This joint post with Stephanie Majerowicz first appeared on the Views from the Center blog at the Center for Global Development
“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.
This blog post first appeared on the aidinfo site.
More than two thousand delegates have gathered today in Busan, South Korea, for the fourth installment of a succession of meetings aimed at making aid more effective.
There has been significant progress since the meeting in Accra in 2008 towards improving transparency of aid. This is important because it’s a pre-requisite for achieving all the aid effectiveness principles. Jamie Drummond from the ONE campaign explains this very well in the Huffington Post.
The challenge is to provide information to people at country level. Our existing aid information systems are mainly designed to enable donors to share information with each other, not to meet the needs of people in developing countries.
But the information needs at country level are hugely diverse, both between and within developing countries. Within governments, the information needs of the finance ministry are different from the needs of line ministries. The needs of parliamentarians, civil society, media and citizens are all different again. It is impractical for donors to try to meet the needs of every niche interest with their own subset of the data in a particular format.
뜻이 있는 곳에 길이 있다 (where there’s a will there’s a way)
Here’s the technical bit: the way to serve all these different needs for information without massive duplication and bureaucracy is to separate the data from the interface. An open, standardised, detailed, shared data layer can support a whole range of different applications, tailored to specific users.
That is why it is so exciting that the open data revolution is coming to aid. In 2008, in a side-meeting in Accra, a coalition of willing donors, developing countries, foundations and NGOs made a declaration which launched the International Aid Transparency Initiative. A lot of that data is now being published – countries accounting for nearly half of global aid are now publishing through IATI, and that proportion will grow in the coming months.
If you are in Busan this week, and you want to know how IATI works, the IATI secretariat will be doing a briefing at 5pm on Wednesday, in room KW202 (I’m making a guest appearance to show off some beta software, so do come along and laugh at me when it doesn’t work).
천릿길은 한 걸음부터 (A 1000-li journey starts with one step)
Transparency by itself does not lead to more accountability, less waste, or better coordination. That happens when people are able to use the information. The extent to which they are able to do so depends on their context, including the political and administrative climate. Open data won’t automatically make organisations responsive, but will greatly reduce the difficulty and cost for citizens of taking the data and turning it into something meaningful and useful.
With an open aid data platform now in place, huge opportunities are being opened. We can use the standard to introduce traceability of aid as it passes from organisation to organisation. We can improve the quality and detail of the data that is collected and publish it through these systems.
Reporting of aid data should be not just by donors but by NGOs, private sector implementing agencies and foundations. The mechanisms for sharing information can be extended beyond aid to other kinds of resources for poverty reduction. We can add detailed geo-coding, to enable aid projects and programmes to be mapped, and better coordinated. We can begin to compare across aid programmes and across countries. We can mix aid information with other data from other sources.
The twenty four donors who have signed IATI should be congratulated for their efforts to make data available. The payoff from that effort will come when we all start to use the data to understand aid better: to see what is working and what is not, and to hold the aid system to account, so leading to improvements in the effectiveness of aid. IATI removes the most significant barriers to entry for a wide range of diverse applications.
The next step is to nurture and encourage an ecosystem of civil society groups, parliamentarians, researchers, think tanks, academics, governments, private sector organisation, media and hackers, all accessing and using the information in different ways, and using this as a platform to push for improvements in how resources for poverty reduction are used. The new Open Aid Partnership is an example of an initiative of this kind: the door is now open for many more.
We can now look forward to the day when we take for granted the ubiquitous availability of aid data. We will soon forget that it was ever a struggle to find out about aid projects in a developing country, or to follow the money through NGOs and implementing partners. Having laid these important foundations, we will be able to move on to much more important and exciting innovations which support people in developing countries to use and repurpose this information and use it to change their world.
Will the largest aid donors hide behind China to excuse their inability to make substantial improvements in foreign aid? How can Busan balance the desire to be more universal with the pressing need for real changes in the way aid is given?
Much of the development policy world converges on Busan this week for the High Level Forum on Aid Effectiveness. This is the fourth in the series after Rome (2003), Paris (2005) and Accra (2008). The Guardian has a good ‘explainer’ about the issues being discussed.
Behind the scenes here in Busan, the trade-off is between getting everybody on board, including new providers of south-south cooperation such as China, India and Brazil, and pushing the boundaries towards more effective aid from existing donors.
Liberian children hold Chinese flags before the arrival of China's President Hu Jintao
Busan offers the possibility of a globally inclusive agreement, especially bringing in the important providers of south-south cooperation such as China and India, and non-traditional donors such as foundations and the private sector. But a broad consensus may only be possible if the text is sufficiently watered down. New donors are unlikely to sign up to an agreement which seeks faster improvements in development assistance by setting more explicit and demanding targets than were agreed in Paris and Accra. Most would not be willing to sign up even to long-established effectiveness principles such as untying aid, more predictability, and greater transparency and accountability. Nor are they likely to agree to be bound by any kind of monitoring or enforcement regime.
Many of the organisations involved in Busan have a strong institutional interest in emphasizing the benefits of a ‘big tent’ agreement:
- Individual DAC donors will be glad to talk up the importance of drawing new players into the process. They can trumpet this as a big step forward, especially to domestic audiences which feel threatened by China’s growing global role. They can pretend to be disappointed that it has required them to accept a rather bland communique which steps back from their existing commitments, while being privately relieved to have been let them off the hook for the improvements in aid to which they have agreed in the past and which they have shown themselves unwilling to make.
- A dialogue with new donors could give a new raison d’être to the DAC, an OECD body which is otherwise staring into the abyss of obsolescence. The DAC is a club of traditional government donors which constitute a dwindling proportion of global aid; nobody any more believes that an exclusive group of donors should set the rules of the aid system; and anyway DAC members themselves have failed to implement the principles they have agreed. It is not lost on the 150 staff of the DAC that hosting a dialogue between traditional and emerging donors could give the DAC a new lease of life.
- The Korean hosts will be looking ahead to how the Busan conference will be remembered. Building the bridge to new Asian donors would be a natural legacy. Korea has itself only recently joined the DAC and they would be very glad to shift the discussion away from compliance with a (largely European inspired) aid effectiveness agenda towards the value of a broader dialogue with emerging donors and the private sector.
- China would be happy to have a declaration which validates their approach to development cooperation, but they do not regard this as important. They are apparently sending a small, low-key, delegation of about six people to Busan, and it is rumoured that they will either not sign the outcome document at all, or that they will sign as a developing country but not as a donor. China believes that different rules should apply to ‘south south cooperation’, so in principle they do not regard any of this discussion as applicable to the aid they give. In any case, China gives very little actual aid (as defined by the DAC) – probably less in total than Switzerland. The vast majority of China’s involvement in developing countries takes the form of quasi-commercial trade credits which are not included within the scope of these aid effectiveness discussions.
Given these strong institutional interests which favour getting China on board, it is no surprise that the latest (5th) draft of the Busan Outcome Document is a largely anodyne document with few additional commitments by donors. The UK Aid Network has a concise update about this here. Unless this changes in the next few days, Busan will be remembered as the conference at which traditional donors retreated from the explicit, time-bound commitments and monitoring arrangements which they agreed in Paris in 2005.
There is one group of stakeholders with something to lose from this: the people of developing countries who are the intended beneficiaries of aid, whose voice is not strongly heard in the discussions. They are the people who lose out when aid is wasted because it is unpredictable, untransparent and unaccountable. It is their services, not the aid bureaucracies, which suffer when there is duplication and burgeoning bureaucracy. It is their businesses which are damaged by tied aid. It is their governments which become answerable not to their citizens but to an unaccountable group of donors. A decision to accept a weaker, more universal agreement in Busan will satisfy the donors, but the poorest, most vulnerable people in the world will pay the price.
