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From Terence Wood on Should aid practitioners worry about economic inequality?
Thanks Kate,
That is an excellent comment. I've got a busy morning, but want to reply, so please forgive my hasty shorthand response.
First up, please remember that I'm opposed to unnecessary economic inequality (paragraph 2 of the blog post).
With regards to specifics:
You write, "no development agenda can be transformative and effecive unless it addresses inequalities of wealth."
I don't completely disagree with you here. However, I think that no development agenda can be transformative unless it grows aggregate wealth, while preventing (or subsequently mitigating) high levels of inequality; and while also tackling other forms of inequality (those of political power, gender inequalities, etc). An omnipotent aid worker would worry about all of this. But no aid worker is omnipotent -- indeed the fates of nations as a whole is largely determined by factors other than aid -- and as a result aid work should focus on issues, and inequalities, most relevant raising human well-being, <em>where aid can have an influence</em>. In the economic sphere, in countries where aid has significant leverage, this will primarily be about raising aggregate wealth (primarily but not exclusively) simply because, as I note in my post, countries where aid has considerable potential leverage are mostly countries that do not have enough aggregate wealth to significantly reduce poverty on the basis of redistribution alone.
And, on the other hand, when it comes to inequalities that impact on aid work, the inequalities that interact with the outcomes of aid work on a day-to-day basis are, I think, for the most part (although not always), non-economic.
On the relationship between inequality and economic growth. I agree with you there are some new studies revealing some interesting new findings (see: <a href="https://www.imf.org/external/pubs/ft/sdn/2015/sdn1513.pdf" rel="nofollow">here</a>, <a href="http://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf" rel="nofollow">here</a>, <a href="http://www.oecd.org/social/in-it-together-why-less-inequality-benefits-all-9789264235120-en.htm" rel="nofollow">here</a>). However, with any econometric work where growth is the dependent variable care has to be taken into reading too much into individual studies. See Paul Krugman's cautions <a href="http://krugman.blogs.nytimes.com/2015/06/08/musings-on-inequality-and-growth/" rel="nofollow">here</a>. See a good critique of one of the papers linked to above <a href="http://aidthoughts.org/?p=4150" rel="nofollow">here</a>. (Also, worth noting is that some of this research is based on wealthier countries -- i.e. not the sort of contexts where aid work occurs.)
Similarly, the Oxfam factoids, while highlighting important issues, are not beyond critique. See debate <a href="http://fusion.net/story/39185/oxfams-misleading-wealth-statistics/" rel="nofollow">here</a>, <a href="http://www.vox.com/2015/1/22/7871947/oxfam-wealth-statistic" rel="nofollow">here</a>, <a href="http://www.newyorker.com/business/currency/critics-oxfams-poverty-statistics-missing-point" rel="nofollow">here</a> and <a href="http://politicsofpoverty.oxfamamerica.org/2015/01/guess-what-critics-oxfam-is-right-about-the-top-1/" rel="nofollow">here</a>. Also, <a href="https://openknowledge.worldbank.org/handle/10986/16935" rel="nofollow">more systematic research</a> suggests that the world as a whole is -- if anything -- becoming more equal (inequalities are rising within countries, but falling between on a country weighted basis as two giant economies (China and India) grow rapidly, with rising inequality, but reduce poverty while they're at it.) Indeed, the cases of India and China speak to your point about growth not being able to reduce poverty unless it tackles inequality. Actually, it can, so long as inequality is not rising so rapidly as to offset the gains from growth. Better still -- as I mentioned in the blog post -- if growth does not come with rising inequality, but nevertheless growth can be good for poverty reduction regardless. And much better still if we lived in a world where the majority were doing a lot better, while the 1% were considerably less well off. However, for most aid work (even if there are important exceptions, as I granted above, like campaigning), I still don't think wealth inequality is the form of inequality that matters most.
Thanks again for your comment.
Terence
From Jo Spratt on Capacity building: how to do better
Thanks, Jim, for two interesting posts. I think there is much more to say on capacity building, some of which is reflected in the comments to both posts. One thing that puzzles me is the gap between studies and reflection on capacity building, and practice. It seems to me that thinking about capacity development has moved but practice is sluggish. As Steve and Deborah highlight, there are very useful studies available to inform practitioners and policy-makers, but it seems to me these are not well used.
