Brookings: Topics - Global Poverty

Good Data: The Foundation of Open Government

Sally P. Paxton and George Ingram — Wed, 22 May 2013 14:36:00 -0400

It is not often one gets excited over a dry, hard-to-understand government memorandum, but the newly released executive order, Making Open and Machine Readable the New Default for Government Information, and its accompanying memorandum are grounds for applause. The open data and transparency community, both in Washington and internationally, have been quick to give much deserved praise for this effort to make U.S. government data truly open and accessible.

Led by U.S. Chief Technology Officer Todd Park and Chief Information Officer Steven VanRoekel, this policy makes open government and transparency core aspirations of the administration. It contains specific steps for agencies, including 1) making data readily accessible and useable, 2) using common, open standards; 2) modernizing information systems; 3) sharing best practices; and 4) reporting progress. As characterized by the Sunlight Foundation, the policy "signals a new era for open data in our government”.

This new policy applies to all executive agencies, with some exceptions for national security systems. For those of us focused on foreign assistance, however, the question is what it will mean for aid information – and more importantly – for improving our aid effectiveness?

The quick answer is quite a bit. If these approaches are adopted and implemented rigorously by U.S. agencies administering foreign assistance, it could pave the way for a revolution in the way aid information is shared and used throughout the delivery chain. Overall, this new policy strengthens the chances of the U.S. government delivering on its commitment to the International Aid Transparency Initiative (IATI), which U.S. agencies are beginning to implement, but whose progress has been very slow. The Office of Management and Budget Bulletin, published in October 2012, made some important steps forward for U.S. reporting on foreign assistance. By comparison, the executive order is a leap forward. Why? Here are some highlights:

For the first time, data will have to be in “open and machine-readable formats”, such as XML, the format that IATI uses. This is hugely important for ensuring that the data is as accessible as possible for all potential users. To date, the U.S. has only published partial foreign assistance data from two U.S. agencies – the U.S. Agency for International Development and the Millennium Challenge Corporation – in the machine-readable IATI XML format, so the new executive order should provide a strong impetus to kick-start progress in other agencies. The importance of machine-readable formats will also be reflected in how donor agencies perform in this year’s 2013 Aid Transparency Index. Data that complies with the IATI standard – in machine-readable, XML format – will be deemed most transparent, as recognized by the U.S. commitment to this internationally comparable data standard.

Agencies now have to support “downstream” users and systems, paying attention to how our own systems maximize information interoperability and accessibility. This means that U.S. systems need to take into account other complementary initiatives, such as IATI. It is therefore a prime opportunity to build IATI compliance into our systems. This supports IATI’s aim of “publish once and use often” for different purposes and different users. So, when doing system upgrades – as recommended in a number of reports, including by the General Accountability Office – we need to be smart about maximizing our IT investments.

Deadlines matter and the executive order sets them. Transparency commitments, such as the Foreign Assistance Dashboard, are great concepts but their implementation has been problematic. Almost two and a half years have passed since the Dashboard’s creation and it is still largely incomplete. It is encouraging, therefore, to see the executive order include the development of a “Cross-Agency Priority” (CAP) goal to track implementation progress with metrics and milestones. This should build on the goals set by the U.S. implementation schedule for IATI by urging agencies to produce good quality, IATI-compliant data.

Best practices will be shared online. Such a repository of agencies’ tools and methods helps us all solve problems and be more effective and efficient. To date, 37 official international donor agencies have signed IATI and 22 have begun publishing to the IATI standard. The sharing of concerns, system limitations and data issues have already proven to be useful in easing and speeding the process of adaptation to open data for all participants. The same holds on the U.S. domestic front. With over 25 U.S. agencies involved in some aspect of administering foreign assistance, it makes sense to bring all agencies into a common learning space to foster “government-wide communities of practice”.

This new approach to open data is both visionary and detailed, and we hope the data starts flowing soon. In the spirit of this new policy, we should embrace IATI as best practice in open aid information and learn lessons from others who have piloted this initiative before us. The president has set the goal of U.S. leadership in open data. It is now the task of the aid transparency champions within the administration to see this through to fruition.

