When the world’s leaders get together at G7 meetings and other illustrious pageants, one of the items on the agenda usually is which countries should receive aid this time. At the same time, international aid enjoys a stable support in opinion polls from people who feel that the richer countries should try to do at least something for the world’s poor.
These two groups – the world’s leaders and the public at large – share a common ignorance. They know very little about what aid really looks like in practice. The first group is ignorant for good reasons. Their task is not to engage in hands-on management, but to set the main priorities and leave to others to handle the details. The second group is equally ignorant, because the labyrinths of the present-day aid realities are so complicated that it probably demands super-human skills not to be lost in them.
The author, who definitely is not super-human, has written this paper as part of an attempt to make sense of Western aid to Eastern Europe. The reason is that the realisation of Western aid to Eastern Europe has produced a stunning number of consultants, who in turn represent dozens of countries, hundreds of organisations and thousands of interests, which the East Europeans themselves fail to understand.
This lack of understanding has led to a growing distrust in some countries, notably Russia, of Westerners in general and consultants in particular. One common complaint is that all those consultants only produce words and that you never know how the information they gather is used. There are also disturbing examples of consultants, who abuse the confidence they enjoy.
The recent scandals in the European Union, and the ensuing resignation of the European Commission, also has attracted public attention to the consultants. This time as well, abuses have been revealed, which seem to emanate from unclear relations between clients and consultants.
The author, himself having worked as a consultant in the former Soviet Union and elsewhere, finds the phenomenon of consultancy fascinating, as it is a striking example of “privatisation” of public services. Thinking that there must be a method to this seemingly chaotic reality, he therefore decided to look for the roots of consultancy in development aid.
|Note: For British readers, it is probably helpful to know that the currency rate on 5 August 1999 was £1 = SEK 13.17.|
1. Theoretical Introduction
The problem mentioned in the introduction – the unforeseeable limitations on the power of discretion of the world’s leaders, when deciding on important matters – has been convincingly demonstrated by Graham Allison, in his study of the Cuban Missile Crisis. Allison showed that politicians, when making important decisions, are dependent on other decisions, often made long ago and on other hierarchic levels, which have established structures, the so-called Standard Operational Procedures (SOP), according to which the new decisions are interpreted.
Michael Lipsky even argued that policy often is formulated at the level, where an administration meets its clients . A similar view is that of the bottom-up approach, which, instead of starting with a policy decision, begin by identifying the actors involved in the delivery of a certain service. This approach has been described by Paul A. Sabatier..
A study by J. L. Pressman and A. Wildavsky has entered the realm of political science classics, not only for its contents, but also for the length of its title. Pressman and Wildavsky studied the activities of the U. S. Economic Development Administration, EDA, which had developed schemes to finance the employment of minority staff members in companies. While the programme was announced as a success in Washington, still two years after its inception, only less than ten per cent of the allocated funds actually had been spent, and even that money had rather fed architects than minority groups. The analysis revealed that implementation of the programme involved a multitude of agreements and sub-agreements, which slowed down and deformed the programme. Pressman and Wildavsky ended their study with a strong plea for better evaluation of government programmes.
Between the disciplines of economics and political science, we find the public choice school, which has had a strong influence on scientific debate during the last decades. In this tradition we find strong emphasis on the self-interests of the distributors of government funds. We also find explanations which stress the activities of interest groups as the determining factor when the government engages in activities which particularly favour a certain interest.
Mancur Olson has made a famous study of this subject, where he stresses the importance of selective incentives for the willingness of group members to provide a collective good . Selective incentives can be both positive and negative. A negative incentive is that he who does not pay tax gets fined. A positive incentive is for example that he who joins a trade union also has access to unemployment money. At the same time, subgroups develop an interest in privatising the collective goods in their own interest. Prominent in these subgroups are the very administrators of the collective goods.
