The following post was written by Brad Parks, an AidData Principal Investigator, and one of our research assistants, Anca Cretu (William and Mary '11).


There is growing evidence that in many developing countries a substantial percentage of public funding for sectors such as health, education, and infrastructure never reaches the intended beneficiaries. Some reports suggest that less than a quarter of funding is received. One group of researchers from the World Bank found that during the mid-1990s only 22% of public funding for school supplies actually reached Ugandan schools. More recently, the Indian government admitted that only 15% of its funding for employment programs reaches the intended beneficiaries. Estimates of "leakage" -- and methods for calculating it -- vary widely, but there is no question that corruption, mismanagement, and local capture substantially diminish the impact of international aid and other types of public sector financing.

How can the donor community reduce leakage and increase the impact of aid? Transparency and grassroots monitoring are often cited as powerful remedies. The World Bank's 2004 World Development Report proposes “putting poor people at the center of service provision: enabling them to monitor and discipline service providers, amplifying their voice in policymaking, and strengthening the incentives for service providers to serve the poor." This very simple idea -- that local community members have strong incentives to track how funds are being spent in their own localities, but need detailed public expenditure information and political space to conduct an effective oversight role -- has become increasingly popular. Advocates point to a whole slew of new studies in Kenya, Brazil, Uganda, and India:

• Deininger, Klaus, and Paul Mpuga. 2005. Does Greater Accountability Improve the Quality of Public Service Delivery? Evidence from Uganda. World Development 33(1): 171–191.
• Björkman, Martina, and Jakob Svensson. 2009. Power to the People: Evidence from a Randomized Field Experiment on Community-Based Monitoring in Uganda. Quarterly Journal of Economics 124: 735–769
• Duflo, Esther, Pascaline Dupas, and Michael Kremer. 2009. Additional Resources versus Organizational Change in Education: Experimental Evidence from Kenya. MIT Working paper.
• Ferraz, Claudio and Frederico Finan. 2008. Exposing Corrupt Politicians: The Effects of Brazil’s Publicly Released Audits on Electoral Outcomes. Quarterly Journal of Economics 123(2): 703-745.
• Gonçalves, Sónia. 2009. Power to the People: The Effects of Participatory Budgeting on Municipal Expenditures and Infant Mortality in Brazil. LSE Working Paper.
• Afridi, Farzana. 2008. Can Community Monitoring Improve the Accountability of. Public Officials? Economic and Political Weekly 43 (42).

Martina Björkman of Bocconi University and Jakob Svensson of Stockholm University provide particularly compelling evidence. In 2004, they collaborated with the World Bank to design and implement a randomized field experiment in 50 Ugandan communities. "In the experiment, local NGOs facilitated village and staff meetings in which members of the communities discussed baseline information on the status of health service delivery relative to other providers and the government standard. Community members were also encouraged to develop a plan identifying key problems and steps the providers should take to improve health service provision. The primary objective of the intervention was to initiate a process of community-based monitoring that was then up to the community to sustain and lead." Here's what they found after one year:

• Treatment communities became more engaged and more closely monitored their health service providers.
• The practices of health service providers improved significantly in the treatment communities (e.g. increased childhood immunization, improved examination procedures, lower waiting times, lower rates of absenteeism).
• The weight of infants improved and under-5 child mortality declined by 33% in the treatment group.
• Utilization for general outpatient services was 20% higher in the treatment facilities.

However, there are also reasons to doubt the efficacy of social auditing initiatives. Some scholars warn that the process of community monitoring may be subject to "elite capture." John Sidel of the London School of Economics reports that in Indonesia "economic and political power at the regency, municipal, and provincial levels ... appears to be associated with loosely defined, somewhat shadowy, and rather fluid clusters and cliques of businessmen, politicians, and officials." Scott Fritzen of the National University of Singapore has conducted an evaluation of community-driven development initiatives in 250 Indonesian sub-districts and concluded that "elite control of project decision-making is pervasive." Another group of researchers affiliated with MIT's Poverty Action Lab has evaluated community monitoring interventions in India's primary education sector. They find that, despite significant information disclosure, "community members did not know what they were entitled to, what they were actually getting, and how they could put pressure on the providers."

Last week, Laura Freschi had a great post over on AidWatch on the Indian response to the withdrawal of British aid, where she mentioned the rise of India as a donor in its own right. This issue has gotten other attention recently, from both the Wall Street Journal and Canada's International Development Research Centre.

Here at AidData, we've been working hard over the last few months to track down project level information on Indian aid. As Laura pointed out, the Indian aid apparatus is still forming, and no central agency has been established. However, we have been able to collect some very basic project level statistics from outcome budgets published by the Ministry of External Affairs and Ministry of Finance. These documents give brief descriptions of EXIM loans, technical assistance, and direct grants to developing countries. Most of the data bears out what others have reported, that India is primarily focused on its neighbors, including Bhutan, Afghanistan, and Nepal, but also highlights less-intuitive recipients like Ghana and Sudan.




The sectoral breakdown (made possible by our incredible staff of RAs) shows that India has primarily focused on power. transportation, and industry. However, we suspect that many of the projects that we left coded as multi-sector due to the brevity of the descriptions encompass smaller-scale education, health, and social projects.


We're actively pursuing better data from the relevant offices and departments in the Indian government that will allow us to calculate the grant element of loans, provide more detailed purpose codes, and possibly run pilots in geocoding and crowdsourcing. Obviously, any help that any of you users could give us here would be most welcome.
Finally, here's the full list of India projects in AidData:

The following was written by Brad Parks, an AidData Principal Investigator and Research Associate at The College of William and Mary...

As many of you know, we here at AidData have made it a priority to pursue information on emerging donors and South-South Cooperation partners. We've seen how Arab donors can have a huge impact in a single country, or how Brazil is leveraging comparative advantages from its own experience to assist other developing countries. But there's one unique case that stands out from all the rest, allowing us to add a new donor and a new recipient in one blow.