Governments sometimes struggle to take a firm line on corruption overseas. On the one hand governments recognize the damage that corruption does, particularly in developing countries where the proceeds from corrupt payments can sustain unaccountable governments and divert resources that are desperately needed for public services. On the other hand, governments do not want to penalize British businesses who are responding to the business environment that they sometimes find, especially if that means sacrificing large export orders and jobs.
The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions forbids signatories (of which the UK is one) from putting commercial interests ahead of the need to fight corruption. Even so, governments inevitably face pressure not to put jobs and export orders at risk. For example, on Any Questions in December, both Charles Moore and Edward Leigh appear to say that it is not worth putting jobs at risk to fight corruption.
So this letter sent just before Christmas from Hermes Pension Fund, one of the UK's largest investors, makes interesting reading. It says, in effect, that the market distortions and uncertainty caused by corruption cost British business more than the short-term costs to business of taking a tough position against corrupt payments.
In other words, according to Hermes, there is no trade-off between the interests of business and the desire to be tough on corruption. According to Hermes, Governments that want to be business friendly should stand firm in the fight against corruption.
There has been a lot going on. We've moved back from California to London, and we have moved back to G's old flat in London. This took some time, as we waited for the tenants to move out, and then had some repairs done. We've been combining our luggage from Berkeley with our old stuff from storage – effectively combining three households into one. Oxfam came to collect boxes of books, redundant hi-fi equipment, duplicate crockery and other treasured posessions.
I have started back at DFID, as Director of Global Development Effectiveness. G has made an even tougher transition – from successful investment banker, via an MBA in the States, to starting work a couple of weeks ago at Marie Stopes International.
I've been doing a lot of traveling – getting to know my opposite numbers in Berlin and Tokyo (Germany and Japan hold the G8 Presidencies in 2007 and 2008 respectively), an aid effectiveness conference in Manila, and a meeting of the Donors Assistance Committee in Paris on improving the coordination of health programmes. I've spoken at conferences on the importance of good governance for development, on the need for better donor coordination as aid increases, on the need for global programmes to be more integrated into country systems, on the role of NGOs in the international process, and on the need for a stronger results culture in development. I've been getting to know my colleagues in No.10, the FCO, Treasury, DTI and elsewhere in Whitehall. And I'm involved in policy development from improving our efforts to tackle international corruption, planning the scale up of Government aid, raising the game of the international community in the fight against AIDS, resuscitating the trade talks, and understanding how DFID's "country-led approach" applies in countries with governments that are less than fully committed to improving the lives of their own citizens.
It is, frankly, a mixed blessing to be back in London and at DFID. I miss the sunshine of California; the easy lifestyle of working from home; the intellectual freedom of working in a think tank; and good friends that we made on the West Coast. But it is good to be back among friends and family in London, to be at home in one of the great cities of the world. Despite the inevitable inconveniences of working in a bureaucracy, I am really enjoying being back in DFID. I'm working with really great team of people. I really admire the way my colleagues combine professionalism with passion for our mission.
Blogging is still a bit unfamiliar to my fellow civil servants, and I still don't really know what I'm allowed to do. I think I'm going to re-enter the water, a bit cautiously, and see how it goes.
It is good to be back.
In principle, it should be possible to sustain gravitas while still conveying passion.
I'm here at Wilton Park discussing the scaling up agenda with some world class minds. I find passion easier than gravitas.
At the Asia Regional Forum on Aid Effectiveness in Manila.
Shocking fact – Afghanistan received 1,657 donor missions last year. That’s more than 4 a day, 365 days a year. How is a government supposed to govern properly if it has its face pointing towards the donors and its rear end facing its own citizens?
I will shortly be returning to life as a senior civil servant, and I am looking forward to it. I'm fortunate that the Department for International Development is a very successful department, recognised as one of the most effective development organisations in the world. But like every part of the public service, we could do better.
In that context, I have been thinking about how I can be a better leader and manager. At the risk of sounding like Martin Lukes, here is my personal manifesto. These are my goals as a manger. I would welcome feedback – both from my own staff (positive and negative feedback welcomed) and from others.
1. It is amazing what you can achieve if you don't care who gets the credit.
If something goes right, I'll make sure the credit goes to the people who did the work. If something goes wrong, then the buck stops with me. It is my responsibility to ensure that the team has the right resources, leadership and remit to succeed; if they do not, then I have failed to ensure that they have what they need.
2. Help others to become stars.
There are some very smart people in my team. I want them to succeed and become stars, but I know this is very demanding. This is not entirely selfless: I want more great people to want to join the team to join the talent we already have. We will achieve more together if they have everything they need to succeed. It is my job to see to it that they do.
3. If everything is a priority, nothing is.
If we want to keep things ticking over as they are and take no risks, then we should do a little bit of everything. But if we want to change the world, we need to identify a small number of important and ahievable tasks and focus our resources on achieving them.
