pilot OBA projects in education. We have had some interesting discussions on this - and COD - with both the CGD and the EFA-FTI Secretariat, as well as our donors.

GPOBA is planning to publish a short paper on OBA in the education sector later this year. For more information, please check our website where you can also sign up for our quarterly e-newsletter: http://www.gpoba.org.

Carmen Nonay
Senior Infrastructure Specialist
GPOBA
World Bank

Dilip Kumar

Date : January 20, 2009 11:12

Cash on delivery aid: It sounds a novel concept. Many times developments are mismanaged, either due to deficiencies of the administrative system or due to lack of will... I feel, this type of 'Cash on delivery aid' can atleast generate the will, the will to perform, the will to prove. It is a general tendency, unless one's performance is being monitored, no one tries to improve.
The author rightly pointed out "it is the population that is going to lose due to the inefficiency of the government" . I feel that government should be scrutinised by the public, the public should know that they are loosing their fund because of the government's poor performance. There should be sound public auditing system. The outcome should be measured by the public and at the end the public is the one capable of questioning the Government(In Democracies Like India).
In India, a scheme was started by the government in which unemployed people who wish to do unskilled work are assured a wage of 100 days. In this scheme initially there were lot of hiccups, taking into consideration the huge amount of administration involved. But with time, in some states a profound public auditing system was established, which made the scheme work and the poor were finally able to get benifits.
When funds are meant for public benifit, they should also be part of its management. Then only I feel Inclusive development can take place.

Silvia Mancini

Date : December 29, 2008 11:31

This could be a winning approach.

I also share your two concerns with regard the lack of cash to achieve the objectives and the incapacity of weak governments to delivery.

Potential solution to your two concerns are
1) The achievement of objectives can only be based on steps within a programme log frame. The first objective (not too expensive!) will be designed according to the budgetary capacity of the government. Once the first small objective is achieved government gets the cash back plus a reward which could range from a small grant (from any IFIs) to a facilitated access to financial markets. These additional incentives would support the achievement of further objectives already planned in the programme log frame.

2) The mutual accountability framework (http://www.oecd.org/dataoecd/36/53/40459701.pdf) could be an answer. However in the context of the mapping of accountability framework for donor and partners performance, great importance has to be given to the high quality regular monitoring of the government performance. I suggest the latter would be the responsibility of a third party, most likely a private organization, which would provide an on going counselling on results achievements and evaluation of results.
The costs of the third party would initially be charged to the donor community.

Phillip Huggan

Date : December 8, 2008 09:21

This approach has much potential. It has been used in Mexico in some application, food programmes for families that send their kids to school, or something like that. In the USA, there is a doctor paying obese patients a dollar for each pound of weight lost. It works. For the latter I guess the reward is psychological. Winning a prize is fun no matter the actual value. For the developing world the "prize" is much more tacit: basic human goods.
In the USA somewhere, high school students are giving $50 for earning a high grade.

This approach is capitalism at its best given funding. I'd think philanthropists would jump on board if they knew it was effective aid, because it allows one to cherry pick recipients and applications.

Che Thuy Nhu

Date : December 7, 2008 10:39

Dear readers,
In the global financial crisis, Cash on delivery aid: changing the incentive mix is a necessary problem that will be discussed on BLOG.

In Vietnam we have 2 ways to use money
1 - The donors let Vietnamese PMU team spend money and collect bills (Cash in hand). PMU have to answer for expenditure before the Donors and the law inside and outside of Vietnam. This way often happens with budget from Vietnamese government. In TA project and ODA.

2 - The donors, base on the agreement, send money directly to working teams .The Vietna mese team carry the independent monitoring and registries the progress. The donors answer for directly payment. In LOAN and other projects.

Some time 2 ways are using in one project: part by donors, part by PMU Vietnmese.
I think, in this new post Mr Severino give example in education, it is the only concrete case
The question about Cash on delivery aid: changing the incentive mix need to be discussed in other projects.

In Forum http://edu.net.vn of MOET Vietnam I suggest an idea to help the pupils in poor area. The poor families can't pay for fee in school. So why the drop-out rate is high? When I was in Kunminh ( China ), they had an experimentation: Principal of school established the list of poor pupils, that can't pay for cost fee. The need is about 50 USD for 1 child/1 school a year. For example: In Vietnam it is about 1 USD/1month x 9 months for class 6 + other needs (I am still collecting concrect) but I think this can't be higher than in China.

The support should be send directly to account of School as payment for education. Parent give food for children. Principals have to answer for the effectiveness and send the results of pupils to donors ( Vietnamese and other form abroad ) at the end of the years (By Email - Internet will be in all schools in Vietnam in future or use the Internet of the Cultural-Post office in the commune). The report is also send to Provincial and Ministerial levels by E- Government (one click). Principals answer for correct of request. If something goes wrong he or she have to payback from his or her salary. One child receive only 1 support.

Delete all other Funds for cost fee in schools. Small sum of money will ensures one child to pass 1 class, ensure teachers to receive payment for their work, reduce the drop-out rate in remote area.

I think with Internet the fund can be go directly to Schools,with no need through other channels, other local funds.

Thank you