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Owen Barder is a Vice President at the Center for Global Development, Director for Europe and a senior fellow. He is also a Visiting Professor in Practice at the London School of Economics and a Specialist Adviser to the UK House of Commons International Development Committee. Barder was a British civil servant from 1988 to 2010, during which time he worked in No.10 Downing Street, as Private Secretary (Economic Affairs) to the Prime Minister; in the UK Treasury, including as Private Secretary to the Chancellor of the Exchequer; and in the Department for International Development, where he was variously Director of International Finance and Global Development Effectiveness, Director of Communications and Information, and head of Africa Policy & Economics Department. As a young Treasury economist, Barder set up the first UK government website, to put details of the 1994 budget online.
Millions of people face hazards like cyclones and drought every day. International aid to deal with disasters after they strike is generous, but it is unpredictable and fragmented, and it often fails to arrive when it would do the most good. We must stop treating disasters like surprises. Matching finance to planning today will save lives, money, and time tomorrow.
UN agencies are blocking reforms to aid to Syrian refugees. The donors should hold firm. Here’s why, and what they should do.
The High Level Panel on Humanitarian Cash Transfers, which I chaired, found that 30 different agencies were providing cash transfers to refugees in Lebanon for 14 different objectives ranging from food to legal assistance. We recommended that donors should designate a single delivery agency to manage cash payments to each refugee in situations like this. (This endorsed the recommendation made in independent research commissioned by the cash working group in Lebanon that donors should designate a single delivery agency to manage cash payments to each refugee in situations like this.) Providing a single payment will be less burdensome on refugees, more efficient for donors, and remove unnecessary overheads and duplication. It will achieve the biggest bang for the taxpayer’s buck, and get the most money to the people for whom it is intended.
DFID and ECHO, the EC’s Humanitarian arm, have now asked the UN agencies to make proposals for providing a single cash payment to each eligible Syrian refugee in Lebanon, just as we suggested. The donors have committed $85 million in the first year to cover food and basic needs. (The evidence shows that cash payments are generally more cost effective, enable people to buy what they need, easier to target, and help the local economy. When you give people goods in kind instead they often sell them, at a massive discount, to buy what they really need.)
The High Level Panel warned that there is a risk that the inefficiencies, duplication and turf wars of humanitarian aid are being reproduced in the new cash transfer programmes. We urged instead that the move to cash transfers be used as an opportunity to streamline and simplify the humanitarian system, and introduce more competition and innovation, so helping to move forward long-needed reforms.
The High Level Panel decided not to recommend that there should be a single UN agency responsible for managing all humanitarian cash transfers around the world. Instead we wanted to encourage competition for these contracts between UN agencies, civil society organisations and the private sector, and consortiums of these, to promote innovation and new partnerships, so that we move over time to the most user-centred, cost-effective, secure and technologically-advanced cash transfer systems. But while we don’t want a monopoly cash agency for the world, for any particular refugee population at a given time there is clearly no need for multiple organisations to be managing multiple payments to the same person. That is why we recommended that donors run competitions for who will manage a single cash payment in each context.
Here’s a picture from the DFID and ECHO proposal which shows why a single payment would be an improvement on the current situation, and also offers some clues as to why the UN agencies might feel threatened by it:
The proposal for a single, joined up cash payment for Syrian refugees in Lebanon has sent shock waves through the humanitarian system. Instead of deciding which agency should manage cash payments in Lebanon, as DFID and ECHO are proposing, UNHCR and WFP insist that several different UN agencies should be involved in making cash payments to the same groups of refugees, using their ‘LOUISE’ platform which they launched publicly in December 2016. They aren’t proposing to divide the refugee population between them, for example by covering half each: they are insisting that they must both make payments to all the eligible refugees.
There is no reason, other than their own bureaucratic interests, for the UN agencies to insist on this duplication. Each of them wants to be able to boast of coverage of as many of the refugees as possible, and to claim their share of overheads for serving those populations. And neither of them wants to concede ground to the other as a provider of cash payments to refugees. All at the expense of the Syrian refugees for whom the aid is intended.
The UNHCR and WFP think we should appreciate their efforts to coordinate better—and coordination is indeed better than nothing. But coordination is a sorry second best to avoiding unnecessary duplication in the first place. DFID and ECHO are doing the right thing by demanding a single payment to refugees and should not accept coordination as a substitute.
Since this initiative launched in December 2016, there has been no public announcement of progress on awarding this contract. It appears to be deadlocked. If DFID and ECHO cave in to collusive intransigence by the UN, they will be throwing in the towel on the reforms of humanitarian aid envisaged in the Grand Bargain. The UN agencies will heave a sigh of relief, and we will be stuck with decades more of duplication, inefficiency and waste.
