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How to Fix Fragile States? The OECD Reckons it’s All Down to Tax Systems.

Duncan Green's picture

‘Over-generous tax exemptions awarded to multinational enterprises often deprive fragile states of potential revenues that could be used to fund their most pressing needs.’ Another broadside from rent-a-mob? Nope, it’s the ultra respectable OECD in its Fragile States 2014 report.

After years of growth, aid to fragile states started to fall in 2011, so the report centres around an urgent call for OECD member states to help their more fragile cousins find a post-aid arrangement that funds essential state functions and builds the ‘social contract’ with citizens.

The key is a shift from aid dependence to ‘domestic resource mobilization’ (taxes and natural resource royalties), currently averaging a feeble 14% of GDP across fragile states and far too dependent on royalties from oil, gas and mineral extraction. Foreign direct investment (factories, farms etc) is generally low in volume and volatile.

Can Aid Donors Really 'Think and Work Politically'? Plus the Dangers of 'Big Man' Thinking, and the Horrors of Political Science-Speak

Duncan Green's picture

Spent an enjoyable couple of days last week with the ‘thinking and working politically’ (TWP) crew, first at a follow up to the Delhi meeting (nothing earth shattering to report, but a research agenda is on the way – I’ll keep you posted), and then at a very moving memorial conference for the late Adrian Leftwich (right), who is something of a founding father to this current of thought.

Regular readers of this blog will know that I’m a big fan of this line of thinking: understanding and engaging with the underlying issues of power and politics should be the heart of any serious work on development.

But based on last weeks exchanges, I’ve got some concerns too – here are some reflections:

First some choice quotes:
 

Weekly Wire: The Global Forum

Kalliope Kokolis's picture

These are some of the views and reports relevant to our readers that caught our attention this week.

Transparency for what? The usefulness of publicly available budget information in African countries 
ODI

“Advocacy and civil society groups around the world are increasing their calls for governments to publish budgets and expenditure reports, not least in Africa, where budget transparency remains low by global standards. However, while governments are often praised internationally for the number and type of budget documents they release, less attention is given to the content of these documents and whether they allow for meaningful budget analysis. This note considers whether the budget documents released by African governments are sufficiently comprehensive to answer basic questions about budget policy and performance.”  READ MORE

Five steps to more meaningful youth engagement 
Global Development Professionals Network Partner Zone 

“Today's young leaders are taking on a variety of meaningful and dynamic roles in development organisations. As board members, lobbyists, activists, entrepreneurs, designers, experts, trainers, and researchers, youth are driving their own destinies by taking part in decisions that affect them and their communities. For example, Restless Development, an international youth-led development agency, supports a project in which local young people lead action research aimed at finding solutions to complex challenges in the turbulent Karamoja region of Northern Uganda. These young researchers have produced several excellent products, including Strength, Creativity, and Livelihoods of Karimojong Youth.”  READ MORE
 

Poor Countries are Losing $1 Trillion a Year to Illicit Capital Flows - 7 Times the Volume of Aid

Duncan Green's picture

I was surprised not to see more coverage of last week’s hard-hitting report from the Global Financial Integrity watchdog. Illicit Financial Flows from Developing Countries: 2002-2011 has a whole bunch of killer facts about the escalating haemorrhage of wealth from poor countries. Here are some highlights. My additions in square brackets/italics:

“We estimate that illicit financial outflows from the developing world totalled a staggering US$946.7 billion in 2011, with cumulative illicit financial outflows over the decade between 2002 and 2011 of US$5.9 trillion. [By way of comparison, total global aid in 2011 was $134bn (not mn as first printed -thanks to all of you who pointed this out) – 14% of illicit flows - and has fallen since, even as illicit flows keep booming. Want that as a soundbite? ‘For every dollar of aid, the South loses $7 in illicit outflows; developing countries are losing $2.6 bn a day/$108m per hour/$2m per minute/$30,000 per second’.]

This gives further evidence to the notion that illicit financial flows are the most devastating economic issue impacting the global South.  Large as these numbers are, perhaps the most distressing take-away from the study is just how fast illicit financial flows are growing. Adjusted for inflation, illicit financial flows out of developing countries increased by an average of more than 10 percent per year over the decade. Left unabated, one can only expect these numbers to continue an upward trend.

Thinking and Working Politically: An Exciting New Aid Initiative

Duncan Green's picture

Gosh I love my job. Last week I attended a workshop in Delhi to discuss ‘thinking and working politically’. A bunch of donors, academics, NGOs and others (Chatham House rules, alas, so no names or institutions) taking stock on how they can move from talk to walk in applying more politically informed thinking to their work.

That means both trying to do the normal stuff better (eg understanding the politics that determines whether your water or education programme gets anywhere) and in more transformational work trying to shift power from haves to have nots.

The meeting was convened by some very practical (‘what do I do on Monday Morning’) aid people keen to move on from what they see as the overly academic (‘needs more research’) character  of discussions on governance, institutions, state-building and all its obfuscatory language (‘What we don’t need is lots of people talking about isomorphic mimicry, rules of the game and political settlements’).

The purpose of this discussion was to take the growing body of research from the Development Leadership Programme, Tom Carothers, ODI, Matt Andrews, ESID etc and turn it into programme ideas that can be tested on the ground. A giant ‘do tank’ exercise, in fact. Alarmingly, I can’t think of other examples of such an explicit research →hypothesis→test process on governance (unlike drugs research, say).

Some impressions:

Weekly Wire: the Global Forum

Kalliope Kokolis's picture

These are some of the views and reports relevant to our readers that caught our attention this week.

