Combining value for money with increased aid to fragile states: welcome partnership or clash of agendas? more

Combining value for money with increased aid to fragile states: welcome partnership or clash of agendas? Zoë Scott, Claire Mcloughlin & Heather Marquette Crime, Law and Social Change An Interdisciplinary Journal ISSN 0925-4994 Crime Law Soc Change DOI 10.1007/s10611-011-9362-x 1 23 Your article is protected by copyright and all rights are held exclusively by Springer Science+Business Media B.V.. This e-offprint is for personal use only and shall not be selfarchived in electronic repositories. If you wish to self-archive your work, please use the accepted author’s version for posting to your own website or your institution’s repository. You may further deposit the accepted author’s version on a funder’s repository at a funder’s request, provided it is not made publicly available until 12 months after publication. 1 23 Author's personal copy Crime Law Soc Change DOI 10.1007/s10611-011-9362-x Combining value for money with increased aid to fragile states: welcome partnership or clash of agendas? Zoë Scott & Claire Mcloughlin & Heather Marquette # Springer Science+Business Media B.V. 2012 Abstract This article examines the origins and main strands of recent debates within the international development community regarding the tensions between increasing aid allocation to so-called ‘fragile states’ and growing domestic and international pressure for donors to demonstrate measurable results and returns on their investments. With particular reference to the UK context, the paper examines how the confluence of these two agendas is being viewed, at least publicly, and some of the main arguments that have been put forward about why they may be difficult to pursue simultaneously. It asks whether or not it is feasible that donors will explicitly seek to address and resolve the apparent trade-offs between these two agendas, and concludes that in both international and domestic political arenas, ‘good enough’ aid effectiveness, or a more nuanced, ‘developmentised’ understanding of value for money, are unlikely to become palatable or politically viable any time soon. Introduction The basic principle that donor agencies should be held accountable for ‘development results’ has taken on a renewed salience in the context of the economic turbulence that began with the global financial crisis in 2008 and at the time of writing shows no sign of abating. Over the same period, international development agencies have Z. Scott (*) Oxford Policy Management, 6 St Aldates Courtyard, 38 St Aldates, Oxford OX1 1BN, UK e-mail: zoe.scott@opml.co.uk C. Mcloughlin : H. Marquette International Development Department, University of Birmingham, Edgbaston, Birmingham B15 2TT, UK C. Mcloughlin e-mail: c.mcloughlin@bham.ac.uk H. Marquette e-mail: h.a.marquette@bham.ac.uk Author's personal copy Z. Scott et al. become increasingly concerned with a small group of between thirty to fifty so called ‘fragile’ states, located mainly in Africa, that are said to be ‘falling behind and falling apart’ and where most of the world’s poor live [4]1. This article examines an emerging debate in international development circles regarding the potential tensions and tradeoffs between the increasing focus on measurable results and the increased concentration of aid allocation to fragile states. In particular, it traces the relatively recent rise of the ‘value for money’ agenda, considers how this term is currently being conceptualised in development circles, and examines why its rise to prominence may have ‘caused so many waves’ ([27]: 1). In so doing, the article examines some of the practical problems that have been associated with applying the value for money agenda to development interventions in fragile states. The focus here is on the extent to which these potentially competing priorities have been addressed and reconciled, at the policy level at least, by the UK’s Department for International Development (DFID). The UK is a signatory to the Paris Declaration, and an increasing amount of DFID’s overall portfolio is dedicated to working in fragile states, with a notably strong emphasis on value for money. However, although DFID may be a particularly illustrative case, the analysis reflects wider challenges for the international community as a whole as donors grapple with the need to combine value for money with increased aid to volatile environments where demonstrating value for money may be particularly challenging. The concomitant rise of the fragile states and value for money agendas In October 2010, the UK Department for International Development (DFID) announced that the portion of its aid allocated to fragile and conflict-affected states will increase from twenty-two per cent to thirty per cent by 2014/15 [6]. Other donors are similarly pledging to scale up their aid to these countries in the future, and increasingly viewing them as priority areas for intervention, particularly given the large numbers of poor people who live in fragile states. Recent data indicates that fragile states currently attract about thirty per cent of total annual OECD Development Assistance Committee (OECD-DAC) official development assistance (ODA) [26]. At the same time, partly in response to the global economic downturn and the ‘age of austerity’ in the public sectors of their home countries, OECD donors have come under significant political and public pressure to demonstrate measurable ‘results’ and quantifiable returns on their investments. In this unprecedented global and domestic economic environment, these bilateral