Global Development Institute Blog

Dr Pablo Yanguas is author of Why We Lie About Aid  and a research fellow with the Effective States and Inclusive Development Research Centre (ESID) at the University of Manchester.

In this extract from Why We Lie About Aid, Pablo Yanguas dissects the logic of ‘Value for Money’ in the development sector, a logic which forces foreign aid agencies to choose between irrelevance and subterfuge.

Value for Money (VfM) sounds eminently reasonable. It represents the kind of due diligence we expect from modern liberal states: accountability to taxpayers’ demands that governments keep an eye on how public funds are spent, assurance that these funds are, in fact, employed for their stated purposes, and transparent management of public funds are all necessary for avoiding corruption and waste. In that light, VfM is not only reasonable but perhaps even morally desirable.

However, not all areas of public policy are equally amenable to the same calculations and standards of proof. When procuring bricks to build a school, for instance, we can easily compare the costs and estimates of different providers in order to choose the most economic, efficient, effective, and cost-effective option. As we move to less tangible goals, however, the simple logic of VfM begins to unravel, and at a certain point the demand for hard evidence does not necessarily lead to accountability. And, as we know, many development assistance goals are of the less tangible variety.

Consider the very first conceptual step of VfM: we want to get some value out of aid. That seems fair. But how do you attach value to development outcomes? How much is a vaccinated infant worth? Is it more or less than a woman empowered to start her own small business? What is the value of a new procurement law? What about a more effective ombudsman? And a community policing programme? I am not being facetious here: these are some very common development interventions. By any reasonable measure, they are all very desirable. All of us would like to have healthier children, greater gender parity, cleaner governments, or more responsive police officers. But the VfM agenda forces aid practitioners to attach value and risk calculations to each of these desirable goals, which is not an easy task.

Imagine all of the potential factors that may influence the success of a new public procurement law: the willingness of political parties to agree on a law; the government’s capacity to properly enforce it, which entails funding an oversight body; the professional skills of public auditors, who will keep track of procurement processes; the ability of businesses to adequately comprehend the new requirements and participate in open tenders; the personal relationships between public officials and business owners; the willingness of ministers to take cuts or allow their subordinates to take cuts; and so on. Now try to attach a probability to every possible combination of factors. I’m afraid you will soon exit the land of calculable risk and enter the realm of uncertainty.

Across country offices in Ghana, Uganda and Bangladesh, as well as in Whitehall, DFID advisors that I spoke to between 2013 and 2015 betrayed a mix of disillusionment and perplexity at the government’s decision to apply stringent VfM standards to the thorny, non-linear, and often unpredictable problems of development. VfM and its related tools – like the business case – serve to justify development interventions by artificially constructing a manageable set of risks. They are essential to getting a project approved, funded, and evaluated in a positive light. Calculability is more than just due diligence; it is a religious dogma. However, the incentive to minimise risk leads to two kinds of projects: either the ‘easy bits’ of service delivery that some DFID advisors complain about, or somewhat falsified interventions that have to conceal any uncertainty under an elaborate disguise of spurious numbers and misleading portrayals of the reality on the ground.

All of which resonates with a warning by former USAID administrator Andrew Natsios that ‘those development programmes that are most precisely and easily measured are the least transformational, and those programmes that are the most transformational are the least measured’.

The risk-versus-uncertainty conundrum is not just an analytical one: it has clear ethical implications for what donors choose to do, and how they justify their choices. The VfM agenda carries with it a very specific ethical theory that does not stray far from classic utilitarianism. We learned from John Stuart Mill to think about the greatest happiness for the greatest number of individuals as the pinnacle of ethical decision-making: by calculating the overall value (or ‘utility’) of alternative courses of action, we can identify the most satisfactory one. It is easy to see traces of this moral philosophy in VfM, where the goal is to measure the expected utility to aid recipients as well as aid taxpayers. But outside of the kind of thought experiments devised by moral philosophers and Hollywood writers, it is very hard to make calculable moral choices, especially when faced with development challenges.

Is it right to finance a failing health system so that more patients can be saved from preventable diseases, even if 50% of the total aid funds get lost to waste or corruption? Are the lives of those patients saved worth more or less than what we would get out of the money if it stayed in donor countries? Can we ensure that our own use of public funds at home will be 100% VfM? What if politicians here choose a patently useless project to fund just because it is expedient or good public relations? How can we be sure that the risks of foreign aid are less desirable than the risks of domestic policy? The answer, of course, is that public policy everywhere tends to unfold in a context of uncertainty. And just like uncertain public policy at home, foreign aid is guided by – usually covert – moral principles, even when they are disguised as calculability and due diligence.

What are we left with, then?

The VfM agenda and its proponents, however well meaning, are forcing foreign aid agencies to choose between irrelevance and subterfuge. Either practitioners will look after their career prospects first and design the kind of low-risk projects that politicians like to talk about but rarely lead to sustainable development, or they will obfuscate the very real politics of development in order to comply with the twin demands of accounting and transparency. This condemns donor publics to a superficial understanding of development, which can only give wings to fiscal conservatives and aid deniers who are more likely to use foreign aid as political ammunition than worry about the plight of developing countries. We will have certainty, yes, but a kind of certainty that is ultimately banal in its lack of practical and moral value.

Photo by Ellie Van Houtte/USAID

Note:  This article gives the views of the author/academic featured and does not represent the views of the Global Development Institute as a whole.
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