Are Women Really Less Corrupt Than Men?
Slate

“Will electing more women to office make governments less corrupt? One new paper suggests in might—but the reason for that is not necessarily encouraging.

Previous research has suggested an association between a politician’s gender and their likelihood to engage in corrupt behavior. A World Bank study from 2001, for instance, found that “one standard deviation increase in [female participation in government] will result in a decline in corruption... of 20 percent of a standard deviation". This perception has been behind some well-publicized campaigns, such as Mexico City’s plan to employ all-female traffic cops in some areas.”  READ MORE

The Idealist: A Brilliant, Gripping, Disturbing Portrait of Jeffrey Sachs

Duncan Green's picture

For The Idealist, Nina Munk, a Vanity Fair journo, stalked Jeffrey Sachs for six years, focusing on his controversial Millennium Villages Project (MVP). She interviewed the man, sat in on his meetings with bigwigs, and hung around the Millennium Villages to find out what happened when the Prof’s entourage moved on.

The result is more subtle than a simple hatchet job. She portrays Sachs as a man of almost pathological drive and egotism, which both leads to big successes (massive victories on distribution of free anti-malarial bednets for example) and to a refusal to listen or learn from criticism. He comes across as a kind of uber-campaigner, devoid of doubt, absolutely refusing to take no for an answer, dismissive (often in highly personal terms) of anyone who disagrees with him.

There are some memorable vignettes, captured by Munk’s unblinking observation. Sachs lecturing Uganda’s bored President Museveni about boosting farm yields with free fertilizer, when all the President wants is his cup of tea, concluding (as he leaves) ‘This is not India or China, Professor. There are no markets. There is no network. No rails. No roads. We have no political cohesion.’

Aid on the Edge of Chaos, A Book You Really Need to Read and Think About

Duncan Green's picture

It’s smart, well-written and provides a deeper intellectual foundation for much of the most interesting thinking going on in the aid business right now. Ben Ramalingam (right)’s Aid on the Edge of Chaos should rapidly become a standard fixture on any development reading list.

The book argues for a major overhaul of aid in recognition that the world is made up of numerous interlocking complex systems, far removed from the assumed linear world of cause → attributable effect that underpins a lot of aid programmes. That fits pretty perfectly with a lot of the stuff on governance, institutional reform etc from ODI, Matt Andrews, and Oxfam’s own work, all covered on this blog. But it adds to it in important ways.

  • It deepens our understanding of complexity and systems thinking, drawing on a range of other disciplines
  • Much of the current aid thinking about complexity is happening in work on governance and (to a lesser extent) advocacy. The book widens the scope to just about every corner of the aid business – management, humanitarian, health etc
  • Its 25 great case studies will spark ideas in people’s heads about how they can apply the thinking in their own work

The argument is divided into three sections: a thorough critique of the current aid system; an introduction to complexity and systems thinking; and a final ‘so what’ section on the reform of aid.

Complexity 101 – Part 2: Getting to the So Whats

Duncan Green's picture

ODI’s Harry Jones continues his stocktake on complexity and development.

Yesterday, I tried to pose and answer some straight questions on complexity and development, mostly focusing on whether development problems are complex and why it matters. Today, I try to answer the ‘so what’ question and suggest three areas where changes to aid agency practice could be made:

1) How can development agencies tackle complexity?

Aligning with the three challenges outlined yesterday (distributed capacities, divergent goals and uncertain change pathways), I’d argue that all solutions proposed to deal with complexity fall into one of the three categories:

  • Interventions must capitalise on distributed capacities, finding ways to link up actors and action that fosters more voluntary coordination and collaboration.
  • Interventions must facilitate joint interpretation of key problems by key actors, and must enable negotiation on and commitment to common goals.
  • Interventions must innovate, must foster learning about how change happens, and must be flexible enough to adapt to emerging signals.

This is the reverse of the typical bureaucratic reaction to complex problems, which seeks to ‘reduce’ complexity by strengthening centralised oversight, agreeing up front on narrow, singular goals, and trying to determine in advance what will work and what will be needed. While these approaches have their place, uncertainty, divergence and distributed capacities are integral to many problems and cannot easily be swept under the carpet.

Complexity 101: Behind the Hype, What Do We Actually Know?

Duncan Green's picture

Complexity week continues with this excellent stocktake from the ODI’s Harry Jones (who’s got a new guide out on ‘Managing Projects and Programmes in the Face of Complexity‘). Part two tomorrow.

Seven years ago John Young, Ben Ramalingam and I decided to begin research on complexity theory and international development.  We felt there was really something of use and interest in there but that it might take some time to persuade others of that fact and more time to find out exactly what that value was: although there were already a few people working on complexity, since  then, the blogosphere has come alive with discussion of the ‘C’ word. It’s clear a large number of development professionals see value in complexity theory and international development (for example, here is Owen Barder on complexity in international development, William Easterly’s take, Ben’s blog devoted to the issue, and all the posts on Duncan Green’s blog about complexity and development).

What we don’t seem to have reached is much agreement on exactly what that value is. As we look forwards to this week’s launch of Ben’s book on complexity in development (which I have yet to read), it seems an opportune time to reflect on what we know. In that 2008 exploratory review we set out to examine whether complexity and development was a case of ‘paradigm, hype, or lens. Six years on, here’s my attempt to review the evidence on some straight questions on complexity and development, in two parts.  In this first part, I look at whether development problems are complex and why it matters; in the second part I will look at what to do about that complexity where it exists.

*N.B. to avoid disappearing up my own comments page I will use the popular simple-complicated-complex (bake a cake, make a rocket, raise a child) schema subscribed to by Stacey, Zimmerman, Snowden et al.

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