DFID and ECHO should now find a way urgently to open this tender up to other service providers—including private sector organisations such as Mastercard and PayPal—to take on the role over which the UN agencies are squabbling. (This may need some tweaking of procurement rules.) That kind of competition would push the UN agencies to improve their offer, or be driven out of this market. And in the long run, that would be better for everyone.
DFID’s Multilateral Development Review in 2016 says:
“It is because the UK is such a committed champion of the multilateral system that we will press hard for radical action to raise its performance. The world’s poorest people, and our taxpayers, deserve nothing less.”
This battle with the UN over streamlining aid to Syrian refugees in Lebanon is becoming an intriguing litmus test of whether Ministers and EU officials have the stomach for the fight. Admittedly they are taking on large, politically-influential organisations with whom we need to work. But donors hold all the cards—especially the UK, which is by far the world’s largest donor of multilateral aid. They should use that power to drive reform.
Emergencies cause poverty, drive displacement, and exacerbate insecurity. Aid to tackle natural disasters is generous, but mainly arrives when needs are acute rather than when it would do most good. Responding effectively is hard because budgets are uncertain and funding gets promised but not delivered. Please join us for the launch of a new CGD report Payouts for Perils: Using Insurance to Radically Improve Emergency Aid setting out how we can use the principles and practice of insurance to save lives, money and time when catastrophes strike.
The UK Government has today published a white paper on its broad approach to Brexit—what ’s missing though is a commitment to developing countries on the UK’s trade policy. Having emphasised trade at the heart of its economic strategy on international development, it now needs to commit to providing “duty free quota free” access for developing countries, or risk damaging investment and trade over the next two years and beyond.
DFID’s first economy strategy is welcome…
The UK Department for International Development (DFID) published its “Economic Development Strategy” this week. This is DFID’s first published strategy of this kind and the Government deserves credit for recognising that stimulating economic growth is essential to eradicate extreme poverty and delivering the ‘Global Goals.’ It is reassuring that the strategy focuses on growth in developing countries and not on the potential benefits for British business.
…and rightly has trade front and centre
The first of the strategy’s 11 priorities is “Focusing on trade as an engine for poverty reduction.” The strategy emphasises the UK’s role in funding developing countries negotiating capability (which played a part in getting rid of the developmentally horrendous export subsidies at the WTO’s biggest ever agricultural agreement in Nairobi). It also confirms its commitment to ‘aid for trade’ (which is meant to address in-country trade infrastructure).
But what about the UK’s own trade policy?
But the commitment that’s most important to developing countries – on the UK’s own trade policy—is incomplete. Here DFID’s commitment is to work with the Trade Department to “deepen our trade relationships with developing countries. We will continue to open our markets to the world’s poorest countries” and to use “our voice in the World Trade Organization, international institutions such as the World Bank, and the G20 to promote free trade … and to push back on emerging protectionist approaches.”
These are excellent sentiments but the UK is potentially just two years away from Brexit, and the Prime Minister has made it very clear the UK will have its own trade policy. Today’s White Paper is similarly non-committal suggesting the UK “...can prepare the ground… to ensure continued preferential arrangements for developing countries.“
Potential UK and other investors in developing countries need more clarity. The UK’s large developing country partners are already feeling the effects of depreciation and uncertainty. In Africa, the UK’s stock of investment has more than doubled since 2005 to some £42.5billion. Trade access could be quickly addressed and reduce the chance of the UK losing ground to other investors in the region (China and India are already sub-Saharan Africa’s largest export destinations). So it is a shame that neither document went further. The government should do so as soon as possible.
Post-2019—the first steps
The very first step in 2019, whether as part of transition arrangement or otherwise, is to continue to provide the “duty free quota free” access that some developing countries already enjoy, as my colleagues suggested in CGD’s first Brexit paper last summer. This step will have no bearing on the UK’s negotiation with the EU; it would encourage UK and other businesses to move ahead with investment plans in those countries; it will be good for British consumers and business who import from developing countries; and it will be entirely within the UK’s gift as it establishes a new schedule at the WTO. Indeed, the UK should also commit to exploring how it might improve on the EU’s current approach by, for example, extending free access to more developing countries, cutting red tape at the border (like improving “rules of origin” and simpler administration).
Political cover is also needed to make progress in other areas. Officials need to be able to discuss substance with both the WTO and developing countries. We proposed four steps for the UK to be a global leader on trade for development. Some elements—like low overall tariffs, agricultural subsidies, and reduced thresholds for VAT at the border—are clearly whole-of-Government issues but others, like defining and extending duty free access to more poor countries, can be progressed more quickly.
A British Trade Promise
The Government has rightly taken its time to establish its broad approach to Brexit, and has now made clear the UK will have its own trade policy. Decisions and negotiations are complex and interdependent. Still, on trade for development, the way is clear and urgent—Britain should make a British Trade Promise to confirm the continuation of duty free quota free access, and commit to improve on the EU approach by including more countries, and making administration simpler.
