University of NairobiPresentation by Wolfgang Fengler,

Lead Economist, World Bank

Discussion with

PS Joseph Kinyua

Dr. Richard Leakey

Prof. Michael Chege (Moderator)

Delivering Aid DifferentlyLessons from the Field

2

About Homi Kharas

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

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)

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.

Aid Can Work

The Marshal Plan Europe

The US Govt spent US$ 13 billion to help rebuild Europe after World War II

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.

Bolsa FamiliaBrazil

9

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

Post-Tsunami ReconstructionIndian Ocean

10

In Aceh, the US$ 7.2 billion reconstruction program led to recovery of the province (2/3 financed by the international community)

Mobile MoneyKenya

11

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.

The New Reality of Aid

The Old Reality of Aid

The New Reality of Aid

Seeing the new Aid Architecture in 3D

15

Demand Differentiation

Diversity of Donors

Dynamics of Development

A wide spectrum of clients:

Fragile states, MICs, small states, etc.

Traditional donors, “New

Bilaterals”, NGOs

Innovation, Information, Evaluation, Scaling up

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

ODA 95%

NGOs5%

US$ 92 Bln

ODA 63%NGOs

27%

New Bilaterals

10%

US$ 194 Bln

The total number of projects has quadrupled while the average size declined sharply (ODA

only)

… and New Players have added to Increased Fragmentation

Case study Aceh (Indonesia)

Note: 1 = maximum concentration.; The lower the index the more fragmented the aid program

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

Donors & NGOs NGOs Donors

Hir

schm

an-H

erfin

dhal

Inde

x

... while China’s share is rising rapidly Case study Cambodia

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

... and donor funding has become increasingly unpredictable

Case study Kenya 1981-2006

21

Delivering Aid Differently

Country Level Coordination and a “knowledge engine”

23

National Aid Coordination

Agency

Information

Needs

Standards

Data on Inputs

Data on Outputs

Donors and Implementers Projects and Programs

24

Coordination Forum

Government Donors

UN Agencies

NGOs

Multi Donor Fund

Reconstruction Agency

UNORC?

CommunicationCoordination fora

Delivering Aid Differently: Effective Coordination and alignment with government

Post-Tsunami Reconstruction, Aceh

Delivering Aid Differently: Analysis driving programming

Post-Tsunami Reconstruction, Aceh

25

Delivering Aid Differently: Scaling-Up From small projects to large programs

The Indonesia Community Empowerment Program

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1997 1998 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

PNPM

cov

erag

e (N

o. o

f vill

ages

)

Pilot: 25 villages

Introduction of the project

Government took over, doubled the scope and finances most investments; WB continues to support M&E and supervision of program

Delivering Aid Differently: Summary

27

Old aid model New aid model

Overall approach

International coordination and burden sharing, collaboration between headquarters dominates

In-country coordination and recipient government-led, differentiated by situational demands

Sources and channels

Official Development Aid focus Diverse multi-player, multi-channel aid

Programming Annual Multi-year, dynamic

Delivery Project-based, fragmented Programmatic, scalable

Capacity building

Capacity substitution, technical assistance

Capacity development, local networks

Information systems

Global Global and local

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

Homi Kharas (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 throughwww.Amazon.com