6.

Provide cash to the poorest

How much of aid budgets goes to direct cash transfers for vulnerable citizens? Are these cash transfers equitable and consistent over time? The evidence in support of cash transfers to the poor in developing countries is impressive in terms of reducing poverty, increasing demand for services and stimulating the economy. In South Africa, a cash transfers program reduced the poverty gap by 47 percent. Cash transfers also enable people to access health and education facilities. A cash transfer feasibility study in Haiti interviewed potential beneficiaries, who reported that they most needed money or work to send their children to school. While cash transfers are not a panacea, they provide a tool through which governments and donors can directly empower the poor. By funding cash transfer programs, donors also help to reinforce the social contract between the state and its most marginalized citizens a goal of many development programs.
In Haiti, where no permanent cash transfer program exists, studies on remittances which are comparable to cash transfers show that families spend over 75 percent of funds received on basics, such as food, utilities and clothing.

The Accompaniment Approach: Eight Principles for Effective Aid Delivery

Accompaniment is an elastic term. It has a basic, everyday meaning. To accompany someone is to go somewhere with him or her, to be present on a journey with a beginning and an end. The companion, the accompagnateur, says: Ill go with you and support you on your journey wherever it leads; Ill share your fate for a while. And by a while, I dont mean a little while. Accompaniment is about sticking with a task until its deemed completed, not by the accompagnateur, but by the person being accompanied. Paul Farmer

7. Support regulation of non-state service providers

How much of aid funds for service provision goes to grantees or contractors that are not regulated by any arm of the recipient country? In any given developing country there are hundreds (if not thousands) of operating NGOs, most of them acting as service providers. Donors need to support national and local governments in their role as stewards over service provision, and to ensure that their grantees and contractors align their work with the governments priorities. When non-state service providers work outside the regulatory loop of governments, they run the risk of being duplicative, inequitable and unaccountable to the communities that they serve. An increase in state regulation can lead to better efficiency in service delivery.
In Haiti one leading NGO raised over $138 million in private funding following the earthquake, approximately three times the $45.4 million allocated for the 2010 fiscal year to Haiti's counterpart ministry, which has no regulatory authority over their programming.

8. Apply evidence-based standards that offer the best outcomes

When designing programs in poor countries, are the commonly accepted standards of care applied? When it comes to peoples welfare, there should not be separate standards of care for rich and poor countries. Often concerns about cost and implementation challenges drive decision making in regard to standards of care. Those practitioners who have implemented programs using the accompaniment approach will attest that they are more effective and even more cost effective over time. In addition, for any development program to have a positive and lasting impact, it must take into consideration the full spectrum of needs within the community it serves. Accompaniment takes a holistic view of any development project a practice that may require greater and more varied resources than any one organization can offer. But limited resources should not be an excuse for lowering standards. When evidence shows that an intervention is of pragmatic value donors should fund activities that apply it to the fullest extent possible in both wealthy and developing nations.
As part of its AIDS-prevention work in Haiti, Partners In Health introduced the drug AZT to their prenatal clinicjust as they would have done in a United States clinicand noticed thereafter a sharp increase (from 15 to 20 percent to over 90 percent) in the number of women seeking free voluntary counseling and testing during pregnancy.

The accompaniment approach to aid delivery is based on pragmatic solidarity with the poor. It builds a different type of long-term relationship between donor and recipient and mandates walking side by side, rather than leading. It seeks to listen actively before proffering solutions. If the ultimate goal of development assistance is to reduce poverty and increase self-sufficiency, then the aid community must rethink the way it channels funds. Until the immense money stream of international assistance is used to create jobs and strengthen national and local institutions, the potential for aid to reduce poverty will be unrealized. This note sets forth eight principles for implementation, backed up by data and experience, that will put more funding into national and local government budgets, into local businesses bank accounts, and into local peoples pocket books. While these concepts are not new and are often reflected in the global aid effectiveness agenda, a careful analysis of the funding flows and outcomes makes it clear that there remains a large gap between policy and implementation. The purpose of this paper, therefore, is not to encourage a change in policy, but to offer recommendations regarding implementation. Its message applies primarily to the approximately 79 percent of development assistance that is allocated to public sector support. Methods for accompanying the private and third sector should be discussed separately; yet implementing the eight principles will benefit private enterprise and civic engagement as well.

For more information, contact:

Abbey Gardner Senior Advisor on Aid Delivery Office of Paul Farmer Aid Delivery Support Initiative 55 Broad Street, Suite 13F New York, NY 10004 agardner@pih.org Jhane Sedky Head of Office United Nations Office of the Special Envoy for Haiti New York, NY jehane.sedky@undp.org
For the bibliography and additional materials, please visit: www.haitispecialenvoy.org

No low-income fragile or conflict-affected country has yet achieved a single United Nations Millennium Development Goal (MDG). However there may be an exception: With its consistent progress over the past decade, Rwanda is on track to achieve most of the MDGs by 2015.

Estimated Gross ODA Disbursements from Five Major Donors to 27 States in Fragile Settings in 2010
3.1% 5.6%

3. Make job creation a benchmark of success

Is the creation of local jobs used as a measurement for success in aid delivery? The fundamental question for donors should not just be how many people are we reaching? but also how many jobs are we creating? Jobs not only allow individuals and their families to subsist, they offer people a sense of dignity, self-worth and opportunities to improve their well-being. Job creation also promotes the development of professional skills, stimulates local economies, and strengthens the national tax base, the potential short and long-term effects of which are irreplaceable.
Of the top ten global donor development agencies, none make explicit reference to job creation as one of their priority areas. Of the main UN entities represented in Haiti, only UNDP and WFP have job creation as part of their mandates. 70 percent of the population of Haiti is unemployed.