Traditional economic models have tried and failed to understand why some countries have managed to improve living standards while other countries have not. Using ideas from complexity theory, Owen Barder will argue that development is a property of an economic and social system, not the sum of what happens to the people within it. Drawing on the understanding of complex adaptive systems in physics and biology, Barder will address important policy implications for policymakers who want to bring about faster development in their own country, or to help other countries to make faster progress.
Based in London, Owen Barder is the director of CGD in Europe, which he established in 2011. Barder was a British civil servant from 1988 to 2010, during which time he worked in the UK Treasury, No.10 Downing Street and the Department for International Development. He was Private Secretary (Economic Affairs) to the Prime Minister and previously Private Secretary to the Chancellor of the Exchequer. In the Department for International Development he was variously Director of International Finance and Development Effectiveness, Director of Communications and Information, and head of Africa Policy Department. Barder is a director of Publish What You Fund and a member of the advisory board of Twaweza.
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In the last of a series of three blog posts looking at the implications of complexity theory for development, Owen Barder and Ben Ramalingam look at the implications of complexity for the trend towards results-based management in development cooperation. They argue that is a common mistake to see a contradiction between recognising complexity and focusing on results: on the contrary, complexity provides a powerful reason for pursuing the results agenda, but it has to be done in ways which reflect the context. In the 2012 Kapuscinski lecture Owen argued that economic and political systems can best be thought of as complex adaptive systems, and that development should be understood as an emergent property of those systems. As explained in detail in Ben’s forthcoming book, these interactive systems are made up of adaptive actors, whose actions are a self-organised search for fitness on a shifting landscape. Systems like this undergo change in dynamic, non-linear ways; characterised by explosive surprises and tipping points as well as periods of relative stability. If development arises from the interactions of a dynamic and unpredictable system, you might draw the conclusion that it makes no sense to try to assess or measure the results of particular development interventions. That would be the wrong conclusion to reach. While the complexity of development implies a different way of thinking about evaluation, accountability and results, it also means that the ‘results agenda’ is more important than ever.
Embrace experimentation There is a growing movement in development which rejects the common view that there is a simple, replicable prescription for development. Dani Rodrik talks of ‘one economics, many recipes’. David Booth talks of the move from best practice to best fit. Mirilee Grindle talks of ‘good enough governance’. Bill Easterly has talked of moving ‘from planners to searchers’. Owen Barder has called for us to design not a better world, but better feedback loops. Sue Unsworth talks of an upside down view of governance. Matt Andrews, Lant Pritchett and Michael Woolcock aim to synthesize all this into their proposal for Problem Driven Iterative Adaptation. These ideas are indispensable in the search for solutions in complex adaptive systems. In his 2011 book Adapt, Tim Harford showed that adaptation is the way to deal with problems in unpredictable, complex systems. Adaptation works by making small changes, observing the results, and then adjusting. This is the exact opposite of the planning approach, widely used in development, which involves designing complicated programmes and then tracking milestones as they are implemented. We know a lot about how adaptation works, especially from evolution theory. There are three essential characteristics of any successful mechanism for adaptation:
Variation – any process of adaptation and evolution must include sources of innovation and diversity, and the system must be able to fail safely
An appropriate fitness function which distinguishes good changes from bad on some implicit path to desirable outcomes
Effective selection which causes good changes to succeed and reproduce, but which suppresses bad changes.
focus on solving locally nominated and defined problems in performance (as opposed to transplanting pre-conceived and packaged best-practice solutions);
create an ‘authorizing environment’ for decision-making that encourages ‘positive deviance‘ and experimentation, as opposed to designing projects and programs and then requiring agents to implement them;
embed this experimentation in tight feedback loops that facilitate rapid experiential learning (as opposed to enduring long lag times in learning from evaluation);
engage broad sets of agents to ensure that reforms are viable, legitimate, relevant and supportable.
So there is now some convergence around these ideas, all of which focus on the importance of experimentation, feedback and adaptation as ways of coping with uncertainty and complexity. The role of results in adaptation Andrew Natsios, a former Administrator of USAID, fired a celebrated shot over the bows of what he calls the ‘counter-bureaucracy’ (the compliance side of the US aid system). He says:
Let me summarize the problems with the compliance system now in place:
Excessive focus on compliance requirements to the exclusion of other work, such as program implementation, with enormous opportunity costs
Perverse incentives against program innovation, risk taking, and funding for new partners and approaches to development
The Obsessive Measurement Disorder for judging programs that limits funding for the most transformational development sectors
The focus on the short term over the long term
The subtle but insidious redefinition of development to de-emphasize good development practice, policy reform, institution building, and sustainability.
