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The development policy debate focuses too much on aid.  Aid policies may help to improve the living conditions of people in developing countries, but it is development policies that will result in lasting transformation. If we are serious about promoting long-term change, we should talk less about aid, and more about the other rich-world policies and behaviours that affect developing countries.

Rich countries have many reasons for wanting to help poor countries. The main three British political parties speak in their manifestos of Britain’s obligations to the developing world (Lib Dems); moral duty, common interest and poverty emergency (Lab); and enlightened self interest and commitment (Cons).  The combination of motives – moral concern for others and self-interest – is a strength of the development cause, not a handicap.

These motives translate into two broad classes of objectives for development policy:

• One view is that development assistance should help to accelerate economic and institutional change in developing countries. The idea is that temporary support from outside can be a catalyst for permanent changes in developing countries. As economic growth takes off, developing countries will no longer need our help.  This view is attractive both to donors, who do not want to go on giving aid for ever, and for recipient countries who do not want to continue to be aid dependent.  For shorthand we will call this the transformation objective of development assistance.
• Another view is that development assistance can improve people’s lives today. This is most obvious in the case of humanitarian relief, for which the objective is to provide food and shelter; but more generally a lot of aid is used to send children to school or provide basic health care.  On this view, the development process is long and hard, and one role for outsiders is to enable people to live better lives while this process is happening in their country. Let’s call this the solidarity objective of development assistance.

It is entirely reasonable for countries, organizations and individuals to care deeply about both the transformation and the solidarity objective, and they can coherently pursue both objectives at the same time.

From time to time, people try to make connections between these objectives, positive and negative.

The claim of a positive connection is the idea that spending money on health and education is an investment in the human capital of a country, and that this will, in time, lead to faster economic growth.  Some point to significant investments in education in fast-growing Asian economies as evidence that education spending will promote growth.  Others say that improving health will lead to a demographic transition, in which falling infant mortality leads to smaller family sizes and greater investment in each child.  Both of these stories are appealing, though unfortunately neither is very well supported by the evidence.

The possibility of a negative connection is that the things that donors do to support people in developing countries as a matter of solidarity may actually slow down the political, social, institutional and economic changes that the country needs for transformation.  It may sustain unaccountable governments in power; undermine the social contract between citizen and state; hollow out fragile government institutions; cause appreciation of the real exchange rate and so choke off exports; or create a culture of dependency that dims demand for social change.  Again, the empirical evidence for these (quite plausible) ideas is pretty thin (pace the claims of Dambisa Moyo).

Are we using the right tools to pursue our two types of objective: tying to catalyze transformation, and at the same time to help people live better lives?   I think we are focusing too much on aid and not enough on development policies.

It is quite straightforward to see that aid can help meet solidarity objectives.  It is used to provide clean water and food, and to finance public services such as health and education.  There is quite good evidence that it is effective, though there is much more to learn about how to do it better.

It is much less clear that aid achieves our transformation objectives. The statistical evidence linking aid to economic growth is, at best, uncertain (see The Anarchy of Numbers by David Roodman).  This does not mean that there is no relationship – it is much harder to demonstrate a statistical connection when there are few countries to observe, and so many factors as well as aid that are likely to affect whether a country achieves economic lift-off.  We can think of aid being to growth what venture capital is to start-ups: many investments will fail, but the huge benefits from the few that succeed may make the losses worthwhile.

I personally have my doubts that aid makes much difference to the prospects for economic and social transformation.  Countries change from within, through long, slow, organic processes, and it is hard to see how money and advice from outside can make much of a difference to that.  Consider our own history, and the decades and centuries that it has taken us so far to construct our social and political institutions.

If we are serious about promoting transformation, we need to look beyond aid to how we can change the environment in which developing countries are struggling to change their economic, social and political institutions. Transformation is much likely to take root if we create conditions in which it is likely to succeed.

What are the development policies that might contribute to this?