Budget Support Budget Support (BS) (BS) = 3.1 3.1 percent percent Go vernment systems systems (excluding (excluding BS) BS) Government = 5.6 5.6 percent percent Bypassing B ypassing government government systems systems = 91.3 percent percent =91.3
SOURCE: Office of the Special Envoy for Haiti estimates based on the OECD Creditor Reporting Scheme and the OECD 2011 Survey on the implementation of the Paris Declaration dataset.

91.3%

1. Favor institutions that the poor identify as representing their interests

How much of aid budgets supports structures (in the public, private or third sector) that the poor themselves identify as accountable to them? When identifying partners in developing countries, the first priority for donors should be listening to the poorest people. They know best which institutions and organizations represent their interests. In many countries, for example Haiti, the most vulnerable communities want their governments to provide for them. In cases where the government does not adequately serve the interests of the poor, other alternatives need to be identified, including working outside state institutions.
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4. Buy and hire locally

In the Voice for the Voiceless initiative, which was launched in the aftermath of the earthquake, Haitian citizens shared their views and aspirations for their country, issuing a general call for the state to be the state.

2. Fund public institutions to do their job

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How do international aid organizations encourage local procurement? What percentage of funds is spent on goods and services inside the recipient country? Most goods and services that fall under the category of international aid are purchased outside of the beneficiary country. At best, failure to buy locally is a lost opportunity; at worst, this practice can severely weaken sectors of the local economy. The main barriers to local procurement today are based in practice, not policy. For instance, most aid agencies have restrictive eligibility criteria, such as extensive experience, access to credit, or coverage through insurance services. Donors can help remove these barriers by assisting local businesses to gain access to credit and insurance, and offering smaller contracts. Spending locally not only creates and sustains critically important jobs in the economy; it also develops local markets, increases tax revenue, and stimulates entrepreneurship.

An analysis of post-earthquake contracts awarded by a bilateral donor to Haiti shows that by mid-2011, only 2 percent of postearthquake construction contracts were awarded to Haitian firms. In 2009, OECD donors reported that out of $8.6 billion in untied contracts awarded in Least Developed Countries, only 4% was won by local firms from those countries.

How much of aid budgets designed to improve basic services goes through the systems of national and local public institutions? By sidestepping public institutions, donors effectively ! perpetuate the weakness of the one stakeholder that is both accountable to a nations people and responsible for its development. Successfully balancing the benefits and risks of investing in public systems is one of the greatest challenges donors face. Donors hesitate to invest directly in governments that pose political, fiduciary or capacity risks. When donors bypass governments perceived as weak or corrupt, a self-confirming prophecy can set in.While the risks of investing in the public sector are much discussed, the harm caused by not doing so is often overlooked. Consider Haiti, where aid continues to be channeled outside of government systems: there, aid negates the ability of public institutions to do their job and misses opportunities to strengthen them. Supporting flawed governments may be a difficult choice, but investing in them with appropriate checks and balances will lead to stronger systems, better service delivery and more accountability to citizens.

In 2010, 80 percent of aid disbursed to states in fragile settings bypassed government systems. Since the January 2010 earthquake, bilateral and multilateral donors have disbursed $2.4 billion to humanitarian relief efforts, of which only 1 percent was provided to the government of Haiti. And of the $2.5 billion in recovery and development funding disbursed by bilateral donors, 1.8 percent ($43.8 million) was disbursed as budget support to the government.

5. Co-invest with governments to build a strong civil service

What percentage of aid budgets goes to workforce development, including civil servant salaries? It is imperative for donors to accompany governments in their own efforts to create, reform or strengthen the full spectrum of human resource systems. The structures that may need investment include robust payroll systems with appropriate salary scales, platforms for transparent hiring and firing including performance The American Red Cross agreed to spend $3.8 million in performance-based salary reviews, continuing training programs support for the [Haitian General] hospitals beleaguered employees. But Haitian institutions for civil servants, and the ability for often lack even the infrastructure to evaluate staff. Only an accompaniment approach could government agencies to conduct work- help develop such platforms and put them under the control of the intended beneficiaries. The Red Cross decided to work with the General Hospital to create these systems, and the force needs assessments. One critical impediment to develop- accountability platforms are taking root. This kind of accompaniment is among the best ways ment many countries face is a shortage to help address the structural deficits preventing Haiti from rebuilding better. - Paul Farmer of funds to pay civil servant salaries. In such cases, donors are encouraged to co-invest with governments. When aid agencies fail to ensure that civil servants are paid a living wage, they run the risk of replacing rather than building the domestic workforce. In 2002 in Cambodia, for example, the cost of 700 international advisors was $50-70 million, almost as much as the wage bill for the countrys entire 160,000-member civil service: a 1-to-228 disparity.
effort is already starting to bear fruit: hospital staff are better paid, and the hospitals new

Relief Aid to Haiti by Recipient: January 2010 June 2012

5.1% 0.9% 0.09%

International service providers (UN entities, international NGOs and private contractors): 59.4% or $1.43 billion Donors civil and military entities with a mandate to respond to disasters: 34.5% or $831.1 million

34.5% 59.4%

Recipient of in-kind goods and services not identified: 5.1% of $123.1 million Government of Haiti: 0.9% or $22.1 million (estimate) Haitian NGOs or businesses: 0.09% or $2.1 million (estimate)

In 2010-11, DfID spent over 7 billion in aid (including 643.7 million in budget support <#_edn1>) and reported losses due to fraud of 1,156,000 (around 0.016% of overall expenditure).

SOURCE: UN Office of the Special Envoy for Haiti