agencies are increasingly likely to be laid open to public scrutiny for the way they are spending billions of pounds worth of tax-payers money. This weight of pressure is well understood by politicians, as illustrated by a speech by UK International Development Secretary, Andrew Mitchell, in which he declared: 1 We recognise that the term ‘fragile states’ is in question and has been widely criticised as normative [20], with some experts moving towards the alternative of ‘countries in situations of conflict and fragility’. Nevertheless, we use ‘fragile states’ here because it remains more widely used in development circles at the time of writing. The OECD’s own definition characterises fragile states as: 'unable to meet [their] population’s expectations or manage changes in expectations and capacity through the political process' [17]. Author's personal copy Combining value for money with increased aid to fragile states ‘To the British taxpayer I say this: our aim is to spend every penny of every pound of your money wisely and well. We want to squeeze every last ounce of value from it. We owe you that…And I promise you as well that in future, when it comes to international development, we will want to see hard evidence of the impact your money makes. Not just dense and impenetrable budget lines but clear evidence of real effect’ [6].2 In the prevailing climate of the scrutiny of public service expenditure, the concept of ‘value for money’ (VfM)—a term that originates from within the audit profession—is increasingly being used by development agencies to convey their explicit commitment to ensuring the best possible results are obtained from money spent [2]. Aid agencies across the world have adopted a range of approaches to measuring effectiveness and value for money [13]. At the policy level at least, the UK’s Department for International Development has wholly embraced VfM as a means of improving its transparency and accountability in the allocation of public funds [2]. In so doing, it has explicitly made a commitment to ‘maximise the impact of each pound spent to improve poor people’s lives’ ([8]: 3). The emergence of the VfM agenda in the UK context can be seen partly as a response to the National Audit Office’s (NAO) strategy for ‘structured cost reduction’, which gives prominence to value for money as a means of ensuring ‘the optimal use of resources to achieve the intended outcomes’ ([21]:5). But DFID’s ‘3Es’ framework, based on the NAO operational model, illustrates that value for money should not be seen as synonymous with cutting costs. Rather, value for money combines ‘economy’ (buying inputs at a good price), ‘efficiency’ (how efficiently inputs are converted to outputs) and ‘effectiveness’ (how well outputs deliver the intended outcomes) ([8]: 4). The UK’s Independent Commission on Aid Impact, an independent body responsible for scrutinising aid, adds another ‘E’ to the framework—that of equity, or ensuring that benefits are distributed fairly [16].3 What is common among these models is that they imply intervention logics have to be based on evidence of ‘what works’, that donors need to be clearer about what outputs and outcomes can realistically be expected, and get better at measuring results, including attributing outcomes to specific interventions [8, 16]. The VfM agenda also encourages donors to be more explicit about the ‘chain of causality’ from inputs to outputs to outcomes, and to assess whether the optimal route is being taken to pursue the desired outcomes ([15]: 3). In some policy debates, this has manifested itself as what can sometimes seem to external observers to be a near obsessive concern with socalled ‘theories of change’.4 Such theories broadly aim to reveal the rationale that connects inputs to outcomes and impact ([9]; see also, [1, 11, 32]). 2 The full DFID press release can be viewed at: http://www.dfid.gov.uk/Media-Room/Press-releases/2010/ Mitchell-Full-transparency-and-new-independent-watchdog-will-give-UK-taxpayers-value-for-money-inaid/ Accessed on 29/11/11 3 The ICAI will use a traffic light system to score the value for money of DFID programmes. 4 At the beginning of a blog post looking to explain ‘what a theory of change looks like’, Oxfam’s Duncan Green wrote: ‘…in the last few months, “theories of change” has gone viral as a new development fuzzword. In meetings and documents, people earnestly enquire “what’s your theory of change?” and you’re in trouble if you don’t have an answer. (Quite a good answer is “could you just explain what you mean by theory of change?” - people often have no idea)’ [10]. For one of the most interesting overviews of development ‘buzzwords and fuzzwords’, see Cornwall [5]. Author's personal copy Z. Scott et al. While the term ‘value for money’ may have only recently come into use in development debates, the underlying concern with examining and evaluating the inputs, outputs and outcomes of donor expenditure is not new. Indeed, some observers have noted that in its practical application, value for money is near indistinguishable from earlier tools that have been used to analyse and benchmark the performance of development programmes for some time [15]. Likewise, the basic tenets of the VfM agenda—that is, the focus on value for money—originate from basic and longstanding principles of aid effectiveness. The closely related concern with ‘managing for development results’ has been part of the aid orthodoxy promoted by and among OECD donors since the Paris Declaration of 2005.5 But while the question of ‘results’ has in principle been on the agenda for some time, it has not, until now, achieved the