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POVERTY, AID & DEVELOPMENT COOPERATION
Converting GNP to poverty
reduction
Research on the politics of poverty
carried out at IDS has looked at the question of how effectively governments
can convert a country's GNP into poverty reduction. Mick Moore and colleagues
have calculated a relative income conversion efficiency index (RICE) for 61
countries covering 1980 to 1995. Amongst their conclusions:
- Population density matters - it is easier and cheaper to provide health and education to densely- clustered populations
- Geography matters - West African states are less effective at converting resources into human development, probably because of their highly disease-prone natural environment.
- Countries with governance institutions that are attractive to international investors tend to perform badly at converting material resources into human development
- Governments that are financially dependent on their own citizens tend to treat them relatively well.
Contact Mick Moore: Email: MickM@ids.ac.uk See IDS Poverty Team homepage www.ids.ac.uk/ids/pvty/
Poverty:
strategies & case studies
Despite recent progress towards
making poverty eradicating the guiding priority of development co-operation,
the strategies adopted at international and national levels remain controversial.
Waging The Global War On Poverty: Strategies And Case Studies by Raundi
Halvorson-Quevedo & and Hartmut Schneider tries to identify best practice.
How realistic is it to seek to cut extreme poverty by half by the year 2015?
What are the most effective strategies employed by donors? What lessons can
be learned from the experience of the developing countries? The 235 page book
gives a broad overview of general poverty-reduction strategies and objectives.
It also presents five case studies on Bolivia, Côte d’Ivoire, the State
of Kerala in India, Malaysia and Uganda. The report is available in .pdf format
and is published by the DAC and OECD Development Centre. OECD
www.oecd.org/dac/htm/pubs/p-pov.htm
Email news.contact@oecd.org
Fax + 331 4524 8003.
IMF
and poverty
The IMF is to take on a new
remit focusing on poverty reduction in developing countries, following the
IMF-World Bank annual meetings in Autumn 1999. The IMF 's Enhanced Structural
Adjustment Facility (ESAF) is to be renamed the Poverty Reduction and Growth
Facility (PRGF) and joint IMF-World Bank Policy Framework Papers become Poverty
Eradication Strategy Papers (PRSP). The pros and cons of this new IMF remit
are discussed in Bretton Woods Update Dec 1999 - to join the mailing
list contact BWP Email: bwre@gn.apc.org
Web www.brettonwoodsproject.org
Fax: 44 (0) 20 7523 2170.
World Development Report
In the build up to the publication in September 2000 of the World Bank's World Development Report on Poverty, an online debate has been taking place in February and March on the first draft of the Bank's report. The online debates are being moderated by the Bretton Woods Project and the New Policy Institute. Weekly summaries of the online discussions will be circulated and the WDR lead author Ravi Kanbur will respond to the final conference summary. The report will look at poverty trends in the 1990s, the issue of inequality and the role of institutions, and it will discuss future efforts to eliminate poverty using three key themes: empowerment, security, opportunity. The latest draft of the WDR is on the web at: www.worldbank.org/poverty/wdrpoverty/ See BWP at www.brettonwoodsproject.org or NPI at www.npi.org.uk
Evidence-based policy & statistics
At a meeting in November 1999, donor and developing country governments agreed to launch a shared international strategy to underline the importance of improved national statistical systems which could support evidence-based policy making. The Partnerships In Statistics for development in the 21st Century Strategy (PARIS21) aims by the end of 2000 to initiate statistical capacity building programmes in HIPC countries and to create a consortium which will provide an annual progress report to ECOSOC on efforts to build statistical capacity. Mr Keith Muhakanizi, Director of Economic Affairs, Ministry of Finance, Government of Uganda, underlined the importance of statistics: 'no matter whether you are a politician, farmer, industrialist, businessman, or economist, you need reliable information upon which to base current policy .... We live in a world of infinite demands on finite resources.... Government must therefore ask itself where the marginal dollar of expenditure will have maximum impact.... In primary health, should we focus on outreach activities to inform society of the dangers of malaria... or should we increase expenditure on child immunisation programmes?' Contact Helen Fisher: Email: helen.fisher@eocd.org Web: www.oecd.org/dac/htm/nw99-paris21a.htm
Background to the International Development Targets
In May 1996, the DAC adopted a new strategy called Shaping the 21st Century: The Contribution of Development Cooperation. The Shaping the 21st Century Strategy (S21C), also referred to as the Development Partnerships Strategy, envisaged a limited number of indicators which could be monitored, to assess progress towards development goals which had emerged from several UN Summits held during the early 1990's. Since 1996, many donors have tried to incorporate the principles of S21C and development partnerships into their aid policies. And many donors (such as DFID UK) now see the International Development Targets (IDTs) as key goals.
