The series so far includes:

• Duncan Green from Oxfam, who contrasts progress in developing countries over the last year with the gloom of the ‘formerly rich’ countries of the G-8.
• Calestous Juma from Harvard, who identifies regional integration and better links with the diaspora as key drivers of Africa’s growth.
• Shanta Devarajan from the World Bank, who is cautiously optimistic, especially in the light  of increased demand by Africans for their governments to be accountable.
• Linda Raftree from Plan, who also emphasizes progress towards more inclusive and open societies.
• Kevin Watkins from Brookings and UNESCO, calling for “a properly financed global fund for education like those that have delivered such striking results in the health sector“.
• Jonathan Glennie from ODI and the Guardian, who is pessimistic about the prospects for international cooperation in the face of rising protectionism and nationalism as a result of poor economic prospects in the US and Europe.
• and my contribution, reproduced below, which gives a positive account of progress in many countries in Africa over the past year, and emphasizes the importance for developing countries of better global decision-making.

Economic growth has made the developing world less dependent on aid

A new generation of leaders, business friendly policies, technology, the spread of peace, and strong demand for natural resources have helped Africa to withstand the global downturn.

The Mercato, the commercial hub of the Ethiopian capital, Addis Ababa. Ethiopia's economy grew by 7.5% in 2011.

I celebrated New Year’s Day 2011 in Ethiopia, where we lived for three years. Ethiopia is humming with the optimism and energy of a fast-growing country, creating more jobs, sending more children to school, expanding healthcare, and providing electricity, clean water, sanitation and roads.

Ethiopia’s economy grew by 7.5% this year, and it is not the only country in Africa to boast a high growth rate. Africa has been the fastest growing continent of the past decade. The emergence of a new generation of leaders, the end of the continent’s debt crisis, business-friendly policies, new technologies, the spread of peace, and strong demand for natural resources have helped Africa withstand the global downturn.

Steve Radelet, a former senior fellow at the Centre for Global Development, has documented the emergence of 17 African countries in which total income is growing by more than 5% a year – increasing average incomes by 50% in 13 years. That growth is attracting businesses and investors from Africa and abroad, and the continent’s middle class is expanding. By 2015, about 100m African households will have incomes greater than £2,000 a year, roughly as many as India today.

And as they grow, developing countries are becoming less dependent on aid.

At the start of 2011, we did not expect a year in which so many people would be able to claim their rights and freedom. The Arab spring has moved many of us, but should not have surprised us. Better government has spread across Africa and the Middle East, defying outdated assumptions in the west. Thirteen African countries held national elections in 2011, four leading to a change of government; there will be 13 more in 2012. South Sudan gained its independence after a largely peaceful referendum.

When the year began, we did not know the rains in east Africa would fail. But in contrast to the 1980s, in today’s Ethiopia drought no longer means famine. Unlike its neighbour Somalia, there has been no repeat of the TV images of starving people in Ethiopia. That’s because, with the help of foreign donors, it has put in place early warning, food reserves and distribution systems, and a safety net that supports the poorest families in their own communities.

As developing countries have become more integrated into the world economy, and less dependent on aid, so their interests have changed. The most important international events for developing countries this year were the repeated failures of European leaders to put in place a credible plan to save the euro, the G20′s decision to put the world trade talks out of their misery, and modest progress at the Durban talks on climate change. These will all have more impact on developing countries than gatherings of the “development set” at World Bank meetings, the UN general assembly or the Busan forum on aid effectiveness.

But while progress has been good, it is not yet fast enough. Hundreds of thousands of people in the Horn of Africa will have spent Christmas in refugee camps, and about a billion people will go to bed hungry on New Year’s Eve.

In the years ahead, the Centre for Global Development in Europe will be working with policymakers, researchers and academics to find evidence-based, politically savvy ways for rich countries and powerful institutions to help developing countries lift themselves out of poverty. Our focus is on the world’s efforts to promote shared growth, protect our environment, reinvent our financial system, clamp down on international corruption, encourage and share innovation, reduce inequality and entrench peace.

For affluent and developing countries alike, these are the aspirations for 2012.

“The defining division these days is increasingly: open or closed? Are we open to the changing world? Or do we see its menace, but not its possibilities?”

—Tony Blair, A Global Alliance for Global Values, September 2006

It is easy to be cynical about international summits and their carefully drafted communiqués. But they sometimes matter more than people expect. (If they didn’t, why would government officials put so much time and effort into negotiating the text?) Even if the text is often a bland compromise, these meetings can help to move an issue forward, by locking in a new consensus which forms the platform for further progress.

We saw how this works at this week’s High Level Forum on development effectiveness in Busan, South Korea. In a speech notable for a thinly veiled warning about aid from China, Secretary Clinton made the welcome announcement that the US would join the International Aid Transparency Initiative, which entails the publication of the details of all US aid projects.  This decision has given a major impetus to the international movement for aid transparency, which has been one of the important outcomes of the Busan meeting. According to US administration insiders, this decision was in part a consequence of an earlier international  initiative, which has not had as much attention as it deserves: the Open Government Partnership (OGP).

The OGP is an effort to create a club of nations committed to good governance and transparency. It was launched a few months ago in New York, at a side-event of the UN meetings, by 26 heads of state, the culmination of months of work by the White House and eight partner governments.

David Eaves (an open government enthusiast from Canada) sees the Open Government Partnership as more than just another meeting.  The OGP, he says:

…is much more than a simple pact designed to make heads of state look good. I believe it has real geopolitical aims and may be the first overt, ideological salvo in the what I believe will be the geopolitical axis of Open versus Closed. This is about finding ways to compete for the hearts and minds of the world in a way that China, Russia, Iran and others simpley cannot.

The Economist blog is less convinced: in their view “this is really nothing new or major” especially because the partnership includes “such beacons of openness as Russia and Pakistan.”

We’ve warmed to the Open Government Partnership after some initial skepticism.  The architects never had the grandiose ambitions that David Eaves suggests: rather they wanted to do something which might encourage small, tangible improvements in the way governments promote transparency and good governance. The idea is to provide a network of support to reformers across the world pushing for open government, to enable them to share ideas and lessons, and to strengthen their hand by demonstrating to sceptics that they are part of a broader international movement.  It brings government’s domestic achievements to the international spotlight to encourage reforms and reformers.  By that modest yardstick, the initiative is a step in the right direction.

Why were we skeptical at first?  Partly for the reasons set out by the Economist: the standards for joining the OGP (and the implicit endorsement that it confers) are not very exacting. What kind of transparency club has Russia and Azerbaijan as members? More importantly, we felt that an international initiative would have most value if it focused on transparency of cross border flows such as payments by companies for minerals, cross-border transactions between multinational companies and their subsidiaries, aid transparency, and cooperation between tax authorities. It is in tackling transnational problems that an international coalition makes most sense. But there was little political appetite for starting with these difficult international problems, and the OGP has focused mainly on encouraging its members to implement policies which promote transparency domestically.

But although the OGP has not focused on improving the transparency of international flows, there are already signs of how it can work to put pressure on its members to be more open.  It has apparently contributed to the announcement this week that the US would join the International Aid Transparency Initiative, bringing the US into line with other OGP members. Furthermore  there is now a debate bubbling up in the UK about the Extractive Industries Transparency Initiative which requires governments publicly to disclose their revenues from oil, gas, and mining assets, and for companies to disclose the payments they make. President Obama announced at the launch of the OGP that the US would itself become a member of the EITI.  As a result, the UK is now under pressure to follow suit. Although the UK was a supporter of EITI from its inception, it has never joined itself (partly because of opposition from the Business Department): a position which will be more difficult to sustain if and when the US fulfills President Obama’s commitment to join. That is exactly the kind of international peer pressure which OGP is designed to generate.

