USAID Announces New Focus on Impact Per Dollar
Deputy Administrator Isobel Coleman announced the release of two position papers that take USAID a step forward in prioritizing cost-effectiveness in its programming. As global development and humanitarian needs skyrocket and budgets lag, squeezing as much impact from each taxpayer dollar spent is essential.
The USAID Cost-Effectiveness Position Paper, with its five principles (impact/dollar, comparative, contextual, use existing evidence or produce it cost-effectively, and it’s not the only thing that matters) and lists of best practices and examples, will be rolled out with the support of nearly 100 “Cost-Effectiveness Evidence Champions” throughout USAID. This cadre will be supplemented with outside support, including the Center for Effective Global Action at the University of California, Berkley.
The second paper, USAID Direct Monetary Transfers Position Paper, provides the principles and best practices in cash transfers to individuals, households, and microenterprises. Empirical evidence and impact assessments have consistently shown this to be a cost-effective approach.
Cost-effective approaches and the use of cash transfers will likely become more common in proposals and applications. While the principles of these approaches note that cost-effectiveness is not the only thing that matters and that contextual conditions are important considerations, we also know that development takes time and the principles of engagement in localization efforts are an important part of the development process. Many of your USAID counterparts can describe pressure from the Embassy to concentrate funding on quicker results when USAID knows that the institutions supporting them are not strong enough to sustain the results. And many of us learned early in our careers that you don’t show up with a solution, looking for a problem. Development is difficult and takes time. Evidence-based cost-effectiveness and cash transfers are important steps forward, especially if well-informed by other principles of development.
Read the USAID Press Release here.