A Managerial Dance to a Broken Systemic Tune: The Effects of Institutional Environment on the Performance of Aid Funded Projects in Developing Nations

Abstract

Recent calls by foreign aid experts for aid donors to channel more of their aid funds through national governments stems from the fact that researchers lack the necessary data to ascertain whether nongovernmental organizations (NGOs) manage aid funds better than national governments do. Aid-funded projects are the result of a World Health Organization (WHO), World Bank, United Nations Development Program (UNDP), or some other organization’s assessment of a gap or problem in a developing country such as Ghana. Donors and the NGO community find out about the issue, a donor agency decides to fund the project, and the donor signs an agreement with the government of the developing country to implement the project. Some of the projects funded through NGOs and private consulting firms have been successfully completed, but many have failed. Some researchers blame this failure on factors that the implementation partners usually cannot control. This research investigates the factors that affect the implementation of aid-funded projects as seen through the eyes and experiences of NGO leaders who have led aid-funded projects in Ghana. Using qualitative research and grounded theory approach to analyze the data, we found that the macro and systemic issues referenced in various aid-effectiveness and aid-accountability literature are prevalent in most aspects of the aid-delivery process. Interestingly the main reasons behind aid-project failure tend to be managerial in nature. We conclude that implementation fails because of lack of alignment with the receiving government’s agenda, lack of collaboration with stakeholders, improper planning practices and lack of accountability.