So the OGP is, to misquote Churchill, a modest initiative with much to be modest about. It was not conceived as the opening salvo of a new battle, but as a small step to encourage and support those countries round the world who want to move towards greater openness and transparency. There are some welcome signs that it is already making a difference. It may eventually lose momentum, especially as the politicians who put it together move on, and it may become too diluted by the undemanding criteria for membership. We hope not.

It is a shame that an increase in the number of special adviser posts is treated as an indicator of either profligacy or politicization of the civil service.  Special advisers have played an important role which has helped the civil service and protected it from being drawn into party politics.  In my civil service experience over 25 years, I worked with some excellent special advisers. Some of them, such as David Cameron, John Bercow, Ed Miliband and James Purnell, have gone on to other jobs in politics. Others have returned to jobs in business, think-tanks or public relations.  I worked with some duds too: that’s when you really came to appreciate the advantages of having good one.

Norman Lamont, then Chancellor, with his Special Adviser

A good special adviser plays an important role in government by helping the civil service to think about the political implications of policy options – which is an essential perspective if policy is to be well-designed and implemented.  They work with civil servants to identify the political questions that ministers are likely to ask, and to provide satisfactory answers, helping to smooth the policy-making process. They deal with party political issues – such as writing speeches for party events and dealing with party processes.  Without special advisers, civil servants in Ministers’ offices would inevitably end up being drawn into these party issues.  Special advisers also play an important role in helping to break down the silos across Whitehall – they often do at least as good a job as the civil service at identifying issues requiring cross-departmental discussion, and helping to broker agreements across government.  All this is provided within a reasonably well-regulated structure which helps to avoid accusations of improper influence by outsiders.

The total cost to government of all this is about £7 million a year – in other words, negligible, relative to the institutional benefits of having a transparent arrangement which ensures that Ministers have access to alternative sources of advice from a political perspective.  The Institute for Government recently recommended the appointment of additional special advisers to strengthen the functioning of the coalition government.

Michael White asks in today’s Guardian why Liam Fox didn’t make Adam Werrity a Special Adviser.  I don’t know the answer, but a possible explanation is that each minister has a quota, in an attempt to keep the numbers down.  Gordon Brown, when he was Chancellor, got round this by appointing a “Council of Economic Advisers” instead. It is sad to see a cheap political tail (a fetish about the number of Special Advisers) wag an important institutional dog (having a structured mechanism for Ministers to draw on political advice if they wish).

The political establishment has become absurdly fastidious about the idea of Ministers getting advice from a variety of different sources.  There is no principle – nor should there be – which prevents Ministers from listening to the opinions of a wide range of people from outside the ranks of the civil service and special advisers. We should welcome a diversity of opinion, especially from people who are well-informed in an issue, which almost always means they have some sort of interest in it. These interests may be financial, institutional or simply a matter of doing something in which the person believes.  There is no requirement that a civil servant must always be present when Ministers meet other people: the civil service is not there to police a Minister’s interaction with the outside world (and nor does the civil service wish to do so, though sometimes they may wish they had). It is up to Ministers to choose which advice they wish to heed, and they are accountable to Parliament for those decisions. The civil service already has privileged access to decision-making: it should not (and in my experience does not) aspire to have a monopoly.

So can we please embrace the role of Special Advisers in government; not impose too tight a cap on their numbers; and ensure that they are properly paid and supported? They play an important role in the strange ecosystem of government.

This year the UK Conservative party gave up their party political broadcast which usually coincides with the part conference, and used it instead to appeal the British public to give money for the East African famine.

I recently went on a business trip with three members of the British ruling classes. The late-night banter over drinks was predictably excellent. Sometimes, though, we had to work. When that happened, my companions showed up unprepared and without notes – and did just fine. No wonder, because their entire education had been a lesson in winging it. They knew that all you need to succeed is to speak well, and that’s what the British ruling classes do: they speak well.

… You also need to perform in a peculiarly British ritual: the Oxbridge interview. It works like this: you are 17 years old. You are wearing a new suit. You travel to an Oxbridge college for your interview. You find the tutor’s rooms. Perhaps you’re served sherry, which you’ve never seen before. Then you talk. The tutors, sprawled on settees, drawl questions about whatever is keeping them awake.

For my interview at Oxford, I sat in an ill-fitting new suit and had to explain the difference between ‘precise’ and ‘accurate’.  If this was an issue keeping the tutor awake, he concealed his excitement at my answer pretty well.

The focus on speaking well is mainly an Oxford and Cambridge thing. The tutorial system – in which you have an hour-long meeting once a week with your tutor, at which you read out your essay – teaches people to wing it, and very often not much else.   Life was quite different at the LSE, where I benefited from a fairly technical, mathematical education in economics.  The trouble is too many people in the British establishment have been educated only at Oxford or Cambridge.

The article would be fun if it wasn’t also rather serious:

Numbers remain a challenge for Britain’s ruling class. It treats the City as a magical moneymaking machine, whose demands are best granted because lord knows how the thing works. Even the finance minister, George Osborne, has no education in economics beyond whatever he picked up studying history at Oxford. British public debate just doesn’t feature many numerate people such as Warren Buffett, Bill Gates, Mark Zuckerberg or China’s ruling engineers. Britain’s own excellent engineers and quants are stuck in the engine room while the rhetoricians drive the train.

More than a decade ago a report for the UK Government reached pretty much the same conclusion. It called for “a comprehensive and coherent programme for creating the conditions in which rigorous analysis is routinely demanded and delivered.”  (The present Cabinet Secretary, Gus O’Donnell, was on the steering committee for the report.) I wonder how much has really changed since then.

Development is in our national interest

It is increasingly the conventional wisdom that it is in the national interest of industrialised countries to promote development in the rest of the world. US Secretary of State Hillary Clinton made a speech saying so a year ago at the Center for Global Development:

… development was once the province of humanitarians, charities, and governments looking to gain allies in global struggles. Today it is a strategic, economic, and moral imperative – as central to advancing American interests and solving global problems as diplomacy and defense.

The UK Foreign Secretary, William Hague, also argues that development is a key part of Britain’s strategic and security interests (for example, here and here).

We’ve come a long way over the last twenty years. In January 1991 my father, then a British High Commissioner, sent a despatch to the then Foreign Secretary in London to mark the end of his last post in Africa, arguing that it was in the UK’s national interest to pay more attention to Africa’s development.  His despatch said:

There is an overwhelming case on financial grounds alone for acting sooner rather than later, collectively, to provide the resources required for removing most of the debt burden from African countries (provided that they are committed to active economic reform), for arresting environmental degradation, and for restoring the physical and human infrastructure sufficiently to permit diversification of economic effort and its re-direction into areas that will eventually become self-financing – as well, incidentally, as making a more positive contribution to world economic activity.

At that time, the foreign policy establishment was very suspicious of any argument based on ethical or moral imperatives: it believed that foreign policy should be based on narrowly-defined national interests.  In 1980 the Brandt Report had argued that it was in our “mutual interest” to pay attention to development and inequality, but in the decade that followed Britain’s aid programme, and our attention to developing countries, had declined.  Twenty years ago, when my father was making a case for paying more attention to development based on our national interest as well as our values and moral obligations, his view was regarded as so subversive that the foreign office limited the circulation of the despatch. Today it is received wisdom which is regularly the basis of speeches by the US Secretary of State and the British Foreign Secretary.

We should celebrate the fact that there is, belatedly, recognition among policymakers that promoting development is in our national interest, as well as being the right thing to do.  But I am concerned that we are letting the pendulum swing too far, by placing this argument at the centre of the public case for aid.  We should use every argument at our disposal for doing the right thing, of course; but if we focus too much on aid being in our national interest, we are danger of undermining the effectiveness of aid and of failing to address the real concerns of sceptical citizens.