The reason for most of these process and measurement requirements is the suspicion by Washington policy makers and the counter-bureaucracy that foreign aid does not work, wastes taxpayer money, or is mismanaged and misdirected by field missions. These suspicions have been the impetus behind the ongoing focus among development theorists on results.
These arguments – made with particular authority by Natsios – resonate strongly with the views of the growing movement for more experimentation, adaptation and learning. But does that mean – as is often implied – that it is inappropriate or impossible to pay attention to results? If anything, the opposite is true. All three steps in the adaptive process – variation, a fitness function and effective selection – depend on an appropriate framework for monitoring and reacting to results. Natsios himself calls for ‘a new measurement system’. But – as Ben argued last year – we must ensure that the results agenda is applied in a way which is relevant to the complex, ambiguous world in which we live. Results 2.0: thinking through a complexity-aware approach A meaningful results agenda needs to take account of the diversity of development programmes, and the need for a more experimental approach in the face of complex problems. A good place to start is to borrow some approaches from academia, civil society and business strategy. This work suggests that a complexity-aware approach to results needs to get a better handle on need to be based on: (a) the nature of the problem we are working on, (b) the interventions we are implementing (c) the context in which these interventions are being delivered. This gives us three dimensions – ranging from simple problems and interventions in stable contexts through to complex interventions in diverse and dynamic contexts. Between a rock and a hard place Down in the bottom left-hand corner are simple problems and stable settings. This is where ‘Plan and Control’ makes most sense. Tradition results-based management approach, the more conventional unit-cost based value for money analyses and randomised control trials work especially well. (Classicists among you will recognise the hard rock of Scylla.) At the top right we have complex problems, complex interventions in diverse and dynamic settings. (A lot of donor work in fragile states and post conflict societies are in this corner). Here the goal is ‘Managing Turbulence’. In this space, everything is so unpredictable and fluid that planning, action and assessment are effectively fused together. To deliver results in this zone, we need to learn from the work of professional crisis managers, the military and others working in highly chaotic contexts. (This is the whirlpool of Charybdis.) In between is what we have called the zone of ‘Adaptive Management’. Here we may find ourselves managing a variety of combinations of our three axes. In our view, the vast majority of development interventions sit in this middle ground. In this messy, non-linear world the challenge is to tread a careful path avoiding narrowly reductionist approaches to results without surrendering to excessive pessimism about our ability to learn and adapt. In practice this means a more adaptive, experimental approach, trying out multiple parallel experiments, monitoring emergent progress, rates of success and adapting to context. Real-time learning is essential to check the relative effectiveness of different approaches, scaling up those that work and scaling down those that don’t. It is a learning process which is essential for donors and – more importantly – for the governments and institutions of the developing world. Adaptive management must engage the three drivers of evolution:
Variation – which means participants must be given space to experiment and engage in ‘positive deviance’. The key is to liberate people implementing programmes from the conventional requirements to follow a preconceived plan, while retaining accountability of donors to their domestic constituencies. Development agencies and their partners can be given room for manoeuvre and experimentation if they are held to account not for their activities and spending according to a plan, but for the results they achieve or fail to achieve.
An appropriate fitness function – which means that socially-useful changes are distinguished from ineffective or harmful changes. This in turn requires society to agree – either in advance or at least in retrospect – what constitute useful changes, and to assess whether those changes are coming about. For five decades the development industry has been inconsistent about what constitutes success, has failed to measure overall progress, and has eschewed opportunities to learn more about effects of different interventions through various kinds of rigorous impact evaluation.
Selection – which means that changes that bring about improvements according to the fitness function are reproduced and further adapted, while bad changes, policies or institutions are either reformed or brought to an end. This requires a greater focus on evidence-based policy making, and that decisions about programmes and interventions must be more strongly linked the results they produce. The development industry has traditionally been insufficiently effective at taking success to scale, and insufficiently ruthless about failure.
Getting REAL with Results-Enabled Adaptive Leadership Tracking results (and linking money to results) are often considered most appropriate for the simple stable situations in the bottom left hand corner of the cube. This is where it is easiest to attribute impact to the intervention. It is in this corner that we find ‘piece rate’ systems: the manufacturer knows full well what the production function looks like for sewing machines and machinists and uses the piece rate system to motivate greater effort from staff. But in the complex world of development, we do not know the ‘production function’ and we cannot readily attribute progress to any particular intervention. Furthermore, we often do not know where we are in the cube. We sometimes have reliable evidence about the value of a particular technology (say, a nutritional supplement or a bednet) which suggests we are down in the bottom left hand corner of predictable and attributable results. But when we introduce the messy reality of needing to inform people about the product, overcome resistance to change, of managing production and distribution and creating incentives for effective delivery, we rapidly find ourselves in a much more complex world. So most of what we do to promote development is not in the bottom left hand corner: our interventions operate in the world of adaptive management and complexity. The main value of a results focus in development not squeezing greater efficiency out of current service providers: rather it is in enabling people to innovate, experiment, test, and adapt. The challenge here is to ensure that we have a focus on results which supports, rather than inhibits, effective feedback loops which promote experimentation and adaptation. This requires a new and more innovative toolkit of methods, and most importantly an institutional and relational framework which uses that information to drive improvement. We call this results-enabled adaptive leadership (because it has a nice acronym: REAL). What might results-enabled adaptive leadership look like in practice? The Center for Global Development is currently exploring two specific ideas which we believe fit well with an adaptive, iterative and experimental approach to development : Cash on Delivery Aid and Development Impact Bonds. If you believe that development is a characteristic of a complex adaptive system then both of these ideas are attractive because:
They explicitly focus on independently verified, transparently reported outcomes and impact – that is, appropriate measures of what society is trying to achieve – rather than inputs and outputs which are thought to be correlated with progress (but may not be, especially in a complex system).