As Gideon Rabinowitz of the UK Aid Network pointed out last week, the Accra communique was similarly disappointing at a similar stage before the 2008 conference. That time round, a group of European development ministers arrived in Accra and insisted on significant improvements, causing outrage among other participants, not least the bureaucrats who had sat through endless drafting meetings over the preceding months only to find their work had been nugatory. But this year, those donors seem to be much less inclined to use any of their economic or political capital pushing for improvements in aid. So it will suit them to emphasize the importance of a new agreement which includes China, and hide behind this as an excuse for their own inability to summon the political will to make aid more effective.
There is, however, another approach which could both and secure broad international agreement and still lead to substantive improvements in aid effectiveness. We should learn from what has happened since the Accra High Level Forum in 2008, in particular on transparency which is the issue on which there has been most progress. Donors accounting for half of global aid are now publishing their aid data through the new International Aid Transparency Initiative, IATI. But this has not been achieved by the official DAC processes which are limited to moving at the speed of the slowest ship in the convoy. Instead, a coalition of willing donors has worked alongside the official process to agree and implement an international aid transparency standard.
There is a lesson here as we consider how to move forward from Busan. A possible approach is to accept an outcome document setting out principles which represent the ‘highest common factor’ among all the participants, which is buttressed by (and which could endorse and launch) various coalitions which are willing to move forward more quickly on particular issues (e.g. predictability, using country systems, and so on). These coalitions can then be pathfinders, leading by example and exerting peer pressure on other donors. Taxpayers in donor countries can put pressure on their governments to join these coalitions, so that their aid also benefits from the improvements which the coalitions are bringing about (in the way, for example, that the Canadian NGO Engineers Without Borders has put pressure on the Canadian government to join IATI.) There is more hope of achieving real progress through a series of path-finding coalitions than by investing all our energy in a universal agreement which is acceptable to everyone and satisfies nobody.
In two weeks there will be a huge international meeting on aid effectiveness in Busan, South Korea. Ban Ki-moon and Hillary Clinton will be among the two thousand delegates who gather together to discuss improvements in how aid is delivered. Though David Cameron and Barack Obama said (in a joint statement) that they would ensure that Busan “transforms the way bilateral aid is delivered around the world”, it looks increasingly as if the meeting will, as Simon Maxwell notes on his blog, produce “a bark but no bite.” Though it is full of worthy intent, there is little in the latest (fourth) draft of the Busan Outcome Document which suggests that it will result in more changes in donor behaviour than did the communiques from previous summits in Rome (2003), Paris (2005) and Accra (2008).
Two key pieces of background evidence have just been published which provide the backdrop to the discussions in Busan. First, the Broookings Institution and my colleagues at the Center for Global Development have published an updated Quality of Official Development Assistance index (QuODA), which scores donors on the effectiveness of their aid. Second, Publish What You Fund has published an Aid Transparency Index ranking donors according to how much information they make available about the aid they give.
CGD and Brookings Quality of Aid Index (QuODA)
QuODA is an assessment of the quality of aid provided by 23 donor countries and more than 100 aid agencies. It uses 31 indicators grouped in four dimensions that reflect the international consensus of what constitutes high-quality aid:
- Maximizing Efficiency
- Fostering Institutions
- Reducing Burden
- Transparency and Learning
QuODA itself does not provide an overall ranking of donors. The reason is that your view about the overall effectiveness of a donor will depend on how much weight you place on each indicator. But for what it is worth, here is how the ranking of donors looks if you give equal weight to each of the four QuODA dimensions:
Donors may quibble about which of the indicators are important, though all the indicators reflect solid academic research and experience about what makes aid effective, embedded in the international consensus about aid effectiveness to which they have signed up. For anyone wanting to focus on particular indicator and dimensions of effectiveness, the data are published online in an interactive web tool.
My two observations about this are:
- almost every donor has something to be proud of (nearly every donor is in the top half in at least one dimension) but all donors have considerable room for improvement;
- the multilateral agencies do better, on the whole, than the bilateral agencies; this may be because they are less susceptible to pressures from national donor politics; the World Bank, in particular, scores extremely well across the board
The Publish What You Fund Pilot Aid Transparency Index
The PWYF Aid Transparency Index, published today, dives deeper into whether donors publish adequate information about the aid they give. They analyze 58 organisations on 37 dimensions of transparency, mainly relating to whether information is available about particular projects and activities.
The World Bank tops the transparency index too. Indeed, there appears to be a strong correlation between aid transparency and aid effectiveness more generally. The chart below plots the PWYF transparency scores against the average of the three dimensions of QuODA which do not relate to transparency.
This correlation between aid effectiveness and transparency could come about for three reasons:
a. common causes: well-governed and well-managed aid agencies are likely to be both more effective and more transparent;
b. effectiveness causes transparency: aid agencies that are ineffective and know it are likely to want to be secretive; agencies that are effective are likely to want to tell the world more about what they do;
c. transparency causes effectiveness: agencies that are open and transparent are less likely to make decisions to use aid ineffectively because they will be held to account by politicians and the public.
Conclusions
The good news from both the QuODA index of aid quality and the PWYF Aid Transparency index is that it is possible for donors to live up to the goals they have set themselves to make aid more effective and more transparent. Most donors do well on some indicators, and yet are a long way behind the best on others. The bad news is that there is a long way to go before donors overall live up to the pledges they have given.
Time will tell whether yet another conference, and yet another communique, will make any more difference to donor behaviour than have the last three. However, there does now seem to be welcome momentum towards putting more information about aid into the public domain, and we may hope that this will, over time, provide both the information and political pressure needed to make aid more effective. If Busan succeeds in giving a big push to aid transparency, that may be the biggest contribution it can make towards the ambitious goal of ‘transforming’ aid.
Here is a useful graphic from the International Aid Transparency Initiative about which donors are implementing it, and when.
This post first appeared on the CGD Rethinking US Foreign Assistance blog.
Information, not coordination, is the key to aid effectiveness. Some donors such as USAID are becoming interested in a more decentralized ‘Google Maps’ approach to aid coordination, to facilitate well-informed decisions by people on the ground. For this to work, donors need to do two things: publish more detailed project level information, and do so in an open, reusable, internationally consistent data format. Transparency aimed at a domestic audience is not sufficient.
We now know that the development system has met just one of the 13 targets it set in 2005 for making aid more effective. That is not surprising: the problems diagnosed in the Paris Declaration are real and important, but the solutions that have been pursued in its name have not been practical. There are better ways to achieve the aid effectiveness which the Paris Declaration envisages.
Here is an example of the problem, from Indonesia after the 2004 tsunami:
“Last February in Riga [close to Calang in Indonesia], we had a case of measles. The epidemiologists from Banda Aceh gathered, fearing that the measles would spread among displaced people, but the girl was cured in two days. Eventually we discovered that this child had been vaccinated three times by different organizations, each without a vaccination card or any type of control. The symptoms were the result of these measles vaccines”.
Informal translation of an article in El Pais (April 13, 2005)
This is a graphic example of a widespread problem in development and humanitarian aid: a coordination failure leading to a substantial waste of money.
Following Paris, a conventional wisdom has grown up on how this kind of problem should be tackled. The regional health department should call a big meeting of all the donors and NGOs who might be interesting in running an immunization programme. They should share information with each other about their plans: which vaccines they intended to administer, and where. Under the leadership of the ministry, the donors should agree a division of labour to eliminate overlaps and ensure that aid is used efficiently.
Similar committees would have met to plan and coordinate every other kind of intervention to avoid overlap and make the best use of limited resources.
You don’t have to have a degree in Political Science to be able to see why this committee approach does not work. A country director for a large government aid agency recently told me that he spent more than half his time in donor coordination meetings. Most of each meeting is taken up by donors listing what they are doing. (Not surprisingly, he has now quit.)
So what is the alternative?
