How USAID Could Learn – and Grow – from Failure

I am Charles Kenny, and I spent part of yesterday at a United Nations Foundation meeting with Dr Maura O’Neill, Chief Innovation Officer at USAID.

There was a lot of discussion of development applications using mobile phones (m-development) and how to do them better – things like interoperability and collecting models in an ‘m-app marketplace.’ And there was the usual back-and-forth between those who wanted to see more transformative projects where IT reformed whole agencies and ministries and those who thought that way madness (or at least obscene overruns) lay.

But I thought the most interesting discussion was around learning from experience – particularly in an area where technology is evolving rapidly, so a robust evaluation may not be completed before the project itself looks as dated as an integrated rural development scheme or a structural adjustment loan. The randomized trial result suggesting limited evidence of educational spillovers from a distribution program of Nintendo 64’s might not carry too much weight for those wanting to hand out Wiis as part of a youth fitness program.

One way to speed learning is to encourage project managers and implementers themselves to highlight if things seem to be going particularly well or badly early on in the process. Think of it as the development equivalent of stopping the medical trial because the product so obviously doesn’t work -or works so well it would be immoral to deny the control group such a valuable treatment.

Things are rarely so clear cut successes in development as they can be in medical trials, but we really didn’t have to wait around too long to declare m-finance in Kenya a rip-roaring wonder, for example. On the side of failure, the problem is a little different – it might be complicated to get managers and implementers to come forward and admit so rapidly that their project is a waste of time and resources. And more than one person at the meeting suggested it is just too risky in general to say you’ve failed. Dark things were muttered about ‘the current climate’ (stormy with a 70 percent chance of budget cuts?).

The good news is that USAID doesn’t look like it is shying (further) away from risk. The new Development Innovation Ventures program is designed to mimic a venture capital model to identify, test and scale solutions to development challenges. The model stages funding – so projects that don’t work out at the identification or test stage won’t get more money to roll out.

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The meeting also discussed the possibility of a USAID FailFaire – or even Fail Summit – that would encourage people to come out in the open and say what didn’t work and why. If the authorizing environment could allow, another change to encourage early exit from bad projects would be to let project managers keep some or all of the remaining budget resources from a self-declared failed project to spend on something else in the same sector and country that might actually work.

But what about ‘the current climate’? First off, I’m not convinced that even the Agency’s most committed supporters would be surprised that some USAID projects are duds. And they don’t need a FailFaire to find examples (Google “USAID Project Failure” if you have any doubts). Second, if USAID projects never failed, that would suggest the Agency was being obscenely, counterproductively, risk-averse in a field where risk (political, administrative, economic, climate) is everywhere.

Any portfolio of investments has some bad apples – as long as it has some stars as well, that’s OK. Does every enterprise supported by the Small Business Administration grant turn into a Starbucks or a Facebook? Of course not – and lots fail, miserably. But when it turns out that the market in Topeka for Che Guevara Beanie Baby knock-offs was more limited than the financial plan projected, and the business folds, the SBA moves on. USAID should do the same thing – and not be afraid of telling Congress that’s the approach.

This article was originally published as Next USAID Innovation: Learning from Failure

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