They avoid the need for an ex ante top-down plan, log-frame, budget or activities prescribed by donors. Because payment is linked only to results when they are achieved, developing countries are free to experiment, learn and adapt.
There is no attempt to follow money through the system to show which particular inputs and activities have been financed; it is important for governments to learn about whether certain activities are working, but it is futile for donors to speculate about the extent to which those changes would happen without them.
They automatically build in a mechanism for selection by shifting funding to successful approaches and bringing failed approaches safely to a close (something which development cooperation which has traditionally found it difficult to do).
In a recent talk at USAID, Nancy Birdsall issued the following rallying cry: “It’s time to stop worrying about getting what we’re paying for, and start paying for what we get”. This principle also underpins another initiative with which CGD is associated, TrAiD+, which calls for the creation of a “market of global results” in which investors could choose what type of projects to fund, based on results achieved. Given the growing role of business and philanthropy in development, this approach may well prove to be attractive to many funders. These are examples of how a focus on results could help, rather than hinder, the process of adaptation and experimentation in development. That does not mean that these are the only or even the best approaches (though CGD’s Arvind Subramanian teases his colleagues for offering cash on delivery as a solution to every problem). Conclusion The growing movement towards experimentation and iteration is driven by a combination of theory and experience. Though these argument have rarely been explicitly framed as a response to complexity, as a whole they are entirely consistent with the view that development is an emergent property of a complex system. We in the development community have much to learn from other fields in which thinking about complexity is further advanced. Many development interventions operate in the space between certainty and chaos: the complexity zone which in which we believe that adaptive approaches are not only effective but essential. This is often presented as a decisive argument against results-based approaches to development. We argue that, on the contrary, a focus on results is an indispensable feature of successful adaptive management. The challenge is to do this in a way which avoids simplistic reductionism and promotes an approach which focuses on outcomes rather than process, monitors progress, and which scales up success. We are conscious that this falls well short of a detailed blueprint for how this might work in practice. As they say in the world of tech: that is a feature not a bug. As Alnoor Ebrahim of Harvard University, one of the leading authorities on development accountability, puts it: “there are no panaceas to results measurement in complex social contexts.” A nuanced approach to results must be based on a thorough assessment of the problems, interventions and contexts. Our point is that there is no contradiction between an iterative, experimental approach and a central place for results in decision-making: on the contrary, a rigorous and energetic focus on results is at the heart of effective adaptation. Consistent with our view that success is the product of adaptation and evolution – of ideas as well as institutions and networks – we look forward to comments, improvements and corrections to these ideas so that we can get past simplistic extremes on either side and build a shared understanding of how to make this work. This is the last in a series of three blog posts based on Owen Barder’s presentation on complexity and development. The first blog post asked ‘What is Development?’. The second blog post looked at the UK government’s ‘golden thread’ approach to development through the lens of complexity.Ben Ramalingam’s book, Aid on the Edge of Chaos, will be published by Oxford University Press in 2013.
In this working paper, Owen Barder raises fundamental questions about the purpose of aid transfers. For many donors the purpose is "poverty reduction" in the narrow sense of growth that reduces poverty. Barder argues that such a focus ignores key trade-offs, such as between reducing current and future poverty and between addressing the causes and symptoms of poverty, and results in less effective aid. This is an important paper for practitioners as well as students of how the aid system works.
The Center for Global Development (CGD) and Organisation for Economic Co-operation and Development (OECD) will hold two thematically-linked, consecutive events.
We will begin with the release of the 2014 OECD Development Assistance Committee (DAC) annual flagship publication, the Development Co-operation Report (DCR), at 9:45 a.m. This year’s DCR focuses on the challenges and opportunities for Mobilising Resources for Sustainable Development. A presentation of the report’s key findings and recommendations will be followed by a discussion and questions from the floor.
