Humanitarian aid organizations are bloated, unaccountable beasts that must be hunted down for their voluminous and valuable fat

That’s not exactly what Michael Barnett and Peter Walker say in the latest Foreign Affairs, but it is a reasonable or at least tempting extrapolation. They are two of my favorite humanitarian scholars, and their essay argues we need a regime change for more accountability.

There are many good points, among them: the oligarchs of conflict and disaster hold better intentions than, say Russian oligarchs, but oligarchs they are:

Western governments also have a controlling influence over the core pillar of the global humanitarian network: the UN and its specialized agencies, such as the Office of the UN High Commissioner for Refugees and the World Food Program, which lead the charge in crisis zones. Orbiting this system are a dozen or so NGOs that receive most of the funds distributed by the major Western donors and dominate disaster response, among them CARE International, Catholic Relief Services, Oxfam International, and World Vision International.

One shameful yet predictable consequence is the bloated cost-ineffectiveness of most aid in most crises:

…During ongoing crises in five countries in 2012—in the Central African Republic, the Democratic Republic of the Congo, Somalia, South Sudan, and Sudan—national NGOs saw a mere 14 percent of the resources channeled through the UN’s common humanitarian funds. And in post-earthquake Haiti, nearly 90 percent of U.S. contributions went into the pockets of international agencies and organizations, as documented by the Center for Global Development; only one dollar in ten actually reached the victims.

This is not actually overhead, at least as the organizations themselves define it. It is local salaries and land cruisers and other expenses from organization and delivery of help. Some of this is necessary of course but most is questionable at best. But unaccountable oligarchs have little incentive to trim fat, let alone cut into muscle.

And if you think that is bad, remember than half of the money people do receive is probably mediocre quality programming, since there’s no accountability there either.

In fairness, aid in humanitarian crises is probably far more effective than regular foreign aid, where I’d be surprised if a dollar in twenty reaches a poor person’s pocket. Humanitarian aid is better probably because people die in front of the front line workers when they fail. This focuses the heart and mind.

But apparently not so much that more than a dollar in ten reaches victims.

Fortunately, disruptive forces abound:

For one thing, new sources of humanitarian aid are shaking up the sector. In 2013, donors outside the club—including Brazil, China, Turkey, and the Gulf states—contributed 14 percent of government-derived humanitarian funding,

…Abandoning outmoded “truck and dump” methods of providing aid to the vulnerable, agencies are now experimenting with direct cash transfers and voucher programs

…Diaspora groups, too, are coming to the fore. In fact, global remittance flows exceed the total volume of foreign aid (of which humanitarian assistance is a small part) by a factor of three, and some of these funds are spawning local relief agencies.

But Barnett and Walker’s recommendations on how to be more accountable are more lackluster. It does not sound a lot like regime change. Some examples:

The first step would be for the club to make good on its promises to help vulnerable communities build up their resilience to crises and prepare for disasters ahead of time.

…Donor countries should continue to encourage and reward evidence-based results.

…Improving accountability, however, will not be possible without building true partnerships with local actors—before, during, and after an emergency.

To become as accountable to local populations as they are to the donors who sign their checks, humanitarians should learn to listen to those they aspire to serve.

The economist in me says: “Show me the incentives.” I see no shift here.

The oligarchy are not going to seriously listen more, cut costs, build evidence, or let alone act on the evidence unless they are threatened with the pain of extinction or irrelevance. Thus I have more hope for more disruptive forces.

For instance, in the aid realm, maybe the best thing that happened to USAID was George W. founding two competitors: MCC and PEPFAR. That seemed to have awoken the bureaucratic beast from its slumber, at least a little.

So, I have some hope that the cash and remittance revolution will shake some of the humanitarian oligarchy from their bloat, and shine a spotlight on their bloated costs. But only some hope.

I suspect that Barnett and Walker have a more grisly fantasy about what they would like to do (Release the hounds!), but it probably only comes out after several beers rather than via a Foreign Affairs editor.

14 thoughts on “Humanitarian aid organizations are bloated, unaccountable beasts that must be hunted down for their voluminous and valuable fat

  1. And what of the world of academic research, working on evidence-based results for positive outcomes on development issues. Michael Barnett as a prof at GWU could hypothetically also apply for research grants from donor agencies and tax dollars from government granting councils for which GWU can recover anywhere from 26-52.5% in indirect costs depending on whether the research is on or off campus. Thats based on GWU’s federally negotiated and published rates, so a 100K USD grant ends up as only 47.5K being spent on direct costs of research done on campus – in theory. Not to mention the fringe costs that are attached to their wage lines. Not exactly bloat-free either. Those indirect cost rates are significantly higher than even the UN system attracts for programming or aid delivery. Of course costs are negotiable but still…

  2. @Mano_B: This is a good point, but I think it makes the mistake of focusing on overheads not cost-effectiveness of work. the overhead shell game is usually a distraction.

