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How to re-think international aid agencies to fit the findings of the 2011 World Development Report?

August 12, 2011

The 2011 WDR is a radical document. It’s well-packaged in the politics and jargon of international aid, and so just about palatable to those individuals who have invested their careers in a now-faded approach to development; to donor governments who have invested their billions in both the Washington Consensus and the post-Washington Consensus consensus; to borrowing governments who prefer their grants and low-interest loans linked to soft, technical conditions; and to the many organisations – NGOs, IGOs and private companies – which benefit from and have helped define the way aid has been dispersed over these past couple of decades.

Within this clever wrapping, the WDR has a hard, core message: that in countries experiencing or threatened by violence, where 1.5 billion people live, one of the main “development” challenges is how to foster the emergence of the right kinds of institutions; and among these the most important are those which mediate a functional relationship between a responsive state and responsible citizens.

The World Bank and other development agencies are now considering the implications of the WDR for the way they define and implement their role. This will be difficult, as it is always hard for institutions – especially large, well-established ones – to imagine a radically different role and thus genuinely to radically restructure themselves. Simply put, the question should not be “how can we adapt our existing institutions to the revised terms of reference implied by the WDR?”, but rather “what kind of institution would best be able to foster the emergence of institutions which reduce the fragility of fragile states and societies?” In other words, don’t take the institution you are sitting in as the starting point, as it will get in the way of clear thinking. Instead, take a zero-based approach.

This implies first of all an attempt to define, generically, what kind of tasks this new development assistance role implies. Here are just a few suggestions.

1. Defining the strategic approach

Thinking strategically on a continuous basis, and adapting accordingly, is as or more important than having a perfect strategic plan. Nevertheless, organisations need strategy documents for planning and reference, so it’s important to invest in the right kind of strategic analysis every few years. Some people are recommending that outside agencies – the WB, DFID and so on – conduct their strategic analysis entirely in concert with the host government of the aid-recipient country. This is a seductive idea, in keeping with the Paris Declaration, but – like so much connected with the Paris Declaration – it’s a mistake.

It woud be immensely difficult for the staff of – say – the World Bank to discuss issues of legitimacy and citizen-state relations completely truthfully with the representatives of relatively undemocratic regimes, whose own political survival often depends on untransparent and inequitable policies and practices; and even on a dysfunctional relationship with the populations they are meant to represent. Any joint analysis of such issues would therefore be conducted without complete honesty, would therefore be be based on half-expressed diagnoses, and would therefore recommend incomplete or just plain wrong approaches. This is one of the things which was wrong with the PRSP model, so let’s not make that mistake again.

So while the strategic analysis should obviously be based on wide-ranging conversations with different stakeholders, inlcuding the host governnment, local civil society, businesses, other internationals, etc., it nevertheless needs to be done by the international institution itself, so as to preserve the integrity of the analaysis. It also needs to be based on the right conceptual model. There is no perfect prescription for this, and a thousand methodological flowers should be allowed to blooom, but those conducting the analysis should aim to understand as well as possible:

  • How does the political economy actually function, where is it positive for peaceful outcomes, where does it obstruct them, where are the potential opportunities for improvement, and how can those in positions of economic/political power be persuaded to allow or support changes?
  • What institutions currently exist in society, what function do they/could they play?
  • What is a realistic vision for transformation over the next 25 or more years, in tems of reducing fragility and fostering the emergence of institutions which ensure that people are safe and justly treated, and that they have a voice in decisions which affect them?
  • Who are the likely leaders of such changes?
  • What people or factors might stand in the way of progress, and can they be prevented from doing so?
  • Finally: can we envisage any role for our (international) organisation, which would help enable the kinds of changes we have in mind? (The potential for a “no” answer to this question should be taken seriously).

2. Recognise the difference between humanitarian and development aid

Humanitarian aid is often just a synonym for emergency aid – like the support currently being provided to millions of people in the Horn of Africa in dire need. But it may be that a lot of so-called “development aid” is really just humanitarian aid dressed up in a more intellectual, less sentimental construct.

Take international support for capital investment and recurrent costs in the education or health services of states whose economies will take decades to reach the levels at which they could pay for such services themselves from tax revenues, and where the institutions of power are so flawed that the schools and clinics built and staffed with aid may quietly crumble away or be destroyed due to social violence. Is that really an example of development aid – i.e. supporting the establishment of an enabling environment for societal progress – or is it more like humanitarian aid – i.e. sending money and technologies to fill a gap in service provision? If the task is to help shape a society which is more likely to both want and be in a position to provide schools, clinics, and universal health care and education to its members, is the best way to achieve this to send them money and ideas about schooling and health care? Or should that more properly be described as fulfilling a numanitarian impulse along the lines that “it seems wrong for children to be denied the opportunity to go to school, so we fund school programmes in countries far away”…

It’s obviously a lot more complicated than that. But to me it does seem clear that the test for any “development” investment ought to be whether it is likely to contribute to a change in the likely outcome for society several years hence, and whether that change is likely to contribute to the emergence of effective institutions, and a reduction in fragility. Anything else is a humanitarian transfer of resources. I am not arguing against this kind of humanitarianism, simply for clarity of purpose. But it is also true that humanitarian investments should be undertaken with great care, lest they inadvertently make things worse.

An obvious example of the latter would be a programme which inadvertently reinforces inequalities in society – as for example happened in eastern Zaire where international programmes designed to improve livestock management benefited herders over farmers, hence skewed the terms of trade between cattle and land, and contributed to conflicts which have yet to be brought under control in a quintessentially fragile environment. It was particularly unfortunate that herding and farming were, as so often, linked to different ethnicities, so the livestock improvement programmes may inadvertently have fuelled inter-ethnic tensions.

