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The Republic of NGOs and the Dual Control Oversight Mechanism

June 15, 2011

By Fiorenzo Conte

One of the previous posts discussed the implications of the creation of a dual public health sector in Haiti in the aftermath of the earthquake. The health services offered mainly by NGOs were only parallel to but also in competition to the services offered by the government. The case of International NGOs poaching health staff previously employed in the national health system represents one of the instances in which this scenario plays out. One of the comments to the post stressed how health provision today is what matters most for the beneficiaries in Haiti. Beneficiaries might not even be able to survive the long term it would take to develop a competent state system if substitute service providers were not operating in the field right now. As Keynes once said, in the long run we are all dead.

The problem is that an exclusive focus on efficient delivery of services in the short term preempts the state from becoming legitimate in the eyes of its citizens. As Paul Collier explains, if the state is marginalized in the delivery of basic services the citizens will look at it only as a tax collector or bribe taker. As a result they will inevitably disengage from the political life. A report titled “Do No Harm” commissioned by DAC Fragile States Group and prepared by James Putzel and his colleagues at the London School of Economics corroborates this argument. The report argues that the channeling of funding outside the state create centre of resource allocation outside the state which undermine its legitimacy, as citizens turn to other actors to request their needs to be satisfied. Another effect of this marginalization is that the state is not involved in the process of administration and management of funds and operations. As a result, the lack of capacity and the capability to manage fund of the state pushes donors to bypass the public administration and this  in turn preempts the state from acquiring this capability.

So how can we get out of this vicious cycle? There is a mechanism which is widely known in academia yet it is not much publicized and it fails to get implemented on the ground. It is called dual oversight mechanism and it works like this: funds disbursed by donors are managed jointly by the recipient government and the donor so that the first can gain experience in fiscal management and the second can oversight case of corruption. One example cited in the Do No Harm report is the Afghanistan Reconstruction Fund. Donors put the money in a pooled bank account and can oversight the use of money more easily. At the same time such money are handled by the Ministry of Finance, which gains experience in financial management and is involved in the delivery of services thus gaining legitimacy in the eyes if its citizens. I do not know if such mechanism has been tried out in the after-emergence period in Haiti. So I would like to find out from those of you who knows that Haitian context if this mechanism is feasible and possibly helpful to overcome the risk of a dual public health sector.

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