“Localizing aid is not the only way to strengthen state systems, but it is a crucial tool in donor toolboxes,” says Jonathan Glennie, research fellow at the Overseas Development Institute and the lead author of ODI’s March 2013 research study, “Localising Aid: Key Findings” (PDF).

On June 24, Glennie presented highlights of the study’s findings to development professionals in the policy group at United States Agency for International Development headquarters in Washington, D.C.

Click on image to view the report. Photo credit: ODI

Click on image to view the report. Photo credit: ODI

“The timing of this study is fantastic,” said USAID Assistant Administrator Alex Thier, “because of our efforts to think through what we mean by procurement reform. This has been a driving force for the last few years for our agency. Having some outside perspectives, testing of assumptions, and reaffirmation of the purpose of our work is tremendously valuable.”

Glennie, a regular contributor to the Guardian’s Poverty Matters blog (see his June 21 post on the study), was joined by several colleagues including co-researcher Alastair McKechnie and Susan Nicolai.

The aim of the study, explained Glennie, was to analyze objectively the value of localizing aid for strengthening country systems, to guide donors broadly regarding the most effective ways to localize aid, and to evaluate obstacles blocking its implementation.

ODI’s approach mirrored earlier guidance issued by USAID Agency Counselor Dave Eckerson to field staff in January 2013, cautioning that “there is no ‘one-size-fits-all-approach'” to increasing local ownership of development business. Added Eckerson, “What is important is that each mission understands that the overall development objective is to strengthen local capacity write large in order to improve and sustain development outcomes.”

The comprehensive research study included a broad review of previous studies along with three country visits to areas where USAID has a strong presence – Guatemala, Liberia, and Uganda – to interview experts and practitioners regarding the effectiveness of local aid.

Among the study’s intriguing findings reported by Glennie:

  • While localized aid is not a panacea, due to complex country conditions on the ground, “it is a crucial tool in donor toolboxes.”
  • Most donors should localize more aid, because in many situations it is most appropriate and the amount of local aid right now is so low.
  • The fact that a country is “fragile” does not in and of itself mean local aid won’t work — concerns about corruption and waste may be true, but they are not enough to defer localizing it.
  • There is more than one way to achieve effective aid, depending on whether the emphasis is short-term results or long-term change.
  • In the end, non-local aid and local aid are equally risky. Despite the fact that there are greater financial risks associated with local aid, the programmatic risks may be much lower.
  • Aid objectives may be stated, but not “radically internalized” and this should be done. Donors often focus on “short-term results or technical fixes without getting into detail, politics and the complexity of the situation.”
  • Donor organizations should invest more in human capital to achieve “wise interpretation of principles” and “less emphasis on rules.” There was no literature available evaluating aid effectiveness from the perspective of the ability of staff to make good decisions.
  • Communication between donors, with governments and with the public is relatively poor: “There is an amazing mental block about sharing information.”

The talk was received thoughtfully by attendees. Some pointed out that ODI’s research highlighted the need for more rigorous analyses of local aid effectiveness, and for more innovative empirical approaches to this.

Others discussed the need to explore how progress can best be made in local environments where aid funds cannot be reliably tracked, and where governance systems are unstable.

“We don’t want politics (meaning the desire to implement a donor program) to be an excuse for not recognizing the development reality on the ground,” said Glennie.

Yet the critical need for assistance remains. USAID is committed to delivering it, while recognizing and communicating the complexity of the issues on the ground.