Once an aid agency has been licensed by the health ministry to provide vaccinations, it could simply publish online, in an accessible format, details of its plans and activities. Another organization planning its own programme could then easily check how they can best fit with what other agencies are doing. With open information sharing, no child would be vaccinated against the same disease twice; and under-reached populations could be easily identified and served.
This is an example of an important general point about improving aid effectiveness. Aid staff on the ground should not be stuck in endless coordination meetings: they should have the information they need to make good decisions about how to have the biggest impact, within a regulatory framework established by government, without being constrained by inappropriate rules and incentives imposed on them from far away.
A Google Maps approach to development?
There is growing interest in a ‘Google Maps’ approach to development coordination. We have seen welcome moves towards mapping of aid projects, for example by the World Bank, USAID, and Canadian CIDA. But as the example of vaccination in Banda Aceh illustrates, the key to making this information useful is that sufficiently detailed data from many different organisations is available in one place.
Some of the momentum towards greater aid transparency is driven by the need for increased accountability to taxpayers in donor countries. This is a laudable goal, but if data publication is targeted on this purpose alone it misses even bigger potential benefits from transparency. The US Government is making gradual progress on its Foreign Assistance Dashboard and a geographical coding system: but on current plans the data will not contain enough substantive detail. It will record information which is good enough to get a broad sense of where aid is being spent (‘top level administrative region’) but will not record specific locations (‘street corner’). This approach may be enough to meet the needs of a US accountability agenda, but it will miss the opportunity to use robust project level data and geo-coding to track and coordinate aid, to close down the space for corruption and waste, and to link feedback from project beneficiaries to specific aid funders.
It is also important that aid information is published in a reusable open data format, which has been agreed by a large group of donors in the IATI standard. Several donors – including the World Bank, the European Union, DFID, Australia and the Netherlands – are now publishing their data this way. Other donors have plans to do so. While it is welcome that Canada is publishing more detail about its aid projects, as the website makes clear the target audience for this information is “all Canadians”. The information published by CIDA is of almost no use to people in developing countries because it is not published in a form which is compatible with data from other all the other donors. Open data – in the sense of being genuinely accessible and comparable – enables civil society, parliamentarians and citizens of developing countries to be part of the coordination and accountability from which they are presently excluded.
In contrast to Canada, the United States has said it will ‘cross-walk’ its aid data to the IATI standard, which is extremely welcome. But so far they have not done so. While the implementation of a Foreign Assistance Dashboard is an important step towards domestic US accountability, all this data will only be of use internationally to make aid more effective and accountable when it is also published according to the international data standard.
Of course, USAID and State Department have limited resources and should be spending their money as much as possible on aid rather than administration. But as the World Bank has found out with its Mapping for Results project, it is not tremendously complicated or expensive to geo-code aid projects – and it will be even easier if that is done at the outset by front line staff who have detailed knowledge of the projects, rather than retrofitted afterwards in Washington. Nor has it proved difficult or expensive to organize data into the IATI format: I am told it took UNOPS just four weeks to implement IATI, from start to finish. There are many other donors, and organisations such as the Development Gateway, AidData and aidinfo, who have experience in geo-coding projects and publishing information in IATI format, who would be glad to help to design procedures, set up systems, and even to share their computer code. Furthermore, the administrative savings from reducing duplication by publishing open data are estimated rapidly to outpace these modest implementation costs. This is not primarily a question of money, but of leadership, recognition of the value of transparency which serves international as well as domestic audiences, and a willingness to reach out to work with others.
We can – and must – make aid more effective. This means making sure that decisions on the ground are likely to yield the biggest possible impact, and for that we need not more coordination meetings but better information, greater decentralization, simplified systems, fewer perverse incentives and more accountability.
If you have comments please put them on the CGD website.
Here is my talk at the Power of Information Conference about open aid data.
The Center for Global Development, where I work, has a shiny new transparency policy. From now on, our presumption is that when authors post publications on cgdev.org that involves quantitative analysis, they will also post the data and computer code needed to reproduce their results in full. That way, any visitor to the web site can check our work.
In his blog post explaining the new policy, David Roodman explains why this is important. It is intended to increase both the quality and credibility of our research, and to enable other researchers to use the data and the code.
Of course this is a little daunting for us too. As David says:
Fundamentally, then, the new data and code transparency policy is about putting the pursuit of truth first. We believe that this step is both right in itself and strategically smart. In statistical analysis, as in software, bugs are the norm. So placing more of CGD’s work in the public domain will inevitably expose mistakes. That can be a daunting prospect for an organization that prizes its reputation for high-quality analysis. But transparency serves the public good. And serving the public good is what CGD, as a charity, should do.
Our full policy is here (pdf).
George Bush famously asked, ‘Is our children learning?’. That’s also the question by Uwezo, a coalition of NGOs working in Kenya, Uganda and Tanzania. Their report published today makes dismal reading about the quality of schools.
First, a word about the report. This is not a study by the World Bank, or a group of donors. It is a study by Uwezo, an East African initiative hosted by three NGO networks: TEN/MET in Tanzania, WERK in Kenya and UNNGOF in Uganda, with overall quality assurance and management support from Twaweza. They conducted their own survey (standardized across the countries) to test the literacy and numeracy of more than 100,000 children, the largest ever survey of its kind in the region. When citizens themselves are telling us about whether their public services work, we should be paying attention.
There has been a remarkable increase in the number of children in school in East Africa since Uganda reintroduced free primary education in 1997 (followed a few years later by Tanzania and Kenya). Over the ten years from 1999 to 2009 net primary school enrolment has risen in Kenya from 62% to 83%, and in Tanzania from 49% to 96%.
But the Uwezo report finds that the quality of education that those children receive is ‘very poor’. According to the Uwezo tests, most of the children in Standard 3 had not reached the Standard 2 levels of literacy and numeracy. Only by the time they reach Standard 7 are most children able to read and write at the levels expected in Standard 2.
Kenya’s pupils did best, followed by Tanzania and then Uganda, and there are large variations within as well as between countries. The report has interesting things to say about the apparent reasons for the differences:
an important finding given the enormous resources invested in recent years in improving school infrastructure, was that school quality was weakly associated with literacy and numeracy levels. Children in areas with better school infrastructure did not perform better than in lower quality schools or more crowded classrooms.
The report finds grounds for optimism in the variations within countries; the fact that some places do better than others suggests that improvements are possible within those contexts. The report speculates that quality is driven by non-observed factors such as the quality of teaching, practical accountability and teacher motivation.
The poor quality of education, despite considerable investment in school infrastructure, may perhaps be the result of what Lant Pritchett, Michael Woolcock and Matt Andrews call “isomporphic mimicry”. The idea is borrowed from sociologists of organisations, and it describes the way in which organisations can sustain their legitimacy by the adoption of the forms of effective organisations in a way which camouflages a persistent lack of functionality. This behavour may be partly a consequence of the way that donors work to increase service delivery in developing countries. Pritchett et al observe:
Development agencies, both multi-lateral and bi-lateral, have very strong tendencies towards promoting isomorphic mimicry— encouraging governments to adopt the right policies and organization charts and to pursue best practice reforms—without actually creating the conditions in which true novelty can emerge, be evaluated, and scaled.
What can be done to improve education in Kenya, Tanzania and Uganda? The Uwezo report says:
Differences in performance among districts within each of the three countries, and between public and private schools, suggest that certain schools have ‘figured out’ how to achieve better results within existing constraints. Investigating why certain districts, and within districts certain schools, do so much better than others could provide important clues about what matters most for improved learning.
The report also suggests that Cash on Delivery aid may be a good way to create the incentives to improve quality:
One such approach, which is still untested but whose design has been informed by careful review of the evidence of what works, is called Cash on Delivery. The core idea here is that instead of funding inputs, a mechanism is created by which payments are made against the achievement of a specified and independently verified outcome, such as $50 per student who completes Standard 2 with 80% literacy and numeracy competencies. This approach has been original designed for improving the effectiveness of aid given to national governments, but the approach may be even more useful for how national governments create incentives to improve performance at district and school levels.
