Center for Effective Aid Policy has shut down

By MathiasKB🔸 @ 2024-07-02T16:54 (+547)

May 2024 marked the last month of the Center for Effective Aid Policy. This post serves as the public post-mortem. I have strived for it to be interesting to the average forum reader, who may not know much about the cause area.

For professionals in development, we have a few internal private write ups which we may be more interesting, such as an overview of development asks we tried^[1], their strengths and weaknesses, and our experience advocating for them.

Our mission

Our mission was to improve the cost-effectiveness of development assistance through policy advocacy. Governments spend billions on projects to help the world’s poorest, few of them cost-effective.

For example, one could propose the use of cash-benchmarking to the ministry or push through a political motion to increase the proportion of spending going to the Least Developed Countries.

If one could make even a small part of this very large budget more cost-effective, it would be massively impactful. In October 2022 we were incubated through AIM’s Charity Entrepreneurship programme and came out with $160,000 to get started.

How far did we get?

The first months

Barely a month after receiving funding, we noticed Sweden’s new government was likely to cut the aid budget. The cut would hinge on one party breaking its campaign promise not to cut, perhaps we could campaign for the party to hold their promise.

Over two hectic weeks we put together a write-in campaign for dissatisfied voters. Our execution was not good enough (too little, too late), and we were not able to get voters to write in. Sweden cut its aid spending, and we moved on.

Figuring out where to focus from there was difficult. We tried many things across different geographies, but nothing we did seemed to get much of a response from civil servants and decision makers. Writing credible reports was difficult. We were still learning the development world’s many acronyms, and were struggling to find partners whose trustworthiness we could lean on.

Things pick up

Week by week our network and knowledge expanded. With it came opportunities to get our points across. Through monumental luck we got to present on cost-effective development aid for His Majesty’s Treasury in the United Kingdom. In Denmark we moderated our first public debate between MPs on improving the cost-effectiveness of development.

We eventually fell into a groove of spending the majority of our time writing briefs, taking meetings, and networking.

Between events and meetings, we spent extensive time researching and preparing. Before our first meeting with one Dutch MP, we for example did message testing on 400 voters, broke the answers down by political affiliation, and were able to show with data what voters thought of our ideas. (cash-benchmarking was popular, cash-transfers less so!)

In our record month we had meetings in three countries' parliaments (though it certainly was an outlier!). Our record event had almost 300 attendees and a keynote speech from the Dutch foreign ministry’s chief of science.

A little over a year in we got our first intermediary success. The election programmes of two Dutch political parties now stated their intention to increase the proportion of ODA going to the Least Developed Countries.

The decision to shut down

Our execution eventually became good enough that we got to sit in front of the busy people at the very top, whom we needed to persuade. Speaking to these people we became pessimistic of our odds. Decision makers just weren’t buying what we were selling. You can lead a horse to water, but you can’t make it drink.

Many were skeptical that the RCT-driven approach we recommended would lead to the best outcomes. Those who were on board with our ideas, faced several constraints which made concrete action difficult.

We were failing to move from initial meetings to tangible next steps. Any plans we made with decision makers kept fizzling out, when the next steps were not taken. Several consecutive misses made us believe there were more underlying reasons than just bad luck.

Through our work we got to know several highly effectiveness-minded civil servants with influential roles inside development ministries in multiple countries. We can’t be certain that pushing for another year wouldn’t have yielded a motion or pilot, but seeing how difficult it was even for people at the top to affect change, we became skeptical that persistent outside advocacy from our organization would be cost-effective.

Why changing aid is difficult

Development is a competitive market

The core thesis of our charity fell prey to the 1% fallacy. Within any country, much of the development budget is fixed and difficult to move. For example, most countries will have made binding commitments spanning several years to fund various projects and institutions. Another large chunk is going to be spent on political priorities (funding Ukraine, taking in refugees, etc.) which is also difficult for an outsider to influence.

What is left is fought over by hundreds, if not thousands of NGOs all looking for funding. I can’t think of any other government budget with as many entities fighting over as small a budget. The NGOs which survive in this space, are those which were best at getting grants. Like other industries dependent on government subsidies, they fight tooth and nail to ensure those subsidies stay put.