The nature of public doubts about aid

If I had a nickel for every time someone said to me, “I don’t think we should spend money helping starving people because I don’t give a toss about them,” I wouldn’t have any nickels at all.

The foreign policy establishment may have been sceptical about focusing on the ethical dimension of foreign policy, but the public never was.  Neither the British nor the American people lack compassion for their fellow human beings.  My father’s prescient efforts to awaken policymakers’ interest in development were made several years after Live Aid, which had showed that the public needs no lessons in generosity.

I readily concede that the public is often sceptical about aid. I have witnessed focus group discussions which anybody who is interested in development would find alarming, anyway at first. In such a discussion, the person who says “charity begins at home” will initially get lots of support. But as the discussion goes deeper, it turns out that they are sceptical not because of any indifference to the plight of others, but because they are not convinced that aid works. In many such groups you’ll hear Bauer’s famous remark that aid is “poor people from rich countries giving money to rich people from poor countries.” Many people are worried that aid ends up in the Swiss bank accounts of despots and dictators, or of corrupt consulting and construction firms.  Yet when the same focus groups are given evidence of the benefits of particular aid programmes, their mood changes sharply, and they soon ask: “Why don’t we give more aid like that?”

The idea that “charity begins at home” clearly resonates with many people.  In part the phrase expresses the idea that we have stronger social ties and obligations to people who live in our neighbourhood than we do to people on the other side of the world.  But few people really believe, on reflection, that we should pay no heed to people dying of hunger or for lack of medical facilities just because they are far away.  Perhaps “charity begins at home” resonates for another reason: we can observe at first hand whether the effort we make to help our family and neighbours is actually working, whereas with foreign aid we can’t, and we have a sneaking suspicion that this means that it isn’t.

The most popular critique of aid in recent years, Dead Aid by Dambisa Moyo, does not challenge aid on the grounds that the plight of the poor is not our concern. It is a poorly argued book in many other respects, but it would be wrong to accuse Dr Moyo of callous indifference. Indeed, all the famous aid sceptics, from P. T. Bauer to Bill Easterly, explicitly accept development as the objective: they simply question whether foreign aid is a good way to achieve it.

The dangers of relying on national interest

So perhaps the public does not need to be persuaded that development matters, but needs instead to be convinced that aid makes a difference.  Even so, it seems reasonable to say that we should use every argument at our disposal for aid: we should appeal to the public’s self-interest as well as their moral values, and we should at the same time set out the evidence that aid works.

But there are two big risks to this approach which should lead us to think carefully about the balance of how we make the argument.

First, if we promote aid principally on the grounds that it supports our security and commercial interests, we should not be surprised when people expect that this is how aid should be used.

In the long term our national interest coincides with our moral urge to promote development and to reduce poverty.  But in the short term there is often a trade-off between development and poverty reduction on the one hand, and our commercial, security and strategic interests on the other.

During the Cold War a huge amount of aid was wasted currying favour with despots for geo-strategic reasons and accordingly propping up failing industries and businesses.  Even today, less than 40% of aid is spent in the poorest countries.  This makes a kind of sense if your aim is to increase your influence in emerging economies and in fragile states like Pakistan and Iraq.  There are many poor people in these countries, but all the evidence suggests that these are not the places in which aid is most needed and can do the most good.  A significant portion of aid (though none of the UK’s aid) is still tied to firms in donor nations. This makes sense if the aim is to support the donor’s commercial interests but not if the aim is to have the greatest possible impact on the reduction of poverty.  It is legitimate and proper for donors to want credit for their aid, to enhance both their international reputation and their image and influence in the recipient country. But this goal leads donors to give too much aid through bilateral aid programmes, on which their national flag can be stamped, and too little through more efficient multilateral institutions and other shared funds, resulting in unnecessary duplication, overheads and transaction costs.

We do not have institutions that can protect our long-term national interest in development and poverty reduction from the pressures to use aid to pursue these short-term strategic, security and commercial interests.  In a world of short time horizons, our immediate interests tend to prevail over our longer-term goals.  So the more we justify aid chiefly on the grounds of national interest, the greater the danger that our short-term national interest will dictate the way aid is used, with negative consequences for the effectiveness of aid and for our longer-term interest in poverty reduction.

If the public were unsure whether they cared enough about global development to give aid, then it might be worth deploying aid in ways which are most obviously in the national interest, even if that required sacrificing some of its effectiveness.  (For many years, the Danish government justified tying aid to Danish suppliers on precisely these grounds.)  But if the public is already convinced that development is important, and their doubt is primarily about whether aid is effective, then it makes no sense to use aid in less effective ways in an effort to win greater public approval.

The second reason why we should be cautious about focusing too much on our national interest when justifying aid is that we are in danger of setting ourselves up to fail.

Take an example which is, literally, close to home for me. School enrolment here in Ethiopia has risen from a quarter of all children fifteen years ago to more than four fifths of children today. About a third of Ethiopian children – 8 million boys and girls – are at school as a direct result of foreign aid.  My house in Addis Ababa is a few hundred metres from the local primary school, so I see boys and girls going past my window to school every day.

If the British public could see as I do how their aid money is being used, they would, like me, be encouraged and touched by the good that aid does.  This is a direct, demonstrable benefit of aid, and one which appeals to the British sense of justice and empathy for our fellow human beings.   It would soften the heart of the hardest sceptic.

Kids going to school near my house in Addis Ababa. A third of Ethiopia's education system is financed by aid.

Why then is there such widespread doubt that aid works?  In part it is because people at home cannot look out of their window and see it working.  But it is also because we have made extravagant claims about what aid will do. Even if it is true that aid leads to faster economic development, and that it thereby reduces the risk of global health contagions, organised crime and drug smuggling, this would be impossible to demonstrate statistically.  (It would be like trying to show that the EU has prevented war in Western Europe since 1945: plausible, very probably true, but unprovable.)

People are right to be doubtful about the validity of some of the more grandiose claims for what aid can achieve.  Perhaps it seems too modest to say that we pay for millions of children to go to school, and for people to have access to clean water and basic health care. But this is a reality which we can prove beyond any doubt; and for most taxpayers it will seem well worth the modest amount of money we spend on it.  And it is probable, even if unprovable, that all this works in favour of our own long-term interests as well.

The public and the politicians who represent them will inevitably devote only a modest amount of time to thinking about development.  If we use up scarce bandwidth making an argument with which few disagree – that poverty matters – we waste the opportunity to make the argument of which they are yet to be convinced: that development policy and aid can and do make an important difference to the lives of the poor.

The aid that was used to prop up Mobutu in Zaire during the Cold War may have served a foreign policy interest, but it did little or nothing to reduce poverty and raise living standards in that country.   Money used today to buy food aid may be a convenient subsidy for American and European farmers but if we bought the food locally we could feed twice as many people with the same money and at the same time support the growth of sustainable agriculture in developing countries. The more we use aid to support our strategic and commercial interests, the less effective that aid is likely to be in the fight against global poverty, in which we have an important long-term interest.

It is in our national interest to see faster development and the end of global poverty, and we should not be shy about saying so.   But we should think twice before using this as the central plank of the case for more effective development policies and more aid.  People do not need to be persuaded to care about global poverty: they do need to be convinced that there is something we can do about it.  Just reminding them that it is in our national interest to promote development fundamentally misses the point.  The more we defend aid mainly on the basis that it is in our national interest, the more likely it is to be bent to our short-term commercial and strategic interests, the more ineffectively it will be used, the harder it will be to demonstrate its benefits, and the greater the justification for public scepticism.  Give the public some credit: they don’t need to be persuaded to care about poverty.  Aid does work:  and the first and most pressing task is to demonstrate to the public with persuasive evidence that this is so.

