Non-Governmental Organisations - Performance and Accountability

Beyond the Magic Bullet

Michael Edwards, David Hulme

• Publisher: Routledge
• Year: 2014
• eBook ISBN: 9781134171736
• Topic: Economics
• Subtopic: Development Economics
• Index: Economics

The last decade has seen some significant changes in international development and in the status of non-governmental organisations operating in the field. Not only has the number of NGOs virtually doubled; many of them have seen a considerable growth in their budgets, and have grown closer to governments and official aid agencies. NGOs are acknowledged by many to be more effective agents of development than governments or commercial interests ? even as a ?magic bullet? for development problems.

Despite these positive trends, the real impact of the NGO sector is not well documented. This is partly because NGO performance-assessment and accountability methods are weak, and partly because NGOs are caught up increasingly in the world of official aid, which pushes them towards certain forms of evaluation at the expense of others. This unique book takes a hard and critical look at these issues, and describes how NGOs can, and must, improve the way they measure and account for their performance if they are to be truly effective.

Part I
Conceptual Frameworks

1
NGO Performance and Accountability: Introduction and Overview

Michael Edwards and David Hulme

By any standards, the 1980s and 1990s have seen an explosion in the numbers of non-governmental organisations (NGOs) and grassroots organisations (GROs) active in relief and development.¹ The number of development NGOs registered in the OECD countries of the industrialised ‘North’ has grown from 1,600 in 1980 to 2,970 in 1993 (Smillie and Helmich 1993), and over the same period the total spending of these NGOs has risen from US$2.8 billion to US$5.7 billion in current prices (OECD 1994). The 176 ‘international NGOs’ of 1909 had blossomed into 28,900 by 1993 (Commission on Global Governance 1995)! Similar figures have been reported in most countries in the ‘South’ where political conditions have been favourable, with a particularly rapid increase over the last five years. For example, the number of NGOs registered with the government in Nepal rose from 220 in 1990 to 1,210 in 1993 (Rademacher and Tamang 1993, p 34); in Bolivia the figure increased from around 100 in 1980 to 530 twelve years later (Arellano-Lopez and Petras 1994, p 562); and in Tunisia there were 5,186 NGOs registered in 1991 compared with only 1,886 in 1988 (Marzouk, 1995).

Paralleling this increase in overall numbers has been the growth of some individual NGOs to cover the provision of health, education and credit services to millions of people in thousands of communities, especially in South Asia. For example, the Bangladesh Rural Advancement Committee (BRAC) now has more than 12,000 staff and has plans to work with over three million people (AKF/Novib 1993); in India, the Self-Employed Women’s Association (SEWA) has over one million clients in its credit programmes; while Sarvodaya in Sri Lanka works in 7,000 villages (Perera 1995). The access of NGOs to decision-makers in both North and South is greater than ever before, as their advocacy role continues to expand and they are courted in debates over policy and practice. GROs have a lower public profile, but they have also experienced considerable growth over the last decade and are beginning to organise themselves much more at the international level (Korten 1990; CIVICUS 1994). Clearly, something significant is happening in the world of international development. Lester Salamon (1993, p 1) goes so far as to say that ‘a veritable associational revolution now seems underway at the global level that may constitute as significant a social and political development of the latter twentieth century as the rise of the nation state was of the nineteenth century’.

Whether or not Salamon’s conclusion is justified by current trends, the rise of NGOs and GROs on the world scene is an important phenomenon which has implications for the development prospects of poor people, for the future of these organisations themselves, and for the wider political economy of which they form a small but growing part. But what lies behind these trends? This book takes the view that the rise of NGOs is not an accident; nor is it solely a response to local initiative and voluntary action. Equally important is the increasing popularity of NGOs with governments and official aid agencies,² which is itself a response to recent developments in economic and political thinking. Over the last 15 years, and particularly since the end of the Cold War, development policy and aid transfers have come to be dominated by what Robinson (1993) calls a ‘New Policy Agenda’. This agenda is not monolithicits details vary from one official aid agency to another, but in all cases it is driven by two basic sets of beliefs organised around the two poles of neo-liberal economics and liberal democratic theory (Moore 1993).