same prominence in aid effectiveness debates as other goals such as harmonisation and alignment.6 What does the heightened scrutiny over results and VfM mean for donor work in fragile states? Does it support it or undermine it? Policy makers’ and practitioners’ responses to the recent rise of the value for money agenda been mixed ([27]:2). For policymakers, the inherent appeal of the agenda is its potential to increase the numerical evidence of the results of interventions. It offers a clear means of responding to the growing political scrutiny of the cost-benefit ratio of aid. On the other hand, practitioners charged with implementing VfM have raised a number of serious concerns about how to apply it appropriately to developing country contexts, and particularly to fragile states. These tensions are explored briefly in the following section. Are there tradeoffs between increased aid to fragile states and value for money? Why might tradeoffs exist between value for money and increased aid to fragile states? Does the VfM agenda create perverse incentives that encourage aid allocation to the ‘best performing’ countries or programmes at the expense of more risky programmes in fragile states? Does it imply an inevitable shift towards allocating aid to programmes that are easier to measure? Will it discourage innovation in favour of tried and tested project models with ready-made indicators and data sets? [27]. These questions are ‘live’ in current development policy debates. One of the more high profile points of contestation has been whether or not it is more difficult to demonstrate value for money in fragile states, and whether or not the risks of leakage are greater. It is widely accepted that in volatile political environments contextual factors can dramatically alter and distort the outcomes of donor programmes, in spite of best intentions and proper planning. In the UK context, concern about the increased risks that come with aiding fragile states was brought to the fore by the House of Commons Public Accounts Committee investigation into DFID’s financial management. It concluded that: ‘[DFID’s] plans to increase 5 The ‘aid effectiveness’ agenda is primarily advocated by OECD donors, but there is also need to recognize the emergence of new donors in the global aid market. For a discussion of aid effectiveness principles and non-DAC donors, see Scott et al. [29]. 6 The Paris Declaration is organized around five key themes: ownership, alignment, harmonization, managing for development result, and mutual accountability [23]. Author's personal copy Combining value for money with increased aid to fragile states spending in fragile states and in sectors where it has less experience increase the risks to value for money’ ([30]: 3). Unsurprisingly, several newspaper articles quickly picked up the theme that UK aid funds might be at risk: BBC News ran an article with the headline ‘UK overseas aid to fraud ‘could rise’; The Telegraph reported more vehemently that ‘Britain’s overseas aid budget at risk of corruption’; The Guardian journalist, Madeline Bunting, wrote: ‘It has always seemed to me that the big problem about increasing aid to “fragile states” was that it would be very hard to square with value for money. These are places that, by definition have poor governance and high levels of corruption’ [3]. However, the reaction of development practitioners and NGOs to the question of whether increased aid to fragile states poses greater risk to value for money has been notably different to the media response illustrated above. In fact, one of the key concerns expressed by development practitioners and NGOs in response to the rise of the VfM agenda is that it may in fact encourage risk aversion. As the OECD [27] acknowledges, the pursuit of VfM need not necessarily lead to risk aversion, but it may do. Internationally, donors have often been accused of being risk averse all too often, responding to situations of conflict and fragility too slowly, too inefficiently and in an uncoordinated manner ([25]:16). The UK Committee’s hearing itself acknowledged the need to balance ‘acute need against leakage’ [30].7 Leaving aside the more reactionary debates in the media about the compatibility of VfM and aid interventions in developing countries, it is widely accepted that there are significant limitations and technical challenges involved in attributing costs and benefits to aid interventions [2]. The ICAI [16] recently provided a detailed account of these, highlighting in particular: i) the difficulties associated with managing complex delivery chains, where development programmes are delivered through intermediaries and partners; ii) the problem of measuring in the long term, given that development programmes are often of short duration and outcomes can only be fully assessed in the long-term, and ; iii) the barriers to including beneficiaries’ own views on outcomes, particularly in remote geographical areas. These problems may be particularly acute in fragile and conflict-affected states that are typically characterised by weak or absent state capacity, political instability, and weak monitoring systems [20]. As the ICAI [16] argues, in these environments it may be especially difficult to gather robust, verifiable data. Likewise, the perennial problems of determining attribution and causality that belie all development interventions (and indeed, all social science research) are likely to be particularly dire in the complex and rapidly changing environment of a fragile state. It is intuitive that some development results (e.g. literacy rates) are easier to measure than others (e.g. improved state-society relations), but as the ICAI [16] observes, it is often precisely the less quantifiable results that may have the most transformational impact on development. With this in mind, some commentators have raised concerns that the value for money agenda will result in a ‘race to the bottom’, that is, towards the more quantifiable interventions that can reliably justify funding ([9]: 4-5). DFID has made forthright policy pronunciations to the effect that pursuing value for money does not mean it will ‘just do the easiest things to measure’ ([8]:5), 7 The online transcript can be accessed at http://www.publications.parliament.uk/pa/cm201012/cmselect/ cmpubacc/c1398-i/c139801.htm Author's personal copy Z. Scott et al. but it is early days yet. There is already some evidence that the value for money agenda may generate perverse organisational incentives to shift aid to programmes with more easily measureable results. This is illustrated by a recent ICAI report that describes how DFID’s decision to pull its bilateral aid programme from Burundi was based on calculations of the difficulty of proving the value for money of this programme compared with other, larger country programmes. DFID’s decision to re-allocate the resources to larger programmes where it was felt that better value for money and effectiveness could be achieved was subsequently overturned by the ICAI, and aid to Burundi was reinstated [16]. Prior to the emergence of the contemporary debate about the applicability of VfM to fragile states, questions had already been bubbling about the extent to which it is feasible to operationalize ‘managing for development results’ in fragile situations. It has long been acknowledged that such situations may require ‘adaptation’ of the Paris Principles, as opposed to their wholesale application [23]. Leaving aside the obvious conceptual question about whether or not a ‘principle’ is by nature divisible, a major problem has been that very little operational guidance has been offered on what adaptation of aid effectiveness principles might look like in practice. Is ‘adaptation’ a euphemism for selectively applying the principles to some but not all programmes, or countries, or did it mean doing the best that could be expected while being aware of the limited realm of possibilities? Though the OECD’s [24] ‘Principles for Good International Engagement in Fragile States’ sought to ‘complement and inform the commitments’ of the Paris Declaration, issues around managing for development results and value for money surprisingly did not feature. Towards the latter part of the 2000s, and only a few years after the Paris Declaration was signed, donors began commissioning studies to test its applicability to fragile contexts. The main thrust of the findings of these studies was that the evidence was at best mixed, and the applicability was likely to be dependent on context ([25]: 16). The findings of one widely-cited evaluation echoed the thrust of much of the more academic literature in arguing that combining aid effectiveness and international engagement in fragile states would not be ‘straightforward’. Donor interventions, the evaluation concludes, should be flexibly designed according to whether or not partnerships are likely to be workable [28]. The report recommends that a more fundamental focus on ‘state-building’—or developing the effectiveness, accountability and responsiveness of the institutions of the state—is required if aid is to become more effective. In practice, some commentators have raised concerns that the pursuit of the VfM agenda may actually be working against the grain of state-building processes. Specifically, rather than focusing on increasing state capacity and building state-society relations and encouraging the state to be accountable to citizens as beneficiaries, the VfM agenda can be viewed as putting the emphasis on upward accountability to donors ([9]:3). Some observers offer an alternative, arguing donors should be responding to the VfM agenda by devoting more of their assistance to local researchers and independent monitoring agencies who can most effectively judge government performance [18]. One potential unintended consequence of the what often appears to be a top-down, politically driven nature of the value for money agenda is that it may place increased pressure on front line staff to resolve the potential tensions and tradeoffs outlined Author's personal copy Combining value for money with increased aid to fragile states above ‘in situ’, without the necessary guidance from their own head offices. Anecdotal evidence suggests that front line staff do indeed face challenging and not always complementary incentives, on the one hand, to distribute increasing levels of aid to fragile states in accordance with Paris principles, while also minimizing risk, proving cost-effectiveness and being accountable for taxpayers’ money. In interviews conducted in January 2010, staff at a donor agency in Nepal described trying to deliver these different objectives on the ground as ‘the tightrope we walk’ and ‘the tension we live with every day’. The Nepal case also highlights that at country level, prioritising value for money requires a flexible approach to programme design, and the result may be tradeoffs between the pursuit of value for money and the principle of alignment. Accordingly, DFID-Nepal’s Operational Plan states that: DFID Nepal has a strong track record of delivering effective interventions in this fragile and conflict-affected country. Doing this has often meant that our unit delivery costs are higher than those in