(By the way, I’m on the board of Twaweza, though I can claim no credit for this report.)
Dominique Strauss-Kahn has been accused of a horrible crime. Like everyone else he is entitled to the presumption of innocence until proven guilty.
We may, however, soon find ourselves looking for a new Managing Director of the IMF, either because DSK is involved in a legal case or because he has declared himself a candidate to be President of the French Republic.
The speculation has already begun (see Alan Beattie in the Financial Times) with Christine Lagarde being touted in some quarters as a likely successor.
Under an unwritten agreement, the IMF’s managing director has always been European and the president of the World Bank has always been from the United States. (Jim Wolfensohn had to take out American citizenship to get himself nominated.)
This seems a good time to recall the Leaders’ Statement at the G-20 summit in London on 2 April 2009:
we agree that the heads and senior leadership of the international financial institutions should be appointed through an open, transparent, and merit-based selection process;
This is important for four reasons. First, we want good people in these jobs. This is more likely if we thrown the field open to good people like Kemal Derviş and Trevor Manuel as well as Americans and Europeans, and make a choice based on merit not nationality. Second, people in these roles should owe their allegiance to the institution not to their own government. Third, it is important for the legitimacy and effectiveness of these institutions that they do not appear to the rest of the world be the fiefdoms of rich and powerful nations, to be used as sinecures for supernumerary or inconveniently-placed politicians. Fourth, it brings the G-8 and G-20 into disrepute to say these things in communiques if we have no intention of implementing them.
The traditional next step is for the Europeans to do a deal behind closed doors, get American agreement, and then to accompany the announcement of a fait accompli with a lot of public hand-wringing about how the process will be better next time.
The Europeans want a fair and open process for the appointment of the next President of the World Bank rather than having to accept another imposition from the Americans. The only way to achieve that is to relinquish our hold on top job at the IMF. It looks as if we may shortly have the opportunity to do it.
Using a headline I borrowed from a smart colleague in DFID, there is an article by me in the current edition of the Public Service Review, which focuses on on international development. You can download a PDF of the article here.
My article begins with a quote from Brian Eno:
We expect that the next big thing will be a bigger version of the last big thing. What we don’t expect, yet what is most likely, is that the next big thing won’t look important to us at all – until it’s so important that we can’t ignore it.”
Brian Eno, Prospect, 26th November 2010
There are some interesting articles elsewhere in the same edition looking at the role of the private sector in development, and a rather eclectic mix of other articles.
I’m back from holiday, so here is the promised second of a pair of posts reflecting on three years of working on aid transparency. In the first post I talked about eight lessons mainly about why different kinds of aid transparency are important. In this post, I’m going to look at the next steps, particularly focusing on how we can provide meaningful transparency for citizens in developing countries.
There is a lot of detail below, so for busy readers here is a summary of the proposed ten steps for aid transparency.
1. Donors cannot achieve meaningful user-centred transparency just by putting project data on their websites. Users need information which comes from many different organisations simultaneously. Yet it is not realistic to try to maintain lots of different manually-updated databases which collate information for users. The answer is for organisations to publish online all the information they have about aid projects and programmes, in a common, reusable format, which can then be used as the basis for user-centric databases and applications. The International Aid Transparency Initiative (IATI) is the best chance for a generation of creating such a public infrastructure for information about aid. All donors, foundations, international organisations, NGOs and aid contractors should implement the IATI standard as the key first step to meaningful, user-centred aid transparency.
2. Any organisations which do not implement IATI voluntarily should be pushed to do so by the organisations and people who fund them. For example, official aid agencies should require every organisation to whom they give a grant or contract to implement IATI as a condition of handling public money. Citizens should refuse to put money into a collecting tin if the charity is not implementing IATI. Governments should consider making IATI compliance a precondition for charitable status and tax relief. Developing country governments should make IATI compliance a precondition of local registration by international NGOs.
Google has a policy that it should eat its own dogfood
3. Donors, foundations and NGOs should ‘eat their own dogfood’ – that is, any information on their website and any analysis and data that they publish about aid should use be based on the publicly available data infrastructure. This will give the organisations an incentive to ensure that the information they make available through IATI is up-to-date, comprehensive and accurate and that the system is fit for purpose.
4. Once donors and foundations are (a) publishing their data through IATI and (b) using IATI for their own websites and analysis, they should consider (c) helping other users, especially in developing countries, to make the best use of this information. But donors’ priority should be getting their own house in order by publishing their information in a reusable format, since this is something only they can do, and using that public data infrastructure themselves, before they help others to do so.
5. One of the highest priorities for new information about aid is that all aid spending should be classified in future according to the recipient country budget classifications as well as agreed international classifications. The Technical Advisory Group for IATI should agree the mechanism for this as soon as possible.
6. It seems so obvious that it shouldn’t need saying, but aid would clearly be more effective if we had more information about the future plans of donors, foundations and NGOs. Homi Kharas, in Measuring the Cost of Aid Volatility, estimates that the cost to aid recipients of historic unpredictability of committed aid flows is at least 15 percent. It could be much higher. Finance ministries, line ministries, the IMF, other donors, NGOs and the private sector would all do a better job with their money if they knew what was planned by others. Organisations should publish whatever they know about their future aid plans, generally (with some possible exceptions such as for procurement) at the level of detail they know it. This is likely to be the hardest part of IATI for many organisations, as few have mechanisms to keep systematic track of their forward spending plans.
7. A global system of traceability in aid, enabling money to be tracked from taxpayer to services delivered, via multiple layers of multi-donor funds, international and local NGOs and private sector contractors, is less difficult and expensive to implement than you might think. Traceability of aid would bring about a huge step forward in efforts to make aid more effective and less prone to corruption and waste, and for building public support for aid. Done right, it could also substantially alleviate the reporting burdens of aid recipients, NGOs and implementing agencies, and reduce donors’ costs of monitoring compliance. Priority should be given to implementing this part of the IATI standard.
8. Donors, foundations, NGOs and implementing organisations should start recording and publishing detailed geographical information about aid projects and programmes using the newly-agreed IATI standard format for geocoding of aid, and they should require their implementing partners to do the same.
9. Some donors and agencies have defined, or are in the process of defining, their own internal standardised output indicators. Organisations should now make a big effort to reach an international agreement on a common set of standardised ouput indicators to facilitate international comparability across organisations. This information can be reported through IATI.
10. When we connect feedback from citizens in developing countries to a rich public data infrastructure about aid, we will have a much more realistic inderstanding of the impact and effectiveness of aid. That day is coming sooner than most of us realise.
You will doubtless think me guilty of hyperbole when I say that the emergence of an open, international infrastructure for development information has the potential to transform the development business, much as the internet has transformed so much of our society, and for similar reason. I’m sorry that this is an absurdly long blog post, but I hope it will convince you of the amazing opportunities which are there if we seize them.
I’ve spent the last three years working on aid transparency. As I’m moving on to a very exciting new role (watch this space for more details) this seems a good time to reflect on what I’ve learned in the last three years.
This is a self-indulgently long essay about the importance of aid transparency, and the priorities for how it should be achieved. Busy readers may want to read the 8-point summary below. And for a very clear and concise introduction to the importance of aid transparency, take a look at this video by my (former) colleagues at aidinfo.
The 8-point summary
Here are what I think are the eight most important things I’ve learned in the last three years about transparency in general, and aid transparency in particular:
- To make a difference, transparency has to be citizen-centred not donor-centred.