Though the effects of aid on development are uncertain, there is a huge amount that industrialised countries can do – or not do – which affects how quickly countries develop.  The policies of rich countries on trade, investment, migration, the environment, security and technology can make a huge impact on how quickly poor countries are able to develop.

Yet we tend to judge industrialized countries too much according to how much aid they give, and too little to how they behave in all these other ways.

The Center for Global Development provides an essential service by ranking the rich each year so we can see how we are doing.  They use a series of quantitative measures on all these dimensions to create a composite picture of how a country’s policies affect development. The 2010 results are now in.

The overall rankings in the 2010 Commitment to Development Index

For people in the UK who feel smug about the UK’s approach to development, the Commitment to Development Index makes pretty sobering reading. The UK is in 16th place, out of 22 countries in the index.

The UK has fallen ten places since 2005, when it was in joint fifth place, after only Denmark, Sweden, Netherlands and Norway.

The UK is one of only three countries to have got worse rather than better since the index began in 2003. (The other two are Denmark – which started at the very top, and Switzerland.) And this isn’t a point about the change of government: Britain was 16th last year too.

Given that the UK has a relatively generous and effective aid programme, why does it come so far down the league of overall impact on development?

In short: arms exports.

The Commitment to Development Index uses three measures of a country’s security policy.  It tallies the financial and personnel contributions to internationally mandated peacekeeping operations and humanitarian interventions. It rewards countries that base naval fleets where they can secure sea lanes vital to international trade.  And it penalizes arms exports to undemocratic nations, on the grounds that putting weapons in the hands of despots can increase repression at home and the temptation to launch military adventures abroad.

The UK is by far the worst of the the 22 nations in the index on selling arms to poor and undemocratic governments.  UK arms exports, weighted for undemocratic and unaccountable states, are four times worse, as a share of GDP, than the next worst arms exporter, the United States.

The bars shows the scores from 2003 to 2010in each of the 7 dimensions

As well as being stand-out bottom of the pack on arms exports, the UK does badly on migration policy, because it takes too few unskilled immigrants and students for its size; and technology policy both because Government R&D spending is unduly focused on defence, and because the  UK tends to pursue intellectual property rights policies that are not in the interests of poor countries, such as allowing patents on plant varieties, and pushing to incorporate into bilateral free trade agreements “TRIPS-Plus” measures that restrict the flow of innovations to developing countries.

Critics of aid often argue that we should focus more on helping countries to develop, rather than what they call ”handouts’ to poor countries.  In that context, they usually mention the need for more open trade with developing countries.  That is certainly important. The Commitment to Development Index suggests that they should also be advocating changes in UK policy to: reduce arms sales to undemocratic countries, accept more unskilled immigrants, increase the number of foreign students, remove patents on plant varieties and stop arguing for TRIPS-plus.

The UK gets credit for its environmental policies, mainly because it has done relatively well on limiting carbon emissions and because of high petrol taxes. Global warming has a disproportionately negative impact on developing countries, so these measures have an important impact on developing countries.

Many British people are proud of the UK’s commitment to reducing poverty in developing nations, and Britain’s model of an independent development agency within Government led by a separate Cabinet Minister is widely admired.  But is it working?    Judging by the scores in the 2010 Commitment to Development Index, the UK is  doing a better job at securing and spending a rising aid budget than it is at getting the rest of government to pursue development-friendly policies.

I have worked as a civil servant very closely with politicians of all parties, and my impression of them is much more positive.  There have been many politicians that I have not agreed with, but have found to be principled, hard-working, and genuinely committed to the pursuit of public good.  I’ve seen a few wrong ‘uns too; but most of those have been exposed in time.  There are many politicians who I admire and respect, and I’m sorry to see some of them leave the House of Commons.  Politics will be worse for the loss of people like Tony Wright, James Purnell and Bob Marshall Andrews for Labour, John Maples and Ann Widdecombe for the Tories, Matthew Taylor from the Liberal Democrats, and Clare Short, all of whom decided not to contest the 2010 election.

Though I am not a Liberal Democrat supporter, for me the biggest loss to the House of Commons came with the defeat of Dr Evan Harris in Oxford West and Abingdon.  He has consistently stood up for sound science, and evidence-based policy.  He has been the most consistent voice in support of secularism and free expression.  He has advocated disentangling the church from the state, and for remaining respectful of religion while resisting the idea that it should be immune from criticism or ridicule.   We need more people like him in Parliament, and I hope that he will soon return. (This is no reflection at all on Nicola Blackwood, who defeated him, whom I do not know at all.)

The Clock Tower of the House of Commons within which Big Ben, a bell, resides

Since there will be a lot of politics on our TV screens in the next 48 hours, I should like to take this opportunity to issue some timely pedantic reminders:

• England, not the House of Commons, is the “Mother of Parliaments“
• “Big Ben” is a bell which is found in the clock tower of the House of Commons. The clock tower is not Big Ben, nor contrary to the opinion of faux pedants is it “St Stephens Tower”.
• There are no “keys to Number 10″.  The front door of Number 10 Downing Street has no lock. Nor are there any “books” containing the nation’s finances to be given to incoming Ministers.
• If Mr Brown goes to Buckingham Palace he will have “an audience of the Queen”, not “an audience with the Queen”
• The side of the House of Commons where the MPs supporting the Government sit are the “Treasury Benches”, not the “Government benches”
• Anybody “measuring the curtains at Number 10″ will be examining the curtains for the flat occupied by the Chancellor of the Exchequer.  Prime Minister Blair, and subsequently Prime Minister Brown, used the larger flat above Number 11 Downing Street.

Update: 6 May.  For the record, here is St Stephen’s Tower:

St Stephen's tower

We understand that all the main parties are committed to increasing aid to 0.7% of GDP, with some relatively minor differences about how that would be used.  But if we are serious about development, we need to look beyond aid to address the circumstances in which developing countries are trying to establish economic growth and political stability.  Our other policies – for example, on trade, climate change or immigration – make a huge difference to how quickly poor countries can develop.  Will you, as Prime Minister, be willing to make changes to UK policies which are against the immediate interests of a group of UK citizens – for example, arms exporters or pharmaceutical firms – but which support our collective longer term interest in seeing a fairer, safer and more prosperous world?  If so, what concessions would you make?

The development policy discussion in the UK has focused too much on aid.  As I’ve argued here today, aid is important, because it helps to improve people’s lives while their countries are developing.  But I don’t think aid is the most important factor in accelerating development – for that it is much more important whether we adopt fair global polices on climate change, trade, agriculture, immigration, intellectual property, conflict, corruption and international governance.

The manifestos are largely quiet on how the political parties would address these issues, and they have not yet been pushed to address it.  I think this is because so many people who work in development are dependent for their income on aid, so they tend to judge parties’ policies by their willingness to increase it.  A worthy and notable exception is Alison Evans at ODI, who is always smart, who picks this up in her recent blog post on development in the election:

.. a crucial question is whether there is any a wider read-across from the manifestos to the international development agenda?  Development is not only about aid and there is a danger that the allure of the 0.7 debate can and will detract from a much wider set of policy concerns that impact on the prospects for growth and prosperity in developing countries.  Each of the manifestos cover growth, trade, immigration, security and climate change – all  areas in which the debate about international development policy and global poverty reduction is increasingly engaged – but  none of them spell out in any detail what this means for the way their governments would work on these agendas or how the funding would work. Where is the coherence between policies and between policies and implementation?

