Annoyingly the meeting was held under The Chatham House Rule which means I am not allowed to report who said what. (Tangential thought: I am considering ignoring this in future if the invitation does not make it clear that this is the basis on which the meeting is being held.)  I am allowed to tell you that the group included people from ODI (Simon Maxwell & Andrew Rogerson), a co-author of Philanthrocapitalism (Mike Green), DFID (Paul Healy Healey & Laura Kelly), the EBRD (Erik Berglöf, Gaspard Koenig & Hans Peter Lankes), and representatives from KPMG (John Burton), ActionAid (Lucia Fry), Save the Children UK (Jessica Espey & Kate Dooley) and BOND (Joanna Rey).

It turned out to be an interesting discussion.

First, there was considerable pessimism about the public’s appetite for aid. Opinion polls depend heavily on how you ask the question, but a common theme seems to be that the public’s concern for poverty and development is stable and quite high; while the public’s confidence in government aid is falling rapidly.  There are several reasons why these may be diverging, which are not mutually exclusive. Declining support for aid spending may be the effect of the economic downturn; it may reflect a trend towards public distrust of bureaucracies; it may be the long term consequence of aid’s failure to live up to its supporters’ excessively grandiose claims of what it can achieve. There was some debate about whether a greater focus on ‘results’ could reverse this.  Hardly anyone seriously argued that declining public support is merely a temporary consequence of the economic downturn which will reverse automatically when incomes start to grow again.

A second interesting theme was the tension between more effective aid, and aid which donors are willing to provide. It is possible that as the system shifts towards greater recipient country control of how aid is used (as envisaged under the Paris Declaration), so support for aid in donor countries declines.  If you can’t use aid to promote your economic, commercial, security and strategic interests, then you might not want to give it at all.  Bertin Martens memorably pointed out that the end of structural adjustment programmes in the 1980s (under which donors attempted to impose various policies on recipient countries) was followed by sharp decline in aid in the early 1990s.  If you see the aid relationship as an equilibrium between the interests of the donors and the interests of the recipients, and if the Paris Declaration is an effort to move away from this equilibrium by reducing the power of donors and increasing the power of recipient countries, then perhaps declining aid budgets today are a consequence these modest moves away from the equilibrium. There is almost no public support for budget support (a form of aid which embodies many of the Paris principles) and  budget support may now in retreat – so perhaps the aid system was temporarily pulled from its equilibrium by Paris, and may now be heading back to it again.  In other words, there may be a choice between an abundance of somewhat ineffective aid which balances the interests of recipients and donors, and aid which is less conducive to the interests of donors, more effective at reducing poverty, but much less abundant.  Aid agencies have a stronger internal interest in abundance than in effectiveness, and so will tend to support a return to the equilibrium in which aid is popular and plentiful, but not tremendously effective.

The third theme was the most interesting.  Mike Green recalled an idea from Empire, a ghastly book published in 2000 by Antonio Negri and Michael Hardt, which suggested that activists may organize themselves as a ” post-modern posse”.    Mike suggested that, in the absence of effective mechanisms for global governance to provide public goods in a rules-based system, we are left tackling these problems in temporary coalitions, or posses, which come together outside formal structures and without formal legitimacy. Examples range from the coalitions of the willing which come together to support military intervention, to the vertical funds which have proliferated in the aid industry.  (Mike was not suggesting that this was desirable, but pointing out that this may be what happens in a second-best world without effective global institutions).  This idea clearly resonated with the group, which recognised the applicability of the metaphor as a description of today’s development system. (Update: more on the ‘posse’ idea from Mike Green and Matt Bishop here.)

My own view, for what it is worth, is that:

• we should consciously reposition aid as support to those who are most marginalised to provide them with access to key services such as food, water, health and education, and move away from the idea that the purpose of aid is to accelerate economic development;
• that’s not because economic development isn’t an important objective; but it may not be the best use of aid;
• the main things that industrialised countries can do to promote economic development in the developing world may be changes in other policies ‘beyond aid’ such as trade, climate change, migration, climate change, cooperation on tax, tackling corruption and illicit financial flows; and arms sales;
• some organisations which profess to be interested in development are too heavily focused on aid and not enough on how we can improve these other policies.

Primary school close to our house in Addis Ababa

Living in Ethiopia for the last three years, I saw aid working every day. I saw children going to school, health workers in rural villages, and food or cash preventing hunger for the poorest people.  The academic debates about aid effectiveness seem surreal when you are surrounded by tangible, visible evidence of the huge difference aid makes to people’s lives.

But on the whole the sceptics are not disputing that kids are going to school because of aid. They are asking what effect that has on the country as a whole. Does it lead to economic growth? Does it drive up the exchange rate and so damage competitiveness? Do governments become dependent on donors and so less accountable to their own citizens?  Does aid keep the bad guys in power?

It is possible that aid is effective in terms providing people with basic services, and at the same time that it is not effective at increasing economic growth.  It is even possible that aid simultaneously does short-run good (better services) and long-run harm (worse institutions).

It was this difference between perspectives which made me want to respond to the call for evidence in an investigation into aid by the Economic Affairs Select Committee of the British House of Lords. This committee, which includes some well-known economists and other public figures, is examining the ‘Economic Impact and Effectiveness of Development Aid’.

My written submission is here.  It is just six pages long. ( I’m very grateful to Stephanie Majerowicz for her help putting this together.)

The submission begins by trying to address the question of what aid is for, which seems to be the source of much of the confusion about whether aid works. Aid is often regarded as having two purposes: humanitarian aid to alleviate suffering usually in an emergency, and development aid to promote economic growth and sustained prosperity. But this is a false dichotomy: most aid falls into neither category. About two thirds of British bilateral aid is spent on improving services such as education, health, water and sanitation. This aid is not a temporary humanitarian response to an emergency, but a long-term contribution to the provision of key services and an investment in the institutions needed to provide them in the future.  The success of this aid is not best measured by whether it leads to growth in the short or medium term, but by the improvements it brings about in the quality of people’s lives.

The submission then reviews the evidence about whether aid leads to economic growth (answer: we don’t know) and whether aid improves people’s lives (answer: yes it often does).  The more interesting question is not whether aid works, but which aid works.

