Cash on Delivery Aid
Nancy Birdsall
What Would the Poor Say: Debates in Aid Evaluation
Aid Watch
Development Research Institute, New York University
February 6, 2009
Aid, institutions, and a proposal
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Functional system: taxes for
outcomes, with citizen scrutiny
Aid dependent countries: aid, limited
outcomes, no citizen scrutiny
 Donor micromanagement: aid for
inputs, replaces citizen scrutiny
 Cash on Delivery (COD) Aid: aid for
outcomes, mechanisms for
promoting citizen scrutiny
The idea: Cash on Delivery Aid
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Donor-recipient binding contract
Donor guarantees specific additional
payment for specific incremental
progress, e.g. $200 per child
completing primary school and taking
an approved assessment exam
Recipient reports on progress and
agrees to independent third-party audit
Contract is public information
Essential features of COD Aid
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Pay for outcomes, not inputs
Transparent to the public
Hands-off
Independently verified
Contract for COD Aid
applied to primary education
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Recipient government
 Implements competency test
 Tracks and publicly reports
completion figures and test scores
Donor
 Contracts independent agent from
pre-agreed list to audit government
report
 Makes payments upon good audit
 Payment directly to government
budget
Donor Role in Hands-On Approach
Traditional Project
Aid
Identification
Design
Negotiation
Approval
Startup
Donor
engaged
in almost
every
phase
Implementation
Tech. Assist.
M&E
Final “Evaluation”
Outcome Measurement?
$
Photo: Government of Bulgaria
Missions for meetings to
discuss the process for the
disbursement of the funds for
technical assistance for
improving the process to
receive missions ….
Donor Role in Hands-Off Approach
Traditional Project
Aid
Cash on Delivery Aid
Identification
Donor and
recipient agree
measure of
progress
Design
Negotiation
Approval
Startup
Donor
engaged
in almost
every
phase
Implementation
$
Tech. Assist.
M&E
Final “Evaluation”
Outcome Measurement
Validation of
outcomes by
third party
$
Countries can use funds
for whatever they think will work best
Photo: Anna Lindh Euro Mediterranean Foundation
Photo: U.S. Department of State
textbooks…
teacher training …
Photo: Prefectura Municipal de Erechim
…Conditional cash transfers…
Photo: Horizons Unlimited
…improving roads so
children can get to school …
Photo: Pierre Holtz, UNICEF
…early nutrition programs to
boost learning outcomes…
Benefits for recipients

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Less intrusive; local solutions
Fully transparent to citizens and civil
society (“$200 per child”)
Gets finance ministers focused on
education outcomes
Benefits for donors

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Eliminates complex conditionality
Improves and simplifies monitoring
Makes recipient government visibly
accountable to communities, parents,
citizens
$200 per child easy to explain to donor
legislature and taxpayers
Implements Paris Declaration reforms
Citizens’ role in making
government accountable

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Government publishes contract
Government could publish what
inputs it buys
Results available at local / school
level, compared to other localities
Results of testing published at some
level
Research Level 1
COD Aid
Country
Response
COD multiplies opportunities
to discover what works
Politics
Economics
Institutions
Donor
Response
Schooling
Outcomes
Specific Programs
& Policies
Politics
Economics
Institutions
Foreign Aid
Policies &
Practices
Other Factors
Research Level 2
Level 1 Counterfactual: Traditional Aid / Compare With other country or sector?
Level 2 Counterfactual: Traditional Schooling Project / Compare across schools or districts?
Learning from
COD Aid: level 1 “process”
evaluation
o
Local institutions (think tanks/policy
research) undertake “process”
evaluations (press, civil society
advocates)
• Do donors behave better?
(“coordination”, “ownership”, etc. etc.)
• Do recipient governments behave
better (i.e. more accountable to
citizens)? Does transparency and
feedback increase accountability?
Research level 1

Track COD Aid intervention to
understand
 Donor(s’) behavior e.g. changes
number of missions and the nature
of interaction
 Recipient behavior e.g. resource
transfers more transparent;
patronage in teacher appts. Cut;
minister of education changed;
increased collaboration between
ministries
Research level 2 (Esther Dyson)
maybe. . . .depends. . . .
Happening in real world?
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Recipient governments prefer
budget support (but Tanzania . . .)
Donors fear waste and corruption if
they don’t track inputs (ignoring
fungibility)
Fundamental problem with all
innovation: first mover cannot
capture all the benefits, and
Donor bureacracies risk-averse all
bureacracies