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Fake it till you make it

A new report slams the UK’s aid agency with accusations of spending money on “Fake Aid.” Produced by the London-based International Policy Network (IPN), “Fake Aid” casts a critical eye on the agency’s communications programming, finding that “increasing amounts of DfID funds are channeled through non-governmental organizations (NGOs) to fund lobbying activities, marketing and the promotion of political ideology, often within the UK.” The report uses DfID documents to show that the aid agency uses its communications budget to promote the human-rights based approach to development (which we have debated a number of times on this blog), intentionally crowding out other approaches.

The budget for DfID’s communications programs has more than tripled since 2000, from £40 million in 2000 to £140 million in 2008.

Much of this money is spent through a group of NGOs—including Oxfam UK, Save the Children UK, ActionAid and Christian Aid—which receive unrestricted DfID funds thanks to long-standing relationships with the aid agency, rather than a competitive bidding process. According to a UK government audit document, open bidding was introduced after most of these organizations were already selected, and currently remains closed to new applicants.

DfID also lacks adequate information to judge whether the funds given to these organizations are appropriately spent, since reporting practices have been characterized by self-reported, inconsistent data, and a lack of external, independent evaluations, again according to a UK government audit and DfID annual reviews.

For example, over a five-year period, DfID faulted the Catholic Agency for Overseas Relief (CAFOD) for failing to provide “an overview of the progress and impact of the programme as a whole” and criticized them for measuring inputs rather than results, but still renewed their funding in 2008 for £13.8 million.

One organization funded by DfID persuaded the government of Gambia to ban all-inclusive package holidays, an outcome which seems to contradict the UK’s policy on trade and development to promote the private sector as an important driver of poverty reduction.

The effectiveness of another organization, both founded and entirely funded by DfID to “provide a forum for BME [black and ethnic minority] voluntary and community sector organizations and communities on issues relating to international development,” was challenged by an independent audit. The audit found that there was no working email address for almost half the group’s members, and that “there is a lack of clarity over the purpose of the organization.”

Despite these examples of poor practice, we would suggest a few points of disagreement with the conclusions in “Fake Aid”:

First, it is not unreasonable for DfID to spend money educating UK tax payers about what DfID does, or about international development issues, as the report implies. IPN calls this “propaganda” but doesn’t convincingly explain how “propaganda” is different from “making people aware of concepts that IPN happens to disagree with.”

Second, while £140 million is a sizable sum (enough for 230 million malaria treatments says IPN) it is still less than 3 percent of DfID’s total budget. In an industry with no consistent financial practices, it’s hard to say what is normal, but it would come as no surprise to find that most nonprofits, and most aid agencies, spend more than 3 percent on communications and publicity.

“Fake Aid” concludes: “As the total amount spent on these programs reaches the £1 billion mark, it is reasonable to ask whether they have improved the lives of people in poor countries.” It is a fair question. These programs may be an appropriate use of DfID funds, but the burden falls to DfID to prove it.

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8 Comments

  1. nadeem haque wrote:

    Nice article. Long overdue!

    Can you also find out the amount of Dfid and bilateral aid that to multilaterals such as World Bank, IMF UNDP etc. and to agencies such as GDN, IOM etc.

    I have seen so much waste in these non-transparent transfers! No one looks into these.

    Posted September 23, 2009 at 11:18 am | Permalink
  2. Anonymous wrote:

    Its certainly an interesting article, and demands a defence from DFID that goes beyond ad hominem attacks.

    That aside, those who dislike corporately-funded climate change denial and the establishment of fake “African” NGOs to do web advocacy for privatisation may be interested in the following sources….

    http://www.spinprofiles.org/index.php/International_Policy_Network

    http://thinktank-watch.blogspot.com/2007/12/international-policy-network.html

    http://www.sourcewatch.org/index.php?title=International_Policy_Network

    Posted September 23, 2009 at 11:58 am | Permalink
  3. I could make the case that aid organizations should put more effort into advocacy and education than they do. As you note, I’m not sure 3% of total budget spent on a variety of communications projects is even a red flag.

