What’s the best way to fight poverty? Just give money to the poor. That’s the idea – and the title – of a provocative new book on development policy. True, the book isn’t a call to throw money out of helicopters over shantytowns. But it does argue for giving small payments (and other benefits), directly to poor people, and letting them decide how to use them. Think of it as bottom-up, not top-down, development.
Two of the book’s authors, Professors David Hulme and Armando Barrientos, visited the OECD recently to discuss their work. As they explained, such programmes already have an impressive track record of success in a number of developing countries, for example Brazil’s Bolsa Familia and Mexico’s Opportunidades schemes.
The programmes vary greatly: Some countries simply give out allowances and child grants to the poorest families; others attach conditions, such as requiring children to attend school; and others, such as India, require families who receive payments to work on community infrastructure projects. Whatever form they take, schemes like these now reach an estimated 750 million people around the world, say the authors, and – amid growing interest in China – are on course to reach a billion by next year.
The programmes are interesting from a number of perspectives. One is that they come from “the South”. That’s development shorthand for saying they were designed and implemented by developing countries themselves, and not by donor countries or agencies. “The idea of the Millennium Development Goals and much of the discussion of global poverty over the past 10 years has tended to emphasise what rich countries can do for poor countries,” Prof. Hulme said at the OECD. “But when you look at the origins of these programmes, you find they’re very much from the South,” especially countries like Mexico, Brazil, South Africa and India.
Another is that families make good use of the payments and experience real benefits. To give an example, two years after the introduction of a programme in Mexico, children in beneficiary families were a centimetre taller than children in families that received no payments, Prof. Barrientos said. That suggests the beneficiary children were better fed and enjoyed stronger health.
Critics of the schemes argue they can create welfare dependency. But the authors argue that such fears are misplaced, for a number of reasons. Not least is the fact that the sums of money are very small – they often amount to no more than about a fifth of a household’s expenditure. In Bangladesh, the payment to pensioners is equivalent to only about $2 a month. Incidentally, the small size of the payments means the schemes are relatively affordable, even for poor countries.
The researchers also say they’ve found little evidence that the schemes reduce the number of people who are ready and willing to work. Indeed, the opposite may be the case. In South Africa, for instance, research shows that people living with an elderly person who’s receiving a pension go looking for jobs more often than those that don’t. “People say, ‘it’s because we’ve got the money to pay for the bus fare – before, we couldn’t pay the bus fare to go and find a job’,” said Prof. Hulme.
Impressive as these programmes are, they need to be seen in the wider context of development and the provision of adequate systems of education and healthcare. For instance, insisting that children go to school before a family receives its payment makes sense only if there’s a school to go to.
Still, the programmes give important pointers on how people can be empowered to tackle their own problems. And that’s an idea some developed countries are also picking up on. The Economist reported recently on a pilot scheme in London where homeless people were asked what they needed to change their lives. “One asked for a new pair of trainers and a television; another for a caravan on a travellers’ site in Suffolk, which was duly bought for him. Of the 13 people who engaged with the scheme, 11 have moved off the streets. The outlay averaged £794 ($1,277) per person (on top of the project’s staff costs),” it reported.
“Just Give Money to the Poor: The Development Revolution from the Global South”, by Joseph Hanlon, Armando Barrientos and David Hulme (Kumarian Press).
Social Assistance in Developing Countries Database at the Chronic Poverty Research Centre
Government, civil society and international organisations met in Tunis this month to discuss the priorities for aid and development effectiveness ahead of the High Level Forum on Aid Effectiveness in Busan, Korea in November 2011. Misaki Kruger of the OECD Development Co-operation Directorate reports.
What Africa needs is not only cash, but practical and innovative ideas to “put Africa to work”. Kenyan Minister of State for Public Service, Dalmas Anyango Otieno, set the tone of the meeting – looking for ways to build capable and effective states that can maximise all resources and knowledge.
So what are the main ingredients needed to make this happen?