Using DI Update and this website, you can keep in touch with what is happening on the IDTs - and the views of official donors, southern governments and NGOs on the how development partnerships are progressing following donors' adoption of Shaping the 21st Century.
Can the International Development Targets be met?
Sub Saharan Africa will not halve poverty by 2015 in any likely future scenario, according to ODI's July 2000 Poverty Briefing No. 8. The 4 page briefing looks at growth. It argues that pro-poor growth must involve more attention to agricultural productivity and the distributive impact of policies. It also underlines that gender inequality is an obstacle to both growth and poverty reduction. www.odi.org.uk See also below.Major ODI study for DFID on prospects for meeting the IDT.
Looking at global data, the ODI study led by Lucia Hanmer, focuses on the relationship between equitable growth and poverty reduction. It argues that the target of halving extreme poverty by 2015 will only be met if - and only if - growth is accompanied by low levels of income inequality. The impact of a 1% rise in GDP on poverty reduction is twice as great when income is more equally distributed, than when it is unequally distributed.
According to the global study, 'poverty elasticity' - the responsiveness of poverty to changes in levels of GDP - is dependent on income distribution. In countries where income distribution is more equal, a 1% rise in GDP has a greater effect on poverty than when income distribution is less equal. Income distribution is often measured using a Gini coefficient (see glossary). A Gini coefficient of 0 represents perfect equality and 1 perfect inequality. So for example, South Asia with a coefficient of around 0.32 is more equal than Latin America and the Caribbean with a coefficient of 0.49. According to Hanmer and Naschold of ODI, for countries with a Gini coefficient below 0.43 poverty elasticity is nearly three times as large as in countries where there is more inequality. www.oneworld.org/odi/speeches/hanmer.html
A country study of Uganda, commissioned by DFID from ODI as part of a wider study on prospects for meeting the IDTs concludes ' Even our most optimistic projections…using the Ugandan absolute poverty line, do not indicate that absolute poverty will be halved by 2015'. The Tanzania case study suggests that whilst the income poverty target may be met, targets on under-five mortality and primary school enrollment are unlikely to be achieved and the maternal mortality target is also in doubt.
The Uganda study examined prospects for reaching the IDTs in the context of Uganda's own anti-poverty framework called the Poverty Eradication Action Plan (PEAP) published in 1997. The PEAP aims to eradicate mass poverty within the UN Poverty Eradication Decade (1996 - 2007) - and certainly not later than 2017. The PEAP has a series of time-bound targets and indicators covering all the areas also covered by the IDTs. Broad responsibility for each policy aim under the PEAP is allocated to a particular agent or institution of government. The donor community is working within the PEAP framework - for instance in pursuing the Education Sectoral Investment Programme and other sector wide approaches. Donors' contributions represent about one third of public spending - 8% of GDP. Debt relief is seen as a key source of the funds needed to implement the PEAP. As to the relevance of the IDTs in Uganda, the report says that since Uganda has its own nationally devised and owned framework in the PEAP, the IDTs are scarcely needed. ITSs are likely to be of more relevance where there is no coherent framework within which governments and donors can work. The study was undertaken by Rosemary McGee from Christian Aid, Enoth Tumukwasibwe, Ocheng Mary T.K., Christopher Garimoi Orach, Panta Kasoma and Fred Opio from Makerere Univertity and Euzobia Mugisha Baine of Action for Development Kampala.