Citizen-centred transparency would allow citizens of developing countries to combine and use information from many different donor agencies; and provide aid information compatible with the classifications of their own country budget. - Today’s ways of publishing information serve the needs of the powerful, not citizens
Existing mechanisms for publishing aid information were designed by the powerful for the powerful. Until the aidinfo team started 3 years ago, nobody had ever done a systematic study of the information needs of all stakeholders, including citizens, parliamentarians and civil society, let alone thought about how those needs could be met. - People in developing countries want transparency of execution not just allocation
There are important differences between the information requirements of people in donor countries and people in developing countries. Current systems for aid transparency focus mainly on transparency of aid allocation, because that is what donor country stakeholders are largely interested in, and not enough on transparency of spending execution, which is of primary interest to people in developing countries. - Show, don’t tell
Citizens in donor nations are increasingly sceptical of annual reports and press releases. In aid as in other public services they want to be able to see for themselves the detail of how their money is being used and what difference it is making. They increasingly expect to engaged, and are less willing to be passive funders leaving the decisions entirely to ‘experts’. Donor agencies – whether government agencies, international organisations or NGOs – will have to adapt rapidly to become platforms for citizen engagement. - Transparency of aid execution will drive out waste, bureaucracy and corruption
There is, unfortunately, quite a bit of waste, bureaucracy and corruption in the aid system. There is good evidence that this kind of waste is rapidly reduced when the flow of money is made transparent. Corruption and waste prosper in dark places. - Social accountability could be Development 3.0
The results agenda in aid agencies is currently too top down and pays too little attention to the power of bottom up information from the intended beneficiaries of aid. Increased accountability to citizens may be the key to unlocking better service delivery, improved governance and faster development. - The burden of proof should be on those who advocate secrecy
We have published a compelling business case for greater transparency, with all the uncertainties this kind of analysis entails. So where is the business case for secrecy, which would be far harder to quantify or defend? Why does nobody even ask for it? Why is the (inevitable) uncertainty in this kind of analysis allowed to count against the case for transparency, when the same uncertainty would deal a much greater blow against the case for secrecy? - Give citizens of developing countries the benefit of the doubt
Transparency is necessary but not sufficient for more effective aid. But the fact that transparency alone will not solve every problem should not be an excuse for aid agencies to shirk their responsibilities to be transparent. Nor should we be too attentive to vested interests in the aid industry telling us that transparency is not enough. Citizens of developing countries will be more innovative and effective than some people give them credit for when we give the information they need to hold the powerful to account.
That’s the summary. If any of that whets your appetite and you want the long version, read on. In my next post, I’ll look at the ten steps that development organisations should take towards aid transparency. Continue reading
Here is part of my piece on the Guardian website today welcoming moves from the US and Europe towards a global standard for publishing aid information:
Go to the website of any aid agency and you’ll find a cornucopia of information about the good work that it is doing. The problem is that it doesn’t publish this information in a usable form. Visibility is not the same as transparency.
Members of the US Congress rightly complain that they cannot get a complete picture of US foreign assistance, which is delivered by 26 government agencies. As Congress has discovered, to get a complete picture of what the US is doing you need up-to-date, comprehensive data from each aid agency in a common format that enables it all to be added up, reconciled and compared. It is very welcome that the US government is putting a system in place to do this.
Now put yourself in the shoes of ministers or parliamentarians in a developing country. They face the same problem as members of Congress, writ large. Aid to their country is channelled through bilateral aid agencies, multilateral organisations and thousands of NGOs. Aid goes from one organisation to another – minus a “haircut” at each stage – before any services are provided to anyone. How can officials or MPs get useful, up-to-date, comprehensive information about all this spending and all these activities? Certainly not by trawling through thousands of separate donor websites.
Shanta Devarajan asks if we have found Development 3.0
Shanta Devarajan, the World Bank Chief Economist for Africa, describes in an important new blog post the evolution of development policy in terms of changing ideas about market failures and government failures. In the 1950s and 1960s, he says, development was about addressing market failures by providing public goods, addressing externalities, and redistributing income to poor people. Starting in the 1970s, attention shifted to government failures such as weak capacity, rent-seeking, political patronage and corruption. Today, he says, many of the most egregious failures have been addressed, but the remaining failures directly hurt poor people.
On Shanta’s view, these failures arise from two kinds of imperfection in the public sector: that governments have difficulty monitoring and enforcing performance (leading to absentee teachers, clinics without drugs, etc) and imperfections in the political system which prevent it from serving the poor.
Shanta says that changes in technology and the rise of civil society can change all this:
Our understanding of government failure has coincided with two other developments. One is the rise of civil society’s voice in public discourse. The second is the technology revolution in poor countries. There’s a message here. Can we use technology and the voice of civil society to address these government failures? Rather than imposing conditions, we can empower poor people to monitor service providers. With some 80 percent of Africans having access to a cell phone, it is not difficult to have parents (or the students themselves) send an SMS message if the teacher is not in school, or there are no drugs in the clinic or the purported road maintenance program is not happening. This could do more for helping governments and donors get value for money than all the fiduciary controls we put in place. While we are at it, why don’t donors (including the World Bank) use technology to have the beneficiaries monitor and supervise development projects?
Can this work? Is social accountability a new model for development?
There is increasingly good evidence that transparency and accountability make a significant difference, in some cases surprisingly transformational. There is an increasingly impressive collection of individual case studies, rigorously evaluated, which demonstrate the effectiveness of this approach. For example, Jacob Svensson and Martina Björkman conducted a randomized field experiment in Uganda to test the effect of increasing community-based monitoring. They found that when communities more extensively monitored providers, both the quality and quantity of health services improved, including reducing infant mortality by a third.
There have, however, been no significant comparative studies bringing this evidence together. Until now. Rosemary McGee and John Gaventa have just published an extensive review of literature and experience across the field. There is a lot of material to digest, but here is the core of what they find:
…there are a number of micro level studies, especially in the service delivery and budget transparency fields. These begin to suggest that in some conditions, the initiatives can contribute to a range of positive outcomes including, for instance,
- increased state or institutional responsiveness
- lowering of corruption
- building new democratic spaces for citizen engagement
- empowering local voices
- better budget utilization and better delivery of services.
Reading the study, my conclusion is that we know rather more about the impact of greater accountability than we know about what we can do to bring that accountability about.
I currently work on transparency, because I think makes an important contribution to the ability of citizens to hold governments and donors to account and so improve service delivery and accelerate poverty reduction. There have been some good examples of how this can work in practice, which are summarised in Appendix 1 of this cost benefit analysis for the International Aid Transparency Initiative (page 23 of this pdf; disclosure: I’m a co-author). The most famous example is this study of the impact of information on funds flowing to schools in Uganda which found a strong relationship between transparency and funds flowing to schools, though the evidence was subsequently challenged. So while there is increasingly good evidence to confirm the intuition that transparency plays an important role, we need to understand a lot better how, and in what circumstances, transparency works, and particularly to understand better what else needs to be in place.
One issue on which Shanta is clearly right is that role that technology can play in supporting greater accountability. We know that technology does not end poverty, but we are seeing more and more examples of how technology – especially mobile telephony and text – has enabled and supported changes from mobile banking to wholesale agriculture markets. Just as technology underpins changes in markets (think of newspapers, or bookselling), so it can underpin changes in political economy and social accountability.
So is this, as Shanta says, Development 3.0?
Development is a long, slow, uncertain process and the road is bumpy and winding. Transparency and accountability are not a one bound and we are free solution, any more than the ‘big push’ or the Washington consensus which Shanta labels Development 1.0 and 2.0 respectively. But this time there is an important difference. The ‘big push’ and the Washington consensus were blueprints for a better world. Social accountability, by contrast, does not start with a preconceived idea of how resources should be used or services should be delivered: it seeks to change the dynamics of the system to make it more responsive and more likely to converge by itself on solutions which better serve poor people in developing countries.
