Development aid: no more cogs tyrannic?

Click to find out more about 50 years of DAC work
In today’s post, Jonathan Glennie of the Overseas Development Institute continues the debate with OECD DAC Chair Brian Atwood on the role of the OECD in the architecture of international aid. You can also follow the debate in today’s Guardian.
Brian Atwood will be the moderator of New paradigms for development at the OECD Forum on 25 May. Speakers include Paul Collier and Dambisa F. Moyo.

 

In his reply to my blog suggesting a shake-up of global governance of aid effectiveness Brian Atwood, the chair of the OECD’s Development Assistance Committee (DAC), quotes his colleague Jon Lomoy, Director of the OECD’s Development Co-operation Directorate: “Hopefully in the future, there will be no more central cogs – rather, I see the OECD as part of very efficient machinery in which each of the pieces contributes to a truly balanced, equitable and prosperous whole.”

That is a good starting point, and one that I expect most agree with. The question is what it means in practice, and how to get there from here.

Let me first say that it is possible to exaggerate the importance of a change in global architecture. People on the ground, trying to make aid work on a day-to-day basis, will probably have more pressing concerns than the management of global bureaucracies that are at best only partially effective. On the one hand such changes are notoriously hard to achieve, let alone get right, and on the other hand even when changes are fairly positive, complex problems usually remain complex.

Most important of all is national level management of aid, regardless of global goings-on. If each country developed its own mini-Paris Declaration and insisted that all donors (DAC and non-DAC) stuck to it, aid effectiveness would improve dramatically. The Kigali Statement signed at the development partners meeting in Rwanda in November last year is an example to follow, as is the regional agreement of the Pacific islands back in 2007.

Nevertheless, as a government representative from Uganda said at a meeting I was at recently, “[Global aid governance] doesn’t matter that much on the face of it, but when you look a bit deeper, it does. I feel freer in, say, Malawi to discuss aid effectiveness than I do in Paris. And I would give different answers on a questionnaire from the OECD than I would on a questionnaire from [a more inclusive global body].” So it is an issue worth discussing, although not obsessing about.

What would an effective and inclusive global governance structure to support national level management of aid effectiveness look like? Actually, it is not that hard to imagine.

The OECD DAC Working Party on Aid Effectiveness (known as the WP-EFF) is an increasingly inclusive body comprising bilateral and multilateral donors, emerging economies, aid dependent countries and private sector and civil society representatives. It has emerged in recognition of the view that recipient countries should increasingly take the reins of this reasonably successful campaign to improve aid effectiveness.

The problem is that, as its name implies, its home and administrative support are provided by the OECD, a club of rich countries with all the instincts and interests of rich countries. To take one symbolic example, the first draft of the Busan outcome document is currently being written by the co-chairs of the WP-EFF (good) assisted by a team of OECD staffers (not good).

Anyone and everyone has been invited to submit ideas and comments, and a serious debate will take place in June onwards about the text. But as anyone who has been involved in international negotiations knows, the first draft matters. It not only needs to be neutral, it needs to be seen to be neutral. A Partner Country Contact Group is being established that has been invited to input a coordinated position, but this is not the balanced whole that Jon Lomoy envisions. 

A simple two-stage process would move us in the right direction. First, the WP-EFF should formally delink itself from the OECD DAC. The DAC club of donors would have the same status as a corresponding recipient club (like the Partner Country Contact Group) and both would help manage and support the WP-EFF. Crucially, the DAC would continue to play its vital role in monitoring data and indicators.

Second, the WP-EFF should eventually come under the auspices of the United Nations. The UN’s Development Cooperation Forum met in Mali last month to talk about aid effectiveness in an entirely separate process to the OECD-led aid effectiveness talks which culminate in Busan in November this year. It is plainly a waste of time and money to have two parallel processes claiming to oversee aid effectiveness, one based in the OECD, the other at the UN. It is also ridiculous to spend millions on an aid effectiveness process that does not involve China, Brazil or the Arab donors in any serious way.

