May 04, 2012
CEPR Researcher Jake Johnston wrote in the Caribbean Journal yesterday:
In the aftermath of the earthquake in Haiti, donors pledged billions of dollars for reconstruction efforts. With those dollars was a commitment to “build back better”; this time was supposed to be different from previous big aid campaigns. But so far less than half of donor pledges have been disbursed, and it has become clear that “building back better” remains nothing more than a slogan. While there clearly have been successes in Haiti since the earthquake and the hard work of thousands of aid workers shouldn’t be discounted, nearly half-a-million remain homeless and hundreds of thousands more are living in desperate conditions. With a visible lack of results and little hard data with which to assess progress, one question naturally arises: “where did the money go?” At the Center for Economic and Policy Research and together with many other organizations, we’ve been trying to track where exactly the money that did get spent, went. It hasn’t been easy.
To be sure, aid projects shouldn’t be judged solely on what percent of an aid budget went to overhead, or how much went to American consultants or was spent on American products as opposed to Haitian consultants and products. Ideally, the effectiveness of projects should be based on their outcomes, not just on the breakdown of how funds are spent. But measuring outcomes often isn’t feasible. A nominally independent review of the U.S. government’s response in Haiti attempted to measure the quality and impact of aid, but “a disquieting lack of data on baselines against which to measure progress or even impact” prevented them from doing so.
As taxpayers, we have the right to know how our tax dollars are being used and if they are used effectively. Specifically, this means looking at the United States Agency for International Development (USAID), which has spent well over a billion dollars in Haiti since 2010. To their credit, it’s not difficult to obtain the first level of transparency: to which organizations USAID gave funds. USAID factsheets reveal that close to 100 percent of humanitarian funds for Haiti were channeled through NGOs, U.N. agencies or right back to other U.S. government agencies. Included in this billion-plus dollars hundreds of millions of dollars in contracts which have gone overwhelmingly to “beltway bandits” — firms located in D.C., Maryland or Virginia. Only 0.02% by our latest tally has gone to Haitian firms.
But this isn’t the end of the line when it comes to transparency. Once funds are given to an organization, what are they spent on? What were they meant to achieve? How much goes back to the U.S. and how much goes to local firms? In a meeting last October in Port-au-Prince a USAID official defended the awarding of contracts to so-called “beltway bandits”, telling me that while certainly some money goes off the top for their profits, much gets spent in country or is given to local subcontractors. It was a back-of-the-envelope calculation, but he estimated that each international worker sent to Haiti could cost up to $250,000 a year. The important part, he stressed, was that this money would be spent in Haiti on electricity, security, housing, etc. “He has to live here, eat here, dance here, whatever,” the official reasoned.
Read the rest here.