But there are also possible adverse effects of aid, and these are potentially serious. The submission suggests that these may be mainly a consequence of how aid is given and that they can largely be eliminated if donors give better aid. But that requires donors to overcome domestic political obstacles to reform of aid.

The evidence finishes with ten suggestions for how to make aid work better.  They are:

1. Spend more through the multilateral system
2. Make aid more predictable
3. Make aid transparent, accountable and traceable
4. Build the accountability of governments to their parliaments and citizens
5. Focus on results and use this to simplify aid
6. Invest more in global public goods, especially new technologies
7. Focus aid on people in chronic poverty, and on women and girls
8. Leverage the private sector
9. Use innovative finance to increase the productivity of aid
10. Learn more and fail safely

It is a good discipline to be concise, but it is not possible to do full justice in six pages to the nuances of these issues. I have tried address the big questions with what I hope are balanced and dispassionate judgments.  I hope you will let me know in the comments if you think I’ve got these right.

Read the full submission here.

This blog post was also published on CGD Views from the Center.

We may, however, soon find ourselves looking for a new Managing Director of the IMF, either because DSK is involved in a legal case or because he has declared himself a candidate to be President of the French Republic.

The speculation has already begun (see Alan Beattie in the Financial Times) with Christine Lagarde being touted in some quarters as a likely successor.

Under an unwritten agreement, the IMF’s managing director has always been European and the president of the World Bank has always been from the United States. (Jim Wolfensohn had to take out American citizenship to get himself nominated.)

This seems a good time to recall the Leaders’ Statement at the G-20 summit in London on 2 April 2009:

we agree that  the heads and senior  leadership  of the  international financial institutions should be appointed through an open, transparent, and merit-based selection process;

This is important for four reasons.  First, we want good people in these jobs. This is more likely if we thrown the field open to good people like Kemal Derviş and Trevor Manuel as well as Americans and Europeans, and make a choice based on merit not nationality. Second, people in these roles should owe their allegiance to the institution not to their own government.  Third, it is important for the legitimacy and effectiveness of these institutions that they do not appear to the rest of the world be the fiefdoms of rich and powerful nations, to be used as sinecures for supernumerary or inconveniently-placed politicians. Fourth, it brings the G-8 and G-20 into disrepute to say these things in communiques if we have no intention of implementing them.

The traditional next step is for the Europeans to do a deal behind closed doors, get American agreement, and then to accompany the announcement of a fait accompli with a lot of public hand-wringing about how the process will be better next time.

The Europeans want a fair and open process for the appointment of the next President of the World Bank  rather than having to accept another imposition from the Americans. The only way to achieve that is to relinquish our hold on top job at the IMF.  It looks as if we may shortly have the opportunity to do it.

At a conference at Wilton Park this week a number of people gathered together to review progress since the Africa Commission and Gleneagles Summit in 2005, and to discuss the prospects for a transformation in Africa over the coming years.  One participant (one of the authors of the Africa Commission report) argued that the Commission set out a comprehensive action plan which, if implemented across the range of its recommendations, could address these traps and lead to real progress.

I am not so sure. I think there is a fifth trap facing Africa which is more chronic and pervasive than any of the four traps identified by Paul Collier. It is the “unfair rules” trap, and I think it makes it very hard for Africa to make much progress on the other four.

Development and an improved standard of living for people in developing countries will come not from aid but from industrialisation and economic growth.  We do not know exactly how to ensure that these economic transformations occur, though there is much we can do to create the conditions in which it is more likely.  (Aid can help create the conditions for growth, and can help people to live better lives while the process is under way).  But as the world economy becomes more integrated and more globalised, many (though by no means all) of the determinants of a country’s opportunities for economic development are determined by international institutions, systems, rules and agreements.

The “unfair rules” trap is that the rules of the game are determined by the rich for the rich.  And the consequence for the poorest countries is that they are having to fight uphill to create conditions for their development; so they continue to fall behind the rest of the world economically.  Their relative lack of economic power reinforces their lack of political influence internationally and so makes it harder for them to influence the institutions and rules which contribute to their continued economic marginalisation.

This “unfair rules” trap takes many forms.  There is a myriad of complicated rules and institutions that affect a huge swathe of economic and political life.  These international agreements range from highly political – such as the global allocation of the right to emit greenhouse gases under the post Kyoto framework for climate change – to the deeply technical such as phyto-sanitary standards which unnecessarily limit exports of groundnuts from Africa to Europe.

On BBC World this weekend there is a debate among a group of African leaders in which Linah Mohohlo, the Central Bank Governor of Botswana, points out that new global rules are currently being devised to promote financial stability – an issue that affects every country in the world – without any participation by Africans.

Consider our attitude to property rights.  Rich countries have attached considerable importance to the establishment and global enforcement of intellectual property rights, which enable their firms to secure revenues from the use of their intellectual property. They have, for example, pursued this through the WTO.  Whatever you think about intellectual property rights, there is no doubt that they can be expensive for developing countries, both because of the huge revenues that flow from Soweto to Seattle and because of the restrictions imposed on access to vital knowledge rich products such as pharmaceuticals, software and business practices.    But consider a parallel property right: the right to emit greenhouse gases.  Like intellectual property rights, emission rights are an institutional construct designed to bring about an improvement in economic efficiency (by rewarding innovation in the case of IPRs, and by taxing polluters in the case of emissions rights).   Emissions rights, if properly designed, fairly allocated and enforced around the world, would entail a reallocation of wealth from rich countries to poor countries.  But while the rich world is happy to insist on the importance of intellectual property rights (of which it is a seller) it is unwilling to consider the establishment of property rights over assets for which it would be a buyer.  In the run-up to the summit in Copenhagen, there was no serious discussion of the idea that every citizen should be entitled to an equal share of the atmosphere, and that anyone wanting to occupy more than their fair share should pay compensation to those who are using less. The discourse is limited to the realpolitik of what rich countries are likely to accept.

Of course, it was ever thus.  Nobody should be surprised to hear that the rich and powerful set the rules, and that these are not always to the benefit of the poor.  But within nation states this dilemma is partly addressed through the political process.  Universal suffrage has made it impossible for national institutions, laws and regulations completely to ignore the interests of the poor; though of course there is still a long way to go before the interests of the poor are given the attention they deserve.