What all these approaches have in common is that they help us identify key issues in the policy process. One might believe that, as they provide us with powerful tools to pick the locks of the administrative labyrinths, they should be widely used. The sad truth is that the tools often remain in the researchers’ toolboxes. In the area of public policy, the growth of knowledge is not always progressive. Below, it will be demonstrated how some superficial knowledge of the approaches described can increase our understanding of how development aid works and even suggest some remedies.
2. The Black Box of Aid Implementation
The classic black box (Figure 1) is such an old acquaintance that it needs no further introduction. If we use it to illustrate the implementation of development aid, we can assume that the input (A) is instructions and money and the output (B) is effects.
Figure 1. The Classic Black Box
Research on development aid has a tendency to concentrate on either the political processes or the effects. We can find numerous studies on such issues as parliamentary debate on development aid or aid policies of different countries. We also can find studies on rural development in developing countries or the impact of aid on different developing societies. But something might be missing here. Let us therefore shed some light upon the black box of development aid.
Figure 2. Shedding Light Upon the Black Box of Development Aid
Within the box, we find a row of boxes. A typical implementation chain in development aid consists of “Government”, “Administration” and “Subcontractors”. It seems sufficient to say that the Government is an entity that is well-known to us. The same goes for the administration. But what do we really know about the subcontractors? An inventory of research on the role of subcontractors in development aid reveals that little has been written about them. In this paper, we will concentrate on one group of subcontractors – the consultants.
2. 1. Previous Research
There is a striking lack of readily available information on subcontracting in development aid. The material available consists of
- material intended for potential subcontractors
- some analyses of the role of consultants in development aid
- bits and pieces in studies on development aid, both evaluations and other studies commissioned by the Government
- newspaper articles, which tend to concentrate on limited aspects of the phenomenon, such as export of services or corruption
Recently, two studies on different aspects of Swedish and Nordic aid in the energy sector have been published. The first, Dams as Aid, by A. D. Usher  , analyses the relations between Nordic business interests and the Swedish, Norwegian and Finnish development agencies. Parts of the study are devoted to the role of consultancy companies in these transactions. The second study, Transfer of Technical Training Know-How. A Study of Consultancy Services in Aid Practice, by S. Johansson, [8 ] analyses a Swedish training programme for Egyptian technicians. It also contains some remarks on the conditions of aid programmes implemented by consultancy companies.
A recent article by T. Mkandawire (now Director of the UN Institute for Social Development, UNRISD), Notes on Consultancy and Research in Africa, [9 ]discusses consultancy from the receiving countries’ point of view and particularly treats the effects of African researchers’ free-lance activities as consultants.
As early as 1988, an unusually well-prepared report of the Swedish Court of Auditors, Lär sig SIDA? (Does SIDA Learn?) made interesting observations on the effects of extensive use of consultants on the learning ability of the Swedish International Development Agency, SIDA.
Two recent evaluations deal with problems related to aid consultancy. One of them, Sida Supported Projects in Thailand 1986-1998, is devoted to bilateral consultancy, and the other, Swedish Consultancy Trust Fund with the African Development Bank,  analyses Swedish consultancy activities at the African Development Bank, AfDB.
In May 1999, the Auditors of the Parliament published a study of Swedish support to public sector development.  In the report, the Auditors recommended an overview of some aspects of Sida’s  use of consultants.
3. Consultants in Development Aid
The consultants have been present in Swedish development aid for a long time, but their presence increased during the 1980s. This development was observed by the Swedish Court of Auditors (Riksrevisionsverket), which in 1988 presented a study on the Swedish International Development Agency, SIDA, and its capacity as a learning organisation. 
The Court found that much of SIDA’s behaviour could be explained by assuming that, apart from the official objectives of Swedish development assistance, a separate administrative objective had been established, the so-called disbursement goal. As the budget size is determined by the Government’s ambition to spend a certain percentage of Sweden’s GNP, SIDA receives, almost irrespective of its performance, a large amount of money, which has to be spent during the fiscal year. The agency therefore feels an obligation to find ways to spend the money in order not to be criticised for not doing its job.