According to the World Bank, recent financial turmoil has dealt a blow to expectations that poverty could be reduced in line with the International Development Targets (IDTs). In the three areas of income poverty, health and basic education, there will need to be a major increase in progress if the IDTs are to be achieved. . (DIU2 - Nov 1999) See Bank on the Targets
The Sept 99 issue of Insights (issue 31) from ID21 provides a useful 6 page summary on poverty reduction and income distribution. See www.id21.org
The March 2000 issue of ODI's Development Policy Review will focus on Meeting the IDTs. Email odi@odi.org.uk fax + 44 (0)20 7393 1699. (DIU2 - Nov 1999)
CHRISTIAN AID ON DAC TARGETS
Christian Aid have produced a 38 page report on the prospects for reaching the DAC's international development targets. (IDTs) The report entitled "Distant Targets? Making the 21st-century development strategy work" by Rosemary McGee, Clive Robinson and Arthur van Diesen was published in October 1998. Christian Aid call for interim targets to be established and for speedier debt relief to undo the damage done by debt to health and education - two key areas highlighted in the IDTs. Christian Aid E-mail: caid@gn.apc.org Fax: +44(0) 171 620 0712. (DIU1 - July 1999)
See also the Reality of Aid
Indicators of progress towards 2015 targets
At its July 1999 meeting, the UN Economic and Social Council adopted
a
resolution to:
- build on existing work to identify a limited number of common
indicators - develop indicators on means of implementation of the conference
goals - mobilise resources to support national statistical capacity building
- report on the implementation of this resolution to the Council in
2000.
Further work in OECD-DAC on indicators is now geared to helping to implement
this resolution; specifically:
* A meeting in Paris on 18-19 Nov to launch a shared
international strategy to ensure adequate funding and support for
statistical offices.
* Work to add a few, key, representative indicators of governance to
the core set to cover public administration, human rights, democratisation
and participation.
* A March 2000 Indicators Forum on to examine progress in the
1990s towards the goals and consider the gaps still to be bridged. The
Forum will add four more indicators for the environment and any indicators
agreed for governance. The output will be a short report intended to increase
awareness of the challenges to be met if the goals are to be achieved.
It will be published in June in response to the Cologne Summit's request
for an annual report on poverty reduction and to inform the
OECD Ministerial, the WSSD+5 Conference and ECOSOC.
* Further work, building on the analysis in Chapter 4 of DAC's 1998
Development Co-operation Report, to link resource inputs to development
outcomes in order to provide indicators of the means of implementation
of
conference goals.
The set is available at www.oecd.org/dac/Indicators
The site will be updated by the end of Dec1999 to show progress
to date from the 1990 baseline. (DIU2 -
Nov 1999)
Previous information on the DAC and the targets
(DIU1 - July 1999)
Over recent months, DAC donors have been considering the development of a working set of indicators of development progress. Around twenty such indicators have been developed covering areas such as economic well-being, social development (universal primary education, gender equality, maternal mortality etc.) and environmental sustainability and regeneration. Progress on the working set of indicators can be seen at the Website http://www.oecd.org/dac/indicators The DAC working set of indicators is intended to measure progress against the international development targets established under the OECD DAC development partnership strategy - often referred to as the Shaping the 21st-Century strategy.
