Hunting for Per Diem: The Uses and Abuses of Travel Compensation in Three Developing Countries

Cash is a great incentive. The last decade has seen a boom in various

forms of cash incentive programmes, from the conditional cash transfer

programmes that emerged in Latin America in the late 90’s, providing

cash to budget-constrained households conditional on sending children

to school and for health check-ups, through to results-based financing

and cash-on-delivery programmes, very much in vogue today, whereby

governments only receive funding when they can show an agreed-upon

progress on certain outcomes and results. While the incentives usually

work, the potential adverse and unintended effects need to be kept an

eye on; fertility rates may increase as a result of cash per child, sector

results not in the government-donor contract may be neglected. When

the compensation employees of public and private organisations get for

extra expenses incurred when on workshops and seminars away from

their normal duty station is substantially larger than their actual expenses,

such per diems or allowances gain the same role as ‘conditional cash’.

And while it does ensure an incentive to attend such events, it equally

provides a number of potentially perverse incentives.

Capacity building is a central concern of development efforts in general,

and in Africa in particular. A large portion of development aid is spent on

seminars and workshops to enhance competence and efficiency in state

administrations as well as in civil society organisations. While there can

be little doubt that the government staff, NGO staff and civil society

employees attending such training and awareness-raising events learn

something and upgrade their skills, the effectiveness of these workshops

is a sadly understudied and underreported area. While the effectiveness

of training-workshops is likely to be the subject of a future research

programme of Norad’s Evaluation Department, this study focuses on the

potential abuses of the current mix of per diem and allowances systems.

This report is all the more timely as the last decade has seen a rapid

increase in the amount of donor funds allocated to allowances and per

diem in connection with seminars and workshops. The study makes an

assessment of the origins, operation and potential consequences of per

diem compensation with particular reference to effects on development

programmes, national budgets and civil service delivery.

What are some of the unintended and unwanted consequences of the

current allowances systems? Who are the key external and local actors

among donors and government driving the allowances and per diem

phenomenon? Can the positive aspects of per diems be retained while

minimising the potential negative consequences? Ethiopia, Malawi and

Tanzania were selected as country cases.

The study shows that there is a variation in the three countries with

regard to the way the per diem and seminar systems operate, opening

up the possibility for a variety of methods for misuse or non-optimal use

of the money that has been allocated for seminars.

The study has no conclusive evidence of the precise magnitude of the per

diem problem but gives important insights into the potential for misuse,

and contains a number of recommendations on how donor organizations

and governments can promote a collective approach to improve on the

current systems.

Oslo, April 2012

Marie Moland Gaarder

Director of Evaluation