But the international system does not benefit from the equal representation implied by universal suffrage within nations.  In some international institutions, power is formally one-dollar-one-vote.  In many others  this is not the formal position, but it is true in practice.  The global political system does not rebalance economic power between nations in the way that political processes can within nations.

To address Paul Collier’s four traps will require concerted international action – for example, to take steps to prevent the corruption and patronage that is associated with extraction of natural resources, to limit the sale of arms which fuel conflict, or change trade rules in ways that improve Africa’s prospects of trading with the rest of the world.  That is why the trap of “unfair rules” is so profound: for as long as Africa remains politically weak in the international system, it is hard to envisage how the international cooperation is required will be brought about.

I find it hard to see how a transformation can be brought about unless we find a way to address the problem “unfair rules”.  For as long as Africa remains economically disadvantaged, it is marginalised in the setting of rules and governance of global institutions.   This in turn profoundly affects its ability to escape Collier’s four traps, and so limits its prospects for development, and thus locks in the growing divergence from the rest of the world.   Africa seems to be likely to be caught in the jaws of this trap for as long as there is no political process that allows African countries to obtain more power and influence within these international institutions than their relative economic weaknesses entails.

I’m envious of Tim’s ability to  express the ideas so much more succinctly and clearly than me.  He writes:

it might be easier to change the rules of the game to encourage real competition than to change behaviour

That’s my argument in a nutshell.

Tim also writes:

if you imagine a Howard Schultz of Starbucks attempting to “harmonise” the world coffee-bar industry, you can see how idiosyncratic the harmonisation agenda actually is.

In the paper I argue that more planning and coordiation among donors will not overcome the political constraints that prevent better aid.  The aid system is in a political equilibrium which we need to try to change; we won’t solve aid’s problems by trying to move away from the equilibrium.  This means making more use of market and network mechanisms to change incentives within the aid system. We need to stop thinking of grand new designs of the aid system and start putting in place mechanisms that force evolution in the right direction.

I’ve listed a set of measures, from the commonplace (untying aid, for example) to the unusual (tradable missions permits, or a tax on proliferation pollution) to illustrate the ideas.

I’ll be discussing the paper at the Overseas Development Institute (ODI) on Friday, and on a forthcoming episode of Development Drums.

I’m looking forward to comments and feedback.

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.

The Development Committee Communique says:

An additional Board seat for sub Saharan Africa on the Bank’s Board will be created.  DTC voting shares in IBRD and IDA will increase, giving special emphasis to small members.  … There is considerable agreement on the importance of a selection process for the President of the Bank that is merit-based and transparent, with nominations open to all Board members and transparent Board consideration of all candidates.

These are very welcome steps towards making the World Bank more accountable; but they are small steps so it encouraging that the communique refers to further reforms to come. (Bank President Zoellick  has established a new High Level Commission chaired by Ernesto Zedillo to look at improvements to governance.)

I suspect that there is an inwardness to the phrase “there is considerable agreement on the importance of …”.  This looks to me like a carefully-chosen form of words that masks a failure to agree stronger language that would firmly commit the Bank’s shareholders – particularly the United States – to an open competition for the Bank’s President in future.  Nonetheless, it is a step forward.

Part of the reason NGOs have difficulty meeting their overall goals is that they often end up measuring day-to-day results rather than long-term progress. As Andrew Mwenda, a Ugandan journalist and political economist who’s currently on fellowship at Stanford University, puts it, they measure “inputs rather than outputs.” If an NGO is planning to free up women’s time from domestic labour, for example, instead of measuring how much time they are spending cooking and cleaning, they might typically count how many women attended their last job-training session. “An NGO will say it’s trained 50 farmers in agricultural techniques,” Mwenda says, “but it won’t say whether that has led to an increase in production.”

I don’t think this is a problem confined to NGOs. The problem that many NGOs share with us in government is that there is no feedback loop from those whom we are supposed to be helping. Our accountability is to our donors (or taxpayers) who do not have first hand knowledge of whether we are delivering what we should.

More at Blake Lambert’s blog.

But it announced yesterday that there will be an official inquiry into the alleged removal of human tissues from the bodies of former Sellafield employees.

I just don’t understand this obsession with the treatment of dead bodies. Dead bodies don’t have rights. I really don’t care if human organs are taken out of dead bodies. What’s more, if these body parts can be used to identify causes of and cures for disease, then I think we should encourage scientists to use them.

How can we possibly think it is more important to investigate what happened to dead bodies than to find out whether somebody has negligently infected living people?

In simple language, the claim is that Stern does not properly take into account the principle that an extra pound of consumption is worth less to you as you get richer.  This means that future generations – who are expected by everyone to be much richer than we are – will value an extra pound of consumption less than we we will. If you take account of this, we should attach less weight to the possible costs to future generations when we compare those to the immediate costs of making the adjustment.  (For a technical version of this critique, you may want to read this piece by Byatt, Castles, Goklany, Henderson, Lawson, McKitrick, Morris, Peacock, Robinson and Skidelsky.)   I am undecided on whether this is an important weakness in Stern's account, and I wish that the report had contained a more systematic analysis of the sensitivity of his conclusions to different assumptions about discount rates (there is some of this in the new Technical Annex to the Postscript).

But even if you do conclude that Stern overstates the case for action now to prevent future costs, there is an important distribution effect that is masked by the aggregate numbers that Tim Worstall and others quote.   The likelihood is that the main beneficiaries of the anticipated economic growth will be in rich countries, as they have been through the twentieth century, while the costs of climate change will be borne disproportionately by the poor.   If it turns out, as predicted, that agricultural productivity in Niger collapses as temperatures rise in sub-Saharan Africa, leaving 12 million people with nothing to live on, it will be little consolation to them that people in Western Europe and North America are living much better as a result of the economic growth that the high carbon consumption has permitted.   

So this is the challenge to those who take the view that the overall numbers do not make the case for action against climate change:  are you prepared to support the massive transfers in resources that will be required from those who enjoy the growth to those who suffer its consequences? 

