Transcript Slide 1

The Value for Money Agenda and
NGOs
Aid effectiveness, at the micro level
Dr Patrick Kilby
Australian National University
Value for Money Agenda
 Part of aid effectiveness debates since the late 1980s;
 Focus is on whether aid objectives have been met; or if
there has been an impact,
 has the aid has been well spent; has there been no
waste; and has it all been worth the investment?
 Now put into a rubric of: economy, efficiency and
effectiveness, to which some may add equity (or
fairness);
 Issue of it being cost exercises where comparative costs
are made.
 The Abbott Government now shifted the rhetoric to
‘benchmarking’, but some of the issues are still common
Value for Money in NGO programs
 early work on VfM in DFAT has been done with NGO
programs - they are relatively small and lay outsides the
complexity of intergovernmental bilateral relationship or
multilateral organisations;
 The focus has been on the processes involved: is there
adequate cost control, awareness of alternatives, and the
like.
 Danger is that if metrics are attempted, lead to league
tables, and measures of alternatives, then a whole host
of questions emerge.
 Example is GiveWell criteria versus
OAGDS/Accredation/Code criteria. The former is on
metrics the latter on processes.
Questions: VfM for whom, what, and
when
 For Whom: the donor or the recipient? Most think of the
donor, but for effective aid it must be the recipient. This
raises questions (Paris Declaration):
 of impositions on the recipient;
 recipient control;
 Tied aid;
 For What: Is it the outputs or outcomes that should
represent Value for Money:
 Outcomes but often gets reduced to outputs due to time
lags.
 For When: the life of the project, or the life or the change
– how sustainable is what is proposed.
NGO Programs

usually about micro level (sub-district) social change;
 Issues:
 Social change takes time e.g Ragpicker program in
Pune over 20 years was transformed, but the change
was not predictable;
 socialising change is a slow process;
 the unexpected and unknowable: programs evolve and
so what was known at the start is built upon with new
knowledge as change occurs (causal connections not
clear);
 how can meaningful comparisons be made across
programs. Context, if not everything, is nearly
everything in development.
Ways Forward
For NGO programs value for money might mean:
 Strong partnership processes; clear, and mutually
accountable;
 In-built flexibility – a possible move away from rigid
frameworks;
 Aiming for longer-term change, with possible intermediate way
points;
 A different way in accounting for money: less prescriptive
budgets to perhaps a budget framework but with more
rigorous audits and detailed annual reports, which justify
decisions made;
 This implies a move away from traditional projects modes
Implications
 It puts the VfM (benchmarking?) agenda more in the hands
of the partner (in line with Paris Principles etc); but:
 Might not accord with government/parliamentary risk
averse approaches;
 Moves into the ‘unknowns’ when development has
always been about the predictable and known;
 Has a longer time horizon, much longer than the average
program or project cycle;
 My have to have intermediate process steps;
 Doesn’t provide easy metrics in many, if not most, cases
 How to balance efficiency, economy, (equity) and
effectiveness considerations, what weighting should be
given to each;
 From civil society framework – ‘that CSOs make optimal
use of resources in achieving intended outcomes (value
for money) …[and[ results achieved are commensurate
with resources allocated in differing operating
environments’ is vague but with sting in there.
 Davis notes:
 ‘ issues in capturing the adverse effects of political and
social contexts on delivery costs’.
 the dilemma of clashing rationalities (world views) between
donors, NGOs and partners;
 Time frames (3-5 years) but why?
Thank you