Uncomfortable Truths: Exposing the Colossal Remuneration Differentials and Their Corrosive Effects
The rhetoric of “partnership” and “country ownership” (Post 5) fundamentally clashes with a pervasive and often unacknowledged reality within the foreign aid industry: the colossal disparities in pay, perks, and status between Western donor staff (and their consultants) and their local counterparts in recipient governments. David Sims identifies this economic chasm as an uncomfortable truth that permeates and poisons almost all development activities, generating suspicion, jealousy, and tension, while actively undermining critical objectives such as capacity building and genuine teamwork.
This post dissects the sheer scale of the pay gap, detailing the comfortable compensation packages of international staff, the minuscule salaries of local government officials, and the specific distortions this inequality creates, including brain drain and the perception that local staff working for donors are collaborators against their own countries.
The Elephant in the Room: Vast Pay Differentials
In almost every interaction where the West and “the rest” meet in the development business, the fact remains that a Western donor official, along with the Western consultants and contractors they hire, enjoys levels of remuneration and perks that are multiples of those of local hires and many multiples compared to their counterpart government official or local professional.
The existence of these huge inequalities is rarely recognized but is a constant source of tension and suspicion. It raises fundamental questions about the viability of development cooperation: how can genuine “partnership” or “ownership” be discussed when such economic imbalances exist? And how can effective teamwork be achieved when individuals performing similar tasks have such a colossal difference in pay?
The Comfortable Compensation of the Donor World
International staff working for multilateral organizations, bilateral agencies, and major consulting firms enjoy “comfortable pay scales”.
Donor Agency Salaries and Perks
Multilateral financial institutions like the World Bank pay their “several thousand strong army of professionals very well, probably the best rates in the business”.
In 2017, the average annual salary for a younger professional at the World Bank was $118,900 (plus $59,970 in other benefits).
The average annual salary for a senior professional was $158,200 (plus $83,160 in other benefits).
World Bank salaries are free of US income taxes, and retirement benefits, health, disability, and life insurance packages are “excellent”.
Bank employees also have opportunities for self-improvement and training, including paid time off to write professionally.
Furthermore, donor officials face demanding travel schedules, but these are accompanied by substantial benefits: the average Washington staffer is likely to spend 40 percent of their time on mission away. During these missions, they stay at the “best hotels,” travel business class, and receive per diems that cover meals in the most expensive restaurants and all transportation. The Asian Development Bank (ADB) and other multilateral banks maintain similar pay scales.
Consultants and Contractors
Consultants and contractors hired by donor agencies also command high rates. A study of UK aid found that foreign aid ‘fat cats’ and contractors’ staff were among the best paid in Whitehall, sometimes pocketing nearly twice the average salary of workers in the sector. In Germany, a study concerning development workers from the development agency GIZ found that their salaries were sometimes higher than the average GIZ manager’s salary.
The per diem allowances are a major source of distortion. They are intended to cover the costs of meals, local transport, and incidental expenses in a recipient country. These allowances are set at levels that allow foreign experts to enjoy an exceptional standard of living in the rest. The daily subsistence allowance enjoyed by foreign partners is often higher than the monthly salaries of their local counterparts.
The Plight of the Recipient Government Official
In stark contrast to the donor world, the salaries of civil servants in recipient countries—the individuals expected to be “partners” and show “ownership”—are often shockingly low.
In many developing countries, government salaries are often only a pittance.
For example, in Egypt, government salaries were deliberately depressed following a period of expansionary hiring, becoming inadequate to meet living expenses.
In Zimbabwe, during a period of economic collapse, some civil servants had to survive on salaries equivalent to just $10 per month.
Even in Ghana and Mali, governments face difficulty in retaining competent civil servants due to the low pay.
This desperate financial situation means that local officials are expected to devote considerable extra effort and time to donor projects (and attend endless workshops and roundtables) without material reward, maintaining the “fiction” that they are motivated purely by the best intentions. Similarly, poor citizens affected by a project are expected to “joyfully spend their own time” participating in donor-mandated jamborees without compensation, even though they are the objects of the whole exercise.
Corrosive Effects: Capacity Drain and Suspicion
The massive disparity in remuneration generates profound and chronic negative effects on the efficacy and perception of development work.
1. The Undermining of Partnership and Teamwork
It is impossible to discuss genuine partnership or teamwork when pay differentials are so massive. Donor staff, living in a “privileged bubble” (Post 7 theme) of high pay and luxury travel, are profoundly distant from their government counterparts. This distance makes collaboration fraught with tension, suspicion, and jealousy.
2. Fueling Brain Drain and Poaching Talent
The development industry actively contributes to the brain drain phenomenon. It is “very understandable” that highly skilled professionals in the rest would seek opportunities where their income can easily increase by ten or twenty times simply by moving to a Western country—a process known as achieving “escape velocity”.
The donor world provides pathways for this exodus:
Bursaries and Scholarships: Bilateral donors offer help and bursaries to promising students in the rest, ostensibly requiring them to return home. However, many remain abroad for further studies and teaching assistantships.
NGO/Contractor Experience: Working for an INGO or a large Western contractor in one’s home country is a well-trodden route. National professionals learn in-demand donor skills, such as constructing logical frameworks and preparing complicated spreadsheets on results indicators.
Moving ‘Out and Up’: A Filipino professional noted that when INGOs leave, the capacity gap isn’t caused by a lack of local capacity, but by salary differentials: the tendency for someone who worked for an INGO or big U.S. contractor is to “move out and up—and not come back”.
3. Creating the ‘Foreign Fingers’ Complex
National staff hired by donor agencies (often referred to as ‘donor local hires’ or desk officers) technically belong to the recipient country but are highly remunerated and often better skilled in donor procedures and language competencies than their government counterparts. They can play a useful role in mitigating the confrontational atmosphere of projects by conveying donor logic in the local language and using personal networks to circumvent rigid structures.
However, the high-class status and dramatically higher remuneration lead to deep suspicion among local government officials and those distrustful of foreign intentions. These national staff members are often construed as having “greater loyalty to their employers than to their country” and are thus perceived as part of ’them’ rather than ‘us’. This situation exacerbates the “foreign fingers complex”—the resentment at the apparent arrogance of foreign actors interfering in local affairs.
4. The End of ‘Topping-Up’
In the past, donors or contractors would use “topping-up” salaries—offering small monetary rewards to key local officials or functionaries for their efforts—to ensure local buy-in or smooth project running. This practice has been prohibited by most donors, who now maintain the fiction that local government counterparts are motivated purely by good intentions. The prohibition means that officials must dedicate significant time to donor operations without compensation, further straining their resources and diminishing their motivation.
In sum, the donor industry’s reliance on huge pay differentials ensures that the “partnership” is never equal, institutionalizing a system where the vast resources dedicated to development also function as a massive magnet, pulling the best talent away from the local institutions they are supposedly meant to strengthen.
The pay gap is the engine of a slow-motion intellectual siphon, constantly extracting the most skilled and ambitious local talent away from their financially constrained governments and into the orbit of the rich, well-funded donor machine. This keeps local institutions perpetually weak, thereby guaranteeing the donor’s continued relevance and need for external, high-cost expertise.
The next post will explore another pervasive “chronic ill of the industry”: the self-serving nature of donor travel, communications, and evaluation, and the enduring problem of institutional amnesia.