The Court of Auditors looked at matters of principle in SIDA’s employment of consultants and posed four questions:
- Does contracting out of development assistance also lead to a change to a certain type of assistance?
- How can SIDA find control mechanisms, which prevent the consultants’ share of the assistance budget to grow more than what is motivated by development considerations?
- How can SIDA find ways to supervise the consultants so that linkages occur between the responsibility of the consultants and the long-term development effects?
- How can SIDA in the long term maintain its competence so that the organisation independently will be able to make decisions on what measures are needed and how?
We will return to these questions, but first we will see how the increased use of consultants is linked to the development of Swedish aid policy.
3. 1. Swedish Aid Policy and Its Relevance to the Use of Consultants
From a modest beginning in the early 1950s, Swedish development aid grew into an important vehicle of Swedish foreign policy during the 1960s and 70s. A significant step was the Parliament’s decision in 1968 to increase the aid budget in order to reach the level of one per cent of the GNP in 1974/75.
The were different reasons for this decision. A sense of solidarity was strengthened by a perception of Sweden’s self-interest as that of a small, neutral country in need of an active foreign policy which stressed peaceful international co-operation. To that we could add a factor which seldom is mentioned in this connection – that of development aid as burden-sharing. At the international level it became an established norm that industrialised countries give development aid.
Swedish aid policy has gone through a number of distinctive stages. From an initial view of development aid as charity, it was labelled as an expression of “moral duty and international solidarity” in a Government Bill in 1962.
The idea of “tied aid“- that is, aid given on the condition that the donor’s products or services be purchased by the recipient – was not favourably received in Sweden. Instead, towards the end of the 1970s, the concept of “return flows” started to appear in official documents. The term was used to describe the amount of aid money which is used for procurement in Sweden. It came to be used together with the phrase “better utilisation of the Swedish resource base“.
This new focus coincided with the growing aid budgets. At the beginning of the 1990s, two official studies recommended a more conscious policy on the part of the aid administration to promote the participation of Swedish companies and organisations in Swedish development aid  In a follow-up study, it was recommended to follow the examples of Denmark and Norway and more actively assist Swedish companies which wish to sell their services to multilateral organisations. The focus thus was set on export promotion and not on such issues as were raised by the Court of Accounts in 1988.
This trend strongly influenced the development of the new assistance programmes for Eastern Europe. Here, “better utilisation of the Swedish resource base” was made into a major Swedish policy goal, although unofficially. If we look at the actual spending, there is strong emphasis on the use of Swedish expertise.
Several trends coincided to bring about this change:
- The non-socialistic Government which was in power during the period 1991-94 wanted to bring about better relations with Swedish business circles.
- Sweden’s financial crisis during these years made it possible to find support for measures which could rapidly improve the country’s balance of payment.
- The spread of New Public Management as a new paradigm for the public sector made it attractive to better use the experience and working methods of the private sector in the public sector.
- It was believed that Sweden’s close Eastern neighbours – the Baltic countries and Russia – would turn into viable market economies within a few years and that the only thing they needed was Western know-how and investments.
3. 2. Tasks performed
The tasks performed by consultants are manifold, A government study  concluded that they participate:
- as process consultants in policy making, analysis of problems, identification and formulation of programmes, as well as in project identification and formulation;
- as process consultants in policy making, analysis of problems, identification and formulation of programmes, as well as in project identification and formulation;
- as technical consultants.
Evaluations also usually are made by consultants. They can be professional consultants, working for the large consultancy companies, specialised evaluators or freelancing researchers.
3. 3. The Areas of Activity
Public Sector development The three dominating consultancy organisations in this area are Statistics Sweden, the consultancy branch of the Swedish Board of Statistics, the Swedish Court of Auditors (Riksrevisionsverket), and SIPU International AB, the successor of a public organisation, the Swedish Institute for Personnel Development, which was closed down at the end of the 1980s, but which has continued to exist as a private consultancy company.
