NGOs Show The Way In Providing Aid That Counts
A new study finds that aid by NGOs is achieving measurable results on the ground, writes Australian Financial Review economics editor Alan Mitchell, according to the World Bank press review Moinday.
The performance of NGOs compared with official aid channels is difficult to measure. NGOs provide important assistance often where official aid is unavailable (in rebel-controlled areas, for example). But when NGOs campaign against free trade, oppose the use of insecticides and resist new technology they are accused by economists of exacerbating poverty.
Research just published by the International Monetary Fund sheds some new light on this old debate, writes Mitchell.
The authors of the research, Boriana Yontcheva of the IMF and Nadia Masud, a PhD student from Oxford University, quantify the effectiveness of foreign aid in reducing poverty, as measured by changes in the United Nations Human Development Indicators.
Yontcheva and Masud also measure the impact of two kinds of foreign aid: official bilateral aid and aid projects led by international NGOs. As far as the authors know, this is the first study of the effectiveness of NGO aid at the macro level.
Yontcheva and Masud have chosen two human development indicators for their study: infant mortality and adult illiteracy. That is partly because health and education indicators are more concrete measures than other, more general measures of poverty.
But there is also evidence that infant mortality responds quickly to improvements in health services and can therefore be considered a “flash indicator” of improvement in the conditions of the poor.
Mitchell suggests that the findings of Yontcheva and Masud are more flattering to NGOs than to official aid.
FIRST, they find that NGO aid per capita is above average for countries with above-average infant mortality and adult illiteracy. The opposite is true of official bilateral aid. SECOND, increased per capita NGO aid does appear to achieve a small improvement in infant mortality, whereas bilateral aid has no impact.
There was no evidence of either NGO or bilateral aid reducing the level of adult illiteracy, but the authors warn that the time period covered by the data may be too short to pick up the impact.
Neither bilateral aid nor NGO aid has any impact on the share of government spending on health care. In the case of official aid, that may suggest that the aid effort is being misused. Recipient governments may be using the foreign aid as an opportunity to reduce their own health-care efforts.
On the other hand, the fact that NGO aid has no discernible effect on government health-care spending is a good sign. It suggests that the NGO aid may increase the total resources available to poverty reduction, concludes Mitchell.
Kilde: www.worldbank.org