The UN is the only body that can credibly bring all the different interests together under one roof, setting out rules of the game for the present era of development.

It is not the case, however frequently it is asserted, that the UN is ineffective while the OECD is effective. Of course it can be easily criticised – no global bureaucracies can escape rampant flaws. But possibly the most important globally agreed targets in history, the Millennium Development Goals, have been handled both inclusively and effectively by the UN.

And it is the MDGs which provide the model for this move of aid effectiveness coordination from the OECD to the UN. Few remember that the origin of the MDGs is the 1996 OECD report Shaping the 21st Century: the Contribution of Development Co-operation. The report set out six goals, and these eventually became the MDGs adopted and managed by the UN at the turn of the millennium.

In summary, the OECD should see Busan as an opportunity to pass on the responsibility and power of managing this important process to a body that is more representative of the interests of poorer countries which, ultimately, are the ones that matter. The first principle of the Paris Declaration is ownership.

Useful links

OECD work on aid effectiveness including the Paris Declaration and the Accra Agenda

Annual Bank Conference on Development Economics (ABCDE conference) 30 May 1 June at the OECD

Development in the 21st century: co-operation not donors and recipients

Click to find out more about 50 years of DAC work

Writing in The Guardian last Friday (29 April) Jonathan Glennie of the UK Overseas Development Institute argued that the OECD should give up control of the aid agenda. Brian Atwood, chair of the OECD Development Assistance Committee replies. Jonathan Glennie will be continuing the debate on the Insights blog next week, but you can already see other contributions on the Guardian site, which is also publishing this article.

Jonathan Glennie’s article is timely in provoking debate around one of the biggest challenges of our decade: how to ensure that we are doing our best to meet the commitments embodied in the Millennium Development Goals, and even more important, to take development beyond them in a new framework – one that is fit for the 21st century.

Jonathan is correct: the Paris Declaration – and its follow-up Accra Agenda for Action – have proven to be of seminal importance in transforming aid relationships into true vehicles for development co-operation. The principles they embody build on  50 years of field experience and research to promote what we know works: aligning development programs around each country’s own strategies, reducing  transaction costs, avoiding fragmented efforts, making all partners accountable to each other and to their constituencies and  measuring success by results.

These principles have changed the reality of development co-operation, promoting the much needed transformation of aid into development co-operation – a relationship based on trust, in which all sides accept responsibility for producing results.

But as Jonathan rightly says, this progress is not sufficient to overcome the growing global challenges. In the face of the recent financial, security, food, health, climate and energy crises, I also have to conclude that the development paradigm has not shifted enough.  

 This is not just a matter of language, although as Jonathan notes, words are important in reflecting mindsets. But the language we use to describe development co-operation reflects not only a mindset, but also long-standing and complex ways of working that often respond to many other prompts – including public opinion – than those that strictly derive from development policy.

This brings me to where I must disagree, however, with Jonathan: the OECD DAC does not control the aid agenda, no more than it controls these ways of working. If this were the case –if there were one centralized aid mechanism – then it would be easier to change. But ODA – which accounts for the vast majority of what we refer to as ‘aid’ today – is not centrally managed. It is, rather, the sum of numerous countries’ and organizations’ total – yet individual and independent – efforts to promote the development process. 

These mechanisms have not always worked to the best advantage – and this is where the OECD DAC comes in. the DAC was created to make them work better – not for the donors but for the countries trying to work their way out of poverty and all it entails. And while much has been achieved – in particular since the Paris Declaration was put in place – there is still much unfinished business.

The 91 countries Jonathan refers to are the first to testify to this and to insist – despite the fact that we are reaching the ‘due date’ for the Paris commitments – that we do not let go. Developing countries and donors alike – and yes, we still need these words – still have a job to do to reach their targets.