    On the other hand, competitive bidding is almost always a good idea.

    Posted September 23, 2009 at 1:03 pm | Permalink
  4. Holli wrote:

    These are the articles that NEED to be written. But who will take heed?

    There is far too much unaccountable Aid with no measurable results. Corruption is inevitable.

    I guess the more this is exposed, the more the public will be informed about where their tax money goes and hopefully put their foot down!!!

    Keep up the great work.

    Posted September 23, 2009 at 6:33 pm | Permalink
  5. Adam Foya wrote:

    China, has been for long time accused of producing fake goods, now it is UK being accussed of ‘producing’ fake aid. There are allot of incentive in aid mismanagement and one of effective to minimise the problem is to continue subjecting the industry into transparency and accountability.

    To aid recipient, may be there should be campaign on ‘Publish What You Receive’

    Posted September 24, 2009 at 2:28 am | Permalink
  6. Sceptical Secondo wrote:

    @Holli:

    Arguing that this is what the public NEED to know so that it can put its foot down on the bases of an article, which problematise that funds are spend on advocacy, seems a bit odd to me.

    More generally:

    Is this really the reintroduction of the seventies’ Manchester School, and is the problem with the policy winds in the eighties that they didn’t go far enough? Summing up the underlying logic and consequences of the majority of most Aid Watch posts would seem so suggest it.

    If that is the case, may I suggest that Aid Watch first does a bit more reading on Political Economy to understand how it’s different from Public Choice and then continue the recent history classes.

    It’s not that I mind disagreeing on things – not at all. However, it would be somewhat more interesting if you bothered to do a bit of backreading on development economics other than micro-economics.

    I’m starting to fear that Smith and Ricardo are the only classics known to US scholars.

    And back to the current post. I took note of this quote:

    “IPN calls this “propaganda” but doesn’t convincingly explain how “propaganda” is different from “making people aware of concepts that IPN happens to disagree with.”

    Posted September 24, 2009 at 4:54 am | Permalink
  7. Caroline Boin wrote:

    As a co-author of the report, I thought I’d take the opportunity to clarify a few points.

    You question if it is right for us to characterize as ‘propaganda’ things with which we disagree. DfID is certainly funding many of those. But more than that, it is funding campaigns which have nothing to do with development such as religious group’s “faith and development” activities abroad or the work of anti-Israeli groups. Whatever your political stripe, using taxpayers’ money to fund projects large proportions of the population would find objectionable is wrong.

    £140m is small beer compared to the total DfID budget, as you say. But we chose to concentrate on just four programmes in our study. When researching other areas, we found that many DfID funds include significant “communications” or “campaigning” budgets, in the UK and abroad. Don’t worry, there’s plenty more dodgy funding to be uncovered in future studies.

    It’s a fair point that non-profits need to dedicate a certain proportion of their income to campaigning and marketing, otherwise they would soon run out of donations. DfID, in contrast, does not face the threat of going bust as it is underwritten by the taxpayer. It certainly shouldn’t be using people’s own money to convince them it is spending it well. If that’s not propaganda, I’d like to hear a better definition.

    Posted September 24, 2009 at 5:10 pm | Permalink
  8. orian wrote:

    yes article way overdue and many others could be written on that topic, unfortunately.

    also (a shorten version of the original paper!)

    http://www.businessworld.in/index.php/Miscellaneous/The-Business-Of-NGOs.html

    Posted September 28, 2009 at 5:34 pm | Permalink
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    The Aid Watch blog is a project of New York University's Development Research Institute (DRI). This blog is principally written by William Easterly, author of "The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics" and "The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good," and Professor of Economics at NYU. It is co-written by Laura Freschi and by occasional guest bloggers. Our work is based on the idea that more aid will reach the poor the more people are watching aid.

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