World Development Report 2011 – will it make a difference?

The World Bank released its latest World Development Report (WDR) this week. It does this every year and few people usually pay much attention, unless their job requires it, and/or they are development nerds. Often the best thing about WDRs is that they are just the right thickness to place under the leg of a wobbly table; otherwise, they tend to gather dust on the book shelf.

But WDR 2011 is different, and it is well worth paying attention to. Indeed, given the subject matter and quality of the document, which contains a great deal of primary research and analysis, it should become a seminal text guiding development thinking and practice for years. The focus this year is Conflict and Security, and the report does a good job of explaining, using a lot of data and analysis, why the development community has to find better ways to work in conflict-affected and fragile contexts. According to the report 1.5 billion people’s lives are affected by conflict, and it provides plenty of evidence to back up what’s obvious anyway, that violent conflict is a huge drag on development. For example the average civil war sets back GDP growth by about 30 years, while countries lose about 0.7% of GDP growth per year while their neighbours are in conflict.

The 2011 WDR makes a convincing case that international development institutions are failing the people who live in countries affected by conflict. Not a single low income fragile or conflict affected country has achieved a single one of the Millennium Development Goals. And the report provides new data about recurrent conflict, showing that 90% of new violence onsets in the decade after 2000 occurred in countries with a history of previous conflicts, even as the total number of violence onsets declined, indicating how hard it is to break the cycle of violence that keeps people poor.

There’s nothing particularly new about the link between violent conflict, insecurity and lack of development. It’s not only intuitive but has been written about for years. What’s of interest about the WDR is that it’s the World Bank – perhaps the leading development institution, by size and influence – which is saying it; and that the report offers some intriguing lessons drawn from conflict affected countries suggesting how the problem can perhaps be overcome. The report is full of these, and International Alert has produced a more thorough review of the report  but I pick six of them to highlight here.

1.    It’s the institutions, stupid

As Deborrah Baksh and I argued in our paper last year  one of the keys to development progress is the presence of effective institutions within society. These are formal institutions like parliaments, governments, courts, stock exchanges etc., and informal institutions which are harder to see, and which have been called “the rules of the game” – the norms and values which guide and govern how people live together. The WDR argues convincingly that violent conflict occurs when a society’s institutions are inadequate to deal with the internal and external stresses placed upon them. An obvious example of this is in Côte d’Ivoire, where the organisation of elections unsupported by the institutionalisation of democracy within society led to a breakdown of law and order and civil war.

So what comes across very clearly in the report is that if international development institutions – WB, UN, donors, NGOs, and so on – are to contribute more effectively to development in fragile and conflict-affected countries, they need to learn how to promote and enable the emergence, strengthening and transformation of institutions. This is far easier said than done, and it certainly is not what most such institutions are well versed in. They may be good at putting into place the formal mechanisms, in ministries, courts, parliaments and commissions, etc. But the role of transforming institutions, encouraging the emergence and internalisation of democratic values, and of allowing innovative and context-derived institutions to evolve, is not yet the stuff of World Bank training courses or how-to manuals.

2.    Security and justice for citizens, not subjects

The WDR uses the word “citizen” a great deal, as a way to stress repeatedly the importance of responsive states for peaceful development, where people have a voice, and live securely within the rule of law. Insecurity holds society back in so many ways. It creates a climate of fear, which can easily be exploited by those with the capacity to protect themselves and to either provide or withhold protection from others. The Mungiki gangs of Kenya have shown this – running protection rackets in Nairobi for years. All too often the mechanisms of the state are intertangled with such rackets: in Kenya the protection rackets run by the Mungiki for matutu taxi operators have now been officialised and legalised under the cover of compulsory Savings and Loans schemes. But they are still protection rackets, still run by the same gangs.

Insecurity also holds back economic development because those who feel insecure tend to be risk averse, unwilling to take business risks, seeing their assets as savings, rather than investment capital; and obviously when people lose their assets, due to criminality or political violence, they have to start again at zero.

Again, if the international development organisations wish to make a difference, they need to find ways to create and improve confidence by improving security and fair access to justice. This too must be viewed through the institution-building lens, and represents a huge challenge. This is all the more true in many African countries, where one of the legacies of colonial and post-colonial history is frequently a repressive and corrupt security culture, whose transformation into policing by consent within the rule of law is not a project for the faint-hearted.

3.    Jobs (not growth)

GDP growth remains central to international development orthodoxy, even after years of counter-argument, and evidence of the importance of factors such as remittances. Of course economic growth is essential to provide for the needs of growing populations, and ultimately it’s got to be at a rate which exceeds demographic growth if per capita income is to rise. But the WDR comes out firmly in favour of choosing the right kind of growth. This means for example that in Sierra Leone, where the role of under-employed youth in the genesis of civil war is well-known, it is not enough to rely on boosting GDP through mining and mechanised agriculture, since neither of these sectors will provide enough jobs or self-employment opportunities to go round. Goodness knows that the Niger Delta provides sufficient examples of how oil – or for that matter mining – can contribute to long-term unrest as much as it does to GDP.