This is why the meeting in Busan – the Fourth High Level Forum on Aid Effectiveness – must be a true turning point. If Busan is successful, it will show us exactly where we need to focus to make good on those commitments. But more than that, it will signal a renewed global commitment to attack poverty as a central source of the world’s problems. More precisely, Busan can be considered successful if it achieves the following:

  1. A broad partnership among nations at all levels of income and development, as well as private and non-governmental organizations, based on a clear division of labor and transparent communication.
  2. A set of principles, founded on solid evidence, to guide the new consensus on development co-operation, together with a commitment to eliminate policies that present obstacles to achieving development results.
  3. A revitalized global effort to achieve the MDGs and focus on the need for global public goods.
  4. A recognition that the world’s poorest and most fragile states need security and capacity, and that working with them means being willing to adapt modalities and to take risks.
  5. An acceptance that people, no matter how impoverished, must be empowered to participate directly in the development process.
  6. An acceptance that all participants in development efforts must produce measurable results, and that these results must be duly reported to citizens of all nations.

Achieving these objectives will mean overcoming deep-seated prejudices and misperceptions. It will require respect for non-traditional approaches and a willingness to create a common ground among diverse partners. But it would also permit the elimination of labels such as ‘donors’ and ‘recipients’, which tend to divide the world into camps.

As my colleague Jon Lomoy, head of the OECD Development Co-operation Directorate, has already noted, “The new order we foresee is not a matter of relinquishing… Why relinquish, for example, the insights that are offered by decades of experience in tracking aid, improving its quality and fostering better, more inclusive policies that Southern and Northern countries alike look to the OECD to share? Hopefully in the future, there will be no more central cogs – rather, I see the OECD as part of very efficient machinery in which each of the pieces contributes to a truly balanced, equitable and prosperous whole.”

Underdevelopment is undermining the quality of life everywhere. Busan represents an opportunity to forge the broader and deeper partnership Jonathan and many others are calling for.

Useful links

OECD work on aid effectiveness including the Paris Declaration and the Accra Agenda

Annual Bank Conference on Development Economics (ABCDE conference) 30 May 1 June at the OECD

New Paradigms for development: OECD Forum 2011

Growth and development—for whom?

Innovations in measuring poverty and inequality

Today’s post is from Stephen Groff, Deputy Director of the OECD Development Co-operation Directorate.

UNDP’s Human Development Report, launched this morning at OECD headquarters in Paris, stresses that today’s development challenges require a new outlook. There are no silver bullets or magic potions for human development. Rather than trying to replicate past experience, we need to focus on new opportunities. Rather than attempting to apply policy prescriptions, we need to adapt general principles and guidelines to the local context. And we must address major new challenges—in particular, climate change—and build democratically accountable global institutions to deal with them. Our analysis must go deeper, and we must consider carefully the multidimensionality of development objectives.

The Human Development Index was one of the first serious attempts to broaden the debate around just how we measure development. Over time, the development community has moved from an initial, rather simplistic stance of increased GDP as synonymous with development, to an array of indicators for ranking how countries and people are faring. In recent years, the debate has become much more pronounced with the Stiglitz-Sen-Fitoussi commission and the OECD’s work on measuring the progress of societies.

At OECD we recognize how important measurements are; they are, quite simply, our means of defining success. And as such, we feel that it is vital to consider development outcomes in their multiple facets—not just poverty or income growth levels.  Growth is a means to an end, and not an end in itself. The Human Development Report confirms this central truth, and also makes it clear that there is no single pathway to success. Each country must have the ownership, capacity and resources to find their own solutions to their own development challenges.

In this respect, it is very positive to see the G20’s growing focus on development. Having just attended the G20 Summit in Seoul, I was fortunate to witness as global leaders confirmed the challenge of closing development gaps as a core element of their economic o-operation.

This is good news for at least two reasons. First, the G20 countries are the largest global economies and major partners of low-income countries (LICs), and what they do matters a lot for LICs’ growth. Second, G20 countries bring to the development debate new perspectives and fresh ideas—in particular, they bring their own development experiences and skills, enriching the menu of options available to LICs for the design of their development strategies and policies.