Aid, currently at $120 billion per year globally will continue to be an important source of finance for African countries. However, as African Development Bank (ADB) President Kaberuka says, “aid is only part of the solution for Africa’s problem”.
The priority ahead of Busan coming out of this meeting is to see how aid can be leveraged to build good financial governance, credible public services and generate internal resources through tax and investments. It is about using aid as a catalyst to build capable states and reduce aid dependency.
This also applies to the increasing engagement of the so-called BRICS countries. With China in mind, Aloysium Ordu from ADB argued that the so-called “Beijing Consensus” is an opportunity for Africa and also complementary to traditional donors, both in terms of increased resources as well as lessons, for example on speed of delivery and flexibility.
One might question the developmental relevance of building “friendship stadiums” or the often cited “no-strings-attached” approach. But participants agreed that the responsibility to manage Africa’s development lies squarely with Africans themselves. (more…)
This post contributed by John Mutter, Professor of Earth and Environmental Sciences/Professor of International and Public Affairs and Director of PhD in Sustainable Development, Columbia University, NY.
How will Pakistan do after the floods?
To answer that question we need first to know how bad the flooding was. It is widely said to be the worst in modern history and there is no reason to doubt that, but it’s not so easy to measure the magnitude of a flood. There is no widely accepted scale like the Richter scale for earthquake magnitude. Disasters are commonly scaled by deaths and economic losses.
The death toll for the Pakistan flooding is said to be around 2000. However, such figures are notoriously difficult to assess accurately because many people who are displaced don’t “report in”, making it hard to know who among the missing are alive or dead. The 2000 figure is probably the number of bodies recovered and is surely less than the true total. Even so, that’s still as high as the death toll from Hurricane Katrina, although it’s less than the number killed in other disasters in the region, such as the 70,000 victims of Cyclone Nargis in Myanmar.
Floods are not like earthquakes that give no warning. You can see a flood coming. It has to rain a lot over a long period of time and floodwaters rise over many days or longer. People can get out of the way and move to safer locations and that is what happened in Pakistan. The number of displaced people is thought to be enormous, far greater than the number displaced by the Indian Ocean tsunami of 2004. These figures too are hard to estimate with any accuracy but it is very safe to say that the death toll was mercifully low and forced displacement by contrast absolutely enormous.
Hard as these figures are to assess it is harder still to assess the economic impact of a disaster. Here there is often confusion added to the difficulty of estimation. What is often reported is so-called financial losses that, at least in the US tends to mean the value of that which is destroyed and the figures that come out quickly are insured property losses. Insurance companies usually know how much they have lost. But the very fact that property is insured says that it will be rebuilt without much financial hardship to the owner. Those losses don’t hurt an economy and can even stimulate a surge in the construction industry. As measures of economic set back due to a disaster they are very misleading.
This contribution to the debate on aid ownership comes from Sandra Alzate, Director of International Cooperation, Presidential Agency for Social Action and International Cooperation – Acción Social, Colombia. You can see French and Spanish translations by clicking on the “more” tag.
I would like to express our rejection of the conclusion of Joel Brinkley in his article: “Don’t let Haitians help themselves“, according to which “if the World wants to help Haiti, aid officials should put aside the Paris Agreement on Aid Effectiveness. The donors should decide what to do with their money. The Haitian “government” can have no more than an advisory role, or nothing will ever change”.
There are several points to mention.
As expressed in the article, there have indeed been decades of unproductive work; unproductive work that gave rise to the reflections and actions for more effective aid strategies, both in countries dependent and not dependent on aid.
The Paris Declaration (PD) and the Accra Agenda for Action (AAA) have become a commitment of the international community with the most vulnerable populations of the world. Colombia shares the principles of the PD because it locates the responsibility for development with the so-called partner countries, and because it understands international cooperation as complementary to national efforts.
In particular, the principle of “ownership” is seen by Colombia as the origin of the aid effectiveness chain, and necessary in order to strengthen leadership, coordination, dialogue and interaction between all the development actors, thus enriching their cooperation policies and practices.