First, markets and private initiative are seen as the most efficient mechanisms for achieving economic growth and providing most services to most people (Colclough and Manor 1991). Governments ‘enable’ private provision but should minimise their direct role in the economy; because of their supposed cost-effectiveness in reaching the poorest, official agencies support NGOs in providing welfare services to those who cannot be reached through markets (Fowler 1988; Meyer 1992). Of course, NGOs have always provided welfare services to poor people in countries where governments lacked the resources to ensure universal coverage in health and education; the difference is that now they are seen as the preferred channel for service-provision in deliberate substitution for the state.

Second, under the New Policy Agenda, NGOs and GROs are seen as vehicles for ‘democratisation’ and essential components of a thriving ‘civil society’, which in turn are seen as essential to the success of the agenda’s economic dimension (Moore 1993). NGOs and GROs are supposed to act as a counter-weight to state power – protecting human rights, opening up channels of communication and participation, providing training grounds for activists and promoting pluralism. The rise of citizens’ movements around the world documented by Korten (1990) and crystallised most recently in the establishment of CIVICUS (1994) (the ‘World Alliance for Citizen Participation’), is not just (or perhaps even primarily) a result of developments in official aid, but it cannot be separated entirely from the political ideals of the New Policy Agenda.

As a result of these developments, governments have been prepared to channel increasing amounts of official aid to and through NGOs. Although accurate and comprehensive data are hard to come by, there is a good deal of evidence to suggest that the rise and growth of NGOs (and less so, of GROs) is directly related to the increasing availability of official funding under the New Policy Agenda. NGOs are seen as effective vehicles for the delivery of the agenda’s economic and political objectives, although these roles are potentially incompatible, at least within the same organisation (a proposition which is explored later). The proportion of total aid from OECD countries channelled through NGOs increased from 0.7 per cent in 1975 to 3.6 per cent in 1985, and at least 5 per cent in 1993–1994 (some US$2.3 billion in absolute terms). This figure is certainly an underestimate since it omits multilateral agency funding to NGOs and NGO funding from the US Government, which represented over half the DAC total in all previous years (OECD 1988, 1994, 1995). Figures vary greatly between countries, donors and NGOs, but in general bilateral agencies are spending a steadily increasing proportion of their aid budgets through NGOs (including most recently directly through NGOs in the South), and most NGOs (especially the largest ones in both North and South) depend on these donors for an increasing slice of their total budgets, partly as a result of a flattening out in voluntary income over the last year or two.³ NGOs which are not dependent on official aid for the majority of their budgets are now the exception rather than the rule. As Smillie (this volume) says, ‘when CIDA (the Canadian International Development Agency) sneezes, Canadian NGOs reach for their Vitamin C!’

Although both the economic and political dimensions of the New Policy Agenda are important to official agencies, aid to NGOs has gone primarily to finance welfare services. Some authors have criticised what they see to be a fundamental change in the function of NGOs as a result of official funding, with service-delivery and contracting replacing support to GROs and institutional development (Arellano-Lopez and Petras 1994). The increasing numbers of NGOs in many countries, a growth in the size of individual NGOs, an increasing concentration on service-provision, and rising reliance on official funding, do all seem to be related to each other, but this is not universally true (Wils, this volume).

