The estimation of financing needs is becoming a popular exercise in the development arena. Researchers, NGOs, and institutional players have been developing models to estimate costs of different outcomes, such as achieving the MDGs; saving a child’s life; or financing national and international poverty gaps. But, as much as these estimates provide a useful tool for policy makers and development professionals, they also pose some important questions.

First of all, these estimates are in many cases far from accurate: being used mainly for the purpose of public engagement. Values are usually symbolic, and the methodology for calculating them is not clear, nor public. In a recent campaign, one large INGO argued that £2 a month was enough to save a child; how does this compare to the $38 a month ($1.25 per day for 30 days) extreme poverty line, or the monthly plumpy’nut cost of $30 a month per child?

Secondly, when costs and targets become relevant and well known, it is then difficult to change them. The 0.7% target was based on an estimated development cost of poor countries, calculated in the 1970s, with economic structures very different from the current ones. Long-term use of this target, with consequent political consensus, makes it therefore difficult to revise this target, including the use of GDP and not GNI. Why do we still use these out-dated targets?

Thirdly, the quality of the numbers on which the analysis is based is extremely poor. GDP calculation for many African countries is extremely inaccurate and misleading. This is not bad just from a knowledge point of view but it most importantly means a waste of resources. For example, Least Developed Countries (a UN classification based on income and other socio-economic indicators) benefit from favourable trade rules and attention from aid donors. But are the numbers telling us the right story? Are we targeting the right countries?

Finally, and most importantly, most estimates refer to the additional financial resources required rather than considering the impact of systematic changes. For example, the cost of achieving the MDGs is estimated to require between $60 and $120 billion a year, of additional finance. Perhaps, adapting the current development system would cost less and benefit more . . . ?

I am just emerging from a month in Zimbabwe, my first trip to the country, and indeed to Southern Africa. After such a short time in a country, it’s not really possible to say anything meaningful about it. But, in the best traditions of aid-blogging, I’m going to attempt to do so anyway.

Two conveniently alliterative features of Zimbabwe really struck me. Firstly, it’s very racist, which is something I’ve never really encountered before. In my home country, the circles I move in are far too middle-class to be openly racist. When working overseas, the expat white community tends to be, if anything, desperate to demonstrate their multiracial credentials by finding a Black Friend. But in Zimbabwe, the remaining white population numbers about 50,000, and seems completely segregated from the black population. During my month in the country, I never once saw a white person mixing socially with a black person. I was invited to various events which were almost parodies of colonial culture, elderly gentlemen sipping tea on the veranda while the black housekeeper brought scones and jam. There’s a strong current of casual racism. “That’s the University”, my friend said, pointing out a flat, decrepit looking building. “But nobody goes there.” By which, of course, she meant no white people go there.

At first I was fairly judgmental – albeit quietly so, because I liked my white friends and wanted to keep them. After a while, I started to rethink. In the UK, my parents mix almost exclusively with people from their own religious background. In every country I’ve visited, ethnic minorities keep themselves to themselves. Why should I ask the white community in Zimbabwe to be any different?

This links  to my second theme; repression. I’ve never been anywhere as openly repressive as Zimbabwe. As an unashamed politics geek, I always ask people about local politics – and this was the first place I’ve ever been warned not to, as it is actually a criminal offence to ‘insult the office of the President’. Political repression has frequently been at the expense of the white community, such as through land grabs and the proposed indigenisation bill. Faced with this, they have (I think) retreated into their own community, and cut off attempts to integrate into mainstream Zimbabwean culture.

No conclusions then, but it did get me thinking on the nature of racism, how groups stick (or don’t stick) together, and where the responsibility lies. Should the white community be actively reaching out and trying to integrate themselves into mainstream (black) Zimbabwean culture? Or should I accept their right to live separately, just as groups around the world do? Does the legacy of colonialism (and the 1970s apartheid movement) still play a moral role today?

Yesterday (Tuesday 6 August 2013) the UK news outlets were buzzing with a story by The Telegraph suggesting that the Chief Executives of some of the UK’s top International NGOs were overpaid. Sir Stephen Bubb, chief executive of the Association of Chief Executives of Voluntary Organisations, spoke about the need to provide an adequate wage in order to attract quality candidates to the job on BBC Radio 4.  In addition, these top managers  carry enormous responsibility – Barbara Stocking, ex Oxfam GB Executive Director defended her wage explaining that she had to manage a national retail agency (Oxfam shops), the kidnapping of staff members and the lives of thousands of poor people worldwide.

Marc du Bois, MSF UK’s Director, tweeted his salary for 2013 – £71,500 – following this morning’s debates. Some suggested that transparency about salaries might help us feel more comfortable with the amount that these chiefs were being paid but much of the information can already be found in public annual reports. Plus even if it was plastered across buses, transparency about a £1 million wage package for anybody would make me feel uncomfortable.

The amateur economist in me believes that these problems should be solved by the market. A simple demand and supply equation: what are the organisations willing/able to pay and what quality of CEO can that amount buy? But this creates a further problem, namely who should decide what money is available to pay the wages of the CEO? Is it up to the trustees? The beneficiaries? The donors?

