DfID has a very good reputation abroad, but hardly anybody in the UK knows anything about it, or appreciates how much DfID contributes to positive perceptions of Britain.  I hope this blog will help tell the story in a very direct and personal way.

I used to blog when I worked at DFID, but that was before the government had guidelines about blogging. Let’s hope that the Government will be willing to accept that there will be some uncomfortable moments but that the benefits hugely outweigh the risks.

With the financial turmoil affecting many of the world’s economies, Elizabeth Blunt in Addis Ababa considers how Ethiopia and other parts of Africa may escape the worst of the credit crisis.

But that headline does not seem to be consistent with the rest of the article which goes more like this:

Over the past few years, Ethiopia has been having something of a boom of its own, and Addis Ababa is littered with building sites.

But a lot of these ambitious construction projects seem to have got stuck halfway. Some may have run out of cement, but others, even more of them, have probably run out of money.

… In all of this, the only money coming in from outside that is a significant flow in most African countries might be remittances from workers overseas.

I think the financial difficulties might hit Ethiopia, and other African countries, pretty hard; especially if remittances dry up, investment (such as it is) falters, and rich countries become more protectionist and less likely to give aid.

We are launching the Commission on Growth and Development BLOG (The Growth Blog) today, while unprecedented changes in the financial markets are underway. These changes have the potential to reconfigure financial systems and manner not seen since the 1930s.

I found the Growth Commission Report strangely disappointing.  Let’s hope the blog is better.

Simon Maxwell, Director of ODI, joined me for a discussion of this week’s Accra Agenda for Action, the UN MDG Gap Report, and the latest poverty statistics from the World Bank

To listen to the podcast, you can use this link:
http://feeds.feedburner.com/DevelopmentDrums

I’m aiming for a weekly roundup of development news.

This is my first effort at podcasting. I’d welcome feedback - do you like the format? How can we make it better?

2. The National Gallery of Scotland wants the tax-payer to buy some paintings from the Duke of Sutherland. Why don’t we apply Nice-style cost-benefit analysis here? Would £100m spent on art really produce £100m worth of increases in quality-adjusted life years (by improving the quality of life, not length of course)? And if we don’t apply such reasoning, why not? Why is the restrictive CBA of Nice only applied to drugs, rather than to all public spending?

Exactly right. And, in particular, why don’t we apply this form of cost-benefit analysis to international development spending?

The wisdom of Buzkashi riders, passed on from generation to generation in Afghanistan, says that ‘when you discover that you are riding a dead horse, the best strategy is to dismount’. However, in the UN and NGO community a range of far more advanced strategies are often employed, such as:

• Changing riders;
• Appointing a committee to study the horse;
• Arranging to visit other countries to see how others ride dead horses;
• Lowering the standards so that dead horses can be included;
• Reclassifying the dead horse as ‘living impaired’;
• Hiring outside contractors to ride the dead horse;
• Harnessing several dead horses together to increase the speed;
• Providing additional funding and/or training to increase the dead horse’s performance;
• Doing a productivity study to see if lighter riders would improve the dead horse’s performance;
• Declaring that as the dead horse does not have to be fed, it is less costly, carries lower overhead, and therefore contributes substantially more to the mission of the organization than do some other horses;
• Rewriting the expected performance requirements for all horses;
• Preparing a workshop with paid attendants on the subject of Experience gaining in riding dead horses in post war setting;
• Preparing a second workshop on environmental hazards caused by horse shit, and the advantage on using dead horses since they do not shit therefore are of no hazard to the environment.

The estimates show:

• the developing world is poorer than we thought; there are 1.4 billion people living in poverty (about one quarter of the developing world), not 985 million as we previously thought
• nonetheless, progress in reducing poverty has been about as fast as previously believed - poverty has been declining at the rate of about one percentage point a year, from 52 percent of the developing world’s population in 1981 to 26 percent in 2005. This is a reduction in the number of poor of about 500 million people.

As the full paper explains, the new poverty line is $1.25 a day in 2005 prices, compared to the old poverty line of $1.08 a day in 1993 prices.   This is actually a downward revision of the poverty line in real terms: if it had been kept the same in real terms (ie adjusted only for inflation) it would be $1.45 a day in 2005 prices.  (There are currently 1.7 billion people living on less than $1.45 a day in 2005 prices, the equivalent today of the old poverty line - which is nearly twice as many as we previously thought lived in poverty.)

The meaning of the poverty line is often misunderstood.  Some people assume that the poverty line measures the number of people who have an income of $1.25 a day; and they reassure themselves by thinking “a dollar will go a long way in some countries”.   But the poverty line is measured as $1.25 a day at purchasing power parity - that is, people below this line are able to buy each day what $1.25 would buy them in the United States.  This really is an absolute measure of poverty.

Of course, the newspapers got this all wrong:

James Politi in the FT reported

The new figure was estimated after researchers at the bank raised the threshold for extreme poverty from earnings of $1 a day to $1.25.