This is exactly the right question to ask (it is a pity that the post is entitled: “main parties pledge 0.7% for aid but how will it be spent?”). We have been assured that the three largest parties are committed to retaining DFID as a separate government department, with its own Cabinet Minister, and with a budget that rises to meet the UK’s commitment to increase aid to 0.7% of GDP.  But if they are serious about development then DFID will also need to have an important role right across the government, ensuring that the UK’s interests in development are taken into account when the government considers other policies from immigration to climate change.  That does not mean that the development interests should always trump the UK’s other national interests, but they should be considered and there will often be ways to adjust the details of the policy in a way that costs us little but has a huge impact on the developing world.

If we want to help to accelerate development, then some of the time we will need to put the UK’s broad, long-term interest in  building a safer, more equal and prosperous world ahead of the UK’s narrower and short-term commercial or political interests.  The most important international development question for the UK election should be: which of the political parties is willing to do that?

The Times criticizes the Conservative Party for their commitment to maintain the planned increases in development spending. The leader recycles discredited assertions about the negative effects of aid rather than offering solid analysis.  There isn’t a single reputable econometric study showing that aid causes harm through  exchange rate appreciations, corruption or slowing progress to democracy.   Peter Bauer, whom the leader article quotes, was criticising Cold War foreign assistance programmes which bear little resemblance to aid programmes today. Aid today is increasingly practical, targeted and measurable, just as The Times says it should be, and it works.

Britain was one of 147 countries which pledged we would “spare no effort” to meet the Millennium Development Goals. As The Times implies, we should not be judged on what we spend but on what we achieve. On this basis we are not yet doing enough to achieve the goals to which we are committed.  That is why it is important that Britain should continue to increase its world-class development programme, and press other nations to increase their spending too.  To resist this on the grounds that 0.7% is an arbitrary figure is a clever-sounding point for a debating society, not a reasoned argument against the commitment of all the main political parties to meet Britain’s international promises, and to press other countries to do the same.

From the other end of the political spectrum, Kevin Watkins in The Guardian seems to be determined to use development to score party political points – and to do so he has had to put himself in the strange position of arguing against the country-led approach to development which is supported by all main UK political parties.

Under the Labour Government Britain has helped build an international consensus that aid works best in support of a country’s own development strategy; that policies imposed from outside rarely work; and that governments should be accountable to their own citizens for their policies and actions.  Kevin Watkins rightly supports these points in other contexts. Yet he apparently won’t entertain the idea that other countries may have different views from his (and mine) about the best way to organise and fund public services.

I’ve read the Conservative Green Paper and it does not call for state services to be rolled back in developing countries. It says that governments should guarantee access to education for all their people; and that donors should fund that guarantee and support and encourage governments to choose whatever path enables them to expand education provision fast and effectively.  It does not propose or advocate market-based solutions in education: it says explicitly that the Conservatives would work with the public, not-for-profit and private sectors.

Kevin Watkins quotes the Green Paper saying “We bring a natural scepticism about government schemes“; this is the entire basis of his claim that “the Conservatives will use aid to roll back the state in key services“.  But it is clear when you read this sentence in context that the Conservatives are questioning the role of the government in aid, not planning to tell other countries how they should manage their public services.

There is now a valuable cross-party consensus on the need to use aid money to support countries’ own development priorities and programmes.  The challenge today is how to bring public sector reform to the aid business – including the possibility of some market-like disciplines to make aid more effective and accountable.  There are proposals in both the Government White Paper and the Conservative Green Paper to make aid more transparent and accountable and to link it more closely to results. Kevin Watkins might have used his space to tell us what he thinks about these ideas instead of trying to score party political points on development.

(By the way, I admire Kevin Watkins, but I’m not comfortable with the fact that a UNESCO official, paid from public funds, is using his position to make highly partisan and inaccurate attacks in the newspapers on the main UK opposition party. )

I’ve got no party political axe to grind: my interest is in supporting the best possible policies to accelerate development, so that the world is a fairer, happier and safer place for everyone.  It seems odd that the Conservatives should be attacked from both left and right for articulating development policies which seem to me squarely in the mainstream of development thinking.

The cross-party consensus that the UK’s development budget should continue to increase, and that British development policy is amongst the most effective in the world but nonetheless there is room for improvement, should be a matter of shared national pride, not scorn and sniping from whichever direction.  Let’s sustain that consensus, and not allow development policy to be used as a political football even in the heat of an election campaign.

Update: see Kevin’s reply in the comments.

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.

we are all in this together.

This is a powerful message.

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

we are all in this together.

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

we are all in this together.

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

we are all in this together.

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

we are all in this together.

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

we are all in this together.

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

we are all in this together.

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

we are all in this together.

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

we are all in this together.

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

we are all in this together.

There are three questions to answer:

• should we spend more on reducing global poverty?
  (my answer: yes, if we have to)
• should we tax transactions in financial markets?
  (my answer: maybe, though I am not persuaded)
• should we link aid budgets to revenues from such a tax?
  (my answer: definitely not)

My answers are explained below the fold.

I can see why some people are attracted by a combination of extra money for the world’s poor and a poke in the eye for the unacceptable face of capitalism.  But to support the Tobin Tax on these grounds is at best opportunism, and at worst reveals a hostility to the functioning of markets which will, in the end, not serve the poor.

a. Should we spend more on reducing global poverty?

Regular readers of this blog will know that I believe that aid works, though not as well as it should.  I believe we have obligations to our fellow human beings around the world, and that we have it within our power to alleviate suffering and promote shared prosperity.  Aid is not the measure of our common humanity, but it may be the cost of it.   I would much rather promote the well-being of the world’s poor through more open trade policies, open immigration policies, changes to intellectual property rules, reductions in environmental damage and changes to our policies on peace and security.  But (a) we aren’t in fact doing any of those things; and (b) we should be giving aid at the same time, especially as it is a natural complement – e.g. to more open markets.   We should spend what it takes to eliminate global poverty – it is easily affordable – and if we can do it with less aid, all well and good.  So yes, let’s spend more on aid, but let’s remember this is a means to an end, not an end in itself.

b. Should we tax financial transactions?

Adair Turner apparently believes that there are financial activities which are “a socially useless activity” and which should therefore be discouraged by taxation. However, the test for imposing a tax on an economic activity should not be whether it is socially useful, but whether it imposes costs on the rest of us.   Presumably somebody wants the financial transactions in question, which is why they are willing to pay for them.  If we want to impose a tax on them to discourage them, we have to explain what harm that does the rest of us.   (Readers may be able to think of other activities undertaken by consenting adults that have no wider social benefit, but also do no social harm: should we tax all these too?)

Tobin believed that a tax on transactions might increase financial stability.  That is the makings of a case for taxation, because financial stability is a public good.  (Tobin explicitly distanced himself from the anti-globalisation supporters of his tax.)  But it is not obvious that a Tobin Tax would increase stability.  Are markets with fewer, larger transactions likely to be more stable than markets with more market players, and more frequent, smaller transactions?

In the end, this is an empirical question. If it really is true that markets with higher transaction costs are more stable than markets with lower transaction costs, then a Tobin Tax looks attractive. If not, not.

c. should we link aid to revenues from a tax on financial markets?

This is where I part company most sharply from those who think that it would be a good idea to use a Tobin Tax to finance international development.

My reservations are part theoretical, part practical.

The theoretical objection is this.  Good public policy demands that governments spend the taxpayers’ money in the most effective ways to increase the sum of human happiness; and that they raise the money in ways which are either beneficial (e.g. by taxing bad things such as pollution) or at worst, in ways that do least harm.   These should be separate decisions: linking a particular form of revenue to a particular form of spending unnecessarily constrains those choices.   We should evaluate the case for aid spending on its merits; and we should evaluate the case for a tax on financial transactions on its merits.   If we link one to the other, we may find ourselves pushed into less effective forms of spending, or less effective forms of tax.