Infrastructural projects In support to infrastructure, we find consultants specialising in different areas, such as energy consultants, where the two most prominent are SwedPower, which is owned by the two largest producers of energy, Vattenfall and Sydkraft; The second company, Sweco, is owned by the building company VBB-Viak.
In telecommunications, one prominent actor is SwedTel AB, a daughter company of the telecommunications operator Telia, which still is state-owned. Road maintenance and administration is another important infrastructural area. Here, SweRoad, the consultancy branch of the Swedish Road Administration (Vägverket) is active.
In all these infrastructural activities we find strong links between the consultants and the public sector.
In their study of consultancy in the public sector, The Auditors of the Parliament found that Swedish consultants were used for project preparation in 60-70% of the cases, whereas in the implementation stage, they were used in 75-80% of the cases. The Auditors found that consultancy services had consumed about one third of the funds.
The behaviour of Swedish energy consultants has been quite well researched by A. D. Usher. In her analysis of dam building as part of Swedish development assistance, she found that the energy consultants were strongly biased in favour of dam building. The energy consultants’ environmental impact assessments of the planned dams tended to overlook very serious hazards.  This particular view of the energy consultants’ environmental impact assessments is fully supported in the analysis of yet another dam project in Thailand.  Usher’s conclusion is that the consultancy companies’ objectivity is seriously impaired by their close links to business interests.
Humanitarian assistance In humanitarian assistance, the typical sub-contractors traditionally have been voluntary agencies, such as the Red Cross or the Swedish Save the Children, which therefore are outside the scope of this study, although the behaviour of voluntary agencies often resembles that of companies. In recent years, however, Räddningsverket ( the Swedish Rescue Services Agency). has become increasingly prominent in humanitarian assistance
3. 4. Modes of Employment
3. 4. 1. Bilateral Consultancy
Sida supports projects, which are carried out by the receiving countries. The Swedish participation does not mean that the project is seen as a Swedish project. Instead, it is regarded as a project carried out by the receiving country, through the support of Swedish knowledge and experience. 
In bilateral consultancy, the basic procedure is that a project should be proposed from the receiving country. A written request to Sida from the authority in the receiving country, which is in charge of foreign support is regarded as an expression of sufficient official support.
The reality, however, can differ much from theory. The evaluation of Sida supported projects in Thailand, rather found a procedure, where the consultant approaches the client in the receiving country, and makes him sign a request for financing to Sida. During this process “the consultancy firm emphasises their relation to the owner, the Government of Sweden. (…) The (…) counterpart often gains the impression that they are dealing with the Swedish parallel governmental organisation”.
In the Thai case, the evaluation showed that a considerable number of the implemented projects seemed to be motivated first and foremost by the business interests of the consultants. This tendency, however, was particularly strong in the case of SwedPower, who even secured support for making plans and blueprints for a power dam, the Klong Thung Phen hydropower project, which they must have known, was not to be built. 
3. 4. 2. Multilateral Consultancy
Many (if not most) donor countries make special funds available to multilateral organisations on the condition that the funds be used for hiring consultants from the donor country. These funds make it possible for development banks and their co-operating countries to use expertise from the donor countries, on a grant basis, within the framework of various projects financed by the banks through loans.  Swedish Consultant Funds now exist at
- The International Bank for Reconstruction and Development, The World Bank:
– Consultant Trust Fund General (17 + 15 + 15 + 15 million SEK);
– Consultant Trust Fund General, for environment (12 million SEK);
– Consultant Trust Fund for Central and Eastern Europe (16 million SEK);
- The European Bank for Reconstruction and Development, EBRD (55 million SEK);
- The International Finance Corporation, IFC:
– Consultant Trust Fund General (20 million SEK);
– Consultant Trust Fund for Central and Eastern Europe (5 million SEK);
- The Inter-American Development Bank, IDB (15 million SEK + balance from previous funds);
- The Mekong River Commission, MRC (6 million SEK);
- The African Development Bank, AfDB (15 million SEK);
- The United Nations Development Programme, UNDP/Office for Project Services UNOPS (8 + 10 + 8 million SEK);
- The Food and Agriculture Organisation, FAO (5 million SEK);
- The Asian Development Bank, AsDB (18 million SEK).