It is in this scenario that Colombia has played an active role in the international debate. This has generated new spaces of dialogue and has promoted the incorporation of the effectiveness agenda, and of subjects like broadening and the democratization of the term ownership, the promotion of using national systems and mutual evaluation mechanisms, the recognition of the role of NGOs, the reference to south-south and triangular cooperation policies, and aid information transparency.
As anticipated in the PD and AAA, donors have the responsibility to develop capacities and leadership in Southern countries so as to support the sustainable construction of their own development. Nevertheless, traditional cooperation models in Haiti have reflected a lack of work from donors related to this responsibility (lack of capacity-building, creation of dependence, fragmentation of initiatives, high transaction costs, weakness of accountability, and lack of transparency).
Considering these factors, ownership becomes the common denominator that must govern in a vulnerable and, for decades, criticized context like the one in which Haiti has been living. This principle allows the exercise of an effective authority of development policies and strategies where donors respect the leadership and they contribute to local capacities development and strength.
To imagine a scenario like the one raised in the conclusion by Brinkley, where the Haitian reality reflects the presence of multiple international actors working to develop the country, without guaranteeing a firm leadership and an active participation of the Haitian government, only generates a lack of organization of the numerous cooperation actions, and a negative impact for the future generations of Haitian society.
Colombia, as a Middle Income Country, positioned as a donor of financial and technical cooperation in Haiti, has felt deep solidarity with the Haitian Government since the earthquake of January 12, 2010. As a result, Colombia participates as an observer in the Interim Recovery Haiti Commission (IHRC) and is using the Haiti Reconstruction Fund – created by the Government of Haiti and managed by the World Bank – to realize, as a request of the Government, a donation of $4 million for budget support to the agricultural and land reconstruction sectors.
Colombia has also seen in South-South Cooperation an opportunity to promote in Haiti a new philosophy that encourages an integrated and new approach to development, based on a coordination scheme between all the actors involved, connecting the emergency and recovery stage, and guaranteeing the active participation of local communities in decision-making.
What the author proposes in his article is not new, but is a scenario that has caused a continued chaotic situation in Haiti. It is for that reason that we would like to invite the author to reframe his ideas and to better ask donors what they have done, or what they are doing, to develop Haiti’s capacity for leadership. (more…)
Following the previous post on aid to Haiti, Jerzy POMIANOWSKI, Director of the OECD’s Partnership for Democratic Governance Advisory Unit and Bathylle MISSIKA, Technical Advisor for the OECD-PDG sent us this contribution to the debate. You can find information on PDG work on Haiti’s reconstruction and development here.
Brinkley is absolutely right when he underlines some of the shortcomings of donor involvement in Haiti. The “by the book” application of some of the pivotal Paris Declaration principles of ownership or use of country systems (“alignment”) has not delivered according to plan. But should we expect the same pace of improvement from “good performers” like Tanzania or Ghana in countries like Haiti, which are emerging from decades of political and social instability and rampant poverty?
As outlined in the DAC Principles for Good International Engagement in Fragile States, donors need to adapt their strategies to fragile contexts. In other words, discarding the ownership principle altogether is not the answer and certainly sounds schizophrenic after the political and financial commitments made by aid donors in March at the international conference in New York when more than USD 5 billion was pledged to help Haiti “build back better”.
Clearly, this money cannot be given in the form of a blank check. Brinkley is also right to warn against the misuse of funds and the risks of seeing monies disappear in the wrong pockets. This does not mean that donors should “decide what to do with their money”. A countless number of evaluations have showed that “ring fencing” funds by creating isolated projects run by donors using their own procedures and staff, and accountable only to themselves only leads to greater alienation of the government, a lack of efficiency and unsustainable results. Haitian stewardship is not incompatible with safeguarding mechanisms.
The Reconstruction Commission mentioned by Brinkley, which approves all new development and reconstruction projects, has been established with a built-in, independent “Performance and Anti-corruption Office” with a compliance unit and investigative powers so as to limit the risks of embezzlement in reconstruction projects.