It is no excuse to say that your religion requires you to discriminate against gays.  We would not tolerate the same argument to justify discrimination against people on grounds of race.  

Nor is it a defence for the churches to say that it is OK for them to discriminate because there is another agency that does not.  As somebody said, it is like telling Rosa Parks that she should get off the seats-for-whites-only bus and wait for the fully integrated bus coming along behind.   

This is not mainly a point about public services and public funding. As Evan Harris MP points out, there is a problem with contracting public services out to "third sector" organisations if they then expect to be able to impose their prejudices on how those services are delivered.  But even if the churches were delivering these services at their own expense, they should not be allowed to discriminate against blacks, gays or anybody else.

Frankly, I'm amazed that this is even a matter of public debate. 

Among 25 poor countries probed in detail by the bank's Independent Evaluation Group, only 11 experienced reductions in poverty from the mid-1990s to the early 2000s, while 14 had the same or worsening rates over that term. The group said the sample was representative of the global picture.

"Achievement of sustained increases in per capita income, essential for poverty reduction, continues to elude a considerable number of countries," the report declared, singling out programs aimed at the rural poor as particularly ineffective. Roughly half of such efforts from 2001 to 2005 "did not lead to satisfactory results." During that period, new World Bank loans and credits aimed directly at rural development totaled $9.6 billion, or about one-tenth of total bank lending, according to the group.

Comment:  I suspect that many people will use this report to confirm their prejudices.  If you are an aid sceptic, and you do not read the report carefully, you might conclude that this shows that the money spent by the World Bank is wasted.  But this is not what the evaluation finds.  It finds that many reforms of development assistance that are being implemented around the world  are likely to be effective.  The evaluation finds:

• growth alone is not enough: growth delivers poverty reduction more effectively when it occurs in sectors and regions where most of the poor live and work;
• satisfactory project outcomes alone do not ensure country sector impact: what matters is the long term development of in-sector and cross-sector strategies that complement each other;
• pressure to show results quickly can divert attention from the quality of results;
• achieving and maintaining results requires public sector institutions that are accountable to domestic stakeholders, not donors;
• the long time required to achieve many of the intended results underlines the importance of continuity and predictability of donor engagement;
• results depend on the commitment and ownership of recipient governments.

These recommendations are consistent with the progressive aid agenda, increasingly being implemented by the World Bank, DFID and some other development agencies.  It is, however, an agenda that is sometimes under attack from sceptics of government aid, many of who minstead recommend a project-based approach, in pursuit of short-term, more measurable targets.  This so-called bottom-up approach is often at the expense of the long term, cross-sectoral institutional improvements that really drive sustained and systemic change.

Finally, kudos to the Bank for publishing a thorough warts-and-all analysis of its weaknesses as well as successes. 

More from Ezra Klein,  Washington Post.

For me, the money quote from Hilary Benn is this: 

All functioning governments have essential features in common: a capacity to do things, good financial and information management, clear lines of accountability and freedom from corruption, to name just a few. We owe it to the world’s poor to help their governments to develop these capacities. Strong economic growth and fair trade are simply the fastest and most effective ways to get people out of poverty, and both of these require governments to work properly.

Muhammad Yunus and the Grameen Bank have been awarded the 2006 Nobel Peace Prize. 

This is a powerful statement by the committee (which is appointed by the Norwegian parliament) of the role of poverty reduction in promoting peace.

As the Grameen Bank has shown, access to financial services such as credit can make a huge contribution to improving the lives of the poor. 

Microfinance has become a very popular cause in international development, especially among the large private foundations of North America.  Supporting microfinance appeals to the notion that we should give the poor a hand up, not a hand out.  It appeals to our sense that we should find ways to unleash the entrepreneurial spirits of those who are unfortunate enough to have been born in poor countries. 

But there remain important questions about microfinance.  There remains very little systematic empirical evidence of the impact of microfinance on the incomes and well-being of the poor.  Grameen's main measure of its success – its repayment rate – is impressive but tells us little about what impact microfinance has actually had.

In my view, it is impossible to argue with the view that the poor benefit, probably substantially, from access to affordable financial services, including credit, savings, insurance and remittances.   But as I argued here in November last year, it does not follow at all that it is a good idea for donors and foundations to subsidize microfinance.  After all, the Grameen Bank was developed without donor assistance.

So many congratulations to Muhammad Yunus for his well deserved award, and to the Nobel Peace Prize committee for recognizing the power of economic growth in poor countries to promote peace.  But let's think carefully before we all climb on to the microfinance bandwagon. It is not clear that subsidizing microfinance is a high priority for helping the developing world to grow its way to prosperity.

More at Pienso, Marginal Revolution and NextBillion. Update: Also Mark Thoma, Audemus

Coincidentally, G and I went to a presentation by Bill Easterly this morning, here in London to promote his new book.

I agree with Easterly that:

• we need a range of entrepreneurial, small-scale activities to innovate and test new ideas;
• we need more thorough and independent evaluation of aid; (see here for an analysis of the evaluation gap)
• aid should be more accountable to the people it is intended to help;
• we should stop interventions which do not work;
• and we should scale up interventions which do.

But I also fundamentally disagree with Easterly:

•  there is abundant evidence that more aid is positively correlated with growth in developing countries; Easterly cites a misleading sample of technically inadequate papers to the contrary;
• we need planners as well as searchers: once good ideas have been developed and tested, they should be scaled up and this requires coordinated plans;
• the country-led approach which Easterly derides has not yet been fully tested, but early indications are positive.  The forty years of failure which he criticizes were years in which donors pursued aid interventions much more like those he advocates than the policies they pursue now.

Finally, none of the books that Kristof reviews does justice to the role of the private sector in development.  We need to understand better the range of policies and interventions that would help to foster private sector development, and not stifle it.

… the results do support the main hypothesis presented here, namely that the level of democratic voice and accountability in OECD countries is one crucial factor explaining the variance of the overall quality of development promotion in those countries.  Beyond, these finding also suggest that  a rising level of democratic voice and accountability increases the overall coherency of these countries' foreign policies with regard to development promotion. … Rich countries with stronger democratic institutions produce foreign policies which are at the same time more compatible with the concompassing interests of the rich countries' society while at the same time more adequate to promote development in poorer countires.  