4. Build a shared vision, then empower others to deliver it
As a leader, my priority is to build common understanding about what the team can achieve together. With that in place, I will trust the team to get on to deliver it to the best of their ability. In my view, the managerialist approach – micromanaging staff with rafts of performance targets – is a fall-back for those who cannot lead. Command and control is both a cause and a consequence of failure.
5 . Say what you mean, mean what you say
I will never have a hidden agenda: I will always be open, honest and direct. If my team feels that they have to interpret what I say for hidden meaning then I am not building their trust and not communicating openly enough. In general, colleagues want more communication rather than less.
6. We have a responsibility to take risks and face the consequences
One of our responsibilities in DFID is to dream big and to take risks. We will let down the poor if we care more about protecting our own backs from the risk of failure than we do about seizing every realistic chance we can for change. We should ask ourselves: "what is the worst that can happen?" This is not a rhetorical question: we have to identify what could go wrong, and then decide how to mitigate those risks. It is important to realize that the risks are rarely very serious. We will keep a sense of proportion.
7. Build a diverse team and listen well
One of the most common causes of bad decisions and poor implementation is group-think. Every time we put a bunch of similar people in a room – with the same background, the same training, the same attitudes and the same experiences – they will reinforce each other's faults and prejudices. Instead, I will nurture a diverse team, so that we have a variety of ideas, disciplines and discourses in every conversation. I will listen well, especially to people who challenge my assumptions. Together we will demonstrate the 'wisdom of the crowd'.
8. Be patient.
Nothing really important happens quickly. If we can reach out to others, to build understanding and trust, and open ourselves to learning, we can build a long-lasting shared vision for change. If we try to take short-cuts we will end up with clever language that means different things to different people and which never leads to sustained and serious change.
9. I will not take myself too seriously.
The long term drivers of change are not the actions of individuals, but the collective effect of social trends, of evolution of institutions and incentives, changes in attitudes, incremental changes in technology, and incremental changes in systems. None of us is indispensible. I will do my best to contribute positively, but I ultimately I am not that important.
**
I would welcome thoughts (in the comments below) about this agenda for management.
G ran a personal best for 10km on Sunday, in a time of 42:16. (I think she may well improve on that some time soon). Here is the report in the ContraCostaTimes
Sarah Slaymaker had the best finish among Berkeley-based runners, taking 31st overall. Sarah Smith carried the banner for Piedmont as the 68th overall finisher. Slaymaker and Smith were first and third among women 35-39 with Berkeley's Grethe Petersen between them in second place.
I had the unusual experience of atttending a race as a spectator rather than a participant, as I was still nursing the bruising and bleeding from crashing my bike on the way to the start of the San Francisco marathon.
Fascinating article by Alan Beattie (registration required) on what he says are five common myths of world trade:
1. "Ghana is allowed to sell raw cocoa beans to the European Union, but if it exports finished chocolate it gets hit by big tariffs."
2. "Each European Union cow gets $2.40 a day in subsidies, more than what 1bn people each have to live on."
3. "The World Trade Organisation is undemocratic and secretive.
4. "No economy ever got rich without using tariffs to industrialise."
5. "Cutting rich countries' farm subsidies and tariffs will be a big boost for the world's poorest."
A joint project linking the Brookings Institution, the Center for Strategic and International Studies and the Center for Global Development presented recommendations for transforming U.S. foreign assistance this morning. The recommendation is for a new government department for global development, based on the British model for development policy.
(Full disclosure: I am the author of the chapter of the report which describes the British model which the group recommends.)
The book, Security by Other Means, will be published shortly. The near final version is online here. This from the website for the project:
In a world transformed by globalization and challenged by terrorism, foreign aid has assumed renewed importance as a foreign policy tool. While the results of more than forty years of development assistance show some successes, foreign aid is currently dispersed between many agencies and branches of government in a manner that inhibits formulation and implementation of a coherent, effective strategy.The current political climate is receptive to a transition toward greater accountability and effectiveness in development aid. Because this transition is clearly an imperative but has not yet been comprehensively addressed, the Brookings Institution and the Center for Strategic and International Studies have conducted a joint study that both assesses the current structures of foreign assistance and makes recommendations for efficient coordination.
Drawing on expertise from the full range of agencies whose policies affect foreign aid, Security by Other Means examines foreign assistance across four categories reflecting the interests that aid furthers: security, economic, humanitarian, and political.
Five hundred economists have signed an open letter on immigration. These include five Nobel Laureates—Thomas C. Schelling, Robert Lucas, Daniel McFadden, Vernon Smith and James Heckman. And, for what it is worth, me. The letter says:
We must not forget that the gains to immigrants coming to the United States are immense. Immigration is the greatest anti-poverty programever devised. The American dream is a reality for many immigrants whonot only increase their own living standards but who also send billions of dollars of their money back to their families in their homecountries—a form of truly effective foreign aid.