A big challenge will be whether development agencies themselves are able to adapt. Their models for project cycle management are based on a top-down view: you specify the world you are trying to create (the “goal”) and then you articulate a series of outputs and activities which you expect will bring this about. It will be a big change – intellectually, organisationally and culturally – to modify their systems, incentives and procedures to a world in which donors work instead to help the citizens of developing countries to determine their goals and priorities and build their own systems to achieve them.
If what Shanta is calling Development 3.0 means that instead of offering a one-size fits all solution we should work to close the broken feedback loop so that communities themselves can find the answer, then I think this may indeed be a change of perspective on development worthy of a major version number.
This is a presentation which I gave recently asking what development policy can learn from evolution.
The main conclusion is that as would-be change-makers, we should not try to design a better world: we should concentrate on building better feedback loops.
You can view and listen to the presentation by clicking the image below. This narrated presentation lasts 18 minutes (beware: as soon as you click you’ll hear my voice, so don’t do this if you are in a meeting!).
Alternatively, you can download the presentation as a pdf file here. But this won’t make as much sense, as there are a couple of videos in the presentation.
If you like this presentation, you may also like my previous narrated presentation about aid effectiveness after Paris.
Please let me know what you think in the comments below. Am I right that we should focus more on feedback loops?
Last week’s UN meetings in New York prompted a flurry of papers, speeches, documents, announcements and articles about development in general, and the Millennium Development Goals in particular. There seem to be three emerging development narratives which are not obviously completely compatible. I’ll summarize them here, and in a later post I’ll look at whether there they can be brought together into a coherent synthesis.
Narrative 1: Glass half full: we need a big heave
The dominant story from the summit was that development can be achieved if the world would only come together with a big heave. On this view, the glass is half full. We have made good progress towards the MDGs (supported by the new MDG report card by ODI; and their excellent new Development Progress Stories website); and with more money, we can do more. Jeff Sachs, whose Millennium Villages Project exemplifies the idea of a big, coordinated push, called in the FT for aid to be scaled up through pooled donor funding, “to scale up what has been proven to work”. (Oddly, he chose the Global Fund rather than the World Bank as his example of effective multilateral institution.)
The new report of the Commission for Africa advocates a further big heave
A new Commission for Africa report, Still Our Common Interest, agrees. The original 2005 report was probably the most authoritative (certainly the most weighty) argument for a big heave; and it concluded (among other things) that donors should treble their aid to Africa. The updated 2010 report reiterates that view, celebrates the progress that has been made, and calls for donors to increase their aid, including – very oddly – a proposal for a new Global Fund for Education.
Probably the biggest announcement this week, which sits squarely in the big heave narrative, was for a new UN Global Strategy for Women and Children’s Health. As I argued here the other day, the focus on women and children’s health is welcome, but this is no strategy: it is another list of spending commitments, which the UN press release says is worth $40 billion. The only interesting feature of it is that it lists commitments by private companies and NGOs as well as official donors. All very big heave; all very retro.
Narrative 2: More accountability leads to better institutions
While the UN institutions and the NGOs promote the big heave, donor governments, particularly the US and UK, are beginning to tell a different story which focuses on the need for more transparent and accountable institutions, both in developing countries and in the international development system. This was most evident in President Obama’s speech which announced a new US development strategy. President Obama explicitly distanced himself from the big heave:
“This is the reality we must face — that if the international community just keeps doing the same things the same way, we may make some modest progress here and there, but we will miss many development goals.”
Both the US and the UK government argue that the efforts of donors should be measured not by what is spent, but by what is achieved, both by aid and by other policies. Cynics might think this is preparing the ground for aid cuts in the face of tight government budgets, though this does not appear to be the motive of the UK government which has committed to increasing aid to 0.7% of GDP by 2013.
The emphasis in the new US policy on growth as the permanent path out of poverty is not as new as the President’s speech implies; but the renewed emphasis will be welcome to those who think that the importance of growth is sometimes forgotten. As Lant Pritchett writes:
The “development is about more than growth” backlash, which had important elements of truth, easily got carried away into “development isn’t at all about growth” and it is good to see economic growth back front and center of development objectives.
A more novel feature of the new US policy is the emphasis on investing in systems and institutions, for service delivery, public administration, and other government functions, and the importance of country ownership. This is new for the US. For many European donors it is this reasoning that brought them to give more of their aid through governments as budget support, so this new US approach will be seen as a welcome conversion.
What is striking about this narrative is the emphasis it puts on transparency and accountability as ways to make institutions work better. President Obama set out the argument in his General Assembly speech the following day:
The arc of human progress has been shaped by individuals with the freedom to assemble and by organizations outside of government that insisted upon democratic change and by free media that held the powerful accountable. … In all parts of the world, we see the promise of innovation to make government more open and accountable. Now, we must build on that progress. And when we gather back here next year, we should bring specific commitments to promote transparency; to fight corruption; to energize civic engagement; and to leverage new technologies so that we strengthen the foundation of freedom in our own countries, while living up to ideals that can light the world.
This emphasis on accountability seems to resonate closely with the approach of the UK Government. The UK International Development Secretary, Andrew Mitchell, set out a similar argument in his first major speech, in which he emphasized outputs and outcomes rather than inputs, and launched the new UK Aid Transparency Guarantee. Paul Collier and Jamie Drummond, writing in the Guardian, make a similar point about the need for transparency and accountability in the use of natural resources.
The 32 page outcome document, Keeping the Promise, sets out the usual long list of activities which “with increased political commitment .. could be replicated and scaled up for accelerating progress”. But experienced communiqué watchers (like Lawrence Haddad) also detect a new theme: the need for more citizen-led monitoring of delivery. For example, the outcome document calls on donors to:
[Work] towards greater transparency and accountability in international development cooperation, in both donor and developing countries, focusing on adequate and predictable financial resources as well as their improved quality and targeting; …. To build on progress achieved in ensuring that ODA is used effectively, we stress the importance of democratic governance, improved transparency and accountability, and managing for results.
Until now, I think many people working in the development community have seen transparency as an add-on, at best a way of retaining public support for aid while they get on with figuring out how to use the aid money wisely (and at worst an annoying additional bureaucratic burden). Perhaps I am tempted to read too much into these speeches, because my day job is working towards more transparent and accountable institutions, but it was striking to see Raj Shah, Administrator of USAID, talking about the use of new media to build an online platform to help the government to reach its development goals. I think it is now clear that, for the US and UK at least, transparency and accountability will play a more central role in their development strategies, both as drivers of change in developing countries, and forces for improvements in the effectiveness of development agencies and institutions.
A sign that this narrative is beginning to take shape is that it is already under attack. In an interesting article in The New Republic, David Rieff is sceptical of the idea that donor nations can offer a path out of poverty:
The problem is not with the analysis but rather with the president’s implicit claim that we know how to offer peoples and nations such a path. … The stark fact is that only if one fetishizes the idea of civil society as a kind of universal ideological solvent, and believes that, in tandem with scientific innovation, the road to our collective salvation is now open to us, can such optimism be justified.
An interesting feature of this narrative is that it emphasizes the need for a wider range of instruments (known either as beyond aid or – ghastly term – policy coherence). For example, in his speech, President Obama said:
Development is helping nations to actually develop — moving from poverty to prosperity. And we need more than just aid to unleash that change. We need to harness all the tools at our disposal — from our diplomacy to our trade policies to our investment policies.
Andrew Mitchell’s speech in June said something similar:
21st century development is a complex tapestry of trade, investment and enterprise, climate change, economic growth, debt relief, financial services, intellectual property and advancing new technologies.
Bill Easterly argued in the pages of the FT that trade, not aid, is needed to promote development. I’ve argued elsewhere that we don’t know very much about whether and how aid promotes economic and development, but we do know that it enables people to live better lives while that transformation is taking place. So it may be that these beyond aid policies are the best hope for promoting development, while aid should focus primarily on improving lives in the meantime.