1. Trade policy – As well as duty-free, quote-free access for all developing countries to our markets, we have to dismantle the complex rules – such as rules of origin and phyto-sanitary standards – which make exports complicated.
2. Agriculture policy – We have to stop dumping subsidized agricultural over production abroad, especially as our aid conditions prevent developing countries from competing with us. We also have to stop using food aid as a welfare system for European and American farmers.
3. Climate change – If anthropogenic global warming is a reality, as is the consensus among scientists, then the harm we are doing to developing countries through climate change will become one of the most important obstacles to development.  Probably the most important thing we can do to accelerate development is to stop our own carbon emissions.
4. Conflict – We make and sell the guns that are used in conflicts in developing countries.  We buy the oil and minerals over which groups are fighting.  We sustain the unaccountable leaders in pursuit of our geo-strategic interests.   If we were serious about development, we would by now have stopped the Lord’s Resistance Army in Uganda – it would be a simple matter for a well-resourced army.
5. Immigration – In the 18^th Century, a third of Europeans moved to America, to the benefit of both continents.  In the 20^th and 21^st century we have introduced historically unprecedented restrictions on the movement of people – notwithstanding our rhetoric about globalization. These restrictions may be the single most important factor which explains why poor countries have not been able to converge on rich countries.
6. Intellectual property – Another constraint on the ability of developing countries to close the gap is that there are historically unprecedented constraints on their ability to appropriate technologies. For centuries, new agricultural techniques such as crop rotation spread through word of mouth.  During the industrial revolution, America and Europe were able to use technologies from Britain.  When Henry Ford invented the assembly line, the idea was rapidly adopted everywhere.  But today’s technologies – from business software to pharmaceuticals and biotechnology – are protected by patents that make it impossible for other countries to adopt.
7. Corruption – We often think of corruption as a problem of developing countries, but this ignores the fact that the money for corruption comes from, and often returns to, industrialised countries.  Rich western companies pay bribes, in return for access to contracts or minerals.  To his eternal credit, President Jimmy Carter introduced the Foreign Corrupt Practises Act, which made it harder for American companies to pay bribes abroad. But there is much more we could do, if we were prepared to take on the vested interests of our own multinational companies, to reduce corruption in developing countries.
8. International governance – In our own nations, we have long ago dropped the property qualification for representation; but internationally we do not think that it is strange that representation in our main institutions is based on wealth and power.  This matters because again and again, the interests of developing nations are ignored, or treated only as a footnote.  From banking secrecy to internet peering arrangement, the rules of the game are set by the wealthy in their own interests. Changes to these practices which would be irrelevant to most of us, but could make a huge difference to the prospects for development, are resisted by powerful vested interests from industrialized countries.

It is entirely reasonable that industrialized countries want both to promote transformation in developing countries, and to help people there to live better lives while that process is taking place.  Aid has been proven to be an effective instrument for meeting our solidarity objective, but it is far less clear that it is a significant driver of transformative change.  Our political rhetoric focuses on the idea that development policies should promote transformation.  Yet it seems unlikely that aid is the most useful tool we have for achieving this.  If we are serious about transformation we should invest  more time and effort in creating the global environment in which economic and social change are more likely to succeed, by changing our policies and behaviours on issues like trade, agricultural policies and immigration.

Many people who work in development are directly or indirectly dependent on aid. Government development agencies gain their bureaucratic position from the size of their budget.  International NGOs get a lot of their money from aid budgets or from private charitable giving.  Partly as a result, the debate about development too often shifts to aid: whether it works, how much is given and by what means.  These are important questions, but primarily for the important goal of helping people in developing countries to live better lives while they are waiting for, and helping to build, a more prosperous and fair society.  If we are serious about accelerating the transformation, it is our development policies, not aid policy, that we should be discussing.

I know it is fashionable to denounce celebrities who get in involved in international development, but I admire both Bono and Bob Geldof.   They are smart enough to take advice from smart people, and they put serious amounts of time and effort into visiting developing countries and getting to know the people and understand the issues.  Indeed, they have both probably spent more time visiting in developing countries than the armchair critics who mock them.  They have stuck with the issues for more than a quarter of a century – much longer than the fleeting interest of many journalists and politicians. Neither of them needs the publicity: their willingness to use the platform of their fame to speak out for the poor has helped to keep development on the political agenda.

Bono made two very good points in the New York Times on Monday:

An Equal Right to Pollute (and the Polluter-Pays Principle)
In the recent climate talks in Copenhagen, it was no surprise that developing countries objected to taking their feet off the pedal of their own carbon-paced growth; after all, they played little part in building the congested eight-lane highway of a problem that the world faces now. One smart suggestion I’ve heard, sort of a riff on cap-and-trade, is that each person has an equal right to pollute and that there might somehow be a way to monetize this. By this accounting, your average Ethiopian can sell her underpolluting ways (people in Ethiopia emit about 0.1 ton of carbon a year) to the average American (about 20 tons a year) and use the proceeds to deal with the effects of climate change (like drought), educate her kids and send them to university. (Trust in capitalism — we’ll find a way.) As a mild green, I like the idea, though it’s controversial in militant, khaki-green quarters. …

People Power and the Upside-Down Pyramid
A lot of us have seen or lived the organizational chart of the last century, in which power and influence (whether possessed by church, state or corporation) are concentrated in the uppermost point of the pyramid and pressure is exerted downward. But in this new century, and especially in some parts of the developing world, the pyramid is being inverted. Much has been written about the profits to be made at the bottom of the pyramid; less has been said about the political power there. Increasingly, the masses are sitting at the top, and their weight, via cellphones, the Web and the civil society and democracy these technologies can promote, is being felt by those who have traditionally held power. Today, the weight bears down harder when the few are corrupt or fail to deliver on the promises that earned them authority in the first place. The world is taking notice of this change. On her most recent trip to Africa, Secretary of State Hillary Rodham Clinton bypassed officials and met instead with representatives of independent, nongovernmental groups, which are quickly becoming more organized and more interconnected. For example, Twaweza, a citizen’s organization, is spreading across East Africa, helping people hold local officials accountable for managing budgets and delivering services. (Twaweza is Swahili for “we can make it happen.”)