The services of Swedish consultants which are contracted directly by the banks, are intended mainly for sector studies, feasibility studies, monitoring or evaluation of projects but can also be used for training and/or short-term technical assistance assignments.
The large number of co-operation agreements put a heavy burden on the staff of these organisations. The amounts of the funds fluctuate and the organisations are obliged to consult the donors at each stage of project preparations. To this could be added the bias of different donors towards different countries and projects.
The international organisations therefore have an interest in trying to pool all the bilateral grants into common funds, but the donors are very reluctant to accept such changes. An internal memo from the African Development Bank expresses fear that a proposal to replace the tied bilateral technical assistance funds with one common fund might in fact “jeopardize the existence of technical assistance in general”. 
The reasons behind Sweden’s granting of funding for consultancy funds are quite clear. They are seen as perhaps the most important means of promoting the interests of Swedish companies, with the end goal of having a share in the multilateral organisation’s procurement. In these matters, the language is clear. There is no talk of “solidarity” or “burden-sharing”. The funds are there in order to promote Swedish interests. The consultants’ main task in this context is to act as door-openers for Swedish business interests.
In this light it becomes somewhat surprising that the use of consultancy funds is not restricted to large multilateral organisations, mainly in other continents. Even within the framework of Nordic co-operation, consultancy funds can be used. The Danish government thus, in 1994, established a small trust fund at the disposal of the Nordic Project Fund, NOPEF, which is in charge of financing feasibility studies for Nordic companies which wish to establish subsidiaries in non-OECD countries.
Recently, an evaluation has been made of one of the Swedish trust funds – the trust fund at the African Development Bank, AfDB.  The evaluators concentrated on the performance of the Bank and the financing organisation, BITS (the Bureau for International Technical Cooperation, which later merged with SIDA to form the new organisation, Sida). The study concluded that the overall impression of the performance of the Swedish consultants was favourable.
But the main objective of the evaluation was not to monitor the performance of the Swedish consultants. Instead, the evaluation was caused by concern with the Bank’s performance. The two organisations involved, BITS and AfDB, however, had in many cases failed to keep records. It was therefore not possible to get a full list of all projects which had been carried out. 
3. 4. 3. In-House Consultancy
A third type of consultancy, which can be distinguished, is that of in-house consult-ancy. The agencies themselves procure consultants for such tasks as fact-finding missions or scrutiny of other consultants’ work. Consultants also can be procured in order to remedy staff shortages. Evaluators can be added to this category.
In-house consultancy contracts usually are so small that they are not subject to calls for tender. The consultant is procured directly by the unit. For such procurement, SIDA has been granted an exception from the general rules of public procurement, up to a level of SEK 200.000.
The Parliamentary Auditors, in their 1999 report, were particularly critical of Sida’s procurement of in- house consultants. In some cases, it was found that consultants had been used, when instead regular civil servants should have been used. In a few cases, the amounts were so large that a call for tender should have been issued.
3. 5. The Process of Procurement
As we have noticed, there can be an official version and an unofficial version of how procurement is managed. A study commissioned by the Secretariat for Analysis of Swedish Development Assistance, SASDA in 1994, remarked that
“A crucial precondition for businesslike action is (…) that the decision-maker is confronted with a binding budget restriction. In public organisations one normally is confronted with such restrictions. If the procurement decision is delegated to someone outside of the organisation, who neither feels or is bound by the same restriction, the incentive structure is changed.” 