countries with a more stable political environment and easier topography. It has also been hampered by the weakness of Government of Nepal systems which limit the choice of aid instruments. However, in many areas we have been able to secure good value for money by adoption of a flexible approach to programme design and selection of high quality delivery partners ([7]: 8). The dynamics of the value for money agenda at the level of implementation are not well documented in the public domain. However, in recognition of the need to focus on policy implementation, the 2011 Monitoring Survey of the Fragile States Principles challenges development partners to complement their focus on results, effectiveness and value for money with a focus on the field-level organisational and paradigm changes necessary for achieving better results’ ([26]: 19). Unfortunately, there is as of yet little evidence of this change in focus actually occurring. Prospects for an open debate about value for money in fragile states To some extent, the polarisation of views on the applicability of value for money to fragile states described above may be the result of an ill informed debate, stemming from an underlying confusion about what value for money really means ([27]:2). A recent report detailing donors’ approaches to VfM by the Governance and Social Development Resource Centre concluded that confusion persists about how the concept should be used ([13]:1). The OECD has attempted to address some of the myths surrounding VfM, stressing that it is not synonymous with reducing inputs, monetising everything and fanatically applying cost-benefit analysis in a manner that risks de-humanising development. Rather, it is concerned with getting good results, and it is the quality of the outcomes that is fundamental to whether or not an intervention delivers value for money. The difficulty arises when sight is lost of the foundational principles of VfM (economy, efficiency and effectiveness) and the concept is wrongly conflated with working as cheaply as possible, in an easily measurable way, with as little risk as possible. As has been discussed, there is a need for a more nuanced, ‘developmentised’ appreciation of VfM, which returns to the core principles, rather than a version of VfM Author's personal copy Z. Scott et al. that seems to simplify the principles into cost reduction, easy measurement and risk removal. As the OECD puts it ‘the challenge then is in applying this concept in a productive and pragmatic way, so that it can be a tool for development co-operation and not a straitjacket’ ([27]: 1). It may be the case that a more pragmatic approach to acknowledging risk is one way forward. Donors need to more explicitly take the line that risk can be mitigated, and it can be taken into account, but it cannot be removed. In the UK context, DFID’s reaction to the Public Accounts Committee report suggesting there might be an increased risk of wastage in aid to fragile states was strong. The Secretary of State quickly refuted the claims, stating that ‘wherever we find money being stolen, if ever we find money being stolen, we are absolutely ruthless on the taxpayers' behalf, in stopping it and not allowing it to happen. This government has a zero tolerance of corruption’.8 This response is unsurprising, politically, and is admirable in terms of aspiration, but it does not deal with the Committee’s concerns. In the context of statebuilding and working in fragile states, it may actually be considered a step forward to acknowledge that a degree of risk in programme design is acceptable where ‘small steps’ are being taken towards overall improved governance in very difficult environments [19]. In fact, the transcripts from the committee somewhat echo this view, and make it clear that their central concern is to encourage DFID to take the issue of increased risk more seriously and be more explicit about it in order to encourage more ‘sensible business planning’ [30]. By demanding value for money (including a ‘zero tolerance approach to corruption’), aid effectiveness (including country ownership and alignment) and increasing work in fragile states, DFID has multiple, competing priorities. The ICAI itself encourages ‘well-managed’ risk-taking, where risks are identified clearly and managed effectively, and calls on DFID to recognise more openly the increased risks of working in fragile and conflict affected states and to build risk assessment and mitigation into all its resource allocation, planning and monitoring processes ([16]:11). In practice, this more pragmatic approach to anti corruption and risk management in fragile states may be a step towards toning down expectations appropriately so that donors can explore more politically nuanced approaches to their work [19]. But in reality, what are the incentives for donors to admit more explicitly that some risks, such as corruption in fragile states, cannot be entirely removed? Arguably there are few, particularly in the current economic climate. DFID’s response to the Public Accounts Committee’s concern over its financial management suggests that it finds it difficult to enter into an open and public debate about the challenges of delivering aid effectively in fragile states. This reaction may preclude sensible and realistic debate about what constitutes ‘value for money’ in states where the rate of return may be difficult to measure quantitatively, and about how to define acceptable levels of risk when it comes to corruption, for example, in a way that reflects the reality on the ground but does not lower DFID’s (or other donors’) standards on anti-corruption. Instead, DFID’s response implied that it believes it is possible to ‘do’ aid effectiveness and value for money and increase aid to the world’s most fragile environments, without reflecting the inherent tensions between these agendas. 