Moreover, Brinkley is wrong in asserting that Haitian leadership has led nowhere in the past. It is precisely the past practice of aid donors avoiding the state that needs to be let go. Since former dictator Jean-Claude Duvalier fled the island in 1986, donors have unfortunately often bypassed the government. But Haitian ownership has manifested itself in many ways. It now needs the right stepping stone to take off.
The most recent example cited by Brinkley of displaced people on the Champ de Mars is a good example. Whatever the Government (or in this case, President Préval) puts forth as its own agenda, some international critics raise eyebrows because things should be done by the (their?) book. Should tents have been left in front of the destroyed Presidential Palace, fingers would have been pointed at the Haitian government for its inertia.
The biggest risk now is not to avoid having “Haitians help themselves” but, rather, a return to the sub-optimal pre-earthquake model, in which donors, NGOs and other non-state providers bypassed the state, with 85% of essential services such as health, education or water primarily administered and delivered through NGOs, private companies and other non-state actors such as charities, associations and faith-based groups, with little accountability to the government or the beneficiaries of these services.
As discussed during a workshop organised from 8-9 July 2010 by the Haitian government in collaboration with the OECD’s Partnership for Democratic Governance, the Government of Haiti, donors and service providers have laid the ground for a new approach to the delivery of basic social services. “We need to redefine the model that prevailed before the earthquake, in particular to allow Haitians to have access to the essential services [they] can rightfully expect from the State,” Prime Minister Bellerive said as he opened discussions at the July workshop.
This new paradigm for service delivery, in which all stakeholders accept the Haitian state’s primary stewardship role and, at a minimum, its core policy-making, standard-setting and monitoring roles, can mark a turning point in what has so far been an uncoordinated tango between donors, NGOs and the government.
This uneven relationship of mistrust and low mutual accountability probably stems from Haiti’s complicated history as the first black republic, which freed itself from slavery and declared independence in 1804, while reinstating a culture of dependency through dictatorships, the oppression of the elite and a reliance on foreign aid.
Now is actually the time to allow Haitians to help themselves. Finger-pointing has not led anywhere and it is high time for donors and the Haitians to “walk the talk”. The new rules of engagement discussed in July are premised on the Government setting its policy orientations, being informed of the activities of all donors and non-state providers, and applying its norms and regulations, while being able to decide what services should be delivered and where. This is the least that citizens can expect from their sovereign state and the first step towards greater accountability.
This approach of enhanced transparency was behind the creation of the IHRC, which is not co-chaired by President Préval as incorrectly stated by Brinkley, but by Prime Minister Bellerive. The Commission has become an easy scapegoat, while it is simply the tip of the iceberg of a bigger problem: Donors tend to supply technical responses to political problems and apply old recipes, such as hiring big management consulting firms to set up multi-donor funds and expecting donors to fall in line behind their approach.
Brinkley rightly notes that the Commission has “met only once” and implies it is far from being operational, but this situation has more to do with all the weaknesses of international recruitment systems and the superimposition of donors’ own red tape and pre-defined organigrams than anything else.
The Commission is about to meet a second time on 17 August and is certainly behind schedule. But before resuming the never-ending ‘blame game’ it should be given the space and time to operate. If donors do not support Haitians to help themselves according to a set of mutually agreed new rules of engagement and through the mechanisms that they themselves have helped to create, it would be, as a popular Creole proverb goes, like “lave men siye a tè” (washing your hands then rubbing them in the dirt).
Useful links (the previous post on this topic also has many links)
Atelier sur le renforcement des capacités du Gouvernement haïtien : Provision et coordination des services sociaux de base (8-9 juillet 2010)
BetterAid unites over 700 development organisations from civil society working on development effectiveness and “is leading many of the civil society activities” in the lead up to the Fourth High Level Forum on Aid Effectiveness (HLF-4) in Busan, Korea in 2011
In a widely-circulated editorial opinion piece that the International Herald Tribune printed under the headline “Don’t let Haitians help themselves“, Pulitzer prize winning journalist Joel Brinkley argues that the Haitian government is so corrupt and ineffective that “If the world wants to help Haiti, aid officials should put aside that Paris Declaration on Aid Effectiveness. The donors should decide what to do with their money”.
