Delivering Aid Differently Lessons from the Field

1. Delivering Aid DifferentlyLessons from the Field University of Nairobi Presentation by Wolfgang Fengler, Lead Economist, World Bank Discussion with PS Joseph Kinyua Dr. Richard Leakey Prof. Michael Chege (Moderator)

2. About HomiKharas PhD in Economics from Harvard and BA from Kings College, Cambridge Served as Chief Economist, World Bank, from 1999-2007 in the East Asia and Pacific Region Currently a Senior Fellow and Deputy Director for the Global Economy and Development Program, at the Brookings Institute in Washington DC where he leads research on aid effectiveness.

3. About Myself Born in Germany, January 1971 Graduated from German Universities in 1996 (Masters) and 2000 (PhD) Founded a number of companies including “Africa Consulting” in the 1990ies Left Germany and joined World Bank in January 2000 Became World Bank Senior Economist in Indonesia, 2004 Moved to Kenya as Lead Economist, World Bank, August 2009

4. About the Book • Describes the new realities of a US$ 200 billion aid industry that has overtaken the traditional aid model. • 10 chapters: • Overview • 6 Country Case Studies: Kenya, Ethiopia, Aceh (Indonesia), Cambodia, Pakistan, Tajikistan • 3 Thematic Chapters: Joint Assistance Strategies, Information Systems, Humanitarian Aid • All country case studies written by scholars of aid-recipient countries, including Francis Mwega (University of Nairobi)

5. Main Messages Aid Can Work. From the Marshall Plan in Europe after World War II to M-PESA in Kenya today, aid has often played a critical role in the development of countries. The New Reality of Aid.The number of new players has increased rapidly and the demands of clients has differentiated. New players have brought fresh energy and approaches to the delivery of aid. But they have also added to fragmentation and volatility.  Delivering Aid Differently.Filling gaps is not sufficient. Today, aid needs to leverage knowledge, the hardest currency of the 21st century, to evaluate programs, identify success, and then scale up.

6. Aid Can Work

7. The Marshal Plan Europe The US Govt spent US$ 13 billion to help rebuildEurope after World War II

8. The Green RevolutionWorld Wide, mainly Asia, Latin America With the help of aid-funded research, agriculture yields increased and made India self sufficient in food grains.

9. Bolsa FamiliaBrazil The world’s largest conditional Cash Transfer program has scaled-up to cover more than 12 million Brazilian families with the help of the World Bank, IDB and other partners

10. Post-Tsunami ReconstructionIndian Ocean In Aceh, the US$ 7.2 billion reconstruction program led to recovery of the province (2/3 financed by the international community)

11. Mobile MoneyKenya More than 13 million Kenyans (62% of all adults) are now transferring an estimated 15% of GDP through their phones. This innovation was initiated through a DFID grant.

12. The New Reality of Aid

13. The Old Reality of Aid

14. The New Reality of Aid

15. Seeing the new Aid Architecture in 3D Demand Differentiation Diversity of Donors Dynamics of Development Traditional donors, “New Bilaterals”, NGOs A wide spectrum of clients: Fragile states, MICs, small states, etc. Innovation, Information, Evaluation, Scaling up

16. Since 1992, aid has doubled, mainly due to the emergence of new players Total Development Assistance from OECD, 1992 Total Development Assistance from OECD, 2008

17. The total number of projects has quadrupled while the average size declined sharply(ODA only)

18. … and New Players have added to Increased FragmentationCase study Aceh (Indonesia) Note: 1 = maximum concentration.; The lower the index the more fragmented the aid program

19. ... while China’s share is rising rapidlyCase study Cambodia

20. Aid to Kenya has been declining until recently ... Case study Kenya 1981-2006

21. ... and donor funding has become increasingly unpredictable Case study Kenya 1981-2006

22. Delivering Aid Differently

23. Country Level Coordination and a “knowledge engine” Donors and Implementers Projects and Programs National Aid Coordination Agency Information Needs Standards Data on Inputs Data on Outputs

24. Delivering Aid Differently: Effective Coordination and alignment with governmentPost-Tsunami Reconstruction, Aceh Government Donors Coordination Forum Reconstruction Agency Multi Donor Fund UNORC ? NGOs UN Agencies Communication Coordination fora

25. Delivering Aid Differently: Analysis driving programmingPost-Tsunami Reconstruction, Aceh

26. Delivering Aid Differently: Scaling-UpFrom small projects to large programs The Indonesia Community Empowerment Program Government took over, doubled the scope and finances most investments; WB continues to support M&E and supervision of program Introduction of the project Pilot:25 villages

27. Delivering Aid Differently: Summary

28. Asante SanaThank You www.brookings.edu http://www.worldbank.org/ke For more information on this book, please contact Wolfgang Fengler (wfengler@worldbank.org) or HomiKharas (hkharas@brookings.edu) To order the book: Hopkins Fulfillment Service, P.O. Box 50370, Baltimore, MD 21211-4370 Phone: 1-800-537-5487 or 410-516-6956Fax: 410-516-6998, E-mail: hfscustserv@press.jhu.edu or through www.Amazon.com