    On university overheads:
    – Yes, universities have bloated costs and need to reform.
    – Overheads charged on federal grants are high, and are basically a government subsidy to private and public universities. In principle this serves a policy objective of subsidizing research institutions. You can debate why and whether it’s a good idea, but it’s unrelated to a humanitarian mission.
    – Most of the university overheads are to science. The stuff to foreign affairs is negligible and has no effect on the design of the system.
    – Most of the non-federal grants that support aid related research (e.g. from foundations) demand very low overheads. The most I’ve ever had on one of my non-federal grants is 15%. The university takes these and may actually operate at a loss on them.
    – Ergo whether the public should subsidize scientific research in this way is a useful public debate but it is a totally different question.

    But overheads are a distraction because it’s not the bulk of costs. The analog to academia was whether they spent too much on salaries and trips and other inputs into the research that had little impact on the quality of the research.

    This is hard to figure out because there’s no single beneficiary for this output, and the output is hard to value. It’s very hard to say whether a given piece of research was efficient.

    Also, the production of knowledge works differently, in that it might make sense to fund 100 inefficient and potentially bad projects because on average one changes the world and makes all the rest worthwhile. this is because the output is often a true public good: non-rival and non-excludable.

    The right critique to lay at the feet of academics is that many are taking a lot of money and generating absolute crap, and they could easily do better if someone held them accountable. I would agree with that.

    But then the brighter stars, like Barnett, who produce useful, widely-read, policy relevant work—some of the most significant public goods in his field—would be the last target of these attacks. The target would be the 100 people no one has ever heard of, getting cushy World Bank and USAID consulting money to write reports only 4 people will ever read.

  3. I agree with you that the overheads debate is a distraction. Perhaps it was a bad example in comparing it to research. Texting reaction…

    But while it’s a distraction to those in the space, when it comes to humanitarian work I think it becomes a question many people (the donor public) do ask when poor distribution comes into the media. Its all corrupt. I cant believe the head of X agency makes this much. How much of my $100 donation actually gets to the people suffering post disaster. I want my $100 to buy the equivalent of food or clothing. Unfortunately people do focus on this when things go wrong. They want their charitable donation to be used at no cost and delivered through volunteerism without understanding in many instances (for smaller organisations at any rate) it’s a low wage structure that makes it difficult to retain quality staff while also covering the costs of the various intermediaries needed to move the goods or deliver the services.

    On your point about quantifying beneficiaries – Does it matter if the short term beneficiaries are part of the research community? Tracking citations for example. What is your thought on open access publishing and on opening research data? Free availability of journal outputs and extending the lifecycle of research datasets particularly for researchers in LDCs can have a significant impact in making more costly research policy relevant to a wider community while diluting the overall cost to some extent. Is this not all part of the bloat?

  4. Dr. Blattman;

    Yours is an ill-informed and rather prejudiced view of overhead, or, more properly indirect costs. Having been in the business of pre- and post-award administration at a major research university for over ten years, I can assure you that indirect costs are not “mostly subsidies” to private and public universities. In fact, the narrowness of your opinion leads to believe that you know practically nothing about how overhead rates are calculated or that they are the product of rather intense negotiations between representatives of the federal government and your Office of Sponsored Research.

    Here’s an idea. Locate the Office of Sponsored Research on your campus. Schedule a tour. They never see professors generally so your presence there will be quite novel. Ask them what they do. Then, if you can get past your academic arrogance regarding the work of non-faculty staff members, you might learn something and be better informed.

  5. “The target would be the 100 people no one has ever heard of, getting cushy World Bank and USAID consulting money to write reports only 4 people will ever read.” Question: if a blog and a few evaluations are read by more than 4 people, would that make cushy consultancies legitimate? Or, when people heavily criticize the very organizations and system that have often funded most of their work, and those organizations keep funding them, isn’t that an example of transparency by those organizations? Yet we all hope to see an intervention that would yield a statistically significant decrease in the prevalence of haugthy in the treatment group compared to control.