Since the World Bank published ‘Assessing Aid: What works, what doesn’t, and why?’ by David Dollar and others in 1998, the report has attracted a good deal of attention in aid circles. But it is also meeting increasing criticism. Robert Lensing and Howard White argue that the theoretical and empirical shortcomings of the book make it a poor basis for aid policy making. ‘Assessing Aid’ argues that aid should be reallocated in favour of poor countries with good policies – a shift away from conditionality towards selectivity. Lensing and White, however, argue against the implicit assumption that aid can only reduce poverty by increasing growth. They point to the need for complementary policies – citing increasing evidence that redistribution is likely to make growth more sustainable and equitable. They stress the importance of the sequencing of growth and direct poverty interventions. They also question what ‘Assessing Aid’ means by 'good' policies, concluding that donors should not take the report as a vindicating either market-based reform or too selective an approach to country aid allocation. Email Whiteh97@aol.com (DIU2 - November 1999)
Major new report from UNDP on Global Public Goods
Rapid globalisation during the 1990s, of areas such as trade, finance, communications and investment has been accompanied by the emergence of many transnational threats to human security such as pollution, conflict and financial instability. But in spite of international conferences such as the Earth Summit (UNCED, Rio 1992), the essentially national nature of government leaves international action weak, under-funded and inadequate.
Against this background, Inge Kaul, Isabelle Grunberg and Marc A. Stern have edited a major new report, Global Public Goods: International Cooperation In The 21st Century (published for UNDP by OUP, ISBN 0-19-513052-9). This argues the case for a new approach to international cooperation based on the idea of Global Public Goods. The authors argue that many of today's problems, including waste and the continuing rise in global inequity, reveal a serious under-provision for global public goods.
The book explains what is meant by a global public good and looks at a number of mechanisms which will help reshape international cooperation in the 21st Century in a way that will help to 'internalise externality' (in other words, encourage people to take full responsibility for all of the costs consequences of their actions). The authors recognise that traditional ODA (reformed and redirected) will still be needed, principally to help eradicate extreme poverty - the wealthiest 20% of humanity now being as much as 135 times richer than the poorest 20%. Specific recommendations in the report include the need to address:
- the 'jurisdictional gap' - that is the discrepancy between the globalised world and national policy making;
- the 'participation gap' - international cooperation is still primarily conducted between governments, to the exclusion of other actors, such as civil society and the private sector;
- the 'incentive gap' - follow up mechanisms to international agreements rely too much at the moment on the aid mechanism and ignore other policy options that could encourage nations to cooperate.
The report proposes:
- the expansion of the G-8 group into a G-16, with the addition of 8 major developing countries
- a new tripartism to bring business and civil society more into dialogue with government
- help for poorer countries to participate effectively in international negotiations. DIU2 Dec '99.
THE FUTURE OF DEVELOPMENT
Future Positive by Michael Edwards (Senior Civil Society specialist at the World Bank) is an overview of the international system at a time of globalising markets, eroding state sovereignty and expanding citizen action.
In his 304 page book Mike Edwards outlines a Third way between intervention and laissez-faire which aims to strike a balance between competition and co-operative forces. Examining issues such as how countries grow, the book presents a new formula for foreign aid, prospects for humanising capitalism and improving global governance. It also tries to explain how the individual can fit in the overall global picture. £20.00 Earthscan, fax +44 (0)171 278 1142, e-mail earthinfo@earthscan.co.uk
(DIU1 - July 1999)
Are Poverty and Social Goals for the 21st Century Achievable? by Lionel Demery and Michael Walton. In this paper the Principal Economist and Director, Poverty Reduction at the World Bank assess the potential for achieving the targets and analyse the dimensions and trends in poverty and inequality.
The main messages from Demery and Walton are: There have been astonishing social gains for some poor groups, but weaker gains and even retrogression for others. In East Asia, the number of people in poverty fell by half between mid 1970s and mid 1990s. The proportion on less than a dollar a day fell from 60% to 20%. In Sub Saharan Africa there is not enough data to give figures, but it is 'a high probability' that the proportion and absolute numbers in poverty increased.
In all regions outside East Asia, the numbers of poor people increased between 1987 and 1993. Infant mortality in 1970 was about 140 per thousand live births in the three high mortality regions of Middle East/North Africa, South Asia and SSA. By 1995 this had fallen to 54, 75 and 92 respectively Almost everywhere primary and secondary enrolment rates have steadily risen even in period of stagnation and decline. SSA is the exception where gross primary enrolment fell from 80% in 1980 to 72% in 1993. Recent history and predicted growth imply that many countries will halve their poverty rates by 2015. But many will not including most of SSA. The goal for child mortality will be even harder to achieve. (DIU1 - July 1999)
IS CAMBODIA GETTING VALUE FOR TECHNICAL ASSISTANCE MONEY?