Development aid can be seen as an efficient market where NGOs are heavily optimized towards receiving funding by whatever means necessary, including lobbying.

When a startup wants to break into a competitive market, the right question to ask is: “what’s your edge?”. This is also the right question to ask any organization trying to move aid spending. Why should the decision maker listen to you over the WFP director who is telling them to do the opposite?

CEAP did not have a good answer to this question.

Political champions are few and far between

We weren’t able to find allies in parliaments. Alone getting to meet the MPs who were development rapporteurs proved challenging.

Of those we met, we found MPs on the left-wing tended to be skeptical of our language around cost-effectiveness. Not everything that matters can be measured and such. Left-wing voters, however, responded positively to our ask for a larger proportion of aid to be spent on the least developed countries.

MPs from right-wing parties were more willing to meet. That too much of aid was ineffective was not a hard sell. It was more difficult, but typically possible, to convince them that some things really were quite effective. I usually came out of these meetings feeling optimistic.

But all things considered, we found that development assistance just isn’t that high a priority for right wing parties. If an MP agreed with us, they'd have to sell it to their party. As one MP put it: “I have to show my party how this will benefit our country”. Spending aid money to prevent migration is a vote winner, vaccinating needy kids in Africa is not.

Among those we got to agree, we at best got lukewarm excitement. We found ourselves unable to move from initial meetings to the next steps such as drafting a motion. Lukewarm excitement doesn't move policy, at least not in the short term. 

Decreasing budgets limit maneuverability

While budget cuts present an excellent opportunity to fight them, once passed, they severely restrict the maneuverability of development ministries.

We believed budget cuts presented an opportunity for us. Cuts shake things up, and by pushing for ministries to keep the most cost-effective programming we hoped to have a large counterfactual impact. As we came to better understand the challenges a development ministry faces when facing a significant budget cut, we became less certain in this hypothesis.

For a ministry which has to get by on half its previous budget, reducing spending without breaking existing agreements and harming diplomatic relations is already a very difficult challenge for a director to face.

Going to a ministry during their most stressful time and asking them to ALSO consider all these additional factors on the cost-effectiveness of programming, is a steep ask.

Was our execution sufficient?

I’d love to tell a narrative where the founders made all the right decisions, and failed because the task was just insurmountable, but that would not be the whole truth.

From its very inception CEAP was blessed with talented volunteers and early employees who did brilliant work. The founders were not quite as brilliant.

Looking back, I am proud of the networks we built and meetings we managed to get. On this, I think we performed above expectations. But what we did present during those crucial meetings was underdeveloped and not sufficiently thought through.

We needed far better material and far more persuasive arguments. To be persuasive we needed to dig far deeper into the government’s aid budget and programming, get input from many more experts, and really think through the policies we wanted to push for.

Our briefs, reports and letters needed to be more detailed and our recommendations much more refined. If there is any single clear failure of execution to point to, this is it. Our materials were far from good enough and we were not sufficiently trustworthy as a result.

Insufficient founder-fit

We lacked development experience

As directors of a policy charity, you have to present as an expert in the topic you’re speaking about.

Neither founder had experience from the development field, and spent the first many months learning the field and its many acronyms. Unlike a policy idea, such as Tobacco Control or Road Traffic Safety, which requires the founders to become experts on a single specific topic, being a credible voice on prioritization within the development sector requires a good understanding of the many facades of development, from educational interventions to democracy building.

Becoming a credible voice on *all of development* is far from easy!

Personally, wanting to present as an expert and a fear of looking stupid made me learn much slower than I needed to. For example, had I pushed to ask more stupid questions about cash-benchmarking early, I would have arrived at the conclusion that it has enormous implementation difficulties much faster.

We came to struggle with morale

I don’t remember exactly when I started noticing my motivation had taken a dip. Early on, I remember leaving the AIDEX conference feeling very demotivated. This was a sign of what was to come.

Seemingly every talk had brought up how their NGO was adopting a new holistic approach to aid, each featuring six new buzzwords and a curious lack of measurement.

Initially the field’s questionable priorities encouraged us to think our mission was all the more important, but eventually it came to feel completely crushing. Every time a report introduced some awful acronym only to use it twice thereafter, my sanity took a hit.