(Not true; the threshold has been reduced in real terms). The BBC reported

The new estimates suggest that poverty is both more persistent, and has fallen less sharply, than previously thought.

(Not true: it has fallen at the same rate as previously thought; just at a much higher level.)

Finally - a big untold part of this story is the big changes in the purchasing power parity estimates that underpin these poverty figures.  These show massive changes in the estimates of GDP at PPP. For example, here in Ethiopia, GDP per capita is now estimated to be $591 per year, compared to $1084 under the previous estimate.  India is down 40%, now below Pakistan in income-per-head; and China’s income per head is also 40% lower than the previously estimated.

The GM ban has three adverse effects. It has retarded productivity in European agriculture; grain production could be increased by about 15% were the ban lifted. More subtly, because Europe is out of the market for GM technology, the pace of research has slowed. GM research takes a long time to come to fruition, and its core benefit - the permanent reduction of global food prices - cannot fully be captured through patents. European governments should be funding this research, but it is entirely reliant on the private sector. Private money for research depends on the prospect of sales, so the ban has not only blocked public research - it has reduced private research. …

…. It is conventional to say that Africa needs a green revolution. The reality is that the green revolution was based on chemical fertilisers, and even when fertiliser was cheap, Africa did not adopt it. With the rise in fertiliser costs as a byproduct of high energy prices, any green revolution will perforce not be chemical. What African agriculture needs is a biological revolution. This is what GM offers, if only sufficient money is put into research. There has as yet been no work on the crops specific to the region, such as cassava and yams.

Mainstream scientists have responded to Priince Charles that GM offers the opportunity to redistribute wealth to feed the poor. With the right investments in technology, Africa could not only feed itself, it could be a major food producer for the rest of the world. GM corn in Africa produces four times as much corn per acre (and the corn can be protected from witchweed, unlike the previous varieties).

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• Untie all aid, including technical assistance, and publish information on which providers get contracts in practice.
• Tell recipients what donors are spending through a concrete set of standards for transparency.
• Make all evaluations public, regardless of their results, by entering them into a prospective registry.
• Pay for outcomes not inputs, by piloting a Cash on Delivery aid contract with interested recipients.
• Let recipients use technical assistance to buy what they need by piloting with interested recipient(s) an arrangement giving recipients full flexibility in what consulting and training to buy, and financing a platform for recipients to give and see each other’s feedback on the services offered by multiple providers.
• Give recipients ironclad predictability of the future aid flows to which they commit by allowing recipients to arrange with an intermediary to receive a guaranteed cash flow, and sign over the donor’s actual flows over some agreed period to the intermediary.

I like these suggestions partly because they are each sensible in themselves. But the main reason I like them is that too much of the discussion about Accra has focused on rather narrow and technocratic measures to address particular items in the Paris Declaration. These ideas from CGD are more far-reaching: proposals such as greater aid transparency (which is what I spend most of my time working on) or on paying for outcomes (instead of micromanaging how money is spent) are ways to change the whole nature of the relationship between donor and recipient in the way that Paris envisages.

My only complaint is that they should have called the paper “a little less conversation”. After all, as Elvis said:

A little less conversation, a little more action please
All this aggravation ain’t satisfactioning me
A little more bite and a little less bark
A little less fight and a little more spark
Close your mouth and open up your heart and baby satisfy me
Satisfy me baby

The Welbodi Partnership was established to support the provision of paediatric care in Sierra Leone, where child health statistics are the worst in the world.

The cool thing - as Tristan points out - is that:

they work directly with the Ministry of Health and Sanitation to improve the hospital, instead of running their own hospital, as many NGOs like to do. This way, they deliver services and build capacity in the country’s health system.

There are far too many NGOs who, for respectable reasons, set up parallel services. The result is duplication and waste, and foreign-funded NGOs often deplete capacity from already hard-pressed government systems. The Welbody partnership approach seems to combine the best of both worlds.

Does anyone know of other NGOs taking this approach?

A prerequisite for effective ownership and efficient aid delivery, at the core of the Paris Declaration on Aid Effectiveness, is to map the rising complexity of multilateral development finance, to help identify areas for consolidation, address fragmentation and poor co-ordination at country level, and help identify comparative advantages for institutional role assignments among multilateral agencies. Such mapping identifies overlaps - leading to reduction of multilateral remit or proposals for consolidation; rivalries - leading to clarification of roles; and absences of co-ordination - leading to the design and implementation of co-ordinating structure.

I don’t think that mapping comparative advantage is the way forward. In the real world, firms do not try to analyze comparative advantage: they focus on maximising shareholder value and the ones that don’t succeed go bust or get taken over. Focusing on comparative advantage is the outcome of effective decisions, not the input. The problem in the aid industry is that there is no feedback mechanism to drive organisations towards their comparative advantage. The solution to this is to create stronger incentives - such as measuring results, greater transparency, funding outputs rather than inputs and increasing accountability - to force organisations closer to their comparative advantages. The “Gosplan” approach has been tried in development and it doesn’t work.

