Cash on Delivery: A New Approach to Foreign Aid

by William D. Savedoff, Nancy Birdsall

Overview

Foreign aid has no shortage of critics. Some argue that it undermines development and inherently does more harm than good; others insist that aid must be seriously reformed to work properly. Cash on Delivery (COD) Aid proposes serious reform to make aid work well by forcing accountability, aligning the objectives of funders and recipients, and sharing information about what works.

Public and private aid can improve lives in poor countries, but the willingness of taxpayers and private funders to finance aid programs depends more than ever on showing results. COD Aid is a funding mechanism that hinges on results. At its core is a contract between funders and recipients that stipulates a fixed payment for each unit of confirmed progress toward an agreed-upon goal. Once the contract is struck, the funder takes a hands-off approach, allowing the recipient the freedom and responsibility to achieve the goal on its own. Payment is made only after progress toward the goal is independently verified by a third party. At all steps, a COD Aid program is remarkably transparent: the contract, the amount of progress made, and the payment are disseminated publicly to highlight the credibility of the arrangement and improve accountability to the public. COD Aid is a new approach to foreign aid, but one that complements other aid programs and would ultimately encourage funders and recipients to use existing resources more efficiently.

Cash On Delivery Aid: A New Approach to Foreign Aid explains the approach in detail and investigates its application in one sector: education. More specifically, the authors show how foreign aid agencies could use COD Aid to help developing countries achieve universal primary school education. The example illustrates how to deal with potential challenges of the approach—challenges that are no greater than those of traditional aid—and includes model term sheets for contracts that could be used for any COD Aid agreement.

Product Details

ISBN-13:	9781933286617
Publisher:	Center for Global Development
Publication date:	12/30/2010
Sold by:	Barnes & Noble
Format:	eBook
Pages:	100
File size:	509 KB

About the Author

Nancy Birdsall is the founding president of the Center for Global Development. Before launching the center, she served as senior associate and director of the Economic Reform Project at the Carnegie Endowment for International Peace. William D. Savedoff is a senior fellow at the Center for Global Development and senior partner at Social Insight.

Table of Contents

New preface v

Original preface and acknowledgments ix

Part I A proposal for Cash on Delivery Aid 1

Chapter 1 Buying things versus buying development 3

Chapter 2 A solution: Cash on Delivery Aid 17

Part II Applications of Cash on Delivery Aid

Chapter 3 Applying COD Aid to primary education: a contract between partners 45

Chapter 4 Applying COD Aid to primary education: funding and implementation 67

Chapter 5 Learning what works: the research challenge 75

Chapter 6 Federal systems: a COD Aid proposal for Mexico's upper secondary schools 87

Chapter 7 Beyond primary education: COD Aid for other development goals 97

References 105

Appendix: Term sheets for COD Aid contracts 111

Index 119