World Bank, PBS and Aid Politics for Dummies: Part 2
So donor nations’ problem child,
And, as always, the World Bank’s ‘aw shucks’ explanation as to why the Ethiopian government gets rewarded for ragamuffin behavior is more interesting than the reward itself because, true to form, the World Bank assumes we are all snot-eating imbeciles. Love that.
Get ready, set… whatever…
Instead of lending to the national government as it usually does, the [World] bank will provide $215 million of its new aid to hundreds of local governments, mainly for basic services such as water, health and education.
Monsieur Ishac Diwan, care to string together a blustery, yet oddly predictable vociferation? You do? Oh well.
"It's not a magic solution. It's just a completely different way of doing business."
The problem is, no one asks Dr. Diwan what exactly is the difference between the federal and local government. Who controls local governments? Who are its leaders? Oh, yeah. Why were local elections ‘postponed’ by the federal government? So when Dr. Diwan tells us this is a “completely different” way of doing business, I think we are supposed to nod seriously and be awed by his declamatory fiat. We’re not worthy. We’re not worthy.
On November 16, 2005, a clearly agitated Dr. Diwan was unwavering in his convictions.
"Aid will be cut. The question is by how much?" Isaac Diwan, World Bank country director in
"We have sent very clear signals that international and World Bank assistance will be cut over time if the governance situation does not improve," Diwan said.
Well the “government situation” must have improved since November... what? Why are you giving me the stink eye? All opposition leaders are safely in prison; journalists are journaling… in prison, and Prime Minister Meles has not called anyone else a “self appointed colonial viceroy.” Let aid money rain.
In a May 17 letter to EthioMedia, Dr. Diwan promised this new direct budgetary supplement that shalt not be referred to as direct budgetary supplement would:
have stringent reporting requirements and explicit mechanisms for promoting transparency and accountability in public budgets, resource use and service delivery.
The project has not one, but two, strong components that would seek to empower the poor to demand quality public services.
Ya? Two? Well, good luck with that because the Ethiopian government has not two but hundreds of strong components to keep its poor nice and un-empowered. But, okay. We get it. Maybe ‘stringent reporting requirements’ will tempt the Ethiopian government to treat its people decently. We all know what deference Prime Minister Meles has for ‘stringent’ reporting.
But here comes the Ethiopian American Civic Advocacy to put the kabash on Dr. Diwan’s buoyant head trip. On May 24, our own Inde Hewan, patron Saint of Wonqville and econ chick extraordinaire, wrote a response to Dr. Diwan.
The letter takes umbrage with the awkward nomenclature and the logic behind the whole “thou shalt not call the Protection of Basic Services (avert your eyes and bow) direct budgetary supplement. Ahoy, witness the birth of PBS…may it live long and prosper. You may FedEx your ululations ” reasoning.
… just because the loan is no longer channeled directly to the federal government budget, but rather to the subnational government budgets, it is no less a form of budget support. We are critical on the basis of the substance of the loan, not its formal labeling.
Oh, EACA. Picky, picky, picky.
But the EACA is rankled by something else. It ferreted out the bank’s February project information document, which I assume means a document that has information on a particular project. (I told you, genius resides amongst you.) In it, we are told why the PBS is not the bastard child of direct budgetary supplement. (Italics theirs, underlining mine.)
What sets the approach of the PBS apart from the previous modality of direct budget support, is the way in which the PBS operation will involve more timely and detailed reporting on the use of resources, explicit monitoring and oversight of the fairness of the transfers, monitoring of service delivery results at the Regional/sub-national levels rather than national levels, and the introduction of measures to encourage local accountability to support Government’s commitment to distribute resources for basic service delivery equitably.
(Haaaaa? “Government’s commitment to distribute resources for basic service delivery equitably”!!?? Is that like telling Tony Soprano, “Hey, ho. Ho, hey. Vinne “two fingers” Blundetto said to make sure you distribute his ‘contribution’ evenly between Carmella and all the rest of your gumbahs.”)
Okay, alright already! There will be strict monitoring of funds. We get it.
But… hold it, hold it… what is this on page three…?
While the PBS itself has no direct mechanism to influence choices made at the local government level, the preservation of resource flows for basic services should enable expansion in service coverage and incremental improvements in service quality.
Okay, now I am confused. Hhhh’watt? Whaddayamean the PBS has “no direct mechanism to influence choices made at local government level”, bud? But what happened to the stringent accountability we were promised? And what in the heck does “the preservation of resource flows for basic services should enable expansion in service coverage and incremental improvements in service quality” mean??
Me no likee economics.
Naturally, the EACA has questions about the “we can’t influence what happens with the money” part:
This statement is no longer present in the May version of the PID. Is that because the PBS has indeed been redesigned to [introduce] mechanisms for influencing budget choices, or is it structurally the same as the February conception of the PBS, on this point?
Goddamit. Does this mean that I have to read the May PID. Say no… say no… say no…
So let’s get this straight: after so much hype about accountability and transparency and how this is a completely different way of doing business, we are told that the bank has, really, no influence as to how local governments distribute the money? Then, someone at Dr. Diwan’s office realized we know how to… what do you call that thing… read, and xnayed that phrase. Hope they replaced it with examples of some of them crazy stringent requirements.
Not quite. Hmm. I don’t know about this Diwan feller. I just don’t know.
Okay. Bygones. I am sure after realizing the faux pas in the February PID the bank lays out a series of clearly thought out and specific ways to monitor the moolah. La-la-la. It does. It does. I refuse to believe it doesn’t.
