How to Allocate Public Funding to Nongovernmental Development Organizations

Abstract

The Dutch co-financing system for nongovernmental development organizations (NGDOs) is unique in Europe. Almost a quarter of public development aid is channeled through a selective group of NGDOs that have to satisfy a broad range of institutional and operational criteria. The procedures for defining the eligibility of these co-financing organizations have recently been streamlined to enhance competition and to guarantee more objective fund allocation. This article provides a critical review of the current system for allocating public funding to private development organizations and discusses the criteria used for comparing institutional performance and assessing the quality of submitted multiyear co-funding requests. Even though important progress has been made in cross-organizational appraisal of development agencies, the operationalization of selected indicators still suffers from ambiguities and arbitrary weighing procedures. Past performance and demand-side criteria are not yet considered, thus reducing the potential relevance of the assessment system for improving the effectiveness of development projects.

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