When I was managing a multi-country capacity building project, the ADB's work, and the Morgan and Baser studies were very helpful. And Deborah's contribution about cross-cultural relationships and related skills and knowledge is an important, recent contribution.
One thing is for sure, we have to stop thinking about capacity building as only training and technical assistance. As your post alludes to, it is about long-term relationships. It is about collective capabilities, not merely individual competencies (which is where most training and TA is focused). I think there is more that donors can do to improve: they need to engage with the studies on effective capacity development; they need to define what they mean when they 'do' capacity development; their capacity-builders need to be engaged over longer time periods, as you suggest for local government staff; contracts need to have KPIs that are about professional development goals that the people they work with articulated, not outputs, like strategic plans; and people employed to engage in capacity building need to have appropriate knowledge and skills, such as listening, coaching, mentoring, cross-cultural communication, teaching and self-reflection, not merely technical specialist skills.
There are people out there who know a great deal about this and have lots to share. I would love to hear more from them. Maybe some more blogs?
From Jane Thomason on DFAT’s new health strategy: a new approach?
I totally agree re PNG - we should try and find where things are working, try and understand why and try see if they can be replicated elsewhere. PNG is intensely political, culturally diverse and needs a nuanced approach. But there are places where things work and have improved. However, there has been scant substantive evaluation - and limited focus on really learning from past experience. When I first went to PNG in 1982 - things worked and the public service was full of expatriates in line positions. TA per se is not the problem - indeed embedded TA or inline positions are badly needed - but advisers with no accountabilities often working with public servants who don't want the advice, are a problem. We can't keep trying to do the same things and expect a different outcome. We truly have to start to think and act politically if we are to hope for any measure of improvement - and as Stephen says - work more in different ways with churches, private sector and the political class.
From Jo Spratt on Should Australia partner with Coke in the Pacific?
Reliance on education alone is an inadequate way to change behaviours. For example, most people know what they should do with their diet and exercise, but doing it is a whole other story. We've known for a long time now that you need multi-level and faceted approaches to assist people to make healthy choices, particularly when they are making choices for their future self. Not only do we need to educate people, but also reorient health services so that they encourage health-supportive behaviours, build healthy communities and create the broader structural conditions that enable the healthy choice the easy choice. As we saw in NZ, there were a raft of measures to reduce smoking such as legislating, encouraging and supporting quitting, ensuring health systems encourage and support quitting, careful advertising, norm-creation and continuing to restrict purchase. Even then we haven't managed to stop smoking altogether.
Evidence shows that reducing soft drink consumption will make a solid contribution to reducing risk factors for NCD's, and bans can help. I have no problem legislating against fizzy drinks, which have no nutritious value, and contribute to a great deal of suffering in the long term. We should be working with Pacific governments to find evidence about what works and supporting them to enact whatever measures they think will work to make sure their people can be healthy and productive.
From Richard Tate on Capacity building: how to do better
Although initially excited to read this article, I am now very sad to realise that there are no new ideas in this report whatsoever?
It reads mostly like a piece of propaganda in favour of private sector interests.
Basically you argue that countries should embrace the private sector as the answer to their long term economic problems?
How many years have we had the private sector in the world?
What economic state do nations find themselves in today?
Is there a lot of un-repayable debt and poverty in the world?
Has the private sector since the 1950's helped to eradicate this and bring about long term economic prosperity?
Is GDP a good measure of human wealth?
However you come from a long history with the World Bank - an International organisation with its focus entirely aimed at increasing return for its primary shareholders/investors/partners. (Not the long term good of people and communities).
If you could see what is happening on the ground in Papua New Guinea with the likes of Ramu Nickel, New Britain Palm Oil, Ok Tedi mining and many many more (Private Sector) profit making businesses, then I think you would not be so convinced that these private sector businesses are any good for humanity or the long term economic interests of a low/middle income country's people.