Of course, we may not be right. But the breadth of the consensus is striking.
The letter is framed in a mainly the context of the American debate, which is a little different from Europe. America makes it relatively easy for immigrants to work, but hard for immigrants to claim welfare benefits. Europeans tend to make it hard for immigrants to work, but relatively easy to claim welfare. Thus in America the debate focuses mainly on the impact on jobs and wages, while in Europe there is more discussion about fiscal costs.
The International Development (Reporting and Transparency) Bill will today be voted on for its third reading by the House of Commons. The bill requires the government to produce an annual report assessing progress toward the 0.7% target, the UN's millennium goals and the effectiveness of aid.
As the second-reading debate showed, there is considerable support for this bill on both sides of the House.
Update: the Bill passed the House of Commons unanimously.
Clare Short in The New Statesman writes in praise of the World Bank:
One of the great problems in the field of development is that there are too many players. Each developed country has its own programmes in the poorest countries, and so do a large number of UN agencies and NGOs. Each has a bank account, reporting requirements and missions that take up the time and energy of government ministers, who spend more time accounting to the donors than to their own electorates.
As we try to shift from unsustainable projects to an investment fund for helping countries improve their own institutions, it is the World Bank that makes the best long-term analysis and provides a framework around which other donors can co-ordinate.
Considerable progress was made under James Wolfensohn. There is more to be done, but weakening the bank would reinvent development as a mere series of charitable projects to make donor governments popular with NGOs and the wider public.
I could not agree more. It is not the World Bank that should have to justify its existence (a justification made through its positive impact every day) but the proliferation of bilateral aid agencies and NGOs. I remain to be convinced that the benefits of diversity and competition between aid agencies outweigh the costs of proliferation.
William Easterly and Jeff Sachs make a living by disagreeing with each other, though it seems that there is actually quite a bit of common ground. The Los Angeles Times has a head-to-head (free registration required). So far, Easterly is beating Sachs in the readers’ poll 2:1.
Here are the money points:
The end of poverty will come as a result of homegrown political and economic reforms (which are already happening in many poor countries), not through outside aid. The biggest hope for the world’s poor nations is not Bono, it is the citizens of poor nations themselves.
Instead of pointing to failures, we need to amplify the successes — including the green revolution, the global eradication of smallpox, the spread of literacy and, now, the promise of the Millennium Villages.
My views, for what they are worth, are as follows:
- Easterly is right to challenge central planning – there are no examples in which it has worked.
- Sachs is right that aid can, and does, work. Saying – as Easterly does – that we know that aid doesn’t work from the fact that Africans are still poor is like
saying that modern medicine is ineffective as people still get sick. - Though central plans are not the answer, there is too little coordination – we could do better if we reduced duplication & contradiction, learned more from success, and maximised synergies between interventions.
- Sachs’s villages will prove nothing, even if they are successful. They simply cannot be scaled. Easterly’s label of "Potemkin villages" is on the mark.
- Easterly is right to complain about the corrosive impact of corruption. But very little of the corruption in developing countries is fuelled by aid – most of it flows from the private sector (for example, in kickbacks for oil contracts). We all want more private sector involvement in developing countries; but Easterly is kidding himself if he thinks this will be less corrupt than aid.
- Aid agencies are "devising specific, definable tasks that could actually help people and for which the public could hold them accountable" as Easterly thinks they should, and using the money for medicines, clean water, bed nets, text books, and improving the environment for business. But there is too little aid money to do enough of this. Three million people die each year of vaccine-preventable diseases alone. That is why the agencies also have to run a "glitzy but unrealistic campaign to end world poverty".
- Sachs may well be right that "An African green revolution, health revolution and connectivity revolution are all within reach." Now that would be something.
According to this BBC report, the Government is to back down over the Legislative and Regulatory Reform Bill, which would have given ministers the power to alter legislation without the approval of Parliament.
If so this is perhaps the first scalp for UK bloggers, who I believe first identified the dangers of this Bill, analysis which was subsequently picked up in the mainstream media.
And it is good news for parliamentary democracy.
I have never thought of my gaff in the Elephant and Castle as being in a fashionable part of London – though I personally like the area, and I think it is underrated (and hence relatively cheap, considering how central it is).
But I see from this article in The Observer that, unbeknownst to me, I in fact live on the fringe of a fashionable part of the city. Gaby Hinsliff and Conal Walsh criticize Sean Woodward for using his MP’s allowance to pay for an appartment "London’s fashionable South Bank". What is bizarre is that there is no suggestion that Mr Woodward has done anything wrong: he has used his additional cost allowance for exactly the purpose for which it is intended (defraying the costs of a London home that an MP needs to do his or her job) and the article admits that he has claimed no more than he is entitled to. But Ms Hinsliff, the utterly useless political editor of the Observer, seems to think that because Mr Woodward is rich, he should forgo claiming these allowances.
