Making Aid Work (Urban Institute) - Hardcover

9781840141320: Making Aid Work (Urban Institute)

Hardcover

ISBN 10: 1840141328 ISBN 13: 9781840141320

Publisher: Ashgate, 1997

From the perspective of a distinguished director of technical cooperation projects in Hungary and the Russian Federation (as well as several Asian countries in an earlier period), this book provides a set of lessons for structuring a successful program. These lessons are for the donor community and the firms and individuals in charge of implementation. Written in readable nontechnical terms, Making Aid Work is a must for both the donor community and firms and individuals on the implementation front line. According to a General Accounting Office report, the Russian Federation project that Struyk uses for his primary examples has won rare praise: The USAID Mission Director in Moscow called it one of the most successful ones he has ever seen; a USAID official in Washington said that, for the money, no USAID project has had more macroeconomic impact.

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About the Author

Raymond J. Struyk

Excerpt. � Reprinted by permission. All rights reserved.

From Chapter One Foreign assistance is a controversial topic, to judge by the acrimonious debate about it within Congress and the amount of energy the Administration spends year after year to secure funding. In 1995 the House of Representatives, led by its Republican freshman and sophomore classes, voted major funding cuts and the merging of three specialized federal agencies in the foreign affairs complex with the State Department. At the same time, members such as Lee Hamilton of Indiana, Henry Hyde of Illinois, and Doug Bereuter of Nebraska tried to stem the rising tied of isolationism (Greenberger, 1995). Powerful congressional figures like Senator Jesse Helms routinely attack the foreign aid programs as ineffective and wasteful, while equally powerful members such as Senators Thomas Daschle, Richard Lugar, and John Kerry find merit in these expenditures and argue for maintaining foreign aid if not increasing it to the levels of earlier years. Foreign aid has numerous parts, including humanitarian aid, in kind assistance such as food transfers, funds to help with macroeconomic stability, and technical cooperation programs. The complaints often concentrate on the last category; programs that aim to improve the effectiveness of government institutions and programs or likewise help the private sector, such as the restructuring of banks and enterprises in Central and Eastern Europe. These programs require the delivery of expert advice and close work with local counterpart individuals and agencies. To be successful the tasks have to be done very well and the client has to be receptive to the advice and willing to make changes--a combination that has been exceedingly difficult to realize in practice. In the case of the United States, the task of managing aid programs falls primarily to the U.S. Agency for International Development (USAID). All bilateral donors have similar agencies and the European Union has a large bureaucracy to manage its programs for Eastern Europe (PHARE) and the Newly Independent States (TACIS). Without exception these agencies find themselves under pressure from their governments to have more success stories to report. Senator Helms and like thinkers in other countries receive help episodically in their efforts to portray foreign assistance as wasteful and ineffective (and therefore not deserving of funding) form journalists who write stories about the high living and lack of productivity of consults engaged to provide expert advice to recipient countries. Typical of these is the article in the October 16, 1995 International Herald Tribune, in which Justin Keay reported:

Whether advising on privatization in Poland, suggesting

how best to reform Hungary's banking system or

revamping Romania's tourist industry, consultants have

been in the front line of the West's efforts to help

post-Communist Europe help itself. But where they were once welcome as saviors imbued with special knowledge, they are now increasingly reviled as overpaid--an average daily rate for a Western consultant in the region is 1,000 European Currency Units ($1,315)--ill-informed or under equipped to deal with the problems. Resentment has been fueled by the knowledge that this army east into the West's aid programs--taking up as much as 40 percent of last year's 2 billion ECU's disbursed by PHARE, the EU's assistance program for Eastern Europe--and its soldiers rarely stay in one place, prompting critics to use the phrase, "consultancy tourism." (p.11) A February 1994 Wall Street Journal article about U.S. assistance to Russia sounded a similar theme:

...With cash-starved Russians trying to jump-start their

fledgling businesses and economy--and antireform

politicians gaining ground--"we don't need 90% of

technical assistance' money going to American experts,"

says Aleksander A. Jlnikov, head of Russian commission

coordinating foreign aid. Some U.S. policy experts share those concerns. Marshall Goldman, a Russia specialist and professor at Wellesley College, recently told the Senate Banking Committee that Russian aid in the hands of U.S. consultants and "beltway bandits" benefits Russians "minimally, if at all." He added, "I look for a scandal down the road that's going to upset the American taxpayer." Even the generally positive 1995 article by Fred Hiatt and Daniel Southerland on assistance to Russia included the following critique:

...as the aid program swelled to more than $1 billion last

year, the political desire to show support for Russia

out-stripped U.S. bureaucrats' ability to dole out aid

sensibly and Russian reformers' ability to absorb it,

according to people familiar with the program. As a

result, more and more money went to American

consultants with generous overheads and travel budgets

and little knowledge of the Russian scene, and to Russian

bureaucrats with little appetite for reform. Of course, there are success stories, some striking, to balance the criticisms, among them those of small grassroots projects cited by Hiatt and Southerland. But even among proponents there is a sense that improved performance must be possible, that better organization or a different philosophy will yield visibly enhanced achievement. "High living" consultants would receive less attention if the impact of their work were greater and more visible to recipient country officials and its business community, as well as to outside observers. This book is about how to improve the performance of technical cooperation programs in Eastern Europe and the Newly Independent States of the former Soviet Union. (Below I typically refer to these countries as the former Soviet block.) fundamentally, the objective of the book is to lessen the dependence of project success on a brilliant performance by the chief-of-party by retailing a set of practical steps for donors, project managers, and recipients of aid.

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