(Disclosure: I am a member of the board of Twaweza, so it is not surprising that I agree with Bono that their work is good.)

Update: You should also read Alex Evans’s excellent piece at Global Dashboard on the importance of Bono’s support for contract and converge.

Over the weekend we were trekking in the north of Ethiopia. The fields were full of wheat and barley, looking (to my inexpert eye) about 3 weeks from harvest (see the picture, right, taken on 29th November).  The farmers all said they were looking forward to a good harvest this year.

Then last night, we woke up to torrential rain. I gather it was raining in Addis Ababa too.  It doesn’t normally rain at this time of year in Ethiopia.  If this continues for another day or two, the crop will be ruined.

The rain today is an unwelcome reminder of how precarious is the livelihoods of millions of people who are dependent on rain coming at the right time (and not at the wrong time).  It can turn a good harvest into a bad one, or into no harvest at all.  Affected families may be forced to sell their meagre assets, pushing not only them but their children into another generation of chronic poverty.

Our thoughts today are with the millions of farmers of Ethiopia and their families.

UPDATE: (2nd December) – It has been cloudy, but not raining, here in Addis. Fingers crossed.

George Osborne told the Conservative Party Conference eight times:

we are all in this together.

This is a powerful message.

When 15 million people  face starvation in East Africa this Christmas, let us say:

we are all in this together.

When twenty thousand children die tomorrow from easily preventable and treatable diseases, purely because they don’t have enough money to buy drugs that cost cents to produce but for which we charge rich world prices, let us say:

we are all in this together.

When the developing world demands proper compensation for their part of the atmosphere, which we have filled up with carbon emissions far beyond our share, resulting in the risk of destruction to entire nations, let us say:

we are all in this together.

When the people of the Niger Delta demand a share of the wealth lying beneath their ground, and an end to the environmental destruction caused by our oil companies so that we can drive our cars and cool our houses, let us say:

we are all in this together.

When we complain about corruption in the developing world, forgetting that all the money that pays for those bribes comes from us, and then choose not to prosecute our own companies that pay the bribes, let us say:

we are all in this together.

When we continue to be one of the largest manufacturers and exporters of arms in the world, fuelling conflict all around the world, but are more concerned about a hundred jobs on the Isle of Wight, let us say:

we are all in this together.

When people are forced to leave their homes, their family and their country because they lack freedom or face persecution, or because they cannot find work that pays them enough to support their family, and they look for a new beginning in rich countries, and we decide how we will treat asylum seekers and immigrants, let us say:

we are all in this together.

When the world’s poor demand fair payment for their coffee, cocoa, and minerals, and for their labour which provides us with the cheap clothes and electronics which we take for granted, let us say:

we are all in this together.

When the world economy recovers, companies of the rich world begin to prosper, when bankers get their bonuses again and the rich start to become richer, and we decide how to share the proceeds of that growth within and between nations, let us say:

we are all in this together.

We hear a lot about the impact on carbon emissions and climate change of travel, especially by air, but very little about the impact of the livestock industry, which has been estimated to be responsible for 18% of all man-made greenhouse gas emissions, more than the total emissions from all sorts of travel put together.

I have a personal interest in this because I travel a lot by air (boo!) but I have not eaten meat for 25 years, nor do I own a car.  I also live in a house that has neither any heating nor air conditioning; nor (unlike many ex pats in Addis Ababa) do we have a generator.  So if we are fixated only on air travel, my carbon footprint looks horrendous; but it looks a lot better if you take account of other aspects of my lifestyle. I am sure I should do more, probably much more, to reduce the damage that I do to the environment: but let’s look objectively at the overall impact of a person’s lifestyle, rather than focus on any single measure.

The fixation with air travel annoys me because I think that there is public good in air travel.  The world would, in my view, be a better place if more people were able to travel and meet people in other countries and learn about other cultures.  We would have a stronger sense of solidarity with other people around the world and a greater willingness to act collectively to solve global problems.  We would probably be more worked up about the need to tackle global warming if we saw first hand how it is already affecting communities affected by rising temperatures and rising sea levels.  Air transport also enables farmers in Africa to grow flowers and beans for sale in Europe, with an overall carbon cost that is much lower than if these products were grown in greenhouses in Europe, and that trade provides livelihoods for more than a million people who desperately need it so that they can trade their way out of poverty.

