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Project Management Cycle

It’s time to improve the ‘Value for Money’ toolkit, and not junk it

Suvojit Chattopadhyay's picture

 Julio Pantoja / World BankThe ‘results agenda’ of donor agencies have inspired several heated debates. Value for money is one of the main tools that helps further this agenda. There is significant pressure on donor development agencies to ‘demonstrate’ what they have achieved (results), and further, examine whether these results have been achieved in a cost-effective manner (‘value for money’). This pressure to demonstrate ‘value for money’ often leads to plenty of frustration, as those designing and implementing aid programmes struggle to strike a balance between what is easy to prove versus the complex nature of an intervention designed to tackle a real-world problem.

There are several problems with the results agenda – development interventions take place in a wide range of contexts, that lend themselves to comparisons on some counts and not, on others. These contexts change every day, and certainly over the lifetime of a development project, and attempting a grand theory or mathematical formulae to capture the entire process is nearly impossible.

Besides technical problems, there are valid fears that focusing too closely on ‘value for money’ will lead development workers to focus on ‘bean-counting’ and preferring interventions that can be easily measured and whose costs and benefits are easy to estimate. Some researchers have gone further and argued that an obsession with such metrics essentially forces development workers into lying about how their projects actually work.

One question, eight experts, part two: Fernando Crespo Diu

Fernando Crespo Diu's picture

To gain a better understanding of how innovation in public-private partnerships (PPPs) builds on genuine learning, we reached out to PPP infrastructure experts around the world, posing the same question to each. Their honest answers redefine what works — and provide new insights into the PPP process. This is the question we posed: How can mistakes be absorbed into the learning process, and when can failure function as a step toward a PPP’s long-term success?

Our second response in this eight-part series comes from Fernando Crespo Diu, Director of UTAP, the Portuguese PPP unit.

Although not a desirable outcome, failure is always the first step of the learning process toward more successful projects, in terms of implementation, value for money, and financial and fiscal sustainability. There is an enabling prerequisite for the learning process, particularly given the complexity and long duration of PPP arrangements: the establishment of institutional arrangements that provide stable, professional and fully dedicated teams of experts within the structures of the public sector.

A central PPP unit — ideally located in the Ministry of Finance — should participate in all stages of a project lifecycle, from structuring to contract management, allowing continuous feedback and dialogue between contract management and public teams. In such an environment, the role of external advisors has to be carefully planned, as they provide key skills along the project lifecycle, but must not substitute those tasks where knowledge must be developed, stored and used by the public sector.

DFID is Changing its Approach to Better Address the Underlying Causes of Poverty and Conflict – Can it Work? Guest Post from two DFID Reformers

Duncan Green's picture

Aid donors are often maligned for bureaucratic procedures, a focus on short-term results at the expense of longer-term, riskier institutional change, and a technical, managerial approach to aid with insufficient focus on context, power and politics. Are these institutional barriers insurmountable? Can aid agencies create an enabling environment to think and work politically? 

Tom WingfieldTom Wingfield (top) and Pete Vowles (bottom) from DFID’s new ‘Better Delivery Taskforce’ have been trying to do just that. Here’s where they’ve got to.

For the past year DFID has been focussing on these issues and how we can both guard taxpayer’s money and have transformational impact in the countries where we work. The result has been the introduction of a comprehensive set of reforms targeting our process, capability and culture. Pete VowlesThis is about creating the conditions that allow us to better address the underlying causes of poverty and conflict, and respond effectively to the post-2015 agenda. At the heart of the reform is a revamp of DFID’s operating framework (ie the rules and principles which govern our work). Known as the ‘Smart Rules’, it can be downloaded here.

Like any institutional reform, this is a long term change process.  The next 12 months provide a real opportunity to strengthen our partnerships with a wide range of partners and enhance our collective effectiveness.