The study made some references to contract theory and the problems of moral hazard. It was quite critical of BITS’ handling of the documentation of procurement matters (in conjunction with the previously mentioned report on Swedish Thai projects.) and found that, generally, it was impossible to track the process of procurement at BITS.
The Auditors of the Parliament, in their 1999 report, were critical of Sida’s methods of procurement of consultants, and found that in some cases the appropriate rules had not been followed.
4. 1. Effects in the Receiving Countries
A view from the receiving countries is presented by T. Mkandawire,  In his Notes on Consultancy and Research in Africa, the effects of the consultancy work in Africa are presented. He describes a reality of ministers and civil servants, who sign requests for consultancy services in return for a stake in the consultancy. Public material can be had for a fee. According to Mkandawire, consultancy drains African universities of talent, due to the higher salaries paid to researchers, when engaging in consultancy.
The integrity of consultants’ report is seriously put in question. The main thing seems to be to follow the trends of the day. Confidentiality makes the results inaccessible. There is a positive side, however. Consultancy gives local researchers access to otherwise inaccessible material.
The same concern about the corrupting effects of consultancy can be found in other studies, although vaguely implied. 
4. 2. Aid Consultancy As Privatisation
As we have been able to see, when discussing aid consultancy as a kind of privatisation of the aid process, one risks falling into a trap of using incorrect labels. The increased use of consultants in Swedish development aid to a large extent is a kind of mock privatisation, where many of the consulting organisations in fact are daughter companies or the international departments of state organisations.
Another strong tendency is that the consultants in fact are former employees of the aid agencies, working in private companies.
4. 3. Consultants As Export Promoters
The conclusions of the two evaluations are unequivocal: in the cases studied, consultancy services seem not to lead to export from the consultants’ home countries.
4. 4. Efficacy
The impression gathered is that the consultancy business, seen as a whole, leads to suboptimal use of aid funds. Superfluous paper work, environmental impact studies, which take into account too few of the aspects, plans which are not to be realised, are a few of the examples.
This inefficacy seems to have one, single cause: the lack of political will (which, in turn, probably is caused by lack of information) to use the resources more efficaciously. Still, there are many good reasons for aid organisations to use consultants:
- The consultants solve the responsibility problems of bilateral aid organisations. By paying the bills and not interfering with the methods by which the consultants secure the consent of the clients, the aid organisations avoid being involved in potentially scandalous matters.
- Whereas political power and economic power are separated in most donor countries, political power remains the safest road to economic power in many of the receiving countries. Consultants here become one potential source of additional income for those in power.
- Contrary to common belief, an aid agency has few incentives to economise on expenditure. Instead, there are strong incentives in favour of spending on relatively costly projects.
- The internal power structure of multilateral organisations, where those who pay the bills have to pay the salaries of a large number of citizens from the receiving countries. Here, the consultant funds can be seen as a way to influence the multilateral organisations’ decisions through “the back door”, by making sure that consultants from the donor countries are used.
- The general distrust of the donor countries towards multilateral institutions and their management.
- Among the very few success criteria, which can easily be applied to aid agencies, the ratio between staff costs and turnover is one of the most prominent. In-house consultants have the advantage that the costs of their use easily can be drawn from other funds than staff costs.
- In-house consultants, usually used for short time periods, are easy to handle. They are unlikely to engage in whistle-blowing.
At the same time, one has to distinguish between different areas of activity and different companies. There is a need for comparative studies on the performance of different companies and on differences between areas of consultancy.
4. 5. Who Wags Whom?
There are many indications that consultants actually shape policy and make the financing organisations work in their interests. This has been noticed, both by the Court of Auditors and in the evaluation of Swedish projects in Thailand.
4. 5. Implications for Evaluation
The implications for evaluation are quite interesting. It is very seldom that a project evaluation actually looks at how a consultant-managed project has come into being. But an evaluator, who keeps in mind the peculiar conditions of aid consultancy, can find interesting explanations behind seemingly unintelligible projects.
