Management of the Dutch Development Cooperation

There is reason for concern about the Dutch development cooperation. A survey of some aid evaluations of the Dutch Ministry of Foreign Affairs (MFA) showed that the aid results are limited and that the goals of the programs are not achieved. Management concerns using an organisation's resources to achieve its goals, so the MFA's management is inadequate. As the MFA is by far the largest Dutch aid organisation and because it also subsidises and therefore strongly influences other Dutch aid organisations, this research examines the MFA's management. Development is a result of many processes, so it is difficult to attribute examples of development to aid measures, especially when the amount of aid is relatively small, e.g. in case of the Dutch aid. Therefore, first, it was investigated whether the effect of the combined international aid can be detected. It was found that it is not possible. On the contrary, over the past decennia world regions that received much aid per capita generally stagnated, whereas regions of comparable development level that received little aid per capita showed fast economic growth. To estimate the effects of the Dutch aid, a number of evaluations of Dutch aid program were analysed. It was found that, as far as the results could be determined, the goals were generally not achieved, and the contribution to development and poverty reduction was very modest. Based on the findings of the evaluations, two research questions were formulated: What is a suitable research model to assess the professional level of the Dutch development cooperation?, and How professional is the management of the Dutch development cooperation? Professional is defined here as: taking care of the relevant management aspects, and in such a way that the main goals of the Dutch development cooperation are achieved. The adopted research strategy comprises an extensive study of literature, discussions with experts, and interviews with people active in the field, i.e. MFA employees and politicians. To arrive at conclusions, sources at different levels of aggregation are applied as much as possible, e.g. statistical data, individual aid programs, and individual cases. The evaluations also showed that the limited results of the aid were not caused by one or two aspects of management, but that twelve aspects played a role in the achievement of the results. Because existing models were unsuitable to describe these twelve management aspects, a new general management model was developed. It accommodates all twelve aspects: the managing entity, goals, strategy, funded partner organisations, aid provision processes, the employees' capabilities, structural organisation, monitoring, intervention measures, evaluation, external conditions, and the application of an appropriate management model. This general model was applied to investigate the typical characteristics of the MFA's internal and external management in more detail. First, some typical characteristics of the developing countries were analysed. Social capital (e.g. trust, institutions) was found to play an important role in development. In many developing countries corruption is very high but countries with more social capital develop nevertheless. Western aid and trade can have negative effects, because they may disturb local markets. High amounts of aid can affect the exchange rate of the local currency and the competitiveness of local companies and farms Next, the attainability of the goals of the Dutch development cooperation was analysed. It was found that the results are generally not sustainable, especially because of lack of funds for recurrent costs. Some main goals are very hard to attain or not attainable at all. For example, clean water supply for the poor is intended to bring better health. But it causes more children to be born and to survive, and because food is often scarce, malnourishment increases. Thereby the health gain is lost. Other aid measures aim at changes in the social culture, like improving governance, combating corruption, introducing western democracy, or advancing the position of women, e.g. with respect to sexual and reproductive health and rights. It was found that it is hardly possible to achieve such changes in social culture from the outside in. Then, the MFA's external and internal management was analysed. It was found that an important aspect of the MFA's strategy is inadequate: the MFA fails to be involved in the aid implementation. It just finances partner organisations (governments, multilateral organisations, non-governmental organisations) that address the Dutch policy themes. As a consequence the MFA has no information about the well functioning of the aid programs, and no means to intervene. Furthermore, the MFA employees lack knowledge about the content of the aid themes, the aid implementation process and the conditions in the developing countries, e.g. the way power is structured ('clientelism'). This hampers their decision making regarding the aid programs. The analysis of the internal management revealed that the MFA focuses very much on administrative procedures and accountability, but less so on aid content, effectiveness and results for the poor. The structural organisation is such that internal communication is inefficient. The main conclusion is that the basic concept the Dutch aid is based on, is unsuitable. That concept is that poverty is lack of food, water, health care and social organisation, and that the aid should help to make all that available. The real problem is the lack of capacity in the developing countries to generate these products and services. Based on this view, an alternative approach is proposed. A suitable way for the poor to escape poverty is by earning an income. This allows them to buy what they need, e.g. food, water supply, health care and their children's education. Their chances to earn an adequate income depend first of all on the economy of the country, as in a growing economy employment increases and over the years wages go up. Also issues like public safety and a low inflation play a role. The possibilities to advance these issues through aid are limited, though. But income depends to a considerable extent on poor people's own capabilities as well. The right knowledge and skills enable the poor to get a good job or to run a profitable business (farm, shop, workshop, service) of their own. The aid could help poor people to acquire skills suitable to earn an income. Recommendations were formulated regarding the way aid programs could bring that about. One of these suggestions is that the training of simple, practical skills should be included in the primary school curriculum. Poor children attend no more than a couple of years of primary school and only learn a little reading and writing, which does not help them much to earn an income. The Dutch aid could support such efforts to help poor people to generate an income, the best way to escape poverty.