In Seoul, the G20 adopted the Seoul Development Consensus for Shared Growth and an action plan comprising nine pillars to promote LICs’ growth. The G20 is uniquely placed to provide leadership in advancing the international development agenda and achieving the MDGs. They can do this by: improving their own policies; sharing their development experiences; providing assistance to build capacity; and offering strategic guidance to international organizations, thereby enhancing the effectiveness of the multilateral system.  It is essential that all these work together toward the ultimate objective of improving the impact of G20 policies on LICs’ growth.

The OECD—like the G20—takes a comprehensive approach to development and to knowledge sharing, cross-fertilisation and policy coherence, placing development at the core of our work and engaging our full range of policy communities. With decades of experience in development, we are pleased to be mandated by the G20 to work closely with the UN, the World Bank and other international organisations to contribute to implementing the action plan. We believe that our contributions will help the G20 to identify what works when promoting growth and poverty reduction, to better assess the impact of G20’s own policies on LIC growth, and to find ways of maximizing positive impacts.

The G20 approach to development is underpinned by a fundamental belief in the core importance of growth.  This is the right perspective as growth is a necessary component of development but it is also important to remember that the rate of poverty reduction depends on the pattern, and not only the pace, of growth.  One of the key messages of the HDR—and one that I know the G20 will heed—is that growth does not automatically equate to other aspects of development.  Nor is there a minimum threshold of growth required for countries to develop.

At OECD, we are keen to share our experience regarding what makes growth benefit the poor—something we have been exploring for years in the DAC and its Network on Poverty Reduction. More generally, we will continue to put a strong emphasis on measuring the progress of societies, because people, as the HDR says, are the real wealth of nations.

Useful links

Human Development Index

OECD work on G20 issues

The best books in the world (of government and international organisations)

Security consultant

You don’t see many Zapolets these days, except outside the Vatican. The Swiss Guards are the last vestige of a mercenary tradition Thomas More satirised in Utopia under this name as “a rude, wild, and fierce nation… made, as it were, only for war”.

The rise of the modern state and the constitution of standing armies largely put an end to the outsourcing of war to the private sector, but equivalents of the “free lance” still exist. However, in much the same way as pesticides companies now refer to themselves as the “plant protection industry”, we now have a “stability operations industry”.

Some of these firms became famous, or infamous, in Iraq and Afghanistan, but they’re present in practically every conflict and post-conflict zone and in many post-disaster areas too, providing a range of military and other services. Indeed, the ground in Haiti had hardly stopped trembling before one of their trade organisations was setting up a forum on business opportunities in the earthquake zone. Should governments be hiring them?

The OECD’s Partnership for Democratic Governance debates the question in Contracting Out Government Functions and Services: Emerging Lessons from Post-Conflict and Fragile Situations. Paul Collier, author of The Bottom Billion, uses the analogy of how mobile phone technology enabled many developing countries to bypass analogue technology to argue that fragile states needed to look past the 1950s European model for ministry-based service delivery.

If you don’t agree, you can contribute to the discussion on the PDG website.

Contracting Out was named as one of 2009’s “Notable Government Documents” by the American Library Association and the Government Documents Round Table. The ALA/GODORT Panel singled out another OECD publication too. In Innovation and Growth: Chasing a Moving Frontier, the OECD and World Bank discuss “options for national and global policy initiatives that can foster technological innovation in the pursuit of faster and sustainable growth”.

They argue that the competitiveness and prosperity of high income economies has come to rely increasingly on their innovative capability, but that developing countries’ competitiveness and prosperity remain largely tied to their natural resources.

Countries like Korea that shifted quickly from “developing” to “developed” support this. Today, we all know world leaders like Samsung or LG, but as the Insights book on international trade points out, fifty years ago, Korea was poorer than the Sudan and its main export was wigs made from human hair.