Following a coffee break, CGD fellows Frances Seymour and Jonah Busch will present a preview of the findings from a forthcoming CGD book, Why Forests? Why Now? at 11:15 a.m. The book draws upon science, economics, and politics to show that tropical forests are essential for climate stability and sustainable development, that now is the time for action, and that payment-for-performance finance is a course of action with great potential for success.
The first part of the program will provide a valuable overview of the available resources and options for mobilising financing for sustainable development. The second will allow a deeper look at how to apply the ideas in the OECD-DAC report to the specific and urgent challenge of protecting the climate and promoting development by slowing tropical deforestation.
Prime Minister sees UK aid for Iraq at DFID aid distribution centre. Photo credit: Paul Shaw
Britain’s new aid strategy has important implications, not only for DFID but for international organisations who will either need to adapt or face losing some of their core funding. Here’s why.
The British government recently announced new medium-term spending plans (the first for two decades produced by a Conservative government), which included a Strategic Defence and Security Review and a new aid strategy. Perhaps most surprising to many, the UK government remains committed to spending 0.7% of national income on aid, despite the unpopularity of this commitment with voters. With parts of the UK hit by severe flooding, the BBC is reporting that the government now spends more on flood defences abroad than in the UK. But criticism of the aid target has been muted by the announcement that the UK will also meet NATO’s 2% target for spending on defence: the right has now discovered that they support spending targets after all. The UK is now the only big country to meet both the targets for aid and defence spending.
So what is new about the aid strategy? In its overarching goals, not a lot. The four strategic objectives are familiar enough. They are (a) global peace, security and governance; (b) resilience and response to crisis; (c) global prosperity; and (d) tackling extreme poverty. But there is a notable shift in tone and in detail.
This is very much an aid strategy written in the Treasury, which rather artlessly makes clear that aid will now be used to further Britain’s own interests. The phrase “national interest” is mentioned twelve times, compared to four mentions of the new “global goals”. This shift is apparent in two ways. First, there is much greater emphasis on using aid to tackle problems which affect Britain directly, such as the present refugee crisis on Europe’s borders. Second, the government intends to use aid in ways which both contribute to poverty reduction and which help create opportunities for British industries and institutions or help the public finances. A striking example of this dual benefit is the allocation of £85 million a year to the BBC World Service, reversing a decision two years ago which ended all government funding for the service.
The new strategy has some significant implications:
Influenced by the crisis in Syria and Libya, and its effects on migration, there is an even stronger focus on investing in fragile and conflict affected states. Half of all aid will be spent on these countries – though this new target has been changed to include spending in the region dealing with the effects of conflict, and not only the countries themselves. DFID says that 85% of bilateral aid is spent in these countries, whereas multilateral agencies and global funds spend much less – more on that below.
The share of UK aid managed by DFID will fall from about 86% now to about 70% by the end of the decade – so tripling the aid managed by cross-government funds (conflict, health, prosperity) and by other government departments (foreign office, climate change, environment, health etc). This is a big change from the tradition (which began in 1961) of British aid being managed mainly under one roof.
More aid will be spent on global public goods, notably research and development (e.g. for neglected tropical diseases) and on climate finance. Policymakers have been very influenced by Angus Deaton’s remark (in The Great Escape) that donors should spend money for developing countries, but not in developing countries. The focus on R&D is motivated in part by expectation that this will also benefit British universities, pharmaceutical firms and research labs.
The UK will no longer provide general budget support. This decision reflects the reality that there is now very little GBS, so it won’t change very much in practice. The UK will increase results based aid and it promises greater transparency (both of which are issues dear to our hearts at CGD).
Parts of the UK government (perhaps more DFID than Treasury) remain very concerned about no-one left behind and the need to focus aid on the poorest and most marginalised people. As Hans Rosling points out towards the end of his recent BBC TV programme, the poorest countries with the worst human development outcomes receive substantially less aid per person below the poverty line than do middle income countries. There are some in DFID who would like to target more aid on very poor countries (a category which does not overlap completely with fragile and conflict affected states).
It isn’t going to be easy to make these numbers add up. The aid budget won’t grow much over time (since aid will neither fall below 0.7% of national income nor rise significantly above it). Take off the fast growing share being used to ease the pain in other government departments. Within what’s left, the government wants to spend more on global public goods; spend at least half the budget on fragile and conflict affected states; and increase the amount of aid going to the poorest countries and most marginalised people.
We will know next spring how the Government will square this circle when they publish the results of the Bilateral Aid Review, the Multilateral Aid Review, and the Civil Society Partnership Review. But we got a clear signal in the evidence given the other day by Mark Lowcock, DFID’s most senior civil servant, to the House of Commons International Development Committee. He told the Committee that core funding of multilateral agencies and global funds would be likely to fall, given how little of their spending is allocated to the UK’s core priorities of fragile and conflict affected states and the poorest countries. While he acknowledged the importance of effective multilateral institutions, he also said they need to adapt to today’s development agenda if they want continuing support from the UK.