In criticizing the OECD-backed Declaration that over 100 ministers, heads of agencies and other senior officials have now adhered to, Brinkley focuses on the principle of “ownership”: “Developing countries set their own strategies for poverty reduction, improve their institutions and tackle corruption.”
Brenda Killen, head of the OECD division working on aid effectiveness, replies to Brinkley.
We agree with Joel Brinkley that corruption can undo the best of efforts and intentions, and it has a strong hold in many of the neediest countries. But we strongly reject his conclusions that Haitians should not be trusted with their own rebuilding and that donors should abandon the principles of the Paris Declaration.
The Paris Declaration sets out five strong principles to make aid work for development. Brinkley zeroes in on one of them: countries must take the reins of their own development. The reasons for this seem obvious to those of us who have had the privilege of growing up and living in countries that do so – at least when we are talking about our own countries and futures.
But the principle of ownership, like the other principles that underpin the Paris Declaration, is not an expression of political correctness. It is based on objective assessments of what works – and what doesn’t – and drawn from experience in the field.
Countries like Vietnam (which has adapted the Paris Declaration to its own priorities and needs) and Ghana (which has set its own programme to achieve middle income country status by 2015) illustrate why local ownership is essential if aid is to be a catalyst for effective development. And even where systems are weak and there is corruption and inefficiency, ownership is key to uncovering and reversing this. Post-conflict Uganda in the 1990s provides a well-known example in the form of the Public Expenditure Tracking Surveys of education grants that showed a reduction in the diversion of funds from 80 percent to 20 percent over a decade – reflecting strong ownership by the public (through broad public debate and citizen engagement) and government (through reform and strengthening of public financial management systems) of the country’s post-conflict process.
Referring to the origins of the Paris Declaration, Mr Brinkley states that it came out of “decades of unproductive work”. Certainly, if the donors and developing countries that adhered to this Declaration found it worthwhile to work on making aid more effective, it was not because aid had achieved nothing. It was, rather, that the experience gathered over time provided evidence of what could be done to make it work better. The Paris Declaration made harmonisation of donor efforts imperative long before the media reported stories of duplicated and wasted efforts due to turf battles among donors.
One of the major obstacles to aid effectiveness during the decades referred to by Brinkley as “unproductive”, was that a substantial part of aid was tied to conditions and services set by the donors. In other words, donors – not recipients – controlled it and how it was used. The Paris Declaration has helped to reverse this situation, and today almost 90%of aid is untied.
But above and beyond the specifics of aid effectiveness – which are often very complex and process- oriented – there is another, overarching lesson that today seems obvious: aid is not an end – or a solution – in itself. Nor can it take the blame, or the credit for that matter, for what has or has not worked. The problem in Haiti is about much more than aid, and here – as in so many other places – the Paris principles must be applied not in isolation, but rather in the context of much larger, more complex development issues.
Brinkley states that “Haitians were as poor and uneducated as ever” before the earthquake. It could be argued that this is simply not true. The 2009 Human Development Index report states that “Between 1980 and 2007 Haiti’s HDI rose by 0.77% annually from 0.433 to 0.532.” Not great, but still an improvement.
Yet this still leaves the fundamental question raised by Brinkley: earthquake or not, is Haiti in a position to be able to direct all international aid resources through its own government systems? Absolutely not. On this we agree. But does this mean we should not be working with the Haitians? Or does it mean we should be working to help them get to a point where aid can eventually go through Haiti’s national systems? We believe the answer is the latter. Absolutely, we should and we must.
At the heart of the issue is the question of how to combat corruption. Punishing a crime requires legal institutions. Should foreign charities or donor governments run these too? Rather than standing on the high moral ground and telling Haitians what they must do, shouldn’t we be helping Haiti to build those institutions?