3. Seek out and support change agents – wherever they may be found

Change comes largely from within society, and is often led by inspired and inspiring individuals, at local level or on a wider scale. It stands to reason therefore that international agencies looking for ways to support transformation need to find ways to identify such individuals and support them.

The support doesn’t only have to be in the form of funds: it might equally be in the form of solidarity, the provision of opportunities to broaden horizons and explore ideas with others, or may take other forms, depending on circumstances.

As to identifying leaders: that is clearly a task fraught with risk. We need to accept that, as in the old European fairy tale, we may have to kiss a lot of frogs before we catch our prince. Above all, it’s very labour-intensive: looking for and getting to know leaders and potential leaders, and isn’t something which many international civil servants spend much time doing, as of now.

4. Provide long-term economic subventions to provide decent job opportunities

One of the core findings of the WDR is the need, in fragile and conflict affected contexts, for jobs. Young people, especially young men, are vulnerable to being recruited to violence by political leaders, in inverse proportion to their access to decent economic opportunities. Meanwhile, societies which exclude young women from decent economic opportunities are holding themselves back in terms of their ability to harness the potential for progress. Ergo, an economy in which jobs and other economic opportunities are in short supply is one which remains vulnerable to instability…

… Ergo, one might think, donors and other international agences would invest large amounts in job creation in conflict-affected contexts. But they don’t, at least not on the scale which one might expect. Take Sierra Leone, for example: it’s commonly accepted that one of the main factors underlying the civil war was the lack of opportunities for young men. Indeed, post-war elections have been marked by the mobilisation of violent youth militants representing both the main parties. The analysis of the UN, World Bank and other donors – and the government itself – all make a big issue of the need for jobs. But none of these agencies appear to have plans to invest in a way which will create the tens of thousands of jobs which are needed to build peace in Sierra Leone. Instead the international agences fall back on the mantra of “sustainable economic growth”, and the main investment focus is on mining and oil, neither of which are likely to create large numbers of jobs per GDP percentage point of growth – and which are associated in other contexts with instability.

Surely the problem here is that the agencies are failing to develop a strategy to match their own analysis. Rather than support peacebuilding, by subsidising job creation on a massive scale – e.g. through large scale, labour-intensive public works – they prefer to stick to the economic development orthodoxy that says it is wrong to distort the economy by creating jobs with external transfers. But it will take years, decades, for a country like Sierra Leone to create sufficient jobs in its own economy to absorb enough of its young people to reduce its vulnerability to destabilisation. Surely the orthodoxy is standing in the way of what the agencies’ own analysis tells them is needed? Which is worse: artificially subsidising jobs which thus reduce the risk of violence, but which may have unintended consequences for endogenous economic growth; or taking the longer-term, orthodox approach, stimulating FDI and local entreprenership – but enhancing the risk of more cycles of violence?

So one of the most important questions facing large international development agencies, post-WDR, is how to fast-track the creation of jobs and other economic opportunities in a careful way, so that the short-term gain of getting young people active in the economy – laying the foundations for peace – is not achieved at the expense of laying the foundations for healthy economic development which will in time, perhaps 15 years or more, replace the international transfers.

____

These are only a few of the things which international agencies need to consider in their programmes in fragile and conflict-prone contexts. What they imply is that the agencies – the World Bank, DFID, the EU, and so on – need to have a capacity for disinterested strategic analyis and planning, within a clear conceptual framework of how societies changes over the medium term; for the identification and support of change agents; and for implementing and supporting very different kinds of programmes, designed to fit the local context, and which at times seem to go against the orthodoxy of both the Washington Consensus and the post-Washington consensus. That’s quite a challenge.

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4 Comments leave one →
  1. Richard Clarke permalink
    August 21, 2011 7:20 pm

    I read your Blog with great interest. I would agree that the international community finds themselves understanding jobs are the key to development and peace. However following failed models are unable to stimulate employment. Lets take Sierra Leone as an example. A country rich in natural resources that are now being exploited to raise foreign currency and create expat jobs. If organisations follow a african development model based on community ownership it may lead to peace. Let me expand this ideal. The mines in Sierra Leone should be sold with a government share lets say 35% another 35% to a foreign company and the rest locally in shares to local or african populations. Then a percentage of profits made by the government part should be used to create industries related to mines to create more jobs while stimulating a stock market and maintaining jobs and as a result peace. I herby argue that just exploiting natural resources or giving jobs does not create stable communities. The society must share and see development in order to progress. Let the community decide what they wish to build and work at the smaller levels to bring development and peace Many of these models have not been tried in Africa and i feel the reason for this is the diaspora community is not fully utilised by NGO’s or foreign organisation to ensure growth and development to the African Continent.

    • August 26, 2011 2:15 pm

      Interesting idea – to work it would need a good local governance mechanism to manage the local community’s (or communities’) ownership of a % of the asset, which would need to be well-informed (or well-advised) about mining etc. and through which any profits or dividends accruing to the local owners would be be fairly invested or distributed.

      Isn’t there also a question about who is included in the local populations who would own a percentage of the mine? Would it be eligible to all people living locally, irrespective of the length of time they have lived there? I can see some real difficulties putting this idea into practice….

  2. October 4, 2011 8:20 pm

    Sustainable development is simply small-scale Schumacher/Sen thinking which is basically neo-liberal in thinking, leaving the ‘little man’ vulnerable to the bigger man. Its failed in the West and will continue to in Africa. Investment only takes place in resources leaving the rest needing to take those jobs or be lost. The trade deals under the same mantra condemn Africa as well.

    Without strategic reasons or resources, international donors dont care deep down. Creating strong states with viable and democratic institutions is ultimately a threat to resource access with is bad for the local and international elite.

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