And here is the practical objection.  It has been clear from the current financial crisis that we need aid to be counter-cyclical – that is, we need more of it in a downturn; whereas in fact it is proving to be cyclical – that is, industrialised countries find it convenient to cut back on aid when things are tough.  Turnover in financial markets is pro-cyclical. That means that if a tax on turnover is a primary source of aid finance, aid will become more cyclical, which is the opposite of what we need.

Conclusion

We concede too much ground when we advocate a Tobin Tax to pay for international development.   We have profound obligations to help our fellow human beings, and we can do so at little cost to ourselves.  Our obligation is to see to it that people have the  food, water and shelter they need, access to security, health care and education and to a decent quality of life.    If this costs more money than we are spending, so be it.  The sums are small.  If we can achieve these things with less aid, or no aid at all, all well and good.   This is solid ground which we should defend.  When we argue that the money should come from a Tobin Tax, or an airline duty, we implicitly move the debate to measuring our solidarity by the amount of aid we give, rather than what we seek to achieve, and implicitly concede that aid at the levels required to achieve these simple things cannot be afforded without additional taxation.

I returned from leave to discover that my office had halved in size: the wall had been moved six feet.  To create a new meeting room for the Permanent Secretary on the other side.

For the first time I can remember, I agree with Danny Finkelstein (and, less unusually, with Alex).  We need special advisers; and if anything we need more of them, not fewer; and we need to give them proper power and authority.

I say this partly for the reasons that Danny gives: we should be glad to have a diversity of ideas and advice to Ministers.  If civil servants can’t stand that heat of competition, they should get out the kitchen.  And as Danny says, the special adviser network can actally enhance effective Cabinet Government, by maintaining political conversations between government departments that do not work as well through the civil service networks.

But there is one other reason why civil servants should be in favour of having more special advisers: they help to prevent politicisation of the civil service.  For as long as we have sufficient, high qality special advisers, they can write speeches, brief journalists, write political strategies, liaise with MPs and the more political lobby groups – which prevents Ministers from having to ask civil servants to perform tasks which brings them into the gray areas at the margins of political neutrality.  So a greater number of Special Advisers does not imply an increasing politicisation of the civil service, as is sometimes claimed, but rather a protection against it.

I have worked closely with many special advisers, some of whom are now quite well known (whatever happened to David Cameron, John Bercow, David Milliband and James Purnell, I wonder?) and I found most of them to be extremely smart, productive, and responsible. Working with special advisers helps civil servants to understand the political context of their advice better.  A good partnership between civil servants and special advisers enables them to design policies and explain them in ways that are politically attractive, helping to introduce better policies which might otherwise be ruled out on political grounds.

I’d like to think that the Yes, Minister days are behind us, but Alex’s recollections suggest that, at least unconsciously, those civil service attitudes are not yet entirely in the past.

The power of technology – such as blogs – meant that the world could no longer be run by “elites”, Mr Brown said.

Policies must instead be formed by listening to the opinions of people “who are blogging and communicating with people around the world”, he said.

Mr Brown’s comments came during a surprise appearance at TED Global.

“That in my view gives us the first opportunity as a community to fundamentally change the world,” he told the TED Global (Technology, Entertainment and Design) conference.

“Foreign Policy can never be the same again.”

I agree with that.  I’m very proud of my team’s work to develop and promote open data standards for aid and other resources for poverty reduction, to enable everyone in the world to engage on how resources for poverty reduction are used.   It ensures that the world is not run by elites, whether in developing countries or donors.

Nick Robinson – the BBC Political Editor – should know better than this:

The fate of nations, of monarchs and of the British people have been sealed in the Commons.  Yet now the reputation of the mother of all parliaments has been brought low by rules written and exploited here by claims for a kitkat, a tin of pet food and a bottle of shampoo.

England, not the House of Commons, is the “mother of Parliaments”.  This phrase was coined by John Bright, in a speech in 1865, in which Bright was advocating an extension of the right to vote.  His campaign led to the Reform Act of 1867 which gave the vote to the (male) urban working class.  Bright said:

We may be proud that England is the ancient country of Parliaments. With scarcely any intervening period, Parliaments have met constantly for 600 years, and there was something of a Parliament before the Conquest. England is the mother of Parliaments.

I realise that this is pedantry. But I would expect the BBC Political Editor, of all people, to understand the resonance of this phrase and to know what it means.

The most satisfactory sight yesterday was that of Dick Cheney, looking for all the world like Dr Strangelove, being wheeled off the scene in a wheelchair. The only problem is that he was then helped into a limousine rather than a police van.

I’m going to make myself very unpopular with  lots of the ferenj here in Addis Ababa, many of whom make a good living working for NGOs with foreign funding and are up in arms about this. But I see where the Ethiopian Government is coming from, and I don’t think the law is completely unreasonable.

Now, don’t get me wrong: I would not have brought in this law. I think 15 years imprisonment (that was in the draft bill) for breaking this law is draconian. I do not think that government officials should have the right to attend internal meetings of civil society organisations.

But it is not unreasonable for the Ethiopian Government to say that foreign-funded organisations should not be able to use their funding to buy political influence and change in Ethiopia. Foreign donations to political parties are illegal in the UK – that is why there has been such a fuss about the allegations that George Osborne may have solicited donations from Russian oligarchs on a yacht. We are uncomfortable with the idea that very wealthy people should buy political power – that is why we have spending limits and caps on political donations – and in the UK we look rather pityingly at the United States, where funding by rich companies and individuals seems to dominate political life.  Think what this must feel like in a very poor country, where even quite modestly wealthy organisations and individuals overseas have undreamt of wealth by comparison with Ethiopians, and try to use that disparity of wealth to buy change.

So why shouldn’t a very poor country be concerned to avoid having its politics shaped by foreign funding?

There are about 3,800 NGOs here in Addis, with a total budget of $1.5 billion a year. (That is a lot of money in a country in which the annual government budget is about $4 billion a year. The government health budget is less than $300 million a year.) The money going to NGOs could make a huge difference if it were used to improve government services directly, rather that to fund a motley collection of advocacy organisations and fragmented small scale delivery organisations.

It is important to note that the new law does not forbid civil society organisations from being involved in advocacy for human rights. It forbids organisations from being involved in political advocacy if they get more than 10% of their funding from abroad.

So while this law isn’t one that I would have introduced myself, I see where the Government is coming from. It is not completely mad. The hysterical over-reaction from donors, often under political pressure from international NGOs at home, is out of all proportion.

Rule 3. Make America or China happy. Make Israel and Saudi Arabia very happy. Become a Muslim, like Idi Amin. Visit Moammar Gadaffi often. He likes African leaders. We do not know why. Pray with George Bush and let him see your soul. Make your country’s leading supermodel the ambassador to France and Italy. Ask her to wear a mini when presenting her papers to Nicholas Sarkozy.

From Ethan Zuckerman, FP

On Development Drums this week, we heard about the impact of the global gag rule on women in Africa, in an interview with Dana Hovig from Marie Stopes International. (Full disclosure: my partner works for MSI.)  My expert guests were sceptical that Barack Obama would give priority to reversing the global gag rule any time soon.

But this weekend, we have heard that Obama is preparing to reverse some key decisions that President Bush took using executive authority, including on stem cell research, oil and gas drilling and – according to the Washington Post, the New York Times and Bloomberg – the global gag rule:

President-elect Barack Obama will reverse U.S. family-planning and AIDS-prevention strategies that have long linked global funding to anti-abortion and abstinence education, a public-health adviser said. Obama “is committed to looking at all this and changing the policies so that family-planning services — both in the U.S. and the developing world — reflect what works, what helps prevent unintended pregnancy, reduce maternal and infant mortality, prevent the spread of disease,” Wood said.