I do not see a similar “public good” argument for eating meat.  I did not become a vegetarian 25 years ago because of climate change, which hadn’t been invented then, but because I thought then and continue to believe that it is wrong to eat animals purely for pleasure.  As well as being bad for the animals themselves, and for the climate, the meat industry is destroying our health and our countryside.

Yesterday Tristram Stuart Hunt in The Guardian calculated how much we should reduce our meat consumption:

Based on the global food production figures published by the FAO, I did a few preliminary calculations. Global average consumption of meat and dairy products including milk was 152kg a person in 2003. Average EU and US consumption, by contrast, was over 400kg, while Uganda’s was 45kg. In order to reach the equitable fair share of global production, rich western countries would have to cut their consumption by 2.7 times – and this doesn’t include the fact that the butter will have to be spread even more thinly if the global population really does increase by another 2.3 billion by 2050.

However, still further reductions would be necessary because global meat production is already at unsustainable levels. The IPCC among other bodies, has called for an 80% reduction of greenhouse gas emissions by 2050. Since high levels of meat and dairy ­consumption are luxuries, it seems reasonable to expect livestock production to take its share of the hit. For rich ­western countries this would mean decreasing meat and dairy consumption to significantly less than one tenth of current levels, the sooner the better.

So let’s try to focus less on air travel – which has positive benefits for the world – and more on changing our diet, which we should be doing even if there were no impact from livestock on climate change.

I suspect that the environmental movement focuses on air travel partly because it appeals to an instinct for class war. The kind of people who fly several times a year on long-haul flights are the kind of people we love to hate.  This makes a campaign against air travel much more popular than criticising people for eating meat, which would mean taking on “ordinary” people.

Of course, as a vegetarian who flies a lot, I would say this, wouldn’t I?

Last month the OECD published aid data from donors for the period up to and including 2007.  With my colleagues at Development Initiatives, we have done an analysis of the figures for the House of Commons International Development Committee. The full memorandum (as .pdf) is here.

Here are some key points:

• Donors promised to increase aid by 2010.  Half way to that target, if donors had been increasing aid at a constant rate to meet their commitments:
  - Global aid in 2007 would have been $18.4 billion higher
  - Over the last three years donors would have spent an additional $29.5 billion
  - This would have lifted approximately an extra 15 million people permanently out of poverty.
• The G7 also promised in 2005 to double aid to Africa. Half way to that target:
  - G7 aid to Africa has increased by only $3.3 billion, less than a sixth of the promised increase.
  - If aid had been increased at a constant rate towards the target, aid to Africa would have been more than $6 billion higher in 2007.
• It is becoming clear that Italy, Germany, Portugal, Greece and France are not going to meet their promises
• The financial crisis is a potential “quadruple whammy” for developing countries. The value of the existing aid commitments has fallen (because they are expressed as a share of GDP), donors are increasingly unikely to meet those commitments, the financing needs of developing countries have been increased by the downturn, and there will be be substantial declines in non-aid flows to developing countries such as foreign direct investment, remittances, and equity investment.

In industrialised countries the fiscal “automatic stabilisers” tend to increase spending in recession, which both dampens the macroeconomic effects of the downturn and channels additional funding to services that face additional costs. By contrast the institutional arrangements for providing finance to developing countries tend to mean that finance is reduced just as needs are increasing, which amplifies the economic downturn, increases economic instability and jeopardises poverty reduction and service delivery.

Al Gore (reported in the NY times)

“We’re borrowing money from China to buy oil from the Persian Gulf to burn it in ways that destroy the planet. Every bit of that has to change.”

Hilary Benn says that we should buy flowers imported from poor countries, even if we are concerned about the environment:

some recent research by Cranfield University – who compared the emissions from producing 12,000 rose stems in Kenya with those in Holland, including transporting them to Hampshire – and found that the emissions produced by Kenyan rose and flying them here can be less than a fifth of those grown in heated and lighted greenhouses in Holland. Why? Because Kenya is warm and sunny, and heating greenhouses in Holland uses enormous amounts of fossil fuels.

Furthermore, even if it were not better for the environment to buy African flowers rather than Dutch flowers, we should still consider buying flowers, fruit and vegetables from Africa:
people living in the vast majority of African countries are responsible for a tiny amount of carbon emissions. In Kenya, carbon emissions are 200 kg a head; here it is fifty times that. We should bear that in mind when making our choices.

This is social justice on a global scale. If we boycott their goods that are flown to the UK we deny our fellow human beings their chance to grow; their chance to reduce poverty. It’s like saying, we messed this planet up, but you can take the consequences.

So do the right thing on Valentines Day: buy flowers from Africa.