Helping the Poor by Cutting Red Tape

Developing countries and international aid donors are poised to embark on a new campaign to cut the red tape that can ensnare even the best-intentioned efforts to help the poor. Officials from 26 developing nations and representatives from dozens of aid agencies met in Rome on February 24-25 to discuss how to streamline the policies and procedures that guide aid delivery. More than 63,000 donor-funded development projects are scattered across the world, each governed by countless demands, guidelines, and procedures designed to make sure that aid gets to the poor. However, the demands of producing multiple environmental reports, project audits, and procurement assessments for each donor can overwhelm developing country governments whose resources are usually already stretched thin.

According to the World Bank, the typical developing country is dealing with 30 different aid agencies across a wide range of social sectors. On average, each donor sends at least five missions a year to oversee its projects, placing an enormous strain on the recipient government, which can find itself hosting three aid missions a week. In addition, the impact of foreign aid may be diluted because it is delivered by multiple, high-cost "aid boutiques." A vast consultancy industry has sprung up around aid delivery that is worth $4 billion a year in Africa alone.

The challenges are daunting and the number of cases of aid gone wrong is enormous. Consider just three examples:

• In Vietnam, implementing a forestry project took donors 18 months and the time of 150 government workers to purchase five vehicles, because the aid agencies could not agree about procurement practices.

• In Bolivia, five different donors financed a survey to measure changes in household poverty, each of which required separate financial and technical reports. The government official assigned to the project had to spent most of her time addressing donors’ demands, leaving hardly any time to conduct the survey.

• In Tanzania, health officials found that the huge number of projects and the accompanying demands to host missions and prepare reports were simply beyond their administrative capacity.

During the conference the World Bank pledged to coordinate more closely with other aid groups; to support governments trying to play a stronger leadership role in development; and to review, overhaul, and adopt practices that would align its efforts with those of the wider donor community.