Following donor pledges of $470 millions at the Tokyo Consultative Group meeting, the question of whether Cambodia is getting value for money is being asked by Martin Godfrey in the Cambodia Development Review (Vol. 3 issue 1, Mar 99). The article notes that aid is a bigger source of foreign exchange than any major export - but also notes the view that little has been gained from technical assistance which solves short term problems, rather than building capacity. CDR is published by the Cambodia Development Resource Institute (CDRI) in Phnom Penh. Contents of recent issues of CDR are on the DIU journals section.
CDRI is currently at the early stages of a major research project on technical assistance, which will involve case studies on 50 ongoing or completed projects and interviews with 32 donor agencies as well as government departments and former counterparts. E-mail cdri@camnet.com.kh or cdri@forum.org.kh Fax (+855-23) 366-094 / 426-103.
INTEGRATED DEVELOPMENT PROGRAMMES
Many donors have discontinued their support to integrated
area development programmes in Africa because of disappointing results,
but the Netherlands has maintained substantial support for this type of
intervention. Dutch experiences in Mali, Burkina Faso, Kenya, Tanzania and
Zambia are analysed in a study in Neda's focus on development series. The
150 page report recommends four strategies for strengthening effectiveness:
Contact: Frank van der Staaij Fax: +31 70 3486117 E-mail: f.vander.staaij@dru.minbuza.nl
CONSULTATIVE GROUPS & AID ROUND TABLES
During the summer of 1999, UNDP asked for comments on the terms of reference for a study on the role of civil society in the aid co-ordination process. Civil society groups have increasingly argued for greater transparency in aid Round Table and Consultative Group meetings. Christian Aid has recently embarked on a collaborative study with partners on civil society participation in consultative groups & round tables - contact Jennie Richmond jrichmo@christian-aid.org To find out more about the UNDP study contact Jose Cruz-Osorio fax + 00 1 212 906 6471.
Partners, collaborators or patron-clients
Partners, collaborators or patron-clients: defining relationships in the aid industry: A survey of the issues is a background document prepared for CIDA/Canadian Partnership Branch by Charles Abugre of ISODEC, Ghana, Aug 99. The paper reviews the idea of proclaimed by the development assistance community and reflected in the DAC Shaping the 21st Century strategy. It goes on to argue that partnership overstates the real relationship between different parties involved in development activities. In practice, the paper sees the partnership agenda as essentially a means of enabling donors to be more intrusive in the management of the economies and societies of developing countries, the very opposite of what actually is represented by local ownership of a development agenda. Abugre argues that if addressing ineffective utilisation of aid is the objective, then promoting mutual transparency of interests and agendas on democracy and the rule of law, inclusion and the liberalisation agenda may suffice. If the aim is to address inequality in aid relations, then solidarity may be a firmer basis for relations between governments and their institutions or between non-governmental actors and their constituencies.
A Review of Foreign Aid in Nepal by Keshav P. Acharya was produced in Dec 1998 for the Citizens Poverty Watch Forum, a grouping of Nepali professionals with a commitment to bringing poverty issues into public debate. The 40 page review is the first publication from CPWF, which expects to become a more formal grouping during 1999. An updated report will be available shortly. . CPWF have also just published A Comparative Study of Election Manifestoes of Major National Parties in Nepali. Contact Laxman Acharya, Coordinator CPWF, email: fpwf@forum.wlink.com.np Postal address P O Box 9665, Chovar, Kathmandu, Nepal.
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What are the International Development Targets?
Monitoring progress towards the IDTs
What are the prospects for meeting the 2015 targets?
- Global study
- Uganda study
- Views from World Bank, NGOs etc.