So, how would the PBS make sure that, say, an Ato Demissew Sereqe, chairman of Asresh Michew district in Central Ethiopia does not “appropriate” X number of PBS dollars to a ‘water project’ located in, say, his backyard that kinda might resemble a swimming pool but not really? No doubt the bank is taking extra care of Americans’ tax money.
Weeeelll, not so much. EACA, care to opine?
... the document does not further elaborate what thresholds of divergence of actual spending patterns from budgeted allocations would set off a discontinuation of spending.
Huh? I read that as, “We all know the money is gonna be diverted, Diwan. Question is, do you have a threshold for what is acceptable divergence and unacceptable divergence of aid?” What would the Ethiopian government have to do with PBS money for Dr. Diwan to get unsettled? Let’s say Ato Demissew decides to add a cabana to that pool. Would that mean he won’t get money for the stainless steel outdoor grill his wife has been haranguing him about?
Goddamit. Now I really have to read the May PID.
Let’ see…. Open your books to the May PID, boys and girls, wet your thumb and start flipping… Country and Sector Background… Okay. Objectives… yadda.. yadda. Rationale for Bank Involvement… whatever. Description… four components … Ah! Component 3 on Financial Transparency and Accountability…Sit back. Enjoyyy.
Sub-Program C will support… [eh?] government-implemented (i.e., supply side) activities at the Regional/City Administration, and Woreda and sub-Woreda levels to significantly enhance transparency around public budget procedures (budget preparation, expenditure and audits); and, foster broad engagement, strengthened “voice” and client power of citizen representative groups and citizens more broadly on public budget processes and public service delivery.
Blink. Blink... Blink?
This component will also finance accountants and Information Technology experts to be hired by MOFED to enhance its own capacity and to provide TA to the regions and Woredas. It will also finance urgent capacity strengthening activities for the Office of the Federal Auditor General.
MoFED = Ministry of Finance and Development of
TA does not = T and A
Well, this is creepy.
After whipping us into a frenzy about “timely and detailed reporting… explicit monitoring… oversight and monitoring of service delivery ” we are left with hope that the Ethiopian government will self-monitor?
What is the economics-y way of saying cotius interuptus?
So, to summarize, and forgive me for the plebian interpretation of Component 3, Dr. Diwan, but does it boil down to giving the federal government money to hire, um, beady-eyed accountants and misanthrope IT geeks who can maneuver a mouse through Excel spreadsheets to significantly enhance transparency? We are giving the Office of the Federal Auditor General (hopefully not a fancy name for Prime Minister Meles’ personal banker) money for some urgent “capacity strengthening.” Exsqueeze me very much, did they say that we are going through MoFED to ensure transparency and accountability? We are soooo Mo-Fucked.
In case you care anymore, here is how “Basic services” are defined in the PBS:
…primary and secondary education, health, water supply & sanitation, rural roads, agricultural extension, labor, social welfare.”
Basically, anything a half-way decent government should be providing for its people without being begged to do so.
And what, pray tell, is possibly excluded?
… spending on public order and security, and some economic sectors whose link to poverty is ambiguous, e.g. Mines and Energy, and [read this carefully] “miscellaneous spending”
Umm… really? “Miscellaneous spending” will no longer be an acceptable line item? My, my. These are stringent checks and balances. Can someone inform the new accountants?
Okay, help us out, Dr. Diwan. We realize you might have forgotten to add specifics on accountability here; after all, $1.05 billion has a lot of zeros in it and little details are bound to get lost. So, we in Wonqville, the economic theory challenged, would like to ask your help in deciphering which of the following is/is not legitimate spending of PBS funds:
1) An assistant to the Minister of MoFED who will hire accountants, but not IT support staff
2) An assistant to the Minister of MOFED who will hire IT staff but not accountants
3) A “Sanitation Czar” who will make sure all the supporting documents coming to you will be sanitized as defined by MoFED
4) Curtains for the Office of the Federal Auditor General
5) Security, um, consultants to protect primary and secondary school students from the influences of “anti-peace” elements
6) A Ministry that will try to understand what “social welfare” means
8) A mechanism that faily and effectively distributes fertilizer to the poor (who did not vote for the CUD.)
We look forward to Dr. Diwan’s response.
And incase you are not quite yet pulverized by WB logic, sink your teeth into this baby:
[PBS] would thus aim to provide the required funding to prevent Government from having to make cuts in pro-poor expenditures especially at sub-national levels.
Surely the Ethiopian government cannot be expected to cut its “upholding of rule of law” budget to feed its poor and provide them with basic services, could it?
And someone, please, check the Ethiopian government’s loose definition of “pro poor”…
This economics is fun. Will be back with part three.
In the meantime, here is Dr. Diwan on VOA. It’s required listening for part three.
VOA Amharic, you know, the one that harbors genocidal maniacs, reported on a seminar at the American Embassy in Addis about AGOA, a program that promotes trade and entrepreneurship as way to development. Funnily, the EPRDF has not bothered to jump on that ‘pro-poor’ bandwagon. Well, to be fair, it IS easier to extort money from the west. “Give us money or more people will die.”
Redeem Ethiopia elaborates on that.
Besides, there is no Ministry of Fiscal Adherence to Conceptual, Keen Efficiency and Development (MoFACK-ED) in
However, they also serve to change the subject from human rights, EU Parliament meetings and
Ethiopundit: Meles Love You Long Time.