For effective development, listen, learn and measure more than GDP

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Our final post from the Annual Bank Conference on Development Economics (ABCDE) is from Jon Lomoy, Director of the OECD Development Co-operation Directorate

Hal Varian, Google’s chief economist, famously remarked recently that being a statistician would be the sexiest profession of the 21st century. After hearing discussions at this week’s Annual Bank Conference on Development Economics, I think he may be on to something. The conference has confirmed my view that good data is an essential ingredient for development. I’m not just talking about how data has illuminated many of the excellent conference papers and debates. I’m also talking about how data helps governments design and measure better policies for better lives.

So how should governments measure whether lives are indeed getting better? In a 2009 report commissioned by the French Presidency, Joseph Stiglitz, Amartya Sen and Jean-Paul Fitoussi showed that the data used to measure success have a major influence on what societies strive to achieve – if we measure only GDP, we will strive only for growth.

But after focusing on growth for a long time, we now know that we need to look at a much more nuanced picture of societal progress – it takes more than income to make lives better. What about better health? What about a cleaner environment? These issues are important to people, and we need to start measuring them better and more prominently.  In this context, I am looking forward to seeing the outcomes of the OECD’s new Better Life Initiative, which allows individuals to build a personal index using their own better life indicators.

The question of what constitutes effective development and how it should be measured is also sure to figure prominently at the Fourth High-Level Forum on Aid Effectiveness in Busan, Korea (29 November – 1 December 2011). While all countries might agree that reduced infant mortality and higher literacy rates constitute “development”, I am sure that many other priorities will differ from country to country. Discussing these priorities and deciding how to measure them will be crucial, and will rely on solid data. 

Organisations such as the OECD and the World Bank, with their vast experience in producing and using good data, can certainly support such discussions. However, what we have learnt at this week’s ABCDE is that we also need to become much better at listening to our partner countries’ needs and learning how they see development. Now you may or may not view that idea as sexy, but I hope you agree that it is extremely important.

Useful links:

World Bank’s open data

Aid flows

OECD International Development Statistics online

Paris21 Statistics for development

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

ABCDE 2011: Broadening opportunities for development

Click to go to the ABCDE website

At the next Annual Bank Conference on Development Economics (ABCDE), to be held at the OECD in Paris on 30 May – 1 June, leading economic thinkers and policy makers will discuss how economic opportunities can be broadened to accelerate poverty reduction, promote human development, and stimulate inclusive growth. Felix Zimmermann of the OECD Development Co-operation Directorate outlines the aims of the conference and introduces the key speakers.

These are uncertain times for decision makers concerned with development issues. The global financial crisis and its after-effects have tested their ability to facilitate job creation, improve education, equip young people with marketable skills, and design effective social protection programmes.

How might people be provided with better opportunities to access education and health services, and other forms of human capital? How might they be provided with access to affordable financial services and the ability to own land or other assets? How can better service delivery be ensured? And how can gender equality be promoted and ensured?

At ABCDE 2011, which will be co-hosted by the OECD, the Government of France and the World Bank, four distinguished policy makers and academics will deliver keynote speeches.

  • Michelle Bachelet*, Under-Secretary-General and Executive Director, UN Women, will share her views on gender equality and the empowerment of women at global, regional and country levels.
  • Daniel Cohen, Director, Centre for Economic Research and its Applications (CEPREMAP, France), will discuss globalization and wealth and income disparities among countries.
  • Christine Lagarde*, Minister of Economic Affairs, Finance and Industry of France, will elaborate on role of the G20 as a new international forum for global economic cooperation in the 21st century.
  • Francis Kramarz, Director, Centre for Economic Research and Statistics (CREST, France), will share results of his work on job and labour-market policies in developed countries.

Five plenary sessions will focus on current research and policies, addressing various dimensions of the challenge of broadening opportunities for development.

  • John Roemer and Vito Peragine will reflect on the concept of inequality of opportunities and how it can be measured;
  • John Haltiwanger and Francis Teal will explore the issues of job creation and the performance of labour markets, firm growth, and other issues in developed and developing countries, particularly Africa;
  • Janet Currie and Rodrigo Soares will provide insights on how early intervention programmes in health, education, and other social services can benefit human capital formation in young people and their transition to the labour market;
  • Stefan Dercon and Sudarno Sumarto* will review the literature on social protection programmes, with a particular focus on African countries and Indonesia;
  •  Finally, Pierre André Chiappori and Raquel Fernandez will look at female empowerment and labour market participation, among other outcomes, and analyze the role that household behavior and norms play in influencing these outcomes.