The neo colonial free market ideologies have not yet taken account of absolute human greed. Humans are simply unable to operate in a totally unregulated free market (private sector) manner without all the wealth ending up at the top!
If we look at the 2015 globalised world economies of China, America, UK, Europe then I would say that the free market private sector ideology has failed terribly to bring about a sustainable and equitable future for any of them or the upcoming developing countries.
The state needs to apply some controls on the 'free market' otherwise human greed and lust for power and money will always end up collapsing the envisaged tower of babel.
Whether absolute free marketeers will accept any additional control or regulation on their big private sector money making plans is another debate....................
From Stephen Howes on DFAT’s new health strategy: a new approach?
Joel, I don't think it's an adequate response to the complete failure of the multi-decade health systems strengthening approach in PNG to say that more time is needed. One wants rather to say: when you are in a hole, stop digging. Nor is it convincing to say health system strengthening has worked in Bangladesh or Thailand or Ethiopia. Likely these countries had more political will. Technical assistance and training (which is what health systems strengthening is) can work where there is political backing but will struggle otherwise. It is striking that, as you say, the new strategy doesn't reflect on past failures in the Pacific. One of weaknesses of aid is its relentlessly forward-looking nature and its failure to learn the lessons of the past. Surely it is time to go beyond rhetoric around systems strengthening, and try to find out what approaches have worked better, and support those. In the PNG, that would mean working more with the churches, more with the private sector, and more with in-line positions.
From Elizabeth Morgan on Capacity building: important but unsuccessful
Very thoughtful response Deborah and thank you for bringing into this public discussion the cultural dimensions of development interventions which are primarily shaped and applied by donors and practitioners from Western democracies and societies. We forget our own development processes. Whilst I found Jim's speech interesting, and applaud his acknowledgement about how important long term approaches to capacity building are, I also found it troubling that the cultural and anthropological aspects were again missing. I think you have summarised them very clearly. Building trust and learning about the cultural dimensions in capacity building efforts takes time and courage on the part of donors and practitioners. You run the risk of severe criticism if your raise cultural relevance as a practitioner (or as an informed donor representative). In a climate of quick wins, donor driven interventions, and moral outrage about corruption, cultural competence is no longer an open conversation. Australia has not come to terms with the significance of collectivist societies and communities in its own work and responses in Indigenous communities. What this means for leaders, communities, individuals and organisations is rarely discussed in the development policy space. We construct problems around collectivist societies and do more harm in the process. The ramifications of this deep cultural knowledge and understanding (and respect), for development models and practice are immense. Heather's and Peter's work from the ECDPM remains some of the most well informed research on capacity building around and your own writing is also very important. Heather's work was heavily informed by her deep engagement with PNG and other partner country PS leaders. Success is not ours alone to judge and I agree such assessments are flawed.
From Steve Pollard on Capacity building: how to do better
Hi Jim,
One more comment. Beyond your ten suggestions, which are largely issues of donor supply, I believe we most especially also have to look at the countries' demand for capacity development.
For me, the main conclusion of ADB's study of capacity development in the Pacific was that it is largely a compromise, a compromise between what donors can and wish to supply in the form of professional, technical assistance and what the island countries are able to receive. This is a compromise between the donor technical supply and the Pacific countries' social, cultural and political situations. The island context is most constraining. This prevails and the islands need designs for interventions that not only understand the sector, professional aspects but also country context. In the end it is the Pacific's choice.
Steve
From Kate L on Should aid practitioners worry about economic inequality?
Terence, I appreciate you're putting a position knowing that it will be critiqued and have taken the time to answer all the posts. I suspect your position will be very much welcomed by both the Australian government and the private sector. But I have a counter position for you - no development agenda can be transformative and effecive unless it addresses inequalities of wealth.
First, as others have said, inequality is recognised as bad for the economy. The IMF, World Bank, several UN agencies and even the World Economic Forum have recognised that inequality is a threat to both economic growth and social cohesion. Second, it's indefensible that a tiny minority capture such a large percentage of the world's resources and, with it, political power.