Narrative 3: The challenge is increasingly inequality, not absolute poverty
In my view, by far the most interesting and important paper to be published around the summit was The World’s Poor Aren’t Where We Think They Are, by Andy Sumner from IDS. Here’s the key conclusion:
In 1990, we estimate that 93 per cent of the world’s poor people lived in low income countries. In contrast, in 2007 we estimate that three-quarters of the world’s approximately 1.3bn poor people now live in middle-income countries (MICs) and only about a quarter of the world’s poor – about 370 million people live in the remaining 39 low-income countries, which are largely in sub-Saharan Africa.
The paper also shows that just 12 percent of the world’s poor live in fragile low-income countries. Take a look at this Guardian data visualisation tool.
Data visualisation by the Guardian
This change in the reality on the ground has profound implications for development policy, and my sense is that the discussion in New York is not yet grappling with these issues. Readers of Paul Collier’s book The Bottom Billion will recall his analysis that the world’s poorest people lived in about 50 very poor countries which he said were stuck in a series of poverty traps. Policy should be focused on helping those countries to escape that trap. But if three quarters of the world’s poor live in middle income countries, the challenge is to reduce inequality in these countries. The figures suggest that the biggest causes of poverty are not lack of development in the country as a whole, but political, economic and social marginalisation of particular groups in countries that are otherwise doing quite well.
It is not clear that additional resources from abroad are an important part of the answer to this. At The Guardian, Jonathan Glennie says:
The world needs to find new ways to help other countries respond to persistant poverty and increasing inequality. The era of aid as we know it is ending. Let’s hope that a new era of development cooperation takes its place.
For some people this suggests that we should reconceptualise development as the ability of all the world’s citizens to live decent lives, rather a problem of economic industrialisation of poor countries. This view has the advantage of focusing on people and communities, rather than countries. A recurring theme of the Chronic Poverty conference, which took place just before the MDG Summit, was the right of all citizens to a basic standard of living, and there is growing interest in the possible role of various kinds of social protection (social safety-nets, conditional and unconditional cash transfers, family grants and so on).
Similarly, a new report from Phil Vernon and Deborrah Barksh at International Alert asks us to get “beyond the MDGs”. They call for a
… a new narrative, based on a vision of a world in which people can resolve their differences without violence, while continuing to make equitable social and economic progress, and without lessening the opportunities for their neighbours or future generations to do the same. This vision would be both enabled and recognisable by five core factors: equal access to justice, political voice, security, economic opportunity and well-being. These would in their turn be underpinned by a self-reinforcing set of values and institutions.
On this view, poverty is a problem of political and economic marginalisation which can affect communities within industrialised, industrialising and low income countries. It calls for a different kind of policy agenda, which is as much to do with empowerment and political voice as the transfer of resources and investment in public services.
Conclusion
These seem to be three quite different views of development. There is a substantial gap between advocating a big heave of more aid to ignite a cycle of industrialisation in the poorest countries, a focus on more transparent and accountable institutions in developing countries and in the development system, and political change that protects the rights of society’s most marginalised groups in whatever country they happen to live.
But while there are tensions and trade-offs, these views are not intrinsically contradictory, and in a subsequent post I’ll look at how these three narratives can be stitched together into a coherent whole.
This is very cool. A team of researchers from Development Gateway and AidData have worked with the World Bank to add detailed subnational geographical information to all of the Bank’s active projects in the Africa and Latin America region. This isn’t just pins in a map showing the country where the money is spent: they have looked through the project documentation to find out as far as possible the geographic coordinates of the actual locations where aid the activities take place.
This video by AidData explains brilliantly what geocoding means, and why its important. Take a look:
Serious kudos to the World Bank, Development Gateway and AidData for doing this work. Geocoding is going to have a huge impact on improving the accountability and effectiveness of aid. By geocoding these World Bank projects manually, the team has demonstrated that geocoding aid is feasible. As Development Gateway’s Steve Davenport says in the video: “This is not that difficult”.
If the new standards for publishing aid information that are being designed by donors under the International Aid Transparency Initiative include appropriate standards for geo-coding of all aid activities, then it won’t be necessary for these projects to be coded by hand in future. The people funding the projects would geocode their projects from the outset, and this information would be included in the data feeds, so everyone will have more comprehensive, more accurate and more precise about who is doing what, and where.
If you want more background, aidinfo’s paper Show Me The Money explains how geo-coding, traceability and transaction level details make a powerful combination for improving the effectiveness and accountability of aid.
H/T: my colleagues at aidinfo
I was in Paris last week for meetings about aid transparency. At the International Aid Transparency Initiative meeting, signatories and the Steering Committee members agreed a very important step forward. Donors comprising more than half of global official aid agreed the details of what will be published under phase one of the IATI initiative.
More details are on the aidinfo.org blog. In short, the donors agreed
- Data will be published more quickly, with an agreement that information will be published as soon as possible, and at a minimum, quarterly. More timely information is a top ask of stakeholders in developing countries.
- Data will be published in a common, open format, so that it is readily accessible, comparable and easy to find.
- More detailed aid data will be published, increasing its relevance to users.
None of this is going to be easy for donors. It will require some investment in collecting better information and quality assurance, and it will require a significant change of culture as they move to the assumption that the details of all aid projects will be publicly available automatically. But we know that the benefits hugely exceed these costs. So kudos to the donors for taking this important first step on the road to comprehensive aid transparency.
Two particular highlights of the meetings from my point of view were:
- The five country pilots demonstrated the feasibility of automatic electronic data exchange between donors and developing country governments, and for the creation of data in standard IATI format; and
- The developing country representatives at the meeting were clear and vocal in their insistence that donors should publish details of how they are spending aid.
There is a long way to go, and there is a comprehensive work programme for phases 2 and 3 of IATI. But last week donors took an extremely important first step for which they deserve credit.
Read more on the aidinfo blog.
Two interesting new articles start with the premise that the aid system needs to be overhauled, and then reach radically different conclusions about what this means in practice.
First up, Roger Riddell says we need a radical rethink of foreign aid:
The gap between what it does and what it could do is widening fast. … The central problem of the aid system is that there is no system. … Almost since official aid was first given, politicians have both warned of aid’s systemic problems and proposed alternatives. These include raising aid funds through an automatic compulsory mechanism based on the ability to pay; pooling aid resources and allocating them on the basis of need; and, if there are grounds for believing that the recipient government is unable or unwilling to use the aid funds transparently, “ring-fencing” the aid in a fund to be administered independently.
Most of these good ideas have been eclipsed by the focus on increasing aid levels. A common response to anyone advocating these solutions to aid’s systemic problems is the counter-argument that they are part of the very nature of the aid system, and that it is naive to suggest that it can be changed. They warn that if governments are unable to decide for themselves how to give aid and then check on its use, then they simply won’t provide it.
There are two ways to respond to these arguments. One is to point out that that aid’s systemic problems are getting worse and fast and frustrating progress on the core objective of ending extreme poverty. Resolving key systemic problems would probably have a greater effect on extreme poverty than expanding the amount of aid given. The other is to draw attention to high-level discussions where the sorts of changes needed to fix aid are being presented as politically viable.
The authors of Philanthrocapitalism, Mike Green and Matt Bishop, also think that the aid system needs reform, but they have a very different view of the direction of travel:
Like it or not, we have to find new ways of making the aid money go further and find new ways of financing development that do not depend on the political will of a few rich countries. Philanthrocapitalism, by tapping the expertise, creativity, money and other resources of the private sector, has to be central to a new development strategy. First, to pilot and test ideas to make aid smarter and more effective. Second, to leverage more private capital – full for-profit, ethical investment and donations – to fill the gap.