Another part of orthodoxy of the past few years has been that economic development must be “sustainable”. Yes, that’s important, but what’s the point of developing “sustainable” economies which will be torn apart by civil war or undermined by the shadowy and violent narcotics trade? The international institutions have got to accept that long-term subsidies for labour-intensive public sector work can be a good investment in the sustainability of the polity itself, and thus a “good”, rather than an unorthodox skewing of the economy and thus a “bad”.

Meanwhile, the same institutions need to find creative ways to support the emergence of a less corrupt political economy, where mining and oil are less likely to lead to criminality and violent conflict.

4.    Rome was not built in a decade…

We’ve known it for years, but the WDR says it loud and clear. It takes at least two generations to establish the foundations of the kinds of institutions that allow progress to be made peacefully. Even the “fastest” countries to do this are claimed in the report to have taken over 40 years to establish the basic rule of law. So we’ve got to come terms with a longer time frame, using a vision-based approach, and measuring progress towards that vision, rather than trying to create perfect institutions in five or ten years. It means we’ve got to learn to do what works in the context, rather than trying to fit the context to international project planning cycles. That will allow space for innovation, for the right processes and institutions to emerge, if the right incentives and support are provided.

This also means that we have to resist the over-simplification in which Burundi, after decades of troubles, is now seen by its government and by the international institutions as having “graduated from peacebuilding to development”. The difference between peacebuilding and development a false dichotomy, since without peace you can’t have much development. But by any sensible measure estimation, it is unlikely that a country in like Burundi can become stable and democratic, ready for economic take-off, after a couple of elections. All those interested in Burundi’s continued development, wether Burundians or outsiders, need to see the context for what it is, and act accordingly, rather than determine their strategy and approach according to a categorisation based on a combination of bueaucratic and political compromise.

5.    … and was built by the Romans

The Romans built their state, and then expanded it to be their empire. The international community just has to accept that the establishment and emergence of institutions and values is almost entirely an endogenous one – unless it plans to build an empire, that is. The role of international institutions is one of supporting, incentivising, advising and promoting. It cannot make institutions happen, only do what it can to enable them to happen. A major part of this is to avoid getting in their way, by purposely or inadvertently reinforcing the institutions which block them. It’s easy to see how the international community has done this in North Africa over the past few decades, for example strengthening the role of an Egyptian state which denied the opportunity of citizenship – as understood in the WDR – to Egyptians for years.

 6.    Creating an enabling international environment

Lastly, but far from least, what the international institutions can indisputably do more of is create a better enabling environment both regionally and more broadly. The elements of this have been well-rehearsed, and they include issues such as free movement of people within regional economic blocs, a fairer playing field for trade, a greater effort to stamp out cross-border flows of illegally-obtained money, and a more thoughtful and strategic international approach to narcotics. A particularly important element of this is to strengthen the regional institutions themselves: formal institutions such as ECOWAS and the AU, as well as informal institutions – the rules of the game – which have allowed people like ex-president Gbabgo to be protected and treated with impunity by fellow heads of state over the years.

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Challenging our assumptions

Those who know the international development institutions well will see straight away that the messages of the WDR represent a major challenge. If taken seriously, this report changes the very nature of how international development is conceived and delivered, at least in conflict affected and fragile contexts and thus in much of Africa. It raises as many questions as it answers. Indeed, if taken seriously it undermines some of the comfortable assumptions which have underpinned most international development thinking and action for the past fifteen years. For example:

• That legitimate development progress is based on a partnership between the international community and the government in power in a fragile state – which in practice can exclude the people whom the government is supposed to represent, but seldom does
• That institution building can be limited to formal institutions, without including informal institutions and values; and without recognising that this a task of transformation, not just incremental improvement
• That domestic institutions are built through technical assistance in making their mechanisms work better, without also improving their legitimacy and levels of participation
• That it is OK to focus on only some aspects of reform, such as fiscal systems, while ignoring more difficult issues such as land tenure, which has huge implications for conflict in rural economies
• That economic growth, rather than broad participation in a growing economy, is the key to progress
• That working on the symptoms of underdevelopment (hunger, sickness, etc., i.e. the MDGs) will somehow address the causes
• That change can be accomplished at a pace defined by the international community’s need to show results, rather than at a pace defined by local factors and which recognises the historical reality that building a new relationship between citizen and state takes many decades – probably at least half a century to be confident it is sustainable.

Unlike some of the institutions in fragile contexts, the institutions of the development sector are highly resilient. When under pressure they heal as quickly as a wound in the mouth. I mean both the formal institutions – look how hard it was for Wolfensohn to change the World Bank – and the “rules of the game”. While it would be entirely wrong to say that international aid instutitions are doing nothing right in conflict-affected countries, it is nevertheless true to say, as does the WDR, that they need to do much better and that this means a complete rethink in their approach.

But institutions don’t readlily rethink their own approach. It’s just not what most institutions do. So it is of tremendous importance that over the coming months, those who believe that this WDR contains important truths about doing development in the conflict-affected and fragile contexts where 1.5 billion people live, take every opportunity to keep this discussion alive. Read the report and check out the live webcast on thursday this week.  And if you see this WDR being used to stop a table from wobbling, put it back up on the table in full view, where it belongs.