The 'business' of international media. What if the WSJ dumbed down development, then bragged about the ensuing discussions?

I wish Jonathan Starr good luck with his project and hope that his boarding school in Somaliland will have a positive impact on its graduates, their lives and livelihoods. However, as much as I will try to avoid to write a rant in response to his comment in the Wall Street Journal on 'The "Business" of International Aid' I found his article interesting and note- and critique-worthy as part of the broader 'DIY aid' debate. Yes, other former executives from the business world have had the idea before to go to a development country and 'fix' some of the things that international aid obviously has not been able to fix yet. 'Leaving Microsoft to Change the World: An Entrepreneur's Odyssey to Educate the World's Children' is another example and also involves schools, children, textbooks and in this case Nepal. And of course Jonathan is pointing out a few key problems that many in the 'industry' are struggling with everyday-a fact he so handily seems to overlook. I am also suprised that he almost exclusively criticises NGOs, which again, are far from perfect entities, but unfortunately more complex than he wants the average WSJ reader to believe. 
Without revenue or other quality customer-satisfaction metrics, NGO executives and donors have no way of measuring whether employees on the ground are providing a product of value to their impoverished "customers." 
I am not going to quote a length current literature and debates ranging from randomized control trials to complexity or system theory thinking. Let's just say the current M&E debates are a bit more advanced than having 'no way' of measuring what is going on on the ground. The only reference he includes in the article is an interesting and important contribution on the shortcomings of food aid to Somalia, but it needs to be put into perspective of 15 or so years of debates and changes that have (or may have not?) occurred since the publication of the book.

If the poorest people in the world require payment to take your services, what does that say about your services?
Yes, training activities are tricky, especially when it comes to the quantity of participants rather than the quality of training. But another aspect of his rhetorical question is simply that people cannot afford to participate in a training because they are day laborers and a day without work means a day without food for the family. The bottom line is that in chronically poor situations simple 'supply-demand' or 'customer-business' relationships do not work. 


Sticking to one geographic market makes sense on many levels since there are no economy-of-scale advantages to being a multinational NGO.
Except when leverage with donors, power of advocacy or having an organisational network for learning, support, capacity development etc. do not count. 

these executives respond to incentives, and what works on the ground isn't what pays their salaries
We could have an elaborated debate about how to measure and debate 'success' in development projects, but there is some form of link between what 'works' on the ground and 'what pays the salary'. Also, I have not met many senior NGO executives who were worried that much about their salary. How to get funding, how to keep the organisation running, yes, but salaries? Again, we could have a debate about short-sighted funding cycles and the limits of results-based management, but by completely personalising the 'development business' he dismisses any of these debates right from the start.
Not only is generous pay unnecessary for success in development work, it is counterproductive
Again, more complicated and, more importantly, not really applicable to the NGO sector. Will all you over-pampered ActionAiders, Save The Children or IRC staff with fancy relocation packages please stand up?!

Our $3,000 annual salary basically pays interest on their college loans with enough left over for the occasional can of Pringles. Our staff works 70-hour weeks because they are motivated by the mission's goal and feel ownership for its success.
This is one of my favourite parts. By taking advantage of the rising interest in volunteering/voluntouring and the growing supply of well-educated graduates who are willing to work for 'free', he completely ignores the 'market logic' that apparently is so pervasive in the 'NGO business' on the one hand and so lacking in delivering real development projects on the other. He is basically taking advantage of the market forces he is criticising-imagine you had to pay a real salary to those graduates...
Plus, most NGO colleagues I know usually work more like 6 days a week and closer to 60 to 70 hours anyway-especially in a place like Somaliland.


why, after spending all that money and far more time on the ground, has no other NGO thought to provide native English-speaking teachers for adult English courses?
Well, even if development money has been spent in Somalia, there have been some real health and safety concerns, foreign office travel warnings and insurance challenges. If you look after your staff these administrative challenges should not be underestimated-otherwise you may be out of business soon espacielly when you deal with international organisations or public money.

We just started the program in January, charging $200 for three months of classes, and our phones won't stop ringing with Somalis who want to pay to learn proper English. This isn't brain surgery; it is just listening to what the customers are asking for and finding a way to provide it at a reasonable cost.
I think it is more complicated, again. So there was a participatory exercise that determined what kind of education Somalis were interested in? Offering English classes is a valuable endeavour, but it is a complex stories. Ask all the teachers, volunteers and adventurers in South East Asia who have been teaching English for years. I agree that there is a demand for education, but given the scale of devastation there may be quite a few Somalis who would take up any class-maybe seeing it as a ticket to leave the country-which brings us to another of those mean development complexities, namely 'brain drain' and the challenges around remittances and diaspora communities.
However, until we take the perverse incentives out of the international NGO business, and only provide funding to those organizations whose executives are on the ground overseeing the otherwise unmanageable
The issues of 'incentives' is complicated again. But what I found quite suprising is that this comes from a 'former financial executive'. Maybe we can have a separate discussion of how many Wall Street, banking, finance, investment banking executives were in touch with home owners or participants of pension plans when they gambled away their money? I am sure Jonathan was not one of them-but that is also true for many NGOs and NGOs executives who are hard-working, dedicated, blog-reading individuals who know that power relations, governance, corruption, climate change, politics, history and relationships are all part of the development process and that very few initiatives that start out to 'fix' a problem will be sustainable. 
In sum, Jonathan and the WSJ are promoting some of the stereotypes of 'failed aid' and only providing one answer: Go there, do it yourself and fix it. There is so much more to learn and discuss...