The Principles for Good International Engagement in Fragile States are about just this – how do we move from the chaos of disaster and conflict to a stable development path? The ultimate aim is to support Haitians in building the ownership (in the form of democratically elected government, strong institutions and a voice for the poor) that will enable them to achieve – and sustain – their own development. Fragile states realise this and the g7+ group of fragile states is calling on donors to recognise it as well.
Just as South Korea was able to use aid as a catalyst to move from poverty and conflict to leadership of the G20 in less than two generations – building on strong national ownership and committed international support – other countries can do the same. Liberia, Timor Leste – and Haiti.
The Paris principles are highly relevant to Haiti’s current situation. In particular, they highlight the need to coordinate the many aid efforts more effectively so aid gets quickly to those who need it. But they can’t stand alone. Without action on many fronts – and action that takes into account the location-specific realities of each country – neither aid nor development will be effective.
The Partnership for Democratic Governance (PDG) is proposing Service Delivery Guidance in English, French and Creole to assist Haitian authorities and the donor community
Watch the trailer of an OECD-PDG documentary about Haiti made to accompany the forthcoming OECD-PDG Handbook on Contracting Out Government Functions and Services in Post-Conflict and Fragile Situations.
Catalyzing development: A new vision for aid, a workshop organised by Brookings in July 2010, concluded that: “Donors remain far too eager to lead, despite empirical evidence that aid programs that are truly owned by recipients have the biggest impact.”
The DAC Network on Development Evaluation works to increase the effectiveness of programmes through evaluation. In Haiti, the Network is supporting a collaborative approach to assessing the international aid response.
The Development Co-operation Report is the key annual reference document for statistics and analysis on trends in international aid.
The Dili International Dialogue sets out a new vision for peacebuilding and statebuilding
When asked what he’d done with all the money he’d earned, former Manchester United star George Best replied that he’d spent a fortune on women, booze and fast cars. “The rest,” he said, “I just wasted.”
No such prodigality from the three dozen billionaires who’ve agreed with Bill Gates and Warren Buffet to give away at least half of their fortunes and get by on what’s left. The initiative is expected to bring in $600 billion eventually, about twice what Americans gave to charity last year.
Some of it would have been given anyway according to an interview with Buffet in the New York Times. He says the real value of the pledge is in the example it sets and the sentiments expressed in the letters posted on the Giving Pledge web site.
If you think that charity is a good thing but would like a more convincing example than somebody who explains in his letter to the Pledge that he only has three luxury homes, try imitating the poor. According to the OECD study Growing Unequal? Income Distribution and Poverty in OECD Countries, the economic expansion that allowed the billionaires to make so much money hasn’t benefitted everybody. In fact, “the change has been equivalent to taking $880 from each of the poorest half of the population, and giving it to the richest half”.
What are they going to do with their philanthropy money? Education and health care top the list of intended beneficiaries. You might object that such basics should be a right, and not have to depend on charity and the whims of the rich.
Various sets of data suggest where other sources of funding could be found, even in poor countries. OECD Secretary-General Angel Gurría has pointed out that developing countries lose to tax havens almost three times what they get from developed countries in aid.
Christian Aid estimates that the sums being lost to tax evasion could save the lives of 350,000 children each year if made available to programmes fighting poverty and disease.
OECD countries suffer from tax dodgers too. According to a 2009 report from the US Internal Revenue Service, the tax gap – the difference between tax owed and tax paid – was around $345 billion in 2005, the most recent estimate. After subtracting revenue obtained through enforcement actions and other late payments, the IRS estimated the net tax gap at approximately $290 billion. The OECD says that tax evasion deprives other member governments of billions of euros a year too.
Charities do vital work that wouldn’t be done otherwise. But in a stronger, cleaner, fairer economy, they wouldn’t have to do it
Outcomes of the first meeting of the Informal Task Force on Tax and Development