The UK is by far the world's biggest contributor of multilateral aid providing 50% more in absolute terms than the next biggest donor (which is the United States). So international institutions - especially those with replenishments coming up next year - should pay attention to the message now being sent by UK officials.
It is striking that this is an “aid strategy” rather than a “development strategy”. It has a box on “beyond aid” which rightly highlights the UK’s good performance in CGD’s Commitment to Development Index. But the only policy that is discussed in the box is a pledge to increase aid to help developing countries collect more tax. There is no commitment to reform any other policy – such as to tackle illicit financial flows, reform intellectual property rules, enable more students to come from the developing world, or to limit arms sales to undemocratic countries. More worryingly, the section headed “A Cross-Government Approach” is entirely about how the rest of government will spend the aid budget, with nothing at all about how the rest of government will adapt its policies to achieve the government’s broader goal of shared, sustainable prosperity and poverty reduction. (The UK’s envoy for the new global goals told CGD in a recent podcast that government departments have been asked how they will implement them: let’s hope departments all understand that aid alone will not enough.)
Here’s my take on all this:
I am open to being convinced about the benefits a whole of government approach, engaging departments other than DFID in the development agenda; but it should be a two-way street. If those departments are going to get part of the aid budget to spend, they should also be obliged to at least consider adjusting their policies where necessary to have a better impact on developing countries. For example, we need to do more than provide technical assistance for revenue collection in developing countries (important though that is): we also need to change the international tax rules.
To make a success of having multiple government agencies managing aid, the UK will need to learn the hard lessons from other countries in which aid is spread across many government departments, notably the US. This kind of fragmentation has invariably been detrimental to aid effectiveness. That isn't to say the UK can't make it work but doing so will require not only properly-aligned development policies, but also shared reporting, performance metrics, lesson learning, evaluation, accountability and transparency.
The increase in spending on global public goods is excellent (and seems to move the UK towards what my boss, Nancy Birdsall, recently recommended for the US). Spending on global public goods can be very good value for money and yet the development system as a whole under-invests in it (as is usual with public goods). It will be important to implement this in a way that doesn’t turn in to a corporatist bung for British universities and companies – preferably by linking the investment to results (such as through Advance Market Commitments or Development Impact Bonds.)
There is nothing new, nor particularly shocking, about a government wanting its choices about how and where to reduce poverty to reflect its broader strategic and commercial interests. But in the past the pursuit of national interest has been more artfully downplayed in the presentation of policy. We will all need to be vigilant against the significant risk that paying more attention to the national interest will result in less effective aid. (For example, insisting that everything that DFID funds is clearly labelled as “UK Aid”, which may be in the national interest, tends to inhibit joint working with other donors and so increases duplication, costs more, and reduces aid’s impact on poverty. Likewise, allocating research funding to mainly British institutions may produce fewer research breakthroughs than if the same money were channelled to centres of excellence elsewhere in the world. How much aid effectiveness should we be willing to give up to demonstrate that aid is in our national interest?)
It is a shame that DFID and H M Treasury have missed this golden opportunity to conspire together on a broader agenda of policy reform. The two most economically-literate government departments should be allies in taking on a wide variety of vested interests at home and abroad. DFID and HMT should be working together to promote more open markets, reduce subsidies, protect public revenues, insure against disasters, price externalities, encourage labour mobility, improve investment, improve financial stability, tackle corruption, and improve international institutions. The fact that the strategy touched on none of this suggests that this once-powerful Whitehall alliance needs resuscitation.
I admire the government's determination to focus aid on the poorest and most fragile countries, even if it is partly motivated by the desire to reduce pressures on migration. But let’s be clear: these are riskier environments in which it is harder, and more expensive, to achieve results. The strategy missed an opportunity to warn readers of the costs and risks, as well as the benefits, of focusing more of our aid effort on those countries. Furthermore, the government should be wary of swinging the pendulum too far in response to the latest crisis, which is dealing with refugees and asylum seekers. Is the government already losing interest in growth and economic development, which were until recently the new priorities?
DFID is right to push the multilateral system to shift its resource allocation to these difficult places and problems. Multilaterals have been less willing than the UK to sacrifice some performance to focus on need. If DFID is going to hit its target for spending money in fragile and conflict-affected states, while maintaining a decent programme in non-fragile but very poor countries like Zambia and Malawi, it will have to shift money across from core funding of multilaterals to the bilteral programme. Somewhere in East Kilbride, the team responsible for the Multilateral Aid Review is hastily titivating its analysis: it will have to put less emphasis on the need to demonstrate "results" (which are inevitably harder and more expensive to achieve in fragile and conflict affected states) and put more emphasis on aid allocation. But it will be a pity if aid shifts markedly from multilateral to bilateral aid: the world needs effective, well-funded multilateral institutions, some of which are much more effective than most bilateral aid agencies. The UK should use the MAR to cut its contributions to poor performing multilaterals, but we should be increasing core funding for the best, and we should be wary of moving the goalposts too readily from one MAR to the next. (It is striking how little mention there is in the aid strategy of partnerships with other countries and international organisations – again, this is indicative of a document written primarily in the Treasury.)