These seems like a good time to raise the profile of this important issue, to make sure that reversing the global gag rule is on the list of decisions for President Obama to take in his first day in office.  The Center for Reproductive Rights has written to Barack Obama calling for the repeal of the global gag rule.  Now is the time to make as much noise as possible about this to generate political support for an early decision to reverse this policy.

For more information about the global gag rule, listen to the interview with Dana Hovig in Episode 6 of Development Drums (about 30 minutes in to the podcast).

Emmanuel is apparently the model for the character of Josh Lyman (played by Bradley Whitford – pictured right) from his days in the Clinton White House.

Lyman has always been my hero in West Wing (except for that are-they-aren’t-they thing with Donna, his assistant).

Of course the West Wing scriptwriters foresaw that Emmanuel would become Chief of Staff: in Series 7, Lyman becomes Chief of Staff to Matt Santos, the first non-white President of the United States (played by Jimmy Smits).

Every time I have suggested things you might do differently, I have been told that this is impossible as you are under an obligation to pursue the interests of your shareholders.

Now that I am – unexpectedly – one of your shareholders, I expect you’d like to know what I would like you to do.  Here are seven new instructions to be getting on with.

1.  Short-term profits are not important: what is important is long-term value.  I would like you to stop chasing short term arbitrage opportunities and overnight trading and focus on identifying and investing in the best-run, most productive and valuable enterprises.  There will be no trading in derivatives or other purely financial products.

2.  Cut executive pay immediately.  From now on, nobody in the bank will get paid more than four times the salary of the lowest-paid employee.  If you want to award yourself a pay rise, you’ll have to increase the salaries at the bottom.

3. All our branches and subsidiaries overseas will pay local taxes, in full. There will be no clever arrangements to transfer profits to tax havens to avoid tax.

4. No more junk mail trying to persuade people to take out new credit.

5. It is no longer our objective to inflate house prices.  An increase in house prices is not an increase in net wealth: it is a transfer from those who do not own houses to those that do.  We will try to dampen the housing market, not reinvigorate it.

6. Every bank that is “too big to fail” will be split up into smaller banks.  We are going to reverse the cycle of mergers and takeovers that has created these monolithic institutions that have held us all to ransom.

7.  There will be no lending for businesses or individuals involved in industries that are harmful to our society and planet.  That means no lending to any of the following: the arms trade, advertising and marketing, tobacco, extracting or burning fossil fuels, or the motor industry.   Instead, please invest more in clean technologies, technologies appropriate for developing countries, non-profit organisations and community groups.

I know that you have many new shareholders, and it will take time for you to get to know us all.  My views won’t necessarily be shared by all your new bosses, but you can be pretty sure that lots of your new bosses  think more along these lines than the old lot.

I was a bit hesitant about becoming a bank-owner, but now that it has happened, I think I’m going to enjoy it.

Work hard – but not too hard.

Yours,

Owen

Sitting in the airport lounge in Washington DC today, I was a bit surprised to find a “bonus issue” of How To Spend It in today’s paper.

I expect that there are lots of investors whose main concerns today include “whether the perfect sound system exists”, “the demure allure of autumn’s flattering longer skirts” (the Cavalli skirt is a snip at £3000), and “whether corporate gifts can ever truly be objects of desire”.

when you make a donation to Planned Parenthood in her name, they’ll send her a card telling her that the donation has been made in her honor. Here’s the link to the Planned Parenthood website:

https://secure.ga0.org/02/pp10000_inhonor

You’ll need to fill in the address to let PP know where to send the “in Sarah Palin’s honor” card. I suggest you use the address for the McCain campaign headquarters, which is:

McCain for President
1235 S. Clark Street
1st Floor
Arlington , VA 22202

PS make sure you use that link above or choose the pulldown of Donate–Honorary or Memorial Donations, not the regular “Donate Online”

First the religious right were asked to pray for rain during the Denver Democratic National Convention:

Stuart Shepard of Focus on the Family, one of America’s leading evangelical groups, was shown in a video filmed at Denver’s Invesco Field, where 75,000 are expected to cheer Mr Obama on Aug 28, asking Christians to pray for “torrential” rain.

“I’m talking ‘umbrella-ain’t-going-to-help-you rain,” the former pastor and television meteorologist said. He explained on the video: “I’m still pro life, and I’m still in favour of marriage as being between one man and one woman. And I would like the next president who will select justices for the next Supreme Court to agree.”

Did it rain on Mr Obama’s parade? Did it heck.

But what’s this? Hurricane Gustav has prompted a rethink over the Republican convention. John McCain said:

“But you know it just wouldn’t be appropriate to have a festive occasion while a near-tragedy or a terrible challenge is presented in the form of a natural disaster. So we’re monitoring it from day to day and I’m saying a few prayers too.”

If the Big Guy is sending rain according to which side he’s on, then He seems to be a Democrat.

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

How the Civil Service Code applies to online participation

The Civil Service Code applies to your participation online as a civil servant or when discussing government business. You should participate in the same way as you would with other media or public forums such as speaking at conferences.

Disclose your position as a representative of your department or agency unless there are exceptional circumstances, such as a potential threat to personal security. Never give out personal details like home address and phone numbers.

Always remember that participation online results in your comments being permanently available and open to being republished in other media. Stay within the legal framework and be aware that libel, defamation, copyright and data protection laws apply. This means that you should not disclose information, make commitments or engage in activities on behalf of Government unless you are authorised to do so. This authority may already be delegated or may be explicitly granted depending on your organisation.

Also be aware that this may attract media interest in you as an individual, so proceed with care whether you are participating in an official or a personal capacity. If you have any doubts, take advice from your line manager.

Good luck to civil servants as they try to implement this. I had rather a torrid time when the Mail on Sunday chose to attack me for my previous blog.

Simon Dickson has more.

Looking back at the successes of previous governments, we remember mainly the institutions they built as their lasting legacies. Lloyd George gave us national insurance; Clem Attlee gave us the National Health Service. We don’t remember Andrew Bonar Law much, because he built nothing. Harold Wilson famously cited the creation of the Open University as his greatest achievement.

This Government’s most notable institutional changes have been devolution, the independence of the Bank of England and the partial reform of the House of Lords: planned in opposition and implemented soon after the 1997 election. In Government, the PM has taken the view that the priority is to put in place the right people to take the right decisions. I think this is a manifestation of New Labour’s philosophy that they would go with “what works”. They would govern with pragmatism, not ideology; and that meant appointing the right people and getting on with it rather than constructing effective and long-lasting institutions that might limit their discretion.

In that context, the Prime Minister’s speech on 27 January in Davos made interesting reading, because it is all about the need for more effective international institutions:

This is my major reflection on 10 years of trying to meet these challenges, 10 years in which, as a deliberate policy, Britain has been at the forefront, for better or worse, of each of these major global issues. Interdependence is an accepted fact. It is giving rise to a great yearning for a sense of global purpose, underpinned by global values, to overcome challenges, global in nature.

But we are woefully short of the instruments to make multilateral action effective. We acknowledge the interdependent reality. We can sketch the purpose and describe the values. What we lack is capacity, capability, the concerted means to act. We need a multilateralism that is muscular. Instead, too often, it is disjointed, imbued with the right ideas but the wrong or inadequate methods of achieving them.

None of this should make us underestimate what has been done. But there is too often a yawning gap between our description of an issue’s importance and the matching capability to determine it. … Global purpose, underpinned by global values requires global instruments of effective multilateral action.

This emphasis on the need for more effective multilateral institutions is both right and important. As the world become more interdependent, there are more and more choices that we need to make collectively. These include the provision of global public goods, collective security, and mechanisms to ensure that the benefits of globalisation are fairly shared so that progress can be sustained. As I think the Prime Minister is now saying, if we do not have legitimate and effective institutions to take these decisions, we will find that we have no way to meet these needs and aspirations, nor to resolve the world’s tensions.