A High-Level Roundtable on “Democratizing Development Economics” will close ABCDE 2011. Panelists will be asked how developing countries can play a part in designing, implementing, and continually improving development solutions. How can the development community broaden its sources of knowledge, taking on board a wider set of lessons from emerging markets and developing countries? How can research in such countries be supported? And how can research and data be disseminated more widely, providing developing countries with the tools for sound development policy?

The OECD, the Government of France and the World Bank are honoured to be collaborating with one another on ABCDE 2011.

To apply to participate in the conference, click here. The deadline is 1 May.

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* to be confirmed.

Conflict – the enemy of development

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The human cost of the conflict in Côte d’Ivoire has been all too clear, with almost daily reports of deaths and casualties. 

Against that background, it can seem callous to discuss the economic cost.

But, unfortunately, it’s likely to be very real and risks hanging over people’s lives for perhaps a generation to come.

Poverty rates may well rise, with knock-on effects in areas like child mortality, education levels and access to water.

 How do we know? Simply, because it’s happened so many times before, as the latest edition of the World Bank’s World Development Report demonstrates.

The report, issued today, is further evidence for the case that conflict and violence are among the greatest enemies of development. It presents some depressing statistics:

  •  Worldwide, 1.5 billion people live in fragile states or areas afflicted by conflict or large-scale, organized criminal violence.
  •  No low-income fragile state or country afflicted by conflict has attained even one of the Millennium Development Goals.
  •  People in such countries are more than twice as likely to be undernourished as those in other developing countries, and more than twice as likely to lack clean water.

 What’s striking, also, is that the conflicts that are dominating the news right now are relatively rare these days (albeit not rare enough): Since the 1980s, says the World Bank, the incidence of war between states has declined, while deaths from civil wars now stand at a quarter of where they were. But in many cases they’ve given way to other forms of violence and crime. “In Guatemala you have more people dying now from criminal violence and from drug trafficking than you did during the civil war,” Sarah Cliffe, one of the report’s authors, told The Guardian.

Of course, there’s an element of cause-and-effect to such conflicts and violence. Countries that are poorer or have high levels of inequality are more likely to suffer conflicts, which, in turn, is likely to make them poorer still, creating a vicious cycle of poverty and conflict. Equally, once a country has experienced a civil war, it’s much more likely to experience another one within 30 years.

The World Bank says international aid and development cooperation need to focus more on breaking such cycles. That call echoes a growing strand of work in the development community, which has seen a new focus on tackling the special challenges facing fragile states, especially governance. At the OECD, a special forum to address these issues was set up two years ago, and a set of guidelines for dealing with fragile states has also been created.

The World Bank says also that the current international system is still designed to handle the conflicts of the 20th century – civil wars and wars between states – and needs to be “refitted” to address 21st century risks, as the Financial Times reports.

Overall, the Bank suggests a number of strategies for breaking the links between conflict and poverty. It calls for a strong emphasis on strengthening national institutions and governance to improve people’s security, justice and job prospects. In the post-conflict rebuilding process, citizens also need to see quick evidence that things are going to get better, for example by making “a few highly visible improvements, like free health care for small children or restoring regular electricity”, as Binyamin Appelbaum notes . But, as he also points out, that’s just the first step of a process that “takes a generation”. If donors and international agencies are to underpin that sort of process, they need to make firm long-term commitments and “end stop-go patterns of aid” .

Incidentally, last week saw the release of annual aid figures from OECD countries, which provide the bulk of the world’s development assistance. Overall, foreign aid hit a record $129 billion in 2010, representing about 0.32% of the combined gross national income (GNI) of member countries of the OECD’s Development Assistance Committee. That was the good news. Less encouraging was the news that although donors plan to raise aid spending in the coming three years, the pace of that increase looks set to slow sharply.

 Useful links

OECD work on conflict and fragility and on governance and development

OECD aid statistics, Aidflows visualiser and Query Wizard

Annual Bank Conference on Development Economics (ABCDE), hosted at the OECD in Paris, 30 May-1 June

Women’s economic empowerment – it’s about money and more…

8 March is International Women’s Day. This year, we mark the occasion with a series of blog posts about initiatives to strengthen gender equality worldwide. In this post, Patti O’Neill, co-ordinator of the OECD DAC Network on Gender Equality, writes about gender-equality focussed aid in the economic and productive sectors.