This is an important finding.  It is consitent with the view that policies pursued by rich countries which damage development – such as restrictions on trade, limits on migration, constraints on technology transfer, corruption or arms sales – reflect the power in those countries of special interest groups to protect and promote their causes at the expense of economic development in poor countries.   As the rich countries become more democratic and accountable, so the voice of our collective interests in global peace and security and in global equity are more overcome those interest groups.

Recent reports about the emergence of Extreme Drug-Resistant TB in South Africa are disquieting reminders of fundamental concerns in international public health: fragile health systems in developing countries, stretched to the breaking point as they struggle to respond to health needs today, have the potential to incubate infectious diseases that are tomorrow's global threat. While the new strains of TB that are untreatable with any of current medications affect only small numbers at the moment, the insurgent microbes cannot be ignored.

As George Bush said in another context, we have to fight it over there so we don't have to fight it over here.

See also Christine Gorman at the Time Global Health blog

You’ll be fascinated to hear that this week’s cover feature is my article calling for the establishment of a service-oriented architecture for IT systems across the public sector.  Here is an extract to titillate your tastebuds:

The priority for government should be an IT strategy that organises the individual functions in government applications into interoperable, standards-based services that can be shared, combined and reused quickly to meet business needs. For example, once the government has developed a procurement system or a payroll module, these should be used and adapted by other business units.

This would catalyse significant changes:

• Public services would organise services to correspond to citizen experiences, such as starting a business or moving house, rather than the functions of government
• The frontline service, not the IT department, would design and create applications directly
• Organisations would not bet their future on a single, long-term IT development – instead they would implement change in smaller steps using small, reusable, interlinked modules
• Systems would be designed to change to meet future needs rather than being tightly coupled to today’s processes, and
• Instead of settling on a single, homogenous technology, the government would adopt a variety of different technologies appropriate to the needs of the services.

A common, government-wide structure, based on components, applications and data that could be reused and shared, would reduce development time, cost and risk. Frontline services would control their own processes, which would allow them to respond flexibly to changing needs and develop increasingly customer-centric services.

The article is a shortened version of my chapter in a new IBM publication, Capability, Capacity and Reform, Insights from government leaders on delivering transformational government.

My initial impression is that it will make blogging much easier for people used to Microsoft Word.  It is astoundingly easy to set up – for this blog, which uses WordPress, all it needed was my username and password.

But speaking personally, I much prefer the Performancing add-on for Mozilla Firefox, which makes it all too easy to knock together a traditional link-quote-comment blog post.

We are quick to criticize when things go wrong, such as the killing of Jean Charles de Menezes and the shooting of  Mohammed Abdul Kahar in Forest Gate in June.  Perhaps I am reading a biased sample blogs, but I have not seen a corresponding flurry of recognition of the success of intelligence gathering, investigation and international cooperation that has prevented the destruction in mid-air of nine passenger aircraft.

Similarly, in today's FT, there is a grudging editorial, complaining about the disruption at the airports and recalling past errors: there is no hint of congratulations for the success that the law enforcement agencies have achieved.  Nor does today's Guardian leader offer any thanks.

Well I think that is humbug.  Well done, men and women of the law enforcement agencies.  We owe you. 

If so, that is very bad news for Nigeria.  She earned the confidence of donors and played a crucial role in negotiating the debt relief deal (the world’s largest ever debt relief package).

I have never put the justification for action as regime change. We have to act within the terms set out in resolution 1441—that is our legal base.

The Prime Minister, speech to the World Affairs Council in Los Angeles, 1 August 2006

The point about these interventions, however, military and otherwise, is that they were not just about changing regimes but changing the values systems governing the nations concerned. The banner was not actually "regime change", it was "values change".

What we have done therefore in intervening in this way, is far more momentous than possibly we appreciated at the time.

Quite so. And perhaps not in a good way.

I discovered today that the US government is developing a National Information Exchange Model. This is precisely the sort of XML schema for data exchange betwen government systems that I had in mind.  

Such an information exchange schema would need to be accompanied by the other components of the system recommended in my earlier post – particularly a secure message layer, auditing of information exchanged across systems, and the right of all citizens to see all information held about them and a log of all accesses to that information by government systems.

The US effort is, rather chillingly, a collaborative effort by the U.S. Department of Justice and the Department of Homeland Security.  But since they are some way down the road (they have recently released a beta of the standard, including no fewer than nine proposed namespaces) it would make sense for this to form the basis of an international effort to develop a shared information scheme.  After all, the information needs of governments cannot vary all that much between countries, and such a shared system would facilitate international cooperation (for example, for cooperation in criminal investigations, tax and immigration).  

At risk of upsetting the anti-Tranzi brigade, it seems to me that an international system, agreed transparently and using open standards for information schema and messaging, could in principle be more likely to protect civil liberties and be more efficient than a series of unconnected information sharing systems developed by national governments. 

China is increasingly making its presence felt on the continent – from building roads in Kenya and Rwanda to increasing trade with Uganda and South Africa. … Under the auspices of the UN, the China-Africa
Business Council opened this month, headquartered in China, to boost
trade and development. It has peacekeepers in Liberia and has
contributed to construction projects in Ethiopia, Tanzania, and Zambia,
though critics say it is using these projects to garner goodwill that
it can tap into during prickly issues like Taiwan’s independence or UN
face-offs with the US.

It seems to me that this is an example of China’s capacity to take the long view; seeing Africa not as a problem but as an opportunity and recognising the value for China’s own prosperity (and the security of its energy supplies) of building economic and political partnerships there.

The industrialised countries of Europe and North America have largely abandoned Africa, providing sticking plaster aid while refusing to allow Africa to trade fairly in agricultural and textile products. We have patronized, lectured and bullied; propped up some of the most vile regimes of the 20th century; and allowed (indeed, encouraged) our companies to bribe their way into sweetheart deals for oil, minerals and other natural resources, resources which are happily returned by the corrupt beneficiaries to bank accounts in Europe.

