Bill Gates, in his annual letter, makes a compelling argument for the need to better measure the effectiveness of aid. There is a nice, 1 minute summary video here. This is becoming a louder and louder message in development and aid, having been pushed now by folks ranging from Raj Shah, the Administrator of USAID, to most everyone at the Center for Global Development. There are interesting debates going on about how to shift from a focus on outputs (we bought this much stuff for this many dollars) to a focus on impacts (the stuff we bought did the following good things in the world). Most of these discussions are technical, focused on indicators and methods. What is not discussed is the massively failure-averse institutional culture of development donors, and how this culture is driving most of these debates. As a result, I think that Gates squanders his bully pulpit by arguing that we should be working harder on evaluation. We all know that better evaluation would improve aid and development. Suggesting that this is even a serious debate in development requires a nearly-nonexistent straw man that somehow thinks learning from our programs and projects is bad.
Like most everyone else in the field, I agree with the premise that better measurement (thought very broadly, to include methods and data across the quantitative to qualitative spectrum) can create a learning environment from which we might make better decisions about aid and development. But none of this matters if all of the institutional pressures run against hearing bad news. Right now, donors simply cannot tolerate bad news, even in the name of learning. Certainly, there are lots of people within the donor agencies that are working hard on finding ways to better evaluate and learn from existing and past programs, but these folks are going to be limited in their impact as long as agencies such as USAID answer to legislators that seem ready to declare any misstep a waste of taxpayer money, and therefore a reason to cut the aid budget…so how can they talk about failure?
So, a modest proposal for Bill Gates. Bill (may I call you Bill?), please round up a bunch of venture capitalists. Not the nice socially-responsible ones (who could be dismissed as bleeding-heart lefties or something of the sort), the real red-in-tooth-and-claw types. Bring them over to DC, and parade out these enormously wealthy, successful (by economic standards, at least) people, and have them explain to Congress how they make their money. Have them explain how they got rich failing on eight investments out of ten, because the last two investments more than paid for the cost of the eight failures. Have them explain how failure is a key part of learning, of success, and how sometimes failure isn’t the fault of the investor or donor – sometimes it is just bad luck. Finally, see if anyone is interested in taking a back-of-the-envelope shot at calculating how much impact is lost due to risk-averse programming at USAID (or any other donor, really). You can shame Congress, who might feel comfortable beating up on bureaucrats, but not so much on economically successful businesspeople. You could start to bring about the culture change needed to make serious evaluation a reality. The problem is not that people don’t understand the need for serious evaluation – I honestly don’t know anyone making that argument. The problem is creating a space in which that can happen. This is what you should be doing with your annual letter, and with the clout that your foundation carries.
Failing that (or perhaps alongside that), lead by demonstration – create an environment in your foundation in which failure becomes a tag attached to anything from which we do not learn, instead of a tag attached to a project that does not meet preconceived targets or outcomes. Forget charter cities (no, really, forget them), become the “charter donor” that shows what can be done when this culture is instituted.
The evaluation agenda is getting stale, running aground on the rocky shores of institutional incentives. We need someone to pull it off the rocks. Now.