Tuesday, 9 April 2013

Why SIB's won't work

I was reading Kyle McKay's article on Goldman Sachs new SIB programme and while I agree with the majority of his points, I think that the fundamental point is missed here...

Myth 3 for McKay is that "The government pays only for success" - McKay is concerned that it will be difficult to decide whether a programme is a success due to the contractual difficulties in defining success and that the government will therefore end up paying for projects that have not "succeeded".

This misses the point that the project developers will be incentivised to produce projects that are at least perceived to have "succeeded". This in itself would not appear to be a problem until you consider that a project that has succeeded in its fundamental aims, versus one that succeeds as per a written contract are two very different things.

As soon as a project is designed specifically with the aim of improving a measurable outcome, rather than with the fundamental outcome in mind, it runs the risk of becoming a self-fulfilling prophecy. Focus shifts away from the aims of the project and onto improving the KPIs. The key word there is "Indicator". A positive shift in a KPI does not reveal a project that is working, in the same way that a negative (or zero) shift would tarnish a project as failing.

SIBs could result in the government paying for programmes that are not effective. That's a true statement. It could also result in far more projects being run that are not effective at all. That is the issue here.

Taking a new direction

In what is becoming a fairly regular(?) occurrence for me, I'm going to make a bit of a change to the focus of this blog. It's been almost two years since I last posted on here, but a lot has changed. I'm back from India and planning the next phase in my life.

The work I did with VSO (see my other blog for more details) had a profound impact on my life and left me wanting to do more than just moon-light in the development sector. Unfortunately, on my return there was a mortgage to pay and it was far too easy to just go back to my old job...

Times have changed, however. I've been back for over 18 months now and while I don't quite have the itchy feet to grab the passport yet, I'm definitely looking at my options. So first step - I've applied to do a Masters in International Development. It's a part-time, distance learning course, which should provide me with a bit of flexibility at least.

Step two - starting this blog. I'm going to try and start commenting on the blogs I'm reading and just giving my general thoughts on what they're saying - join the conversation! We'll see how it goes - it might be that I can't do this as regularly as I'd like, but I'm going to make a conscious effort!

So there you go - new direction in life, new direction for the blog. It's a nice symmetry, right? :-)