China’s engagement in Africa is in some ways problematic.  China is less troubled by the human rights record of some of the countries with which it is building new partnerships, such as Zimbabwe; and in some countries such as Sudan its actions have broken the well-intended donor cartel which has sought to bring pressure to bear.   But having neglected Africa for thirty years – despite repeated warnings that it was not in our economic, security or political interests to do so – we in the West can hardly complain now that China is stepping in to fill the vacuum.    We should not forget the damage we did to Africa during the cold war, when the Soviet Union sponsored monsters like Mengistu while Europe and America propped up equally repugnant regimes like those of Mobutu and Eyadema. 

On the positive side, perhaps this might at last herald a new, more positive scramble for Africa: this time, a scramble for investment and trade.  This suggests we need a way to constrain the behaviour of all the economic powers, through transparency and codes of investment, to ensure that Africa benefits from renewed interest in the continent and does not again suffer as board-full of geopolitical pawns.

Ethan Zuckerman asks:

If the Chinese become a dominant investor on the continent, will we see
a shift in African alignment, from the US to China? And will anyone in
the US notice before the oil and other natural resources in Africa are
spoken for?

The Government has concluded that it will not be able to get its controversial draft Mental Health Bill through Parliament to make these changes, because of criticism of the measures from mental health experts and civil rights groups.

So instead they are going to introduce similar measures by amending the existing Mental Health Act 1983 and Mental Capacity Act 2005.  The main difference is that patients who are locked up without their consent will be given a right to appeal. As things stand, Parliament will need to approve the amendments.

How much easier this will be for Ministers when the Legislative and Regulatory Reform Bill gives the government power to introduce these measures without having to obtain Parliamentary approval.  Then it won’t matter whether Parliament agrees or not. Much more efficient, you see?

Memo to self – this was how I cleaned up my Lacie 500Gb external backup drive which was giving read/write errors.

umount /dev/sdg1
e2fsck -fyc /dev/sdg1


Then go out for 3 hours …

</geek> 

Kristen, Amy, me and Gabor at the track this morning (photo taken by G).

We did 3 sets of 4x400m at 5km race pace, with a very short (40 second) recovery between efforts.

(Click the photo for more photos from this morning.)

There has been some more good news in the last few years.  The abolition of quotas on shoe imports from 1 January 2005 has given Vietnam an opportunity to begin trade its way out of poverty.  Vietnam has begun making not only sports shoes but also high quality, leather upper shoes, partly as a result of a bilateral trade agreement with the US in 2001. The shoe industry in Vietnam now employs at least half a million people, four fifths of them women; and their incomes support many more.
The EU is Vietnam’s biggest footwear market, absorbing 75% of Vietnam’s shoe exports.

This is, of course, excellent news if you want to see an end to poverty. It is not such good news if you are an Italian shoe-maker.  In July 2005, under pressure from Italy and European shoe manufacturers, the EU Commission launched an investigation into whether shoes with
leather uppers from China and Vietnam were being "dumped" in Europe at
prices below the cost of production. The Commission has until April to decide whether to recommend adding duties to shoes imported from Vietnam and China.

According to the Guardian, the Commission is considering a "tariff rate quota" which would allow a set number of shoes to be
imported, with a levy imposed on any surplus; and the European
Branded Footwear Coalition, which has denounced the Commission’s investigations, is proposing a "minimum import price". 

So it looks as if European consumers are going to be asked to spend about $10-20 extra on each pair of shoes, in order to protect an unprofitable industry in Europe, to keep the people of Vietnam poor, so that we can go on giving them aid. 

How hard is it for people to understand that it would be in our interests and the interests of the people of Vietnam for us to buy the shoes that they can make more cheaply than we can? 

So we should celebrate and learn from a remarkable experience which has just come to a positive conclusion.  The United Nations Assistance Mission in
Sierra Leone, UNAMSIL, successfully completed its mandate in December 2005 and the U.N. troops have been withdrawn over the last few weeks. The success of the U.N. mission in Sierra Leone has had very little attention in the media or among the bloggers presumably because failure makes better copy than success.

A recap of the intervention

You may recall that the conflict in Sierra Leone began in 1991. Foday
Sankoh, a former army corporal, led the Revolutionary United Front (RUF) in an attack from Liberia on the government of
President Joseph Momoh.  The RUF adopted the brutal tactic of cutting off the hands of the population to maintain a rule of terror and instil discipline on its fighters. The Government of Sierra Leone used mercenaries, for example from Executive Outcomes, to defend themselves, and maintained a degree of control over the south of the country and on the capital, Freetown.  Ahmad Tejan Kabbah was elected President in 1996.  But in 1997 a group of disaffected soldiers
of the Sierra Leone Army mounted a coup, joined forces with the RUF, and called on Major Johnny
Paul Koroma, who was serving a prison sentence for treason, to lead them. Koroma’s military government drove President Kabbah and his government into exile in Guinea. But it was not recognised by other African nations, and it was largely shunned by the citizens of Sierra Leone. A Nigerian-led West African military force, known as ECOMOG, together with the Sierra Leone Civil
Defence Force led by Sam Hinga Norman, stepped in to remove the military government and reinstated President Kabbah in March 1998.

In January 1999 rebel groups attacked again, occupying most of
Freetown. ECOMOG forces eventually expelled them, but during the fighting over 5,000 people were killed and most of the eastern suburbs of
Freetown were destroyed. Both the rebels and ECOMOG forces reportedly
committed widespread human rights abuses. A ceasefire was agreed in May
1999, after pressure from the US Government. Kabbah and Sankoh signed the Lomé Peace Agreement in July 1999. The RUF rebels won seats in government and were granted an amnesty. 

In October 1999, the Security Council established the United Nations
Mission in Sierra Leone (UNAMSIL) to oversee the peace agreement and to assist with
disarmament. The U.N. agreed to send 6,000 peacekeepers, which was later increased to 11,100 in Feb. 2000.  But three months later violence erupted again as RUF rebels clashed with U.N.
troops, taking 500 peacekeepers hostage and
renouncing the ceasefire. Thousands fled as rebels advanced towards
Freetown. Over half the country was
under the control of rebels, and half of the population became Internally Displaced Persons.