Britain has quite a specific long-term interest in this too. We are witnessing the rise of new world powers such as China, India and Brazil. I personally welcome this, though there is a lot of angst around about what it means for us. One thing it almost certainly means is that in 20 years time, Britain will no longer be a major world power with the same amount strategic influence at the most important forums such as the G8 and the Security Council. If and when that happens, we will depend on the existence of effective multilateral institutions to protect our interests, and those of other middle-ranking powers. It seems to me that we should be using the power that we have today, while we still have it, to put in place those institutions and build them up so that they are effective and legitimate in the future. That is a legacy for which future generations in Britain may well thank us.

I learned some lessons again that I should have learned before:

• You can’t run a marathon well without training for it.   G and I both relied on our background fitness. But really we needed a tailored combination of long runs, speedwork, aerobic fitness, and strength.  Getting the right mixture is much more important than running in the park every day.
• If you go off too fast at the start, you will pay for it later.  It is much better to go off slowly and then speed up.  It is claimed that every 10 seconds a mile you run too fast in the first half will cost you a minute a mile in the second half.  And it is much more fun to be overtaking people in the last ten miles than to be overtaken.
• You can’t run as fast when it is hot.
• You’ll go through some rough patches in any marathon.  Don’t quit: they will pass.  I had a stitch twice, and several segments when I had to walk, and I still ran fast enough to qualify for the Boston Marathon.

I am going to start like the Vicar of St Anthony’s: my text is the Civil Service Code verses 9 and 13: “Civil servants should conduct themselves in such a way as to deserve and retain the confidence of ministers” and “Civil servants should continue to observe their duties of confidentiality after they have left Crown employment.” You should keep those two sentences in mind all the way through.

The very same Lord Turnbull gives an interview to the FT (March 20, 2007):

In an interview with the Financial Times, Lord Turnbull, permanent secretary to the Treasury for four years under Mr Brown before becoming cabinet secretary in 2002, accused the prime minister-in-waiting of a “very cynical view of mankind and his colleagues”.

“He cannot allow them any serious discussion about priorities. His view is that it is just not worth it and ‘they will get what I decide’. And that is a very insulting process,” Lord Turnbull said.

Comment: I’m with the 2005 version of Andrew Turnbull. Civil servants have no business revealing their views of Ministers and their behaviour – even after they cease to be civil servants. That is part of the job. Turnbull should not have spoken as he did.

Here is what Turnbull said should be the consequences for those who break those confidences:

the strongest safeguard is a sense of professional pride, and Radcliffe was right that the real sanction is that those who flout the guidelines will suffer reputational damage. Your calling witnesses is helpful in signalling that breaking confidences is not without cost.

I wonder if that loss of reputation means that Turnbull will be shunned for the Quangos, Inquiries and non-Executive Directorships that make up the life of a former Cabinet Secretary?

Ordinarily, I would be in favour of allowing markets to trade securities, and for companies to be able to enforce contracts against governments. Well-functioning and liquid secondary markets help to reduce the cost of capital when it is originally borrowed, and the subsequent trading at below par enables debt and risk to be priced.

But there is an obvious market failure here: it is the collective action problem of dealing with defaults. We have a solution for companies: when a company can no longer meets its debts, it goes bankrupt. This is an orderly procedure to ensure that the creditors receive their share of the debtor’s assets. In particular, bankruptcy prevents free riders from holding out for full repayment of their debts once other creditors have settled. But as Walter Wriston famously remarked, countries don’t go bust. Once a country’s debts become unsustainable, it is in everyone’s interests to restructure those debts. If there is no collective mechanism for restructuring, then creditors will scramble to be repaid at the first sign of trouble, which is in nobody’s interest. And if free-riders hold out for full repayment, then there will be less money for the other creditors and less prospect of an equitable and sustainable settlement. That is why we have the London Club (for private creditors) and Paris Club (for public creditors). But the Vulture Funds hope to free-ride on these collective mechanisms, and seek the repayment of debts in full once the other creditors have bailed out the country and restructured its debts.

There is a possible solution to this, which is related to the idea put forward by Michael Kremer and Seema Jayachandran. First, laws in creditor countries such as the UK and US could be changed to disallow seizure of a country’s assets for non-repayment of so called ‘odious debt’. In other words, we could change the law so that odious debt contracts are legally unenforceable. Second, foreign aid to successor regimes could be made contingent on non-repayment of odious debt. This would encourage successor governments to repudiate odious loans, which will encourage banks to refrain from originating them.

Who would determine what debts are odious? Kremer and Jayachandran suggest that we give a mandate to an international institution such as the UN or the IMF to declare a regime odious. For example, Mr Mugabe’s government in Zimbabwe would be declared odious. Any organization considering lending money to that government would know that the debts would be legally unenforcable. In addition, I suggest that we agree that any outstanding sovereign debts of a country that receives HIPC debt relief would also be automatically declared to be odious. This would mean that lenders today would be wary of making any sovereign loans to a country that might in the future run into a debt crisis.

An automatic mechanism to make debts unenforcable if they were lent to a government that was corrupt or incompetent, or if they contributed to a debt crisis, would impose a much stricter market discipline on lenders to make them think twice before making such loans; and it would also close down the free-riding activities of vulture funds.

Romania lent $30m to Zambia in 1999, when Frederick Chiluba was President of Zambia. Chiluba is under multiple charges of corruption and bribery. If those charges are made to stick, then the country’s debts which were incurred under his regime should, in my view, be declared odious and unenforcable in international courts. And that would mean that the vulture funds would not get paid.

what ministers want to do is to restrict any individual or organisation from asking more than four detailed questions a year – severely limiting the opportunity for the most socially active to get stuff from their local council or government department.  The second, more subtle restriction aims to load extra costs against a £600 notional fee (£450 for local councils) – used as a cut-off point by bureaucrats to say it is too expensive to get the information. Basically, the new charges cover time spent reading the information to see if it can be released and time spent by ministers consulting with each other and lawyers on whether to release the information. As you can see, the more contentious the information requested, the less likely it is that it will now be released. And major advances in the release of information – such as the disclosures of the huge agricultural subsidies received by Tate and Lyle and the royals – would never have been released under these regulations. Nor would all the new details of MPs' expenses either.

Hencke urges his readers to respond to the consultation to express their views about this change.

The comments are pretty interesting. A couple of civil servants there (under the names BackOfTheNet and RobertPeel01) say that the Freedom of Information Act is a huge waste of time for civil servants.  I just wanted to say that, as a civil servant myself, I don't agree with them: I am in favour of as much freedom of information as possible.  The government and public servants should be accountable to the citizens (as voters as well as taxpayers) and the public is entitled to know what is being done in their name and with their money.  Transparency also leads to better policy-making.  The additional burden on civil servants is a small price to pay.

Very sensibly, that is what the Home Office has now announced in the Strategic Action Plan for the National Identity Register. 

So far so good.  There is one protection, however, that the government has not yet been persuaded to implement. Each citizen should be able to log in, see their own information, and see the names and job titles of every government official who has accessed that data. 

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.

I cannot see any conceivable public interest in this story.  There is no reason for anybody apart from the people themselves to know the details of their marriage.  Of course, the public may be pruriently interested, but that is a different thing altogether.

As a public service broadcaster, the BBC has no business broadcasting this rubbish. 

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

We went into the desert on camels and slept in tents, and hiked for days in the glorious Atlas mountains. 

The weather was hot, despite which every adult we met was observing Ramadan.

I start work at DFID next week, with a trip to Tokyo to discuss how we can work better with the Japanese government to improve international aid, and a meeting in Manila on aid effectiveness. 

We will be offline so there will be no blogging or emails.  This will be our longest period away from email and the internet since our cycling holiday in Ethiopia.  

See you all in a few weeks.