4. 6. Implications for Auditing
The internal auditor of the European Union, who decided to blow the whistle on the relations between the Commission and its consultants, probably is not the only one, who has found “irregularities”. A curious auditor, who is not afraid o losing his job, probably can make interesting discoveries in any organisation, which finances aid consultancy.
An auditor, on the other hand, who wishes to keep a low profile, should stick to the letter of his instructions, when analysing accounts concerning aid consultancy.
5. instead of a Theoretical Conclusion
Analysing deficiencies in development aid is like shooting at a sitting duck. Whenever the researcher wishes to illustrate administrative disasters, it is safe to choose an example from development aid.
The discourse on implementation assumes that there is an intention behind a political decision, which can be carried out in a more or less optimal manner. Today, however, it is in many cases doubtful whether there really are any intentions behind political decisions. A smokescreen of rationality often hides the real intentions, which can be much less ambitious.
To take one example, Swedish assistance to Eastern Europe is carried out under four goals, which have been adopted by the government. Among those goals, there is the goal to support the transition to democracy in Eastern Europe. This looks like a process, whereby the government and its administration actively try to attain goals, which have been arrived at after serious considerations. In reality, however, these goals rather function as administrative labels, which determine which administrative unit is to distribute the funds. The real goals instead are listed in the country strategies, which are arrived at after serious discussions between the Ministry of Foreign Affairs, Sida, other concerned administrations and the governments of the receiving countries.
A fascinating result of this usage of goal definitions is that it works like an insurance against failure. If the “goals” really are not goals, it becomes meaningless to try to evaluate to what extent they have been attained. At the other end, there is another development. The means of development aid really have become ends in themselves. If we look closely at the role of consultants in development aid, we realise that it is official government policy to take care of one’s own consultants.
Returning to this paper’s introduction, this in turn means that the Swedish Prime Minister, who meets an East European colleague, might promise him a certain amount of money in support of the democratic transition in his country. The East European colleague then might return home and, after some time hear from his subordinates that nothing has been done which resembles what he would call “support to democratic transition”. Some Swedish consultants, however, might have written reports on such items as how to maintain archives if you have money for the purpose (which the country does not have) and similar subjects.
The next time the two Prime Ministers meet, the East European, with all due courtesy, then might ask whatever happened to the promised aid. The Swedish Prime Minister, of course not informed about the details of the matter, then starts asking his subordinates about the matter. The final answer then appears from a desk officer at one of the Swedish aid organisations: “Yes, we were approached by the ministries of culture and education in the receiving country, which asked us to finance some consultancy work. For that purpose we used the democratisation budget”.
The reader of this paper already knows what such a request really means. This, in a sense, is an illustration to the truth in Graham Allison’s findings: that the chief executives of our countries are prisoners in a web of Standard Operating Procedures. But how about the other theoretical perspectives? <>The reason why Lipsky’s Street-Level Bureaucracy was included in the beginning is that we actually have two levels in this implementation chain which are concerned by the street-level perspective. First, we have the consultants, who formally are not administrators but employees of private companies. But they are, in practice, the representatives of the donor governments in the receiving countries. By their behaviour, the aid policies are judged in the receiving countries. Their considerations actually shape the programmes.
The second “street level” is that of the project officers. If, as strong indications show, the real aid policy to a large extent is to support consultants from the donor governments, so that they can perform the services of their choosing – whether it be making plans for dams which are not to be built or other more useful tasks – the project officers have considerable influence. They can determine whether a call for tender is needed. They can decide whether those who plan fictitious dams should by entrusted with other tasks (and then, of course, take the consequences of their decisions).
Although Lipsky might not be the most appropriate reference in this connection, it seems well-motivated here to attract attention to the fact that the use of consultancy companies leads to very interesting legal consequences. In Figure 3 below, an illustration of the problem can be found.
