1. The Value for Money Agenda and NGOs Aid effectiveness, at the micro level Dr Patrick Kilby Australian National University

2. Value for Money Agenda  Part of aid effectiveness debates since the late 1980s;  Focus is on whether aid objectives have been met; or if there has been an impact,  has the aid has been well spent; has there been no waste; and has it all been worth the investment?  Now put into a rubric of: economy, efficiency and effectiveness, to which some may add equity (or fairness);  Issue of it being cost exercises where comparative costs are made.  The Abbott Government now shifted the rhetoric to ‘benchmarking’, but some of the issues are still common

3. Value for Money in NGO programs  early work on VfM in DFAT has been done with NGO programs - they are relatively small and lay outsides the complexity of intergovernmental bilateral relationship or multilateral organisations;  The focus has been on the processes involved: is there adequate cost control, awareness of alternatives, and the like.  Danger is that if metrics are attempted, lead to league tables, and measures of alternatives, then a whole host of questions emerge.  Example is GiveWell criteria versus OAGDS/Accredation/Code criteria. The former is on metrics the latter on processes.

4. Questions: VfM for whom, what, and when  For Whom: the donor or the recipient? Most think of the donor, but for effective aid it must be the recipient. This raises questions (Paris Declaration):  of impositions on the recipient;  recipient control;  Tied aid;  For What: Is it the outputs or outcomes that should represent Value for Money:  Outcomes but often gets reduced to outputs due to time lags.  For When: the life of the project, or the life or the change – how sustainable is what is proposed.

5. NGO Programs  usually about micro level (sub-district) social change;  Issues:  Social change takes time e.g Ragpicker program in Pune over 20 years was transformed, but the change was not predictable;  socialising change is a slow process;  the unexpected and unknowable: programs evolve and so what was known at the start is built upon with new knowledge as change occurs (causal connections not clear);  how can meaningful comparisons be made across programs. Context, if not everything, is nearly everything in development.

6. Ways Forward For NGO programs value for money might mean:  Strong partnership processes; clear, and mutually accountable;  In-built flexibility – a possible move away from rigid frameworks;  Aiming for longer-term change, with possible intermediate way points;  A different way in accounting for money: less prescriptive budgets to perhaps a budget framework but with more rigorous audits and detailed annual reports, which justify decisions made;  This implies a move away from traditional projects modes

7. Implications  It puts the VfM (benchmarking?) agenda more in the hands of the partner (in line with Paris Principles etc); but:  Might not accord with government/parliamentary risk averse approaches;  Moves into the ‘unknowns’ when development has always been about the predictable and known;  Has a longer time horizon, much longer than the average program or project cycle;  My have to have intermediate process steps;  Doesn’t provide easy metrics in many, if not most, cases

8.  How to balance efficiency, economy, (equity) and effectiveness considerations, what weighting should be given to each;  From civil society framework – ‘that CSOs make optimal use of resources in achieving intended outcomes (value for money) …[and[ results achieved are commensurate with resources allocated in differing operating environments’ is vague but with sting in there.  Davis notes:  ‘ issues in capturing the adverse effects of political and social contexts on delivery costs’.  the dilemma of clashing rationalities (world views) between donors, NGOs and partners;  Time frames (3-5 years) but why?

9. Thank you