I am sorry to see the end of general budget support. But whether or not you agree with this decision, there is a lesson for DFID here. I remember a time, not that long ago, when the UK would mock and scorn countries who were sceptical about budget support. We would cajole other governments (such as the US) and bribe international organistions (such as the World Bank and the EU) to discourage the use of aid projects, which we regarded as inefficient and which we criticised as undermining domestic accountability. As the UK now steps away from its hobby horse, we should have more humility about our latest views on how to make aid more effective. (One of the advantages of multilateral aid agencies is that they are less suceptible than bilateral agencies to these kinds of mood swings.)
Aid advocates should be careful what they wish for. If you advocate for an input target like 0.7%, you don’t have have a leg to stand on when the government hits the target but uses the money for whatever it can get away with within the rules.
The World Bank President Jim Kim has said that the next frontier for the World Bank is to 'help to advance a science of delivery'. And over on the ODI blog, the new Director Kevin Watkins praises Jim Kim for asking the right question but says the approach does not give sufficient weight to politics.
Speaking in Seattle recently I was challenged about my off-hand remark that ‘there is no science of delivery’, so I was relieved to see Kevin Watkins independently raising questions about the idea.
We have fantastic science in many fields, greater use of which would improve lives. This science ranges from bednets to fertilizers, and seeds to contraceptives. Jim Kim is right that in aid-financed projects, “most failures happen at delivery”. He is right to ask what more we can do to ensure that more people have access to these advances.
And Kevin Watkins is right to say that power and politics are curiously absent from the narrative of delivery. The obstacles are very often that marginalized communities have insufficient voice, and are excluded by bargains agreed between elites.
But the problem of delivery is bigger than even Kevin Watkins and the ODI programme on ‘the politics of delivery’ recognize. The problem is not that we are ignoring politics; the problem is that we are ignoring complexity.
Consider the problem of eradicating polio. We have the science in the form of a polio vaccine, first developed more than sixty years ago. But reaching everybody with that vaccine turns out to be a complex problem. The challenges are not just finance, supply and logistics – problems which could be solved with enough managerial effort – but trust, incentives, education, attitude, history, religion, politics and power.
One answer to this complexity is to study harder. We could try to understand more about traditional and religious politics, about attitudes to children, and so try to break down the problem into manageable parts (“first educate the religious leaders”). Programmes on politics and delivery often seem to be advocating this kind of approach.
But this makes the same mistake as everyone else. Like everything, politics and power are endogenous. They co-evolve as education and attitudes change, as the economic structure changes, as technology changes. There is no ‘way in’ to delivery by solving the political problem.
If the idea of “science of delivery” means breaking the problem down into predictable, soluble parts, using rigorous evaluation and spreading best practice, then it is a doomed enterprise. It is doomed even if we extend our analysis to include politics and power. It is still a version of the waterfall model which is widely used by almost everyone in the aid industry. These problems simply cannot be solved that way. You cannot design solutions to complex problems: they can only be solved by adaptation and iteration.
Jim Kim gets this absolutely right when he says:
… I do not mean to suggest that we have ready-made solutions for every development problem. We do not, nor is this our goal. Rather, as a solutions bank, we will work with our partners, clients, and local communities to learn and promote a process of discovery. Through decades of development work I’ve learned that the best solutions to economic and social problems often lie with the individuals and communities coping with these challenges in their daily life.
In my view, the most promising avenues for the delivery of science is not a “science of delivery”, but something like the “Problem-Driven Iterative Adaptation” proposed by Matt Andrews, Lant Pritchett, and Michael Woolcock. Development Impact Bonds, an iteration of Social Impact Bonds which are now being developed, are a conscious effort to find ways to finance development programmes which create opportunities for this kind of iteration.
I spent part of my holiday in Silicon Valley, reconnecting with friends working in various dotcoms and start-ups. Agile software development is all the rage there now. It all began with the Manifesto for Agile Software Development written 12 years ago. Perhaps the time has come for a Manifesto for Agile Economic and Social Development?
Why does poverty persist across so much of the world, despite billions of dollars in international aid and the efforts of development professionals? William Easterly’s answer, as proposed in his new book, The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor, is a lack of respect for liberty—not just on the part of governments of impoverished countries but also, more provocatively, on the part of the development experts. Owen Barder, director of CGD in Europe and a noted development expert himself, disagrees. A vote of the audience will determine who wins the debate, which will also be streamed live.