In a bold move, the United Kingdom despatched British paratroopers in May 2000 to Freetown to evacuate EU
citizens and secure the airport to allow the arrival of UN
reinforcements.  As a result, the RUF was prevented from taking the capital and government
forces assisted by Nigerian troops were able to counter-attack. By
late 2000 over 13,500 UN troops were deployed in the government
controlled south of the country while a British force of approximately
750 men was helping to train the Sierra Leone Army.   The British also stationed a battleship, HMS Ocean, with 400 Royal Marines off the coast of Sierra Leone, to make it clear that the UK would not
stand by if the RUF threatened Freetown.  In
September 2000, members of The Royal Irish Regiment and a Sierra
Leonian Officer were taken hostage by a volatile maverick group known
as the West Side Boys. The British rescue operation, reportedly mounted by the SAS, resulted in all the
hostages being released unharmed; one British soldier was killed and twelve were wounded. 

The U.N.
Security Council demanded in March 2001 that rebels allow U.N.
peacekeepers into diamond mine areas they controlled and authorised an
increase of U.N. troops to 17,500. As the UN force increased in strength, and the Sierra Leone Army increased in capacity, rebels and pro-government militias started to hand over weapons to U.N. peacekeepers.   In November 2000, the Kabbah Government and the RUF signed the Abuja Agreement, a
cease-fire agreement brokered by ECOWAS in Nigeria. UNAMSIL was deployed throughout the country, and the Government of Sierra Leone restored its
authority over the whole country. 

In January 2001 President Kabbah declared that disarmament was
complete and the war over. By March the State of Emergency was lifted.
Work to consolidate the new and fragile peace began on a wide range of
fronts.  Government services were restored throughout the country. Peaceful democratic elections in May 2002 returned President Kabbah.  In June, 2003, the UN ban on the sale of Sierra Leone diamonds was lifted. The UN disarmament and rehabilitation program for
Sierra Leone’s fighters was completed in February 2004, by which time more
70,000 former combatants had been helped. UN forces returned primary
responsibility for security in the area around the capital to Sierra
Leone’s police and armed forces in September 2004, the last part of
the country to be turned over to domestic security control. 

UNAMSIL withdrew in December 2005, having fully accomplished its mission of restoring peace, stability and democratic government to Sierra Leone.

Conclusions

This is a story of extraordinary success in which international forces restored peace and democracy to a nation racked by violence. It seems that key components of this success were:

• resolve on the part of other African countries, especially Nigeria, that they would not allow Sierra Leone to collapse into civil war, and would not tolerate the coup against an elected government;
• the establishment and successful operation of an African-led peace-keeping force, with a legitimate UN mandate to intervene in Sierra Leone;
• the willingness of the UK Government to use British forces to buttress the UN mission when it was necessary to step in quickly to prevent Freetown from faling in to rebel hands in May 2000 and to mount the successful rescue mission in September 2000, both of which had a profound psychological impact on the RUF rebels;
• recognition on the part of the UN that it was necessary to invest over several years in long term peacebuilding and disarmament.

More generally, it seems that wealthy nations are reluctant to use their armed forces to intervene in other countries, even in the face of a humanitarian catastrophe like the genocide in Rwanda, Sudan or the Congo, because they fear that they will be sucked in to a long-term commitment of troops and resources.  ‘Quagmire’ is not a pretty word in an election campaign.  But UN or AU forces lack the logistical capacity and equipment, and above all command structure, needed to deploy them quickly in the face of a rapidly unfolding disaster.  What worked well in Sierra Leone was a sensible division of labour: the UK army moved quickly to prevent the rebels from taking control of Freetown in May-September 2000, and enabling the UN to strengthen its force there, but once it had secured Freetown it withdrew the bulk of its fighting forces, leaving UN peacekeepers to disarm the combatants and help to rebuild long-term stability. If we are looking for ways to work with African governments to help reduce conflict, and so build a safer and more prosperous continent, we would do well to consider institutional mechanisms to establish this sensible division of labour between rapid intervention by countries with the capacity to intervene rapidly, handing over to long term peacekeeping by international forces under the auspices of institutions such as the U.N.

Finally, as UNAMSIL draws to a successful conclusion, we should pay tribute to the brave soldiers of the British army and of UNAMSIL, who have fought with courage and dignity, and some of whom have died, to bring peace and restore democracy to Sierra Leone.

• the clear favourite almost never succeeds (think Gaitskell/Bevan, Foot/Healy)
• with David Cameron in charge of the Tories, the Labour Party will want someone of a younger generation
• Brown will be blamed, fairly or not, for slower economic growth and the impact of fiscal constraints in the coming years
• I suspect Blair will pick the moment of his departure to minimise Brown’s chances of succession

Who will it be instead?  My guesses would be (in no particular order) David Miliband, Ruth Kelly or Douglas Alexander. 

My US working visa expired, which means that I have to get a new one before I can get back to Berkeley.  That is long process – two weeks at least for an interview at the US Embassy, and another week for them to return my passport.  It will be longer over Christmas (or "the Holiday Season" as we say in America.)  So for a 40 minute interview for a job I didn’t get, I’m going to have be away from home for about 4 weeks.

I must have been in the US too long, because A4 paper now seems a funny shape.

• it would provide a dedicated source of revenue to pay for increases in aid;
• it would benefit the economy by reducing volatility by reducing the amount of trading in currency markets.

Neither of these arguments stands up to scrutiny.

First, we can increase aid without finding a new source of revenue.  UK Overseas Development Assistance is expected to be £4.9 billion this year, about 0.39% of GDP. We would need about another £3.8 billion a year to get up to 0.7% – the internationally agreed aspiration, which Jeff Sachs reckons is more than is needed to reach the Millennium Development Goals. UK public spending (measured as Total Managed Expenditure) is expected to increase by £28 billion in real terms over the next two years – we’d need about a seventh of the total increase to go to aid to reach the 0.7% target in two years.  Alternatively, it would need about 1p on the basic rate of income tax, or a 3p increase in the top rate of tax.  Linking aid increases to the introduction of a new tax (and one that is likely to be difficult, if not impossible, to get international agreement on) enables us to hide from the truth, which is that we haven’t increased aid because we don’t want to.