Comments

  1. Tobias, great dissection of that column. The condescension that many in the for-profit sector have for NGOs and nonprofit work really pisses me off sometimes.

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  2. A friend of mine who is a country manager in an INGO pointed out another interesting point:
    'sounds like his little charity project is a soft one (education, etc.) which may mean most of his expenditures are salaries, and more easily managed than procurement and purchasing which is where humanitarian aid has its achilles heel'.

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  3. The DIY-aid debate is always interesting, and I agree with many of your critiques in this post. However, I have to comment on one – based on my field experience, I completely agree that “not only is generous pay unnecessary for success in development work, it is counterproductive.” I think NGO employees should make a reasonable living and be able to support their families. It is ridiculous, though, for them to make $100,000 a year, in countries where living expenses are so low.

    Further, and perhaps more importantly, this IS counterproductive. These salaries and living standards put NGO employees far, far out of touch with local realities. When they live at American standards in the capital city of the country they’re working in, and interact primarily with other ex-pats and maybe the local elite, how much can they really know about what works or what is needed among subsistence farmers in rural villages?

    I don’t know much about the particular organizations you mentioned, but employees at NGOs I’m familiar with, namely PSI, CHF, and EDC, are absolutely what I would call “over-pampered.”

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  4. This is an excellent and measured response to the article, which frustratingly set up a straw man / stereotype of the aid industry instead of engaging in a more useful debate about what effective forms of education provision might be.

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  5. To say it is complicated and then insert aid babble over and over again is not a critique. There is little point in criticizing garage NGOs when the trained professionals are ineffective. That's the whole point of trying to circumvent a dysfunctional system.

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  6. Thanks for your comments Jen, Steve and John.

    @Jen: Nobody wants to deny the detrimental aspects of expat lifestyle on the local economy or life in the capital or major cities. However, one aspect that is often overlooked is that aid work is a global operation and that there are global implications outside the realm of living and working in a developing country. Expat aidworkers often have student loans or a mortage to pay 'back home' and given the nature of aid work there is always some amount of uncertainty about your next duty station, moving expenses or an awkward 6 months of unemployment between contracts. Most aidworkers accept this as part of the job and most INGOs do not pay anything near the $100,000 you mention-at least on the junior to mid-management level. To some extent the debate reminds me of the debates around MPs expenses in OECD countries and the common perception that they are extremely well paid for an easy job. Yes, they do have some privileges and they earn a decent salary, but most MPs are not in it for the money. But the challenge about aid work is that it takes place in two very different spaces and I wonder whether there is space for innovative funding models. Should aid workers be paid a local salary, say, $10-15,000 per year, but the organisations take care of student loans or debt? Or could they set up some kind of trust fund that you can access when you move back 'home', so after 2 years of working in the field you would receive a $50,000 payment to settle in your OECD country? I wonder if there are models that could balance short- and long-term financial plans and take the very different living situations into consideration. This may work in some countries, but there is a problem that the high prices in other countries (Nigeria, Angola, Kenya come to my mind) are not simply caused by international aid workers but by many other domestic and global factors. And if I think about professional consultancy firms that work with USAID money. e.g. in Afghanistan, or salaries of international organisations, (I)NGO-bashing is too easy and is only one aspect of a broader challenge.

    @John: There is a lot of fundamental critique of aid out there and I like some of it for the sake of the argument. However, the more general the accussations are that aid is 'ineffective' the more difficult it is to engage with the problems. Aid has been around for quite some time and it is very much alive and complicated as it ever has been-with all the good and bad aspects, especially at this point in time where many of the old 'North-South' dynamics no longer work as easily as they did maybe 20 years ago. 'Circumventing the system' may work on an individual or project level, but it will be very difficult to generate sustainable added value, because at some point you need to engage with the murky waters of politics...

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  7. Sorry but as a Somalilander from the Diaspora living in Somaliland I have to agree with John's article.

    I see nothing but harm coming from the NGOs to our society and would understand those who would jump to the defense of their inflated salaries.

    Tell me ONE thing an NGO has accomplished in Somaliland that is both tangible and residually beneficial.

    I've had this debate with many people but my honest opinion is that 80% of the NGO world are people who couldn't hack it back in the real world and are enjoying an easy tax-free ride.

    Sorry if this hurts anyone's feelings.


    Mo Hussein

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