Figure 3. Legal Aspects
The implementation chain of development aid, when consultants are included, leads to a situation, where different legal systems are in force at different levels. Whereas the desk officer is bound by public law, the consultant is bound by private law, as specified in his contract. If, in such case, the consultant, on behalf of a public organisation, commits serious errors, to whom should complaints be directed, and on what grounds?
The perspective of Wildavsky & Pressman has interesting implications in this area as well. The differences are considerable, however. In Wildavsky/Pressman’s perspective, the fact that the EDA funds had gone to architects was a deviation from the original intentions, which were to finance the employment of minority staff members in companies. Here, instead, employing consultants is an important part of aid policy.
The public choice perspective, especially in Mancur Olson’s version is quite fruitful. If we see aid as a kind of public good, intended to do something useful for the poor of this world, we can see that there are several groups of administrators, who compete with each other in their efforts to privatise aid. These efforts have been so successful that the privatisation has received the rank of public policy.
A more sophisticated application of collective goods theory is to look at “access to aid funds” as a public good to aid consultants. This access can be had at a price. The price to pay is to accept the game rules which apply to an aid consultant. Among the rules we find the obligation to accept confidentiality (mentioned e g by Mkandawire). This can be an explanation to the striking silence about aid matters during the last ten years.
5. 1. Policy Implications
The Court of Auditors, when making its analysis in 1988, probably was quite right in principle in their assessment of the effects of the use of consultants. The study has entered the Hall of Fame of Swedish aid analysis and is still sometimes referred to. The real development of consultancy use, however, seems to have continued without particular regard to the study.
Why is that? The question is whether the Court of Auditors did not fall into a trap well-known to many researchers: that of looking for a rationality, where in fact there is none, or for a policy, where in fact there is no such thing. The development of consultancy use, first of all, despite some official support for it, does not really seem motivated by any rational considerations. Arguments really seem to be taken out of the air in order to motivate something which is desired. The policy of consultancy support very much looks like a policy of least resistance, arrived at by administrators of aid funds.
The stress on rationality also influenced the Court’s questions. It seems as if the Court expected Sida to actually somewhere make rational assessments as to what level of consultancy use would be “motivated by development considerations”. The author instead has gathered the impression that consultancy use develops in conjunction with the “spirit of the times”. The questions of the Court of Auditors, however, still are interesting and still deserve to be seriously considered.
Development aid is an activity, which is performed on behalf of third parties, who have little or no influence on the decision-making process. There is always a great risk that the activities performed are more determined by the interests of those who can easily influence the process than by the interests of the real clients.
The Auditors of the Parliament, on the contrary, have chosen a more limited approach to the question. In their 1999 report, they have concentrated on the tendering procedure and recommended an overview of that aspect of consultancy use. That seems to be a too limited approach to the problem.
But the same report also contains an interesting proposal – that of the establishment of a special, independent institute for evaluation of Swedish development aid. The idea is that such an institute should connect evaluation to research on development aid. The proposal is interesting, as it is noticeable that most aid evaluations are not cumulative, but rather analyse aid at project level with little or no reference to previous studies.
Allison, Graham T., Essence of Decision. Explaining the Cuban Missile Crisis, 1971, Harper Collins Publishers, 338 p.
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 Satsa på utveckling. En studie av svenska främjandeåtgärder för att sälja svenska varor och tjänster till de multilaterala utvecklingsorganen. Rapport från Multilaterala Upphandlingsprojektet, Stockholm Februari 1994, Utrikesdepartementet, p. 104.
27] Andersson, I., Hellström, H., Östeuropasamarbetet – Konkurrensen i upphandlingen, Stockholm, September 1994, the Secretariat for Analysis of Swedish Development Assistance, SASDA Working Paper Nr. 24, p 7.
JAN BJÖRKLUND ( SÖDERTÖRNS HÖGSKOLA – UNIVERSITY COLLEGE – SWEDEN)