Second, I don’t understand why people think that high turnover in foreign exchange markets makes them more volatile.  Deep and liquid markets are more, not less, likely to converge quickly on prices that reflect the economic fundamentals.  The trends in currency prices that adversely affect poor countries are the inexorable long term depreciation as the terms of trade move against countries dependent on the export of primary commodities and the income gap between rich and poor countries continues to grow.  These long term trends won’t be reversed by a Tobin Tax.  If the problem was short term volatility, it would be simpler and cheaper to hedge than to try to reduce the volatility.

Norm’s profile this week is of Chris Dillow, the author of Stumbling and Mumbling. Chris manages to combine passion and righteous indignation with a sometimes deadpan delivery (today’s entry considering whether suicide bombers are rational is a case in point).

Here is a sample:

What philosophical thesis do you think it most important to disseminate? > ‘The only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant.’ – John Stuart Mill

What philosophical thesis do you think it most important to combat? > Managerialism.

I am full of admiration for Chris, which is why I am blushing furiously at having been named by him as one of his favourite bloggers. The feeling is mutual.

I have two older sisters, and no brothers.  So I obviously learned some of my language from them. When I went to boarding school, at the age of ten, it took several weeks before I realised that referring to my own underwear – Y-fronts, since you ask – as my "knickers" was not likely to make me popular with the other boys.  Or not the ones I wanted to be popular with. 

The evidence from across the globe is overwhelming: governments that “protect” their industries hurt their economies and their people. .. Countries that really believe in free trade should simply make a unilateral declaration to scrap their tariffs without condition on the goods and services of developing nations …

 But I disagree with their criticism of David Cameron:

David Cameron, soon-to-be 20th leader of the Conservative party, can also be counted out. “The poor are getting poorer,” he claimed on a television debate last week, demonstrating his utter ignorance of the subject. The poor are being lifted out of poverty faster than at any time in world history, thanks largely to free trade. More progress has been made in the last 50 years than in the previous 500 years.

Credit where it is due: David Cameron is the first would-be leader that I can remember to speak about our responsiblity to tackle poverty.  Here he is in the Telegraph:

when the Conservative Party talks about international affairs, it can’t just be Gibraltar and Zimbabwe – we’ve got to show as much passion about Darfur and the millions of people living on less than a dollar a day in sub-Saharan Africa who are getting poorer while we are getting richer.

But are The Business and the Adam Smith Institute right, or is David Cameron right? Have the poor got poorer?  As ever, it depends who you mean, and over what time period. 

Here is GDP per capita, in real terms, over the last 30 years.  As you will see, GDP per capita in sub Saharan Africa is 8 percent lower today than 30 years ago; in OECD countries it is 86 percent higher.  But if you look only at the last decade, then incomes in sub Saharan Africa have begun to recover, as governance has improved, conflict abated and aid increased.  Within the region, some countries have grown faster, and some have continued to stagnate.  But broadly speaking, David Cameron’s claim is right: sub Saharan Africa is poorer now than it was 30 years ago.

GDP per capita (constant 2000 US$) Indexed to 1974=100
Source: World Bank national accounts, and OECD National Accounts.

But I think the question of whether the poor have got poorer is largely irrelevant. The more profound point, which I would like to have seen The Business, the Adam Smith Institute, this week’s Economist, and David Cameron all make, is this. Globalization makes the world richer, on average.  We should have more of it, not less of it.  The way to acclerate globalization is to distribute the gains of globalisation more fairly.  In the last thirty years, the gains have largely gone to the richer countries.  This is not surprising: the rich and powerful are able to capture more of the benefits than the weak and vulnerable.  But this cannot continue.  Let us ensure that in the next decade of deeper and faster globalisation, the benefits are mainly enjoyed by the poor.

So I am with Tim in being outraged by this report that DTI officials apparently used public money to pay for expensive hotels, BMW hire cars, and cocktails. (I say ‘apparently’ because I know that these press reports rarely turn out to be completely accurate). 

In my view, civil servants should never charge alcohol to expenses, should use the cheapest hotels in which they can efficiently stay and work, and should, where possible, travel by public transport rather than taxi or hire cars.

I have had to travel quite a bit at the taxpayers’ expense, and in my experience, government departments have strict rules. For example, civil servants are not allowed to use Air Miles earned on official journeys for private travel; and we had to stay at pre-determined hotels selected for their value for money.

Sometimes appearances can be deceptive. For example, my department negotiated a sweetheart deal with a particular airline, using bulk buying power to get business class flights at economy rates – which may have given the impression to an outsider that the travellers were lording it at public expense when the deal was in fact rather good for the taxpayer (as well as benefiting the civil servants).  And civil servants often stay in well known business hotel chains at government rates which mean that the room rates they pay are no more expensive than a mid-priced hotel which would be less convenient and provides fewer facilities. 

So I don’t know if the DTI officials are guilty as charged, but if they are, I hope they will be properly reprimanded. The fact that this is in the newspapers confirms that it is the exception rather than the rule for British public servants to behave this way, and I hope it stays that way.

If there is one thing that annoys me as much as public servants spending my money wastefully, it is private firms spending my money wastefully. All those expensive hotels and business class sections on planes were not built for people spending their own money, you know.  They were built for business travellers spending your money. It all comes out of your pocket in the form of higher prices, lower returns on your investments, or lower wages.  And the waste of your money by private sector firms is, in total, much higher than the waste of your money by your government.

Right wing trolls across the nation are reaching for their keyboards with their free hand to remind me that the difference is that you have a choice about which private company you buy from, invest in or work for, but government extracts its money from you by force.   But the difference in choice is not in fact very great.  For a start, you do not have that much choice about private sector firms to buy from or invest in – it is in practice very hard to find one that does not overpay its executives or allow them to waste your money on expensive flights and hotels. Second, you do have a choice about government – if you don’t like the one you have got, you can vote to choose another.  The difference in choice, to the extent there is one, is one of degree.  And much, much more of your money goes on private sector waste than it does on public sector waste.

That is not intended to justify abuses of taxpayers’ money by public servants or anyone else.  But as the only member of the Senior Civil Service with a blog (as far as I know), when Tim expresses scepticism that all civil servants are "Simply selfless devotees of the common good", I feel compelled to say that I am similarly unconvinced that those to whom we hand our money in a free market are any less inclined to waste it.