The House of Commons International Development Committee has just published a very sensible and well-informed report which attacks the UK and EU negotiating strategy on the Doha trade round.
They attack the EU for trying to negotiate a "grand bargain" between the rich countries and the global south:
We consider that the Government is on the one hand defending the right of developing countries to choose their own policies, while at the same time arguing that movement in EU agriculture, which is crucial for the developing countries, is dependent on certain developing countries providing greater access to their nonagricultural markets and making offers in services. Neither the Commission nor the UK should be pressing developing countries in this way, nor should they be making EU policies dependent on actions of the developing countries. This is contrary to the idea of a development round in general and to the idea of policy space more specifically.
The EU position comes in for particular criticism:
We consider that the Commission has been inconsistent
in its advice to the developing countries. The Commission’s refusal
to practice what it preaches in respect of liberalisation threatens
the EU negotiating position. The Commission would have much greater
credibility in the eyes of developing countries if it were more
consistent. The attempt to argue that further liberalisation of
European agriculture would be harmful to the interests of the
G90 is disingenuous. The EU made a commitment to a development
round which would redress the imbalances of previous rounds by
opening its agricultural markets for developing countries. It
should not attempt to renege on this. The Commission’s offer was
insufficient to move the negotiations forward. The grand bargain
which the EU sought — with progress in agriculture being
dependent on access to developing country and US markets —
was a ‘northern agenda’ and not a development one. The Government’s
support for it was a negation of its commitment not to force liberalisation
on developing countries. …The Commission position must change, and there is good reason
for the Commission to act pre-emptively on this since, in the
WTO, nothing is agreed until everything is agreed. Such action
would demonstrate leadership and political commitment to a development
round. The developing countries have much to gain from an ambitious
outcome. The EU must not become the cause of failure.
This report is an excellent primer for anyone who wants to understand the current trade negotiations. It is an example of the British Parliament at its best: a serious, well-informed look at the issues, reaching a cross-party consensus with clear, practical recommendations. The Committee could easily have taken a short-term, narrow view, dominated by protectionist instincts; instead it recognises the UK’s broader and longer-term national interest in the the successful completion of a trade round which could contribute to economic growth in developing countries. The report is a damning indictment of both EU and UK policy.
When soldiers in the First World War shot themselves in the foot, they did so because the harm they did themselves (injured foot) was preferable to what would happen to them if they were not injured (going over the top). So the phrase “shooting yourself in the foot” means to do something apparently injurious to yourself, in order to achieve a greater overall benefit. (It does not just mean doing yourself harm.)
So what did Condoleezza Rice mean whan she said last week that sanctions against Latin American countries
were “sort of the same as shooting ourselves in the foot.”
As I go about my daily life here in America, I notice things that I really like about this country.
Here are some:
- You can get a proper healthy breakfast almost anywhere here. There must be a profitable business to be made opening a decent breakfast venue in London – selling fruit, porridge, pancakes, omlettes etc.
- Access for disabled people is taken much more seriously. Offices, shops, transport and other services provide access; and as a result you see many more disabled people around who are able to live independent lives.
- You get a glass of iced water when you sit down in a restaurant – without being asked or charged. And they don’t make a fuss if you want tap water with your meal rather than bottled water.
- Americans care about freedom and rights. They talk about them and they are prepared to stand up to their government to protect them. (They are somewhat less vigilant about the rights of foreigners.)
- American dentistry is better than in England. (I’ve changed my mind about this in the light of experience of both.)
I’ve got a post up at Views from the Center – the Center for Global Development blog on development issues, taking issue with Jagdish Bhagwati in today’s Financial Times who says that Bono is noble but misdirected.
Malcolm Gladwell on employer-provided health care:
The closest I can come is to imagine if we had employer-based subways in New York. You could ride the subway if you had a job. But if you lost your job, you would either have to walk or pay a prohibitively expensive subway surcharge. Of course, if you lost your job you would need the subway more than ever, because you couldn’t afford taxis and you would need to travel around looking for work. Right? In any case, what logical connection is there between employment and transporation?
It is good to see Americans questioning the cost and inefficiency of employer-provided health-care. While the analogy is amusing, it does not completely hang together, as the cost structure of the subway (huge fixed costs, small variable costs, and a natural monopoly) is very different from the health industry (high variable costs, and some scope for competition).
It is worth remarking that the absurd US system of employer-provided healthcare is a good example of the law of unintended consequences: it came about because of government imposed restrictions on wages during the Second World War, so employers provided health care insurance instead.
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