Aid reform: Turkeys won’t vote for Christmas

Louise Redvers

Freelance journalist and regular IRIN contributor

Aid policy experts are talking about improving delivery and doing things better, finding new financing streams, and, most of all, localising response.

But can you really just push money down the chain to local organisations and expect better results, or is it time to take a candid look at the entire humanitarian architecture and rethink the incentive structure?

A key challenge for the sector, with its complex and competing interests, is its sheer size: international NGOs (INGOs) are now larger, more numerous and more corporate than ever before.

“Big international organisations have become hugely successful in terms of fundraising and marketing… monopolising the best funding opportunities, choking off opportunities for everybody else,” said Lydia Poole, an independent aid policy consultant.

“Everybody is evangelising about the need to change, and INGOs are championing the need to increase funding to local and national actors,” she told IRIN. “But I fail to see how that's going to work in practice because it is essentially an existential challenge to them.”

SEE: It’s all about the money

Speaking on aid reform in late July, Kyung-wha Kang, the UN’s assistant secretary-general for humanitarian affairs and deputy emergency relief coordinator, called for the power balance to be radically altered.

“I think turning the whole system on its head so that we see the international system shrinking and the local capacity growing is how we want to proceed,” she said.

Kang imagined an “ideal world” where local communities were more resilient and self-reliant, national authorities were there to help, and “the international humanitarian sector is really reduced to a minimum, stepping in where only absolutely necessary to do so.”

Oxfam's recently-released research on the subject is entitled "Turning the Humanitarian System on its Head".

SEE: The humanitarian economy

For Sandra Aviles, a senior advisor on programme development and humanitarian affairs at the UN’s Food and Agriculture Organization (FAO), the issue of “market share” and the fact that the aid industry is “a business” are major roadblocks to reform.

“If we don’t look at some of these architectural issues and incentives head on, we are not going to really tackle the problem of funding,” she told IRIN.

Time to deconstruct?

In parallel with this soul-searching on aid reform ahead of next May’s World Humanitarian Summit in Istanbul, researchers at the Humanitarian Policy Group (HPG), part of London’s Overseas Development Institute (ODI), have embarked on a two-year project entitled “Constructive deconstruction: rethinking the global humanitarian architecture.”

We can’t just give more money to local organisations to keep on doing things we’ve been doing all this time and expect it to work.

The research aims to get a better understanding of how the humanitarian sectors’ systemic relationships, power structures and assumptions influence output, in order to come up with meaningful reform ideas.

“Until we start to look at the incentive structures in the international aid system, the way that NGOs and UN agencies are funded, and the way that the business model of the humanitarian system works, nothing is going to change,” Christina Bennett, HPG research fellow told IRIN.

The UK’s Department for International Development (DFID) is also trying to take a sideways look at the aid system. It is employing a team of researchers to analyse “the effectiveness, coherence and accountability of the humanitarian system to help inform its financing model, also under review.”

“We can’t just give more money to local organisations to keep on doing things we’ve been doing all this time and expect it to work,” Bennett said, calling for a “mind-set change.”

It is time, Bennett said, for humanitarians to think of themselves as a “network” or “constellation of actors,” rather than “a hierarchical system or a formal bureaucracy.”

“Being networked means sharing information,” she added. “It’s about having complementary ways of working, adopting a more market-based approach where you’re asking who is most effective and efficient and who is able to specialise, not who is bigger and attracts more money and has more flags out in the field.”

Taylor Seybolt, associate professor of international affairs at the University of Pittsburgh and director of the Ford Institute for Human Security, supported Bennett’s call for a more network-based approach.

“The idea of a network,” he said, “is that you can find a balance between the best aspects of a hierarchical system and of a market system.

"Hierarchical systems are stultified and slow to respond, whereas markets are more nimble and prone to failure of individual enterprises, which in a humanitarian context wouldn’t mean losing only money, it would mean losing lives. So it’s not an approach to aspire to."

Supply and demand

The power of the supplier (INGO) – over the consumer (the aid beneficiary) – is another big problem, as is competition between agencies for funds and profile.

The current humanitarian business model is reactive, inefficient and predominantly supply-driven, giving end users very little say about what kind of products and services they receive,” explained Aviles.

"I see some things happening in our sector and I think, we are just not in the business of helping affected populations. If we were, we would do things very differently from what we are doing.”

Seybolt diagnoses the peculiarities of the system with economic theory: an oligopoly of donors (a limited number of suppliers) and an oligopsony of aid agencies (a limited number of consumers).“

There's no magic pot of gold at the end of the rainbow that's going to fix all of this stuff. It is more complicated than that.

Aviles, who is also a part of the Future Humanitarian Financing (FHF) initiative, which is looking at new approaches for emergency aid funding, said there were too many “non-incentives” in the system.

“It sounds perverse, but there are no incentives for humanitarians to look at exit strategies and therefore look at the way they are doing business or look outside of their sector for solutions.”

Opportunities

Bennett believes the WHS is a “perfect opportunity” to address the systemic issues. But while there has been plenty of discussion about what changes are needed, not enough people are asking the “hard questions.”

“We need to turn the business model around and get to those incentive structures. Until we do, a lot of this debate is lip service and we won’t be able to get to the heart of why we’ve not been able to put our localisation agenda into practice.”

Poole, who worked on the FHF’s May report, Looking Beyond the Crisis, which advocates reforms such as multi-year financing and a fundamental change in the division of labour, also welcomed the WHS spotlight on humanitarian funding, but said the debate was too “circular.”

Calling out the idea to set a target for how much aid money donors should spend “locally,” she said: “I find the focus on this fixed funding target so disappointing because it's just such a simplistic response to what is quite a complex problem.

“Everybody seems to be looking for big ideas, big fixes and big pots of money, but those things just don't exist. There's no magic pot of gold at the end of the rainbow that's going to fix all of this stuff. It is more complicated than that. It’s about how you tweak the system so that the incentives are different.”

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