It's abundantly clear that the concentration of wealth in the hands of this tiny minority (the 85 people Oxfam identified that own more than 50% of the world's population has now dropped below 80 and this year they predict the richest 1% will own more than the remaining 99%) is the result of global policy making. That has all occurred under the guise of 'development' policy and in the interests of stimulating economic growth (as your post suggest development practitioners should focus).
The idea that economic growth can eliminate poverty without addressing the inequitable accrual of wealth has been exposed by economist David Woodward. Prior to the financial crisis, the world's poorest 60% received only 5% of income generated from growth while the richest 40% received 95%. Since the financial crisis the rate is even worse. So if we continue to try and eliminate poverty using an economic growth model, the world must increase consumption 175 times. Obviously, with finite resources, this would solve poverty by ending humanity.
A question for 'aid practitioners' (noting that even large INGOs, UN Agencies and governments have moved away from aid policy to 'Development Effectivenes') should be - What does civil society in the target countries think are important development objectives?
In the Asia Pacific region civil society engaged in shaping development policy have collectively agreed that Development Justice must be a priority for any development agenda. The first of the five transformative shifts they demand is 'Redistributive Justice' - redistribution of wealth, resources, power and opportunities between states, between rich and poor and between men and women. (See all the statements of the Asia Pacific Regional Civil Society Engagement Mechanism <a href="http://www.asiapacificrcem.org/submissions/" rel="nofollow">here</a>).
Countries that have made any progress in reducing national inequality have done so in ways that are very clearly in the interests of the most marginalised. Thailand reduced its inequality levels when it introduced a universal public health scheme and significantly increased the minimum wage. Malaysia similarly reduced inequality through social protection (though both countries continue to have high rates of inequality). China is addressing inequality through increases to minimum wages in the hope that it will also strengthen local economies (in the knowledge that low income earners spend more quickly and more likely on locally produced goods).
OK too much already ...
From Jason Brown on Remote data collection in Papua New Guinea: an aid to policy deliberations
. . .
I was going to recommend FrontlineSMS as an example of one company offering open source i.e. free ways of setting up mobile phone data collection.
I see that Google is warning that it "may be hacked", possibly due to what Sucuri identifies as an old wordpress installation. Sucuri and VirusTotal rank it as clean however.
For the alerts, see VirusTotal <a href="https://www.virustotal.com/en/url/318ea22ad8c56755d4a07c175880cf1e6535d7c6343e40545ec00c8381e7fba3/analysis/1437106418/" rel="nofollow">here</a> and Sucuri <a href="https://sitecheck.sucuri.net/results/www.frontlinesms.com/" rel="nofollow">here</a>.
Meantime, <a href="http://opensource.com/life/15/3/frontlinesms-humanitarian-foss" rel="nofollow">here is an article</a> about its background.
From Grant Walton on Is education a magic bullet for addressing corruption? Insights from Papua New Guinea
Thanks for the response Ash and sorry about the tardy reply.
You’re right, the findings suggest that donors are in a tricky position when it comes to supporting anti-corruption efforts in PNG. But I think they can still play an important role.
What should they be doing? I think there is a role for institutional strengthening in PNG, but I suspect it would achieve more by focusing resources at the sub-national level. With a <a href="http://www.pngperspective.com/news/district-development-authorities-to-replace-jdbpc-/" rel="nofollow">move to District Development Authorities</a> more power is going to reside at the districts in PNG; anti-corruption responses need to follow this devolution. At the moment we know very little about the most basic aspects of district-level finances, as a <a href="http://www.ago.gov.pg/images/Report_No3_DSIP.pdf" rel="nofollow">recent Auditor General’s report shows</a> [pdf].
This is where donors could do more; at the moment much of the institutional strengthening is at the national-level.
I also think there is a role for donors to strategically put diplomatic pressure on PNG, particularly when anti-corruption agencies are attacked. Australia could do that more easily if it shut Manus.
In addition, there’s a need to respond to the broader socio-economic conditions in which corruption occurs. It’s a bit much to expect people in PNG to become fervent anti-corruption warriors – although a surprising number still are – in the midst of a weak state and poor economic opportunities. These are issues that are difficult to address, but an essential part of the mix none-the-less.
From Joel Negin on DFAT’s new health strategy: a new approach?