The overall picture is one in which NGOs are seen as the ‘favoured child’ of official agencies and something of a panacea for the problems of development. As Vivian (1994) puts it, official agencies (and the supporters of Northern NGOs) often see NGOs as a ‘magic bullet’ which can be fired off in any direction and, though often without very much evidence, will still find its target. Clearly, the increasing availability of official funding for NGOs, the popularity they enjoy and the increasing access they are offered to centres of national and international decision-making, represent both an opportunity and a danger. NGOs can scale-up their operations using official funds and use the New Policy Agenda to make their voices heard more loudly and more often through lobbying and advocacy; at the same time, by becoming more dependent on governments, NGOs run the risk of being co-opted into the agendas of others and seeing their independent social base eroded. As far back as 1988, Jan Pronk (in Hellinger et al 1988) warned that ‘the corruption of NGOs will be the political game in the years ahead’. Pronk saw ‘corruption’ not simply in terms of financial scandal, but more broadly as the deviation of NGOs from their mission for social transformation. The only way in which NGOs can avoid ‘corruption’ in this sense is to develop systems for performance-monitoring, accountability and strategic planning which ‘ensure that a line remains drawn between transparent compromise and blind co-option’ (Eade 1993, p 161). That is why the central themes of this book – performance and accountability – are so important.

Strong accountability systems can help NGOs to take advantage of the opportunities offered by the New Policy Agenda while ensuring that any warning signals are identified, listened to and addressed. Of course, performance and accountability would be crucial subjects for debate whether or not NGOs were growing closer to governments. Performing effectively and accounting transparently are essential components of responsible practice, on which the legitimacy of development intervention ultimately depends. Moving ‘beyond the magic bullet’ means taking accountability much more seriously than has hitherto been the case among most NGOs, Northern or Southern. But the New Policy Agenda does complicate the issue of accountability considerably; as the chapters in this book demonstrate, there are real dangers that dependence on official aid and the models of planning and intervention which underlie it will make an already unsatisfactory situation significantly worse.

NGO performance

For reasons which are explained later in this chapter, assessing NGO performance is a difficult and messy business. In any case, the absence of a large body of reliable evidence on the impact and effectiveness of NGOs and GROs makes it very difficult to generalise about this subject, despite claims that NGOs are ‘cost-effective’ or that GROs ‘are close to the poor’ (Fowler 1988). Most studies of NGO and GRO impact are based on small samples and are often restricted to agencies working in a particular sector (often economic development) or context (usually favourable), which makes measurement easier. Internal evaluations are rarely released, and what is released comes closer to propaganda than rigorous assessment. Nevertheless, there is increasing evidence that NGOs and GROs do not perform as effectively as had been assumed in terms of poverty-reach, cost-effectiveness, sustainability, popular participation (including gender), flexibility and innovation.⁴ In terms of service-provision, there is certainly evidence that NGOs are able to provide some services more cost-effectively than governments – for example, the Orangi Pilot Project in Pakistan has developed sanitation systems at less than one-third of the equivalent cost in the commercial or government sectors (Hasan 1993); similar cost advantages have been claimed for BRAC in primary education and credit provision (AKF/Novib 1993). However, evidence from other studies contradicts this conclusion (Tendler 1989) and there is no empirical study which demonstrates a general case that NGO provision is cheaper than public provision. Even where NGO service-provision is ‘low cost’, it usually fails to reach the poorest people, although it may still reach a wider cross-section of the population than government or commercial agencies (Hashemi and Schuler 1992; Farrington and Bebbington 1993; Hulme and Mosley 1995). The sustainability of large-scale service-provision by NGOs has also been called into question by those who cite the large subsidies granted to NGOs (and denied to governments) which make the gap between private and public provision a ‘self-perpetuating reality’ (Farrington and Lewis 1993, p 333). There are also worries about a ‘patchwork quilt’ of social services developing in which only certain regions are supplied by well-resourced NGOs, leaving others to fend for themselves under weak central oversight (Robinson 1993; Edwards and Hulme 1994). In all cases, very careful management is needed to avoid a fall-off in quality when NGOs scale-up service-provision to cover large populations, although as Howes and Sattar (1992) and Wils (this volume) show, there is no necessary trade-off.

