Experimenting with Aid Information

Randomized controlled trials have garnered increasing attention in the development community, particularly with the high-profile work of economists Esther Duflo, Abhijit Banerjee, and their colleagues at the Jameel Poverty Action Lab at the Massachusetts Institute of Technology. Randomized controlled trials provide a method of research to social scientists that allows for the isolation of causal mechanisms while minimizing risks to human subjects (Green and Gerber 2003). This summer, a group of 15 students from BYU will be travelling to Uganda to work as research assistants on a randomized controlled trial led by AidData principal investigators Michael Findley and Daniel Nielson. We will be studying how to improve the transparency and effectiveness of the aid sector in Uganda. I will be joining the group as a representative of the College of William and Mary.

Of the roughly $150 billion in foreign aid committed to developing countries annually, studies suggest that it is often the case that a relatively small portion of this money actually reaches the intended beneficiaries. Often, a large portion of the diverted money is lost to corruption and bureaucratic inefficiency (Svensson 2000, Knack 2001). Of the money that does reach the right hands, it often ends in unsustainable projects that do not produce the intended results due to inefficiencies or project abandonment, or other factors.

Breakdowns in the service provider-recipient relationship contribute to the capture of foreign aid funds by corrupt officials and bureaucratic inefficiencies. One problem occurs in information provision. It is not a lack of information driving this breakdown, but a failure to centralize these sources in a useful way. Studies have suggested that individuals and organizations with access to useful information are far more likely to play an effective oversight role (Miller 2005, Gordon and Huber 2002). Often times, the most useful information regarding where aid is needed and whether aid dollars are being spent effectively is held by citizens in developing countries. However, these citizens generally lack the tools and access needed to provide direct feedback on project status or impact.

Our project this summer will investigate the use of crowdsourcing to solve this information breakdown. Crowdsourcing refers to leveraging the wisdom of the crowd to answer a question or solve a problem that would traditionally be posed to a specific actor. For example, in the business world, companies may use crowdsourcing to poll consumers to name a new product. AidData will be partnering with UNICEF and Ushahidi to run a randomized controlled trial in Uganda to test which incentive mechanisms (e.g. reimbursement, social networks, public praise, immediate feedback, and entry into a lottery providing prizes to the winners) are most effective in recruiting Ugandan citizens to provide useful information on development needs and outcomes. The application of incentive mechanisms will be randomized across districts in Uganda, so that results can be compared against control districts to isolate the effect of the treatment. This randomized controlled trial will provide insight into the causal mechanisms that drive improvement in the effectiveness of foreign aid provision, and I am excited to have the opportunity to work on the project.

Alena Stern ’12 is an AidData research assistant at the College of William and Mary
 

Comments

A. This sentence perpetuates a myth: "Of the roughly $150 billion in foreign aid committed to developing countries annually, studies suggest that it is often the case that a relatively small portion of this money actually reaches the intended beneficiaries." 1. Most aid is not designed to deliver money to intended beneficiaries, the main exception being emergency relief programmes. 2. Nor is the percentage that does reach them a significant measure of aid effectiveness. What does matter is what happens to a country government's budgeted resources, of which aid flows are a part, often quite small. That is where transparency initiatives, and RCTs thereof, should be focused.<br />B. This looks like a case of searching for a lost key under a lamppost, although this particurl light might promise to be quite good, the key may be in fact be elsewhere: "One problem occurs in information provision. It is not a lack of information driving this breakdown, but a failure to centralize these sources in a useful way" Is this the case of yet another aid project trying to provide technical solutions to what are more often than not political problems?

I am one of the principal investigators on the RCT Alena blogged about.<br /><br />Mr. Davies' post was both thoughtful and provocative. When Mr. Davies notes that "most aid is not designed to deliver money to intended beneficiaries," we would definitely agree. Aid is not usually -- nor should be -- about cash payments on the ground. But our point was a broader one about the effects of the aid expenditures reaching beneficiaries. Unfortunately, too much of the time the aid money is "morselized" into pieces that can be fed to cronies and toadies of the government officials that apportion the aid.<br /> <br />What we hope to provide with crowsourced information about the effects of aid projects is not so much a streetlight but a spotlight. And it is a spotlight that the beneficiaries themselves can point at the darker corners of the aid landscape. An excellent example is the recent study (see http://qje.oxfordjournals.org/content/124/2/735.short) by Bjorkman and Svensson, which found that improving the information about health clinics in Uganda and inviting communities to improve the information had greater effects than new medications or procedures; in the small geographic area of the study, transparency saved hundreds of childrens' lives that otherwise would have been under-5 mortality statistics. <br /> <br />More information does not address every problem in development, but it may have its greatest effects on one of the most severe challenges to combatting poverty: government corruption. Based on good evidence, we hope that such information might address exactly the "political problems" that Mr. Davies rightly identifies. <br /><br />Daniel Nielson<br />Director, BYU's Political Economy and Development Lab

Hi Dan sorry to engage in this thread five years down the line. I am a master student at Copenhagen University (Disaster Management). I am considering writing my thesis on funding dilemmas and could not help to be puzzled by your statement, that; "Aid is not usually -- nor should be -- about cash payments on the ground." My thesis thoughts are evolving around that by enabling the "beneficiaries" (i think that term has been replaced within the contemporary terminology) by giving them cash in hand, could solve a great number of accountability issues in the entire Humanitarian sector. Do you have any thoughts or sources that would argue against this view? i know its a longshot. Sincerely Yours Mads