Debate

The search for allowances reduces the effectiveness of aid

No workshops but per diem. The fact that aid money is used for the allowances for civil servants not only leads to costs that are difficult to defend, it also creates the wrong incentives. Aid actors need to reflect more self-critically on how they contribute to distorted reward systems, writes Annie Sturesson.

I came in contact with the term 'per diem' already during my first week of work as an aid worker. As a newly arrived program manager at the EU Delegation in Burkina Faso in 2010, I attended a meeting of the Ministry of Justice in Ouagadougou where a study on reforms in the legal sector was launched. During the meeting, I was pleasantly surprised by the good support and by the fact that officials from several different ministries actively participated in the discussion. During the break, a table was set with tea and peanuts. While my colleague and I lined up for coffee, the officials formed a separate queue. The queue led to a table where a woman sat and dotted the participants and handed out envelopes. I looked questioningly at my colleague who explained:

- Per diem. Sitting allowances.

Per diem, or allowance, shall reimburse salaried employees for costs (accommodation, food and transport) in connection with meetings and courses outside the workplace. But in practice, per diem in developing countries has become a way of compensating civil servants for their low salaries. Unfortunately, aid in many countries has contributed to this. The competition between aid actors means that per diem is often used to ensure a high level of participation by state actors in meetings and workshops. In many aid countries, it is now impossible to organize a well-attended workshop without paying per diem. The hunt for allowances affects not only who attends meetings, but also how and where they take place.

More meetings - more money

To describe per diem as an aid phenomenon would be wrong. Many developing countries have complex regulatory systems for various benefits and allowances. In Burkina Faso, for example, the levels of compensation for government employees are set in five different presidential decrees. An official who participates in a course in his or her hometown can expect a travel allowance of approximately SEK 100. This is not an insignificant sum in a country where the average monthly salary is about 1500 kronor. The per diem system means that salaried employees are rewarded for the number of meetings they attend and not for performing their daily tasks. Studies from the health sector in Burkina Faso, for example, show that the “income” of healthcare professionals from per diem often exceeds their monthly salary.

Wrong person on the course

Aid actors often fund and organize courses for local civil servants as part of their capacity-building programs. However, the possibility of receiving per diem, especially in hierarchically structured organizations, risks leading to the wrong people attending meetings and courses. When I worked at the Ministry of Finance in Uganda from 2014 to 2015, it was clear that courses and per diem were used as an informal reward system. Which of the administrators had the right prior knowledge and who would professionally benefit most from attending a course was secondary.

Particularly sought after by my colleagues were courses organized by the IMF in Mauritius and courses in Dubai or Jeddah, funded by the Islamic Development Bank. My head of the aid coordination unit traveled virtually every month to meetings and courses around the world. The extent to which all these courses raised her competence is difficult for me to assess, but the consequences of the unit's ongoing work, which often stopped during her absence, were clear.

Thick envelopes in expensive hotels

In Uganda, I also worked for a short period with civil society organizations that conducted advocacy work on transparency issues in the oil sector. Effective advocacy often requires meetings at several levels - from grassroots level up to the highest political elite. The problem is that the higher up people you want to participate, the thicker the envelope is required. In order to get parliamentarians to attend, meetings had to be arranged in expensive hotels, preferably a number of miles away from Kampala, so that night allowances of 150 to 200 dollars were paid out. You do not have to be an aid critic to question how cost-effective these meetings will be. Aid actors should therefore be careful and self-critical about the methods used to achieve different goals - no matter how good these goals may be.

How should aid actors relate to per diem?

Unfortunately, there are no easy solutions. The fact that compensation systems look the way they do in many developing countries is largely due to major structural problems. Thus, it can be difficult for individual aid actors to influence the system, at least in the short term. A first step, however, is to increase awareness within the organization of what distorted incentives per diem can lead to, in order to avoid further strengthening the system. In order for an organization to attract the right people to participate in a workshop or a course, requirements for prior knowledge and consideration should be clarified. With regard to salaried employees' salary structures, it is hardly a long-term solution to use development assistance funds as compensation. On the other hand, there should be room to support state administrations in developing reward systems where civil servants are rewarded for achievements and not for how diligent they are in attending external meetings. It may also be justified to ask whether a workshop in a multi-star hotel with an accompanying envelope is really the most effective way of conducting advocacy work.

Annie Sturesson

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