Trust Can't Wait a Year
How blockchain could help restore trust in foreign aid
Last week, Global Citizen and IBM launched a blockchain developer experience called Challenge Accepted. We have tasked all developers interested in participating to build a simple three-member proof of concept network on the IBM Blockchain Platform (Government, AID.org, Global Citizen) where cause-specific pledges and fund transfers are made by the government, registered with aid organizations and validated by Global Citizen.
We launched from the stage of Consensus 2018, where I made an offhand comment that it takes far too long to know whether aid is making a difference, and our “trust can’t wait a year.” Off-stage, I was asked why it takes so long to find out where aid money goes.
The short answer is that money is moving between big bureaucracies, and that’s a slow process.
Recently, our team at Global Citizen were doing research for a report following up on where more than $100 million of pledges had gone. Money was committed by a number of Governments from high income countries (think North America or Europe) to get kids back in school after their education had been disrupted by conflict.
Some of the money was new, and some of it was allocated out of existing grants that these countries had. A UN agency was keeping track of the money and what happened, but they weren’t always the ones receiving the cash. Sometimes it went to them and they spent it directly. Sometimes it came via them and got given to local NGOs, and sometimes it went directly from a donor government to local NGOs.
Each donor gave the UN updates at different times, and each NGO likewise reported on a schedule that made sense for them. That means that when we asked the UN to tell us how the money was being delivered a year after it was promised, they could only give us part of the story. They were amazing when they had the information, and they chased relentlessly to get it quickly, but the reality was slow and messy.
On another occasion, our Impact Manager shared with me the story of a small but significant donation, from a small but politically influential European country toward an immunization program. Because the donation was designed to attract other non-traditional donors to start giving toward immunization, a contract seemed excessive. However, without a contract in place, as far as the multilateral was concerned, the multi-year commitment was not secured, meaning they did not plan to receive, budget with, or spend those funds. So when the donation appeared in the general account of one of the agencies that run the multilateral delivering immunizations, they did not recognize it as the scheduled annual installment toward the delivery of the commitment.
The thing is, it doesn’t need to be this complicated.
One of the agencies in the multilateral still considers this country an example of poor donor accountability, even though the commitment’s specific advantage was its unrestricted, light touch; “many small amounts together are powerful” approach.
Imagine if instead of this disjointed system, this money and the billions of similarly directed aid could be more easily tracked. What if the donation had been made with Blockchain? Not only would a contract have been entirely unnecessary, anyone would have able to see the cumulative impacts of small donations in aggregate.
In the words of our Global Impact Manager, Abi Hiscock, “I would like to see a foreign aid environment where I can confidently share with Global Citizens up to date information on how the funds they’ve raised have been disbursed, that the beneficiary organisation has received them, and potentially something about how those funds have been deployed, without having to waste precious aid money to find out. I am excited that Blockchain might provide the answer, and bring our sector to a new era of good accountability practices.”
It would speed up feedback, improve trust, reduce the potential for corruption, and free up time for officials to do good rather than write reports.