Evidence on the performance of NGOs and GROs in democratisation is more difficult to come by, except in the area of ‘micro-policy reform’ where a growing number of case studies demonstrate that NGOs and GROs can influence governments and official agencies, especially where they come together to form a united front (Edwards and Hulme 1992). On occasion (as in Bangladesh with the fall of President Ershad or the Philippines in the case of President Marcos), such united action can exert an influence on the position of governments as a whole. However, there is little evidence that NGOs and even GROs are managing to engage in the formal political process successfully, without becoming embroiled in partisan politics and the distortions that accompany the struggle for state power. In both Latin America and Africa, evidence shows that NGOs have had little impact on political reform, partly because states are adept at containing such a possibility, and partly because NGOs themselves (as non-representative organisations) have failed to develop effective strategies to promote democratisation (Lehmann 1990; Fowler 1991; Bratton 1990). The failure of many NGOs, and even GROs, to democratise their own structures makes them less effective in this process and, as the chapters in this book show, poses a particular problem for ‘downward’ accountability to members and beneficiaries (Carroll 1992; Bebbington and Thiele 1993). Nevertheless, NGOs and GROs can be proud of their achievements in helping to cement human and political rights in many societies, and in democratising the informal political process by training grassroots activists, building stronger local institutions, promoting micro-policy reform, and undertaking education for citizenship (Friedmann 1992; Ghai and Vivian 1992).

A particular area of concern here is the contradiction which may exist between effective performance in the two dimensions of the New Policy Agenda – economic and political – an issue to which little attention has been paid thus far. Large-scale service-provision requires standardised delivery mechanisms (to reduce unit costs), structures which can handle large amounts of external funding, and systems for speedy, and often hierarchical, decision-making; effective performance as an agent of democratisation rests on organisational independence, closeness to the poor, representative structures, and a willingness to spend large amounts of time in awareness-raising and dialogue (Edwards and Hulme 1994). It is difficult to combine these characteristics within the same organisation, and there is little evidence that alliances of different organisations (which could enable the two to go together) have developed very far. The fear is that, because service-delivery tends to attract more official funding, there will be a growing rift between well-resourced service-providers and poorly funded social mobilisation agencies, a danger already identified by Pearce (1993) in Chile and Central America.

The tendency of Northern NGOs to base their strategic plans on the easy availability of funding for humanitarian emergencies poses similar problems for their longer-term work in institutional development and development education. Some critics (including Hashemi in this volume) cite the switch from ’conscientisation’ to ‘service-delivery’ by NGOs such as BRAC in Bangladesh as evidence that they have retreated from any serious role in addressing structural constraints to poverty and injustice. However, recent attacks on BRAC and other large NGOs by religious fundamentalists citing their ‘success’ in ‘empowering women’ suggest that such pessimism is misplaced, or at least that the real situation is more complex than is suggested by the supposed dichotomy between service delivery and conscientisation, an issue which is explored further in this book’s Conclusion.

As NGOs become more involved in large-scale service-delivery (or grow for other reasons), and/or become more reliant on official funding, one might expect some fall-off in their flexibility, speed of response and ability to innovate. Although organisational growth can be managed successfully, bureau-cratisation poses problems for any agency, as do the complex appraisal and reporting requirements which accompany official aid (Edwards and Hulme 1992, 1994). When official agencies finance service-delivery they expect contracted outputs to be achieved and are less interested in a ‘learning process’ (Voorhies 1993; Perera 1995). Time and space for reflection may be reduced and the ability of NGOs to articulate approaches, ideas, language and values which run counter to official orthodoxies may also be compromised. These issues are discussed later in this chapter. A further concern is that the willingness of NGOs to speak out on issues which are unpopular with governments will be diluted by their growing dependence on official aid. There is evidence from Africa that NGOs which depend on external funding (though not just...

Table of contents

• Cover Page
• Half Title Page
• Title Page
• Copyright Page
• Contents
• Foreword
• Contributors
• Part I Conceptual Frameworks
• Part II Case Studies
• Part III Ways Forward
• References
• Glossary
• Index