Aid Watch has a post up by Claudia Williamson (a post-doc at DRI) about the "Best and Worst of Official Aid 2011". As Claudia summarizes, their paper looks at "five dimensions of agency ‘best practices’: aid transparency, minimal overhead costs, aid specialization, delivery to more effective channels, and selectivity of recipient countries based on poverty and good government" and calculates an overall agency score. Williamson notes that the "scores only reflect the above practices; they are NOT a measure of whether the agency’s aid is effective at achieving good results." Very true -- but I think this can be easily overlooked. In their paper Easterly and Williamson say:
We acknowledge that there is no direct evidence that our indirect measures necessarily map into improved impact of aid on the intended beneficiaries. We will also point out specific occasions where the relationship between our measures and desirable outcomes could be non-monotonic or ambiguous.
But still, grouping these things together into a single index may obscure more than it enlightens. Transparency seems more of an unambiguous good, whereas overhead percentages are less so. Some other criticisms from the comments section that I'd like to highlight include one from someone named Bula:
DfID scores high and USAID scores low because they have fundamentally different missions. I doubt anyone at USAID or State would attempt to say with a straight face that AID is anything other than a public diplomacy tool. DfID as a stand alone ministry has made a serious effort in all of the areas you’ve measured because it’s mission aligns more closely to ‘doing development’ and less with ‘public diplomacy’. Seems to be common sense.
And a comment from Tom that starts with a quote from the Aid Watch post:
“These scores only reflect the above practices; they are NOT a measure of whether the agency’s aid is effective at achieving good results.”
Seriously? How can you possibly give an aid agency a grade based solely on criteria that have no necessary relationship with aid effectiveness? It is your HYPOTHESIS that transparency, overhead, etc, significantly affect the quality of aid, but without looking at actual effeciveness that hypothesis is completely unproven. An A or an F means absolutely nothing in this context. Without looking at what the agency does with the aid (i.e. is it effective), why should we care whether an aid agency has low or high overhead? To take another example, an aid agency could be the least transparent but achieve the best results; which matters more, your ideological view of how an agency “should” function, or that they achieve results? In my mind it’s the ends that matter, and we should then determine what the best means are to achieve that result. You approach it with an a priori belief that those factors are the most important, and therefore risk having ideology overrule effectiveness. Isn’t that criticism the foundation of this blog and Dr. Easterly’s work more generally?
Terence at Waylaid Dialectic has three specific criticisms worth reading and then ends with this:
I can see the appeal, and utility of such indices, and the longitudinal data in this one are interesting, but still think the limitations outweigh the merits, at least in the way they’re used here. It’s an interesting paper but ultimately more about heat than light."
I'm not convinced the limitations outweigh the merits, but there are certainly problems. One is that the results quickly get condensed to "Britain, Japan and Germany do pretty well and the U.S. doesn’t."
Another problem is that without having some measure of aid effectiveness, it seems that this combined metric may be misleading -- analogous to a process indicator in a program evaluation. In that analogy, Program A might procure twice as many bednets as Program B, but that doesn't mean it's necessarily better, and for that you'd need to look at the impact on health outcomes. Maybe more nets is better. Or maybe the program that procures fewer bednets distributes them more intelligently and has a stronger impact. In the absence of data on health outcomes, is the process indicator useful or misleading? Well, it depends. If there's a strong correlation (or even a good reason to believe) that the process and impact indicators go together, then it's probably better than nothing. But if some of the aid best practices lead to better aid effectiveness, and some don't, then it's at best not very useful, and at worst will prompt agencies to move in the wrong direction.
As Easterly and Williamson note in their paper, they're merely looking at whether aid agencies do what aid agencies say should be their best practices. However, without a better idea of the correlation between those aid practices and outcomes for the people who are supposed to benefit from the programs, it's really hard to say whether this metric is (using Terence's words) "more heat than light."
It's a Catch-22: without information on the correlation between best aid practices and real aid effectiveness it's hard to say whether the best aid practices "process indicator" is enlightening or obfuscating, but if we had that data on actual aid effectiveness we would be looking at that rather than best practices in the first place.