8 Andrew Mitchell speaking on the BBC Breakfast Show, 20 October 2011. Author's personal copy Combining value for money with increased aid to fragile states In the UK context, open public debate about the risks inherent in working with fragile states are unlikely to be politically expedient, given the ‘broad but shallow’ level of public support for overseas development aid [31]. As the recently published UK Public Opinion Monitoring Report states: ‘the majority of respondents think that tackling poverty at home takes priority over tackling poverty in other parts of the world. Aid is seen as a prime target for cuts in order to reduce the UK budget deficit. Over sixty-four percent of respondents were of the view that it is more important for the UK Government to tackle poverty at home than in other parts of the world’ ([14]: 1). Given the prevailing climate of the global economic crisis, the age of austerity and the weakening of trust in government that has been demonstrated not only in the Middle East but also in the US and in Europe, explicit donor recognition of the possibility that public money spent on aid may be increasingly at risk would be unlikely to fly under the media radar and avoid the standard hyperbolic response. For this reason, there is unlikely to be a publicly accepted and advertised principle of ‘good enough’ aid effectiveness or value for money in fragile states.9 In both the international arena and the domestic political context, anything other than a fairly limited presentation of value for money is unlikely to be publicly palatable, and therefore not politically viable, any time soon. Conclusion This article has highlighted how donors are currently grappling with resolving the apparent tensions between the dual goals of increasing aid to fragile situations while demonstrating value for money. Combining aid to fragile states with the results agenda through ‘good enough’ aid effectiveness, or a more nuanced interpretation of value for money is unlikely to be politically viable. Nevertheless, to avoid setting up expectations that they are unlikely to be able to fulfil or place unrealistic demands on country office staff, development agencies need to be more open about the challenges they are facing in pursuing the value for money agenda in fragile situations. Externally, donor agencies have a role to play in educating the public in how to apply the ‘3E’s of VfM meaningfully in a development context, without falling into the trap of focusing exclusively on cost reduction, measurability of results and risk removal. The most economic, efficient and effective ways of reaching a development outcome in a fragile state probably are unlikely to be the cheapest, least risky or most easily measurable. Internally donors need to be aware of the perverse incentives that can be created by the VfM and results agendas and consider how to take into account these risks. If this is not done there is a risk of development priorities being skewed. To ensure that the rhetoric about aid effectiveness and value for money in fragile states is meaningful, donors will need to ensure that internal tensions are resolved and staff incentives are not contradictory. As former USAID Director Andrew S. Natsios wrote, ‘I do not 9 Here we borrow the phrase ‘good enough’ from Merilee Grindle [12] who advocated an approach to governance reforms that advocated a slimming down of the donor agenda and a focus on what is feasible. Author's personal copy Z. Scott et al. think the debate over aid effectiveness is properly capturing these inherent tensions and contradictions. The problem of development today is to manage complexity’ ([22]: 135). At the time of writing, the question is whether or not the Fourth High Level Forum on aid effectiveness in Busan will advance a more pragmatic interpretation of the results agenda and offer real recommendations for how donors can explicitly respond to the need for political accountability while pursuing bottom-up state-building in fragile states. Over half a decade on, is ‘aid effectiveness’, as expressed to date, insufficient? We wait to see whether or not Busan has managed these tensions better than its predecessor, and whether or not we can think sensibly about ‘good enough value for money’ or ‘good enough aid effectiveness’ as donors increasingly spend more of their aid budgets in some of the world’s most difficult environments. Acknowledgement The authors would like to thank OLAF for its generous support in being able to present this paper at the III ANCORAGE-NET Biannual Meeting on ‘Protecting Aid Funds in Unstable Governance Environments: Towards an Integrated Strategy’, Lisbon, Portugal, 18-19 May 2010. We are also grateful to Professor Richard Batley and Dr Michael Hubbard for comments on an earlier draft, as well as very helpful comments from two anonymous referees. Of course, any weaknesses in the paper remain with the authors. References 1. Anderson, A. (2004) Theory of change as a tool for strategic planning: A report on early experiences. The Aspen Institute Roundtable on Community Change, October. 2. Barnett, C. et al. (2010). Measuring the impact and value for money of governance programmes, ITAD, available at http://www.dfid.gov.uk/r4d/pdf/outputs/mis_spc/60797_itad-vfm-report-dec10.pdf. Accessed 29 November 2011. 3. Bunting, M. (11 April 2011). 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