Awke Tiruneh and his wife Emaye Beyene are not the only couple who are faintly bemused. They are pleased with their two lightbulbs, one in the main room and a second in the kitchen annexe of their pristine mud hut, and with the radio that everybody in Rema tunes to get music, not news. But they say they don’t want anything else.

“When they have more money, they don’t know what to do with it in Rema,” says Samson Tsegaye, country director of the Solar Power Foundation. “They are happy. They don’t need a Mercedes or a television. When they have money, the men are always going to the bar.

The idea that the people of Rema “don’t want anything else” seems improbable to me. I am all for looking at consumerism with a sceptical eye; but there is a world of difference between conspicuous consumption and having enough money to send your children to school, or to afford health care, or to have what you need to cope with the failure of the harvest. And why shouldn’t the people of Rema have a television if they want one? Does the country director of a western NGO really speak for them?

Major operators such as Difid, the British government arm, and USAid play a cat-and-mouse game with the government (GoE) because Meles is sensitive about external pressures in an environment in which domestic critics are almost silenced and expatriate websites blocked. Yet donor aid contributes at least 20% of GNP to a precarious economy, so cash can’t be turned away.

Donors are aware of their power and responsibility. With the Ethiopian opposition parties in disarray (1) they are the only real curb on Meles. Big-time donors (the World Bank via the International Development Association, UNDP, the US, the UK, international NGOs) work through GoE to agreed MDG objectives set out in the government’s plan for accelerated and sustained development to end poverty (PASDEP). Cash goes to approved projects administered by Ethiopians.

I do wonder about the role donors should play when the domestic political opposition does not exist or, as in this case, is in disarray. It is tempting for donors to step in to the gap and provide the necessary checks and balances. But in the end this undermines the space for parliament and opposition parties to hold the government to account.

So my view is that donors should avoid playing this role: not because I don’t think it is important to hold governments to account but because I do.

Africa needs stronger health systems, to be sure, but can we build those systems with our immigration policy? There is no scientific evidence that this has happened anywhere, or is possible anywhere. We should be very hesitant to force real people with real families to accept wages that we would never accept, without overwhelming and indisputable proof that by itself this blunt act does enormous good.

under the pretext of making aid more effective the Paris Declaration project is a form of collective colonialism by Northern “donors” of those countries in the South that (because of their weakness and vulnerability and psychology of “dependency”) may allow themselves to be subjected to it at the Accra September Conference.

This is massively overstated, but there is a kernel of truth here. Donors have the money, the choice and the power, and however progressive individual officials want to be, that power relationship is translated into institutional mechanisms such as the Paris Declaration.

That said, the Paris Declaration is the best opportunity for a generation to change that power relationship, by committing the donors to improving their behaviour as donors, including several measures which could, over time, rebalance the power.

I will be at the Accra September Conference and will report on whether we make progress.

I’m currently immersed in writing the main pamphlet for my project on food prices with Chatham House (hence not much posting for the last few days) - but I have to take ten minutes out to sing the praises of the gorgeous piece of writing I’ve been immersed in for the past couple of hours.

The paper in question is Escaping Poverty Traps: the Chronic Poverty report 2008-09, from the Chronic Poverty Research Centre. The title, admittedly, makes it sound like any other international development report of the sort that fill cardboard boxfiles in great reams of unread worthiness in people’s offices around the world. But don’t be fooled. This is an edgy, push-the-envelope, fundamentally political piece of work.

It would be preferable for government to understand providing reusable data, rather than providing websites, as the core of its online publishing responsibility. Rather than struggling, as it currently does, to design sites that meet each end-user need, we argue that the executive branch should focus on creating a simple, reliable and publicly accessible infrastructure that exposes the underlying data. Private actors, either nonprofit or commercial, are better suited to deliver government information to citizens and can constantly create and reshape the tools individuals use to find and leverage public data.

The paper goes on to say:

Rather than struggling, as it currently does, to design sites that meet each end-user need, it should focus on creating a simple, reliable and publicly accessible infrastructure that exposes” the underlying data. … Data should be available, for free, over the Internet in open, structured, machine-readable formats to anyone who wants to use it. Using “structured formats” such as XML makes it easy for any third party service to gather and parse this data at minimal cost.

This is, fortuitously, exactly what my colleagues and I working on aidinfo - an initiative to improve the transparency of aid information - have been saying. (Temporary website at www.aidinfo.org)

Reference: Robinson, David, Yu, Harlan, Zeller, William P. and Felten, Edward W., “Government Data and the Invisible Hand” . Yale Journal of Law & Technology, Vol. 11, 2008

Hat tip: Power of information blog