It would be interesting to follow private giving flows to those large NGOs named in today’s news stories. If the general public that supports these agencies disagrees with the CEO’s wage then one would expect to see a withdrawal of monthly donations over the next three months by disgruntled or dissatisfied supporters. It is less likely that private companies would withdraw money due to a disagreement with the total wage package – though they may pull out of partnerships due to the danger of bad press coverage. Foundations and trusts provide an interesting case to study of how donors approach staff pay within their grantees. Their donations are usually more tailored and would include a percentage for admin costs, so they have technically already engaged with the debate.

Current private giving flows are not public in a real time sense so we may not be able to track this information to conclude, how big a packet the donors believe is available for paying the ‘top dog’. It might make for an interesting research project for an insider though . . .

If we aren’t able to generate the answer through a demand and supply machine, then we will have to decide what is ‘reasonable’ by some other criteria. Ethics? Moral beliefs about what is right and what is wrong or how much is reasonable and how much is scandalous do not provide us with a strict framework to base decisions on. For instance, is it ok to pay a CEO of a charity £58k? Sounds fair. Is it ok to pay a CEO of a charity £258k? No, that’s unreasonable. Is it ok to pay a CEO of a charity £105k or £89k? Not so easy . . . Where do we draw the line?

Perhaps by unpacking the reasons why large wage packets could be deemed unreasonable for the Chief Executives of aid agencies we can begin to unpack these intuitions. Firstly, any money spent on the wages of staff is no longer available to spend on the ‘cause’. Yet, without staff none of the money accumulated for said cause could be distributed, let alone monitored or evaluated. Second, such large pay packets contribute to the unequal society that many (not all) of these aid agencies are supposedly fighting against. This is only a relevant argument for those who believe that inequality is a central problem and not to those who believe we should just be focusing on removing absolute poverty (which is all relative anyway . . . . future post). Thirdly it concerns us that these ‘top dogs’ might be doing the job for the wrong reasons: to benefit themselves, or their families. Why does someone who cares so much about the poor need over £100k a year?

This is an interesting point. As a middle income aid worker (i.e. I’m not poorly paid and I’m certainly not well paid), I would like to think that I’m working in a sector where there is potential for me to grow and reach exciting heights. My peers all earn over £50k already so it would be strange for me to accept a ceiling of that very same amount for the remainder of my career. I like to dream of having a family, living in a nice house, going on holiday to warmer climes, paying for my children to go to ballet or to play the saxophone etc. But how much does this all cost? If a CEO has two or three children and a partner who also works, then they need to cover the costs of childcare. If they are travelling a lot for work, then childcare may need to include overnight cover and even weekend cover too. Could we add up how much it would cost to live a reasonable life where our children are able to take the opportunities around them and then use that to establish a ‘reasonable’ wage?

There are lots of variables involved, but it would quickly show us beyond what point people are beginning to spend their money on luxury goods or items rather than daily life. Perhaps that is where we draw the line? But whose expectations do we base it on? Those who want to send their children to private schools, summer camps and exotic holidays or those who are content with state schooling, camping holidays and staying with your grandparents? Like everything, the problem is that ‘reasonable’ is a relative concept.

When you get the call from your child – really a grown man/woman – saying they are off to some exotic third world country to work in humanitarian aid, your first thought is “what a wonderful opportunity.  How exciting to see such a place and its people – to learn about different cultures and experience that wonderful new geography.  They’ll have such great stories to tell when they come back.  I’ll miss them but it won’t last forever.”  This is reinforced by the positive response of friends and colleagues.  “You must be so proud to know what a positive contribution they are making to those poor souls in need of basic support.  It’s to your great credit”.

Then, the doubts emerge.  People say, “aren’t you a bit worried about their health and safety?  Isn’t there some conflict going on in that region?  I wouldn’t like all those creepie crawlies and nasty diseases.”   And, what about the risks of kidnapping and hardship, without access to civilised systems and processes.  “What would you do if they get into serious trouble?”.  You wonder why they can’t get a proper, more predictable, job closer to home?”  So, you start to ask questions.  “Where are you staying?  Who are you going to be with?  Have you got all the jabs you need?  What about medicines, finance, insect repellents, clean water and suncreams?  How do we contact you if we need to?  Who’s in charge?  Can we come and visit you?”  All these questions covering the real one, “do you really have to go?”

Eventually, they’ve gone and you wait for an SMS or an e-mail or something to tell you they’ve arrived and what local facilities are like.  Yet, you also dread getting a message – are they ill, hurt or, God forbid, missing?  No news is good news.  Each day gone by takes you closer to their return.  On the one hand, knowing as much as possible about local conditions and what they’re doing helps you to picture what’s going on, however worrying.  On the other hand, not knowing allows an illusion of ‘no need for alarm’ to develop.  These contrasts between wanting as much information as possible but not wanting to hear about the real risks and uncertainties are what is really stressful: the emotional swings of the parental see-saw from pride to doubt.

Finally, they come back.  You utter a great sigh of relief.  And, now you hear all the amazing stories – the successes and failures, the laughter and the learning.  It’s all so exciting and invigorating.  You wonder where they get the strength and determination.  You wish you’d been as adventurous when you were young.  The photos fascinate you, glossing over the deprivation.  Pride swells and a little jealousy rises at the same time.  You tell everybody what a great impact they are having and how wonderful it is to hear their adventures … and to have them home again.

Pride comes before the fall.  You get another call … “Oh no, you’re not really going to …. next”  Here we go – back on the parental see-saw again.