I believe many issues relating to execution were downstream of founder motivation. Why couldn’t we produce higher quality material? Part of it was that it required reading reports that I really did not want to read. Why did we not meet with more civil servants in the Netherlands? Because I procrastinated on writing those emails! And so forth.

Around a year into the charity’s life, my co-founder had his first child. After returning from paternity leave, child rearing and co-running a charity proved too much, and he made the decision to step away.

This did not make things any easier. The intervention still looked impactful in expectation, so I soldiered on, but eventually I lost conviction that we had any realistic shot of succeeding.

Should others try this intervention?

Perhaps!

In some sense, ‘improving the cost-effectiveness of aid’ is not really an intervention any more than ‘improving public health in Africa’ is.

Starting a charity with the mission of “improving public health in Africa” without any specific idea as to how is rarely a good idea. With hindsight, this is a bit how I view our venture into aid advocacy.

But like the mission of improving public health in Africa, there absolutely is room for many charities working on this! Similarly there’s room for lots of great projects in the aid space, but they will benefit from a more specific remit.

Throughout CEAPs life, we tried many instantiations of the broader mission. Perhaps we could fight cuts in Sweden. Perhaps we could push for commitments to increasing spending for the Least Developed Countries in political party programmes. All of these had different reasons for not working out, and we weren’t able to find a slam dunk.

Broad lobbying for improved cost-effectiveness is very difficult unless you have a clear competitive edge. The space is too crowded. The counterpoint to my view, is that our political advisor for our work in the Netherlands believes more time and better execution could have gotten language on cost-effectiveness into the coalition agreement and have had the ministry ready to execute.

My best guess is that a pair of highly talented and motivated founders will run into many of the same issues as we did, but very well could succeed with a pivot or a niche that we missed. I think a founding pair with at least one person with seniority in the development field, would significantly increase their odds of success.

It’s also difficult to know for certain that it wasn’t just a matter of folding too quickly. With sustained effort for 5-8 years things might eventually have come to look different. But as the director, I did not want to take people’s hard earned money to continue a project I no longer believed in.

My loss of conviction is not necessarily an indicator of any objective facts having changed. The odds were always against us, we knew that going in. The glass might just have gone from looking half full to half empty.

I don’t want to say the idea can’t work. I see a million things I could have done differently, hours I could have worked harder, and a thousand ways we could have succeeded. At the end of the day execution is everything. The Center for Global Development proves the core concept can work.

Ultimately aid remains as important as ever. $200B is spent every year. It is imperative to ensure this money does as much good as possible.

I remain optimistic for projects in the space which:

1. Presents a clear problem (eg. India’s poorest states lack capacity to spend the water sanitation budget they have been allotted)
2. Presents a clear solution (The Dutch Government should send sanitization experts to advise on how to spend the budget)
3. Makes a credible case for stakeholders want the problem solved (The Dutch government wants to carry out WASH projects, local Indian NGOs will benefit from new contracts to bid on, etc.)

But if someone wanted to start a project similar to ours because the EV looks really good on paper, I am less optimistic about their chances.

Thank you to everyone who helped

I want to thank everyone who helped along the way.

From start to finish The Effective Altruism community had our back and without it we wouldn’t have gotten half as far. The caliber of volunteers and advisors we got to work with was a privilege I won’t soon forget.

Especially the Dutch EA community went above and beyond. The number of people who reached out offering to volunteer or introduce us to someone in their network was astounding. Whatever went well for us in the Netherlands, did so because of the help we received from the Dutch EA community. You people seriously rock.

Lastly, thank you to the donors who placed their trust in us and donated their hard earned money knowing the risks involved. Publicly admitting defeat is never easy. I’ve had my fair share of failures in life, but none as hard to swallow as this one.

On failure, Peter Thiel states:

"Most businesses fail for more than one reason. So when a business fails, you often don't learn anything at all because the failure was overdetermined. You will think it failed for reason 1, but it failed for reasons 2 through 5."

This was the case for CEAP. I’m hesitant to point to a single reason for why we failed or to claim with confidence whether it lied with the intervention or the execution. It was anything from all execution to a good deal of both.

1. ^{^}

    Such as pushing for more spending on LDCs or on global health