As we have argued before, this means thinking about aid not as the exclusive preserve of government but as a partnership with philanthrocapitalists, rich and less rich alike. This challenge is urgent and the rich countries are being slow to take it up - Britain’s new government, in particular, seems set on business as usual (although there are plenty of disgruntled voices on the right who would like to see an axe taken to the aid budget).
Both arguments start from the view that the challenges to aid are the result of political pressures in donor countries. Roger Riddell argues for a more centralised, technocratic aid system which can be isolated from undue political influences. Mike and Matt want to see much greater involvement from a range of other actors, especially the big philanthropic foundations.
I think they are both partly right, and both partly wrong.
Roger Riddell is right to say that the systemic problems of aid are the result of politics; and he is right to disagree with the pessimistic idea that these problems are insurmountable. But he wants to address these problems but putting the aid system at arm’s length. I don’t think this is a viable solution: it wishes the problem away. It is like saying that we can solve the global climate change problem by handing over control of energy policy to an international panel of wise people. The politics matters, and we can’t make them go away by asking technicians to give us the answer; so we have to figure out how to change the politics.
The aid system today is characterised by aid institutions (official aid agencies, international organisations and charities) trying to mediate between the preferences of the people who give them money and their view of the interests of people in developing countries. Aid agency staff typically want to do as much as they can for people in developing countries: if you ask most aid agency staff who their “client” is, they will tell you it is the world’s poor, not their own taxpayer. But they feel they can’t do many of the things they would like to do (such as improve the allocation of aid, reduce conditionality, make long-term commitments, scale back paperwork and process, focus more sharply, untie aid etc) because they have to take account of the preferences of the people whose money they are spending. They see themselves as a firewall, serving the interests of the poor by protecting the aid programme as best they can from what they consider ill-informed or selfish wishes of their taxpayers. This behaviour is not confined to official donor agencies: many NGOs say one thing to their supporters, and do something quite different (think, for example, of the difference between what Kiva actually does and what most people think that it does). In my view, trying to deliver effective aid despite public opinion is fundamentally misconceived and unsustainable; this model is beginning to fray at the edges, and could well fall apart.
The alternative approach is for aid agencies to recognize that the public wants to see aid used as effectively as possible; and to build an informed conversation about how that can be achieved. The stakeholders see the issues from different perspectives: for example, the public sees the benefits of spreading its aid across many countries and sectors, while aid agency staff see the ineffective duplication this creates. The solution to this is to share information and build a common view, not to try to disempower the public. If the aid bureaucracies believe that long-term commitments of aid to strengthen national systems is more effective in the long run than the series of smaller ad hoc projects that the public seems to prefer, then they should produce the analysis and evidence and persuade their stakeholders. Both Roger and I believe that more aid should be given to the poorest countries; he believes that this decision should be taken out of the political process, while I believe we have to win the public round by explaining why that would be better.
In the long run, public opinion will determine how much aid is given, to whom, and by what means: we cannot and should not try to sidestep the argument by putting the administration of aid beyond the reach of public opinion. The only sustainable way to make aid more effective is to change the political pressures by producing persuasive evidence and analysis. If Roger’s approach is to insulate aid from political pressure, my approach would be work to align those political pressures with more effective aid by making aid more transparent and accountable.
By contrast, Mike Green and Matt Bishop want to improve aid, and attract more resources, by making more use of the expertise and money of the private sector. I agree with them that there is huge potential for the growing diversity in the aid system to improve the effectiveness of development system, if different organisations focus on the contributions that they can make. Foundations could act like venture capitalists: taking bigger risks but leaving long-term financing of scaled up successes to official aid donors. Private aid could focus on achieving community and individual level results. Specialised global organizations could provide particular expertise not available through generalist support. The diversity of official donors could provide innovation rather than a monoculture of ideas. Official aid agencies could focus on long term funding and resource transfer, and support for institutional change.
Unfortunately it is not clear that all these different actors really are focusing on their strengths, and there is nothing in the aid system that pushes them to do so. The foundations do not display the higher risk appetite that we would expect them to have (despite their rhetoric). The approach of official aid agencies to the division of labour does not appear to be intended to drive specialisation (from which the benefit of division of labour derives) but simply to limit spread. Diversity of approaches and innovation are essential, but this must be accompanied by mechanisms which kill off bad innovations and take good ideas to scale; otherwise the effect is simply to add to costs and fragment systems.
In their book, Philanthrocapitalism, Mike Green and Matt Bishop give several examples in which philanthropic foundations have made significant and worthwhile contributions. The role of the Rockefeller Foundation in promoting the Green Revolution is a compelling example. But from these successes they extrapolate a wildly rose-tinted view of the work of foundations. As with official aid, there are successes and failures; there are good practices and bad.
My impression is that, at their worst, foundations are much less effective, and behave even worse than official donors. For example, I have seen:
- massive unpredictability and volatility of foundation grants; many foundations make grants worth 5% of their capital asset value each year, which is the minimum imposed on them by US tax authorities. In years when asset prices are volatile, many foundations pass on this volatility to grantees – they do not (as they could, if they chose) use their capital to smooth out the grant-giving and make it more predictable and stable. In 2009 I know of some foundations which imposed in-year cuts exceeding 25% on their grantees, leading to cuts in services and imposing huge costs in developing countries just at the time when the world economic crisis created needs for additional funding;
- reinventing the wheel and failure to learn – it is one of the advantages of foundations that they can be innovative and unconventional; unfortunately, both the benefactors and staff of many foundations suffer from an inflated sense of their own abilities, and foundations often repeat basic mistakes that have been made for many years, rather than building on the experience and wisdom of organisations that have made these mistakes before;
- capriciousness and personality-driven priorities – both the staff and benefactors of foundations get ideas into their heads from which they cannot be dissuaded. There are many examples of ludicrous decisions and instructions from foundation staff to grantees based on nothing more than their prejudices or personal preferences.
Of course, official aid agencies also suffer from these problems to some extent. But they also benefit from a degree of public accountability which puts them under pressure to be more effective. I think Matt Bishop and Mike Green underestimate the problems that foundations suffer as a result of their lack of accountability. In many cases benefactors became rich in markets; and they often trusted their instincts. But when they got a judgement wrong they were soon punished by the market, and they were able to change course. Now that they are philanthropists, they do not have any such feedback. When they make the wrong decision, everyone is too afraid to tell them, for fear of losing the opportunity to apply for the next grant. There is no mechanism for identifying and rewarding their most effective staff; nothing that forces foundations to concentrate on what they are really good at.
In many ways we have the worst of all worlds: with some notable exceptions, foundations do not in practice take enough advantage of the opportunities that their lack of accountability give them (for example, taking bigger risks, or supporting unpopular causes) but they do suffer from the weaknesses that lack of accountability imposes on them.
So I think Mike and Matt are right to say that development relationships should not be the exclusive preserve of government, and that is should increasingly be an effective partnership with philanthrocapitalists, NGOs, private sector organisations and individuals. But without some more effective governance arrangements in the aid system, we will not reap the potential benefits of this partnership. We need stronger pressures for the different partners to make their specific contributions effectively, which in turn demands greater transparency and stronger accountability for all organisations.
Both articles start from the premise that the aid system needs to be improved; on this I think we all agree. But Roger’s solution – putting aid beyond politics – is unlikely to be effective, and is undemocratic. If we believe that politics constrains effective aid decisions, we should square up to trying to change the politics, not trying to insulate ourselves from it. And Mike and Matt’s answer – passing the baton to very rich Americans – is no answer either. These stakeholders certainly have a contribution to make, but to be effective their contribution must be part of a system that is likely to get the best from all partners working together, and holds everyone to account; otherwise we risk having all the disadvantages of the free market with none of the benefits of market discipline.
Disclosure: the organisation for which I work receives grants from the Gates Foundation and Hewlett Foundation.
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