“We stress that investing in women and girls has a multiplier effect on productivity, efficiency and sustained economic growth.” (para. 54 of Keeping the promise:  United to achieve the Millennium Development Goals.

At last year’s Millennium Summit, investing in women’s and girls’ rights was front and centre – the breakthrough strategy for achieving all the Millennium Development Goals.  Even though it is often said that investing in gender equality yields some of the highest returns of all development efforts, are women central to the aid provided by OECD member countries to the economic and productive sectors? (more…)

Haiti earthquake: Independent evaluations needed

 

Aid arrived, but the capacity to process it was limited

Today’s post is by Hans E. Lundgren and Megan Kennedy-Chouane of the OECD Development Co-operation Directorate

It has been called one of the worst disasters in human history. The earthquake that struck Haiti on 12 January 2010 saw destruction on an unprecedented scale.

Some 230,000 people lost their lives and 300,000 more were injured. Over 1 million people were left homeless.

In response, the international community mounted a massive humanitarian relief effort. The Red Cross, for instance, deployed the single largest country response in its 148 year history. People around the world gave millions in charitable donations and governments pledged $5.8 billion for relief and recovery.

At the peak of the emergency response, four million people received food aid and 1.7 million people were provided with material for basic shelter or tents.  Over time, 158,000 families have been relocated into sturdier transitional shelters. Today, 1.3 million people have access to potable water and one million are using 15,300 newly built latrines. Immunisation against major diseases has been provided to 1.9 million children and hundreds of thousands of children are back in school.

And yet, as the world marks the one year commemoration, many of us are disappointed with the overall result. Over 800,000 people are still living in camps and day-to-day conditions are extremely challenging for many Haitians. Journalists and experts in and outside of Haiti have criticised the United Nations, the donor community and NGOs for failing to improve conditions.

We support lively public debate about the effectiveness of development aid generally and the humanitarian response in Haiti specifically. However, while anecdotes and stories are useful for highlighting individual experiences, these discussions should also be informed by credible evidence – evidence that can be provided through independent evaluation. 

Here are just a few of the insights that evaluations of the earthquake have provided so far:

  • Humanitarian coordination: An independent Real Time Evaluation three months after the quake showed evidence of the recurrent problems of weak leadership and limited collaboration among international humanitarian organisations working in Haiti, despite recent progress in improving the efficacy of the humanitarian system.
  • The role of the government: Pre-existing governance weaknesses in Haiti were compounded by the earthquake.  International groups did not do enough to consult with local and national institutions and engage them in coordination mechanisms. Long-term development cannot be a donor-led process but must be effectively driven by a legitimate government. When formed, the new government will need to act decisively to approve projects, resolve issues around land ownership and set priorities for reconstruction and job creation. (IASC, 2010 and OXFAM, 2010)
  • A challenging urban setting: Reports from the Humanitarian Practice Network and OXFAM  show that delivering water, sanitation and other basic services in a major city presented very different challenges than those arising in rural environments (where humanitarians tend to have more experience). For instance, new solutions had to be found for providing toilet facilities for the hundreds of thousands of people camping amid the rubble or in dense tent cities. Organisations must have the capacity to innovate and work flexibly with local communities to find technical solutions suitable for the physical, social and cultural circumstances of the disaster-affected population.
  • Making the right kinds of donations: The Haiti response operation received tonnes of relief items, but the capacity to process these goods and get them quickly to people in need was limited. This lead to high storage costs, waste and the clogging-up of airports and roads. Some items sent were not appropriate, including expired medication that had to be destroyed. (IASC, 2010) Only goods for which there is a clearly expressed demand, and established means for distribution, should be sent.  (Read more about how best to help.)

These evaluations can be found on the ALNAP Haiti Learning and Accountability Portal. Another source for independent evaluations of development aid is the Development Evaluation Resource Centre (DEReC), hosted by the OECD DAC Evaluation Network.  This is a free online collection containing over 1700 evaluations of humanitarian and development aid programmes, including assessments of past donor efforts in Haiti and reports on other disaster responses.

In the context of broader debates about the adequacy of the Haiti earthquake response, evaluators are providing concrete lessons for the future. Sadly, some of these lessons have been highlighted before (see for example this World Bank Evaluation brief or ALNAP’s earthquake lessons note). We need to focus more on creating incentives to implement lessons, in order to ensure that mistakes are not repeated (again) in future disasters.

Useful links

Read more about Aid and the Haiti Earthquake on the Development Evaluation Resource Centre (DEReC)

Find out how the Haiti Evaluation Task Force is working to encourage credible assessments of the aid response.