In Pretoria, South Africa, dozens of USAID officials sit side by side with members of the South African Economic Development Department poring over Excel spreadsheets, formulating equations, and double checking data as part of a math-intensive boot camp designed to improve the number-crunching capacity of all those involved. They work for different governments on different continents, but they are all students in a USAID-sponsored training–the latest incarnation of an ongoing effort to revitalize the use of evidence-based programming within the Agency and beyond.

As part of a four week course funded by USAID, South African government officials are trained side by side with their USAID counterparts on how to perform a cost benefit analysis. Photo credit: USAID

For two years now, a small team of economists at USAID have worked to reintroduce cost-benefit analysis, or CBA, as a tool for ensuring financial sustainability in USAID-funded projects. This particular training marked a turning point, with USAID starting to build analytic skills not just internally, but externally with host country governments as well. The idea behind these joint CBA trainings was to combine two of the Agency’s reform goals:  to make our own projects more sustainable, and also to assist government officials in partner countries as they seek to create economies that are more efficient, growth oriented and focused on reducing poverty.

Trainees looked at effects of inflation, input prices, subsidies, and other financial factors as they examined a wide variety of possible economic interventions. In the end, not only did they learn concrete skills, but U.S. and South African officials forged stronger intergovernmental relationships as each side shared their unique perspectives. The results of this initial course were so encouraging, in fact, that it led to a much larger joint activity, with USAID funding an initiative to set policy assessment standards and guidelines for the entire Government of South Africa.

Based on the success of the training, USAID also partnered with the South African Ministry of Finance to train 35 South African government officials through an in-depth four-week CBA course.  These officials learned important economic concepts for the daily management of various government agencies.  They then requested “Executive Days” for higher-level officials to become familiar with the same concepts. This technical tune-up was particularly timely because over the next five years, the South African government plans to spend billions of dollars on development projects in a diverse array of sectors including health, infrastructure and education. This training is aimed at increasing the capacity of the government to identify and structure those projects that will have the most growth potential going forward.

Since the start of these trainings, positive feedback from both governments has been consistent, suggesting that both an analytic and a diplomatic gap had been bridged. According to USAID Mission Director Jeff Borns, “The course allowed us to deepen our relationships with the relatively new Economic Development Department in South Africa and build capacity within USAID and the host government.” As a result of the class, officials have already started prioritizing projects for analyses. USAID hopes to duplicate this success in May 2013, with a four-week course in Kenya that is being sponsored by the Kenya School of Government. The majority of participants will be officials from Kenya, with representatives from the Tanzanian government as well.

USAID’s CBA trainings have helped improve host country governments’ policy formulation processes, data and research — directly impacting the effectiveness of government spending, with the ultimate goal of increasing employment, equity and economic growth.