CGD in the News

It's Not What You Spend (The Economist)

May 22, 2015
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At the moment, donors fearful of theft or waste usually write detailed plans for how their money is to be spent and insist that they are followed to the letter. But watchfulness may make little difference. Laying a square metre of road costs the World Bank over 50% more in countries where firms report paying bribes above 2% of the value of contracts than in ones where such payments are reported to be lower—even though its anti-fraud measures are equally stringent the world over.

Another reason donors are prescriptive is lack of faith in local bureaucrats’ competence. Scepticism is sometimes warranted, says Mr Solheim, though often overdone. Meanwhile donors are stifling ingenuity and making it hard to adapt schemes to local needs, says William Savedoff of the Centre for Global Development, a think-tank in Washington, DC, that champions the cash-on-delivery approach. To immunise more children, for example, one country will need cold-boxes to stop vaccines spoiling; another to pay health workers’ transport costs to visit isolated villages. A distant donor is unlikely to know what is lacking in each case.

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