Friday, June 15, 2012

Cash On Delivery Aid Pilots

The Center for Global Development is involved in several pilots testing the COD approach in education with the UK DfID.  The COD overview below is taken from a presentation by Desmond Bermingham linked here:

The Idea of Cash on Delivery Aid

  • An open ‘contract’ offered by one or more funders for recipients to sign on
  • Specific amount for specific progress, e.g. $200 per child taking a competency test in the final year of primary school
  •  Not meant to substitute for existing aid

The Problem: Accountability goes in wrong directions

  • In high-income countries, taxes finance service delivery and taxpayers monitor quality
  • In aid-dependent countries, citizens have weak incentives to monitor aid-financed programs
  • Absent local scrutiny and weak outcome measurement, funders seek to control inputs
  • Neither funder nor recipient knows real production function

COD Aid builds on but differs from other approaches

  • Macro level (not household or provider)
  • Program outcomes that are incremental (not pass/fail like many policy conditions)
  • Measurement and transparency makes recipient government accountable to citizens rather than funders
  • Funders are also more accountable – to their own legislators and taxpayers for outcomes

Key features of COD Aid

  • Funder pays for outcomes, not inputs
  • Recipient chooses how to achieve progress not the funder (“Hands-off”)
  • Independently verified by a third party 
  • Transparent to the public
  • Complements other aid modalities

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