Authors

Sally P. Paxton
George Ingram

Image Source: © Jerry Lampen / Reuters

Mobile Technology’s Role in Combating Global Poverty and Enabling Entrepreneurship

Thu, 16 May 2013 14:00:00 -0400

Event Information

May 16, 2013
2:00 PM - 3:30 PM EDT

Falk Auditorium
Brookings Institution
1775 Massachusetts Avenue, N.W.
Washington, DC 20036

According to the World Bank, nearly one-quarter of the global population lives at or below the poverty line of $1.25 per day. The world’s poor experience barriers to lifting themselves out of poverty because of the lack of access to capital to start small businesses and build personal savings. Yet with the growth of mobile technology, there are now new avenues for individuals to improve their economic circumstances, make monetary transfers, arrange for microfinance loans or establish small enterprises.

On May 16, as part of the Mobile Economy Project, the Center for Technology Innovation at Brookings hosted a forum to investigate the barriers to using mobile devices to conduct business in the developing world, explored how mobile devices enable individual entrepreneurship and small business development and examined mobile technology’s role in alleviating global poverty.

Audio

Mobile Technology’s Role in Combating Global Poverty and Enabling Entrepreneurship

The Final Countdown: Prospects for Ending Extreme Poverty by 2030 (Report)

Laurence Chandy, Natasha Ledlie and Veronika Penciakova — Mon, 29 Apr 2013 12:00:00 -0400

Editor’s Note: An interactive feature, highlighting the key findings from this report, can be found here.

Over a billion people worldwide live on less than $1.25 a day. But that number is falling. This has given credence to the idea that extreme poverty can be eliminated in a generation. A new study by Brookings researchers examines the prospects for ending extreme poverty by 2030 and the factors that will determine progress toward this goal. Below are some of the key findings:

1. We are at a unique point in history where there are more people in the world living right around the $1.25 mark than at any other income level. This implies that equitable growth in the developing world will result in more movement of people across the poverty line than across any other level.

2. Sustaining the trend rate of global poverty reduction requires that each year a new set of individuals is primed to cross the international poverty line. This will become increasingly difficult as some of the poorest of the poor struggle to make enough progress to approach the $1.25 threshold over the next twenty years.

3. The period from 1990 to 2030 resembles a relay race in which responsibility for leading the charge on global poverty reduction passes between China, India and sub-Saharan Africa. China has driven progress over the last twenty years, but with its poverty rate now down in the single digits, the baton is being passed to India. India has the capacity to deliver sustained progress on global poverty reduction over the next decade based on modest assumptions of equitable growth. Once India’s poverty is largely exhausted, it will be up to sub-Saharan Africa to run the final relay leg and bring the baton home. This poses a significant challenge as most of Africa’s poor people start a long way behind the poverty line.

4. As global poverty approaches zero, it becomes increasingly concentrated in countries where the record of and prospects for poverty reduction are weakest. Today, a third of the world’s poor live in fragile states but this share could rise to half in 2018 and nearly two-thirds in 2030.

5. The World Bank has recently set a goal to reduce extreme poverty around the world to under 3 percent by 2030. It is unlikely that this goal can be achieved by stronger than expected growth across the developing world, or greater income equality within each developing country, alone. Both factors are needed simultaneously.

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Authors

Laurence Chandy
Natasha Ledlie
Veronika Penciakova

Era of Big Oil Secrecy is Over

Daniel Kaufmann — Wed, 24 Apr 2013 15:49:00 -0400

Earlier this month, the European Union (EU) took a decisive step towards transparency: It agreed to mandate publicly-listed European companies as well as large private firms to disclose their payments to governments for oil, gas and mining projects. This transparency is crucial in the fight for better governance of resource-rich countries. It will empower citizens with information about the amount of money their governments receive, helping them to monitor how this money is ultimately used and to deter corruption.

Opacity has long ties with corruption, and both are detrimental to growth. Our research shows that countries that control corruption and improve governance can triple their incomes per capita in the long term - a 300% dividend. As seen in the figure, this good governance dividend also applies to countries rich in natural resources.

The benefits of transparency dwarf the cost of disclosure. Today about 40 percent of the 1.7 billion people in resource-rich countries live in poverty, making less than $2 a day. Such poverty in the midst of immense resource wealth is due to low standards of governance and transparency, a critical issue for which oil and mining companies are also responsible.

The EU rules are part of the international community’s response to the opacity challenge, and are modeled after U.S. rules the Securities and Exchange Commission (SEC) released last August to implement the Cardin-Lugar amendment of the 2010 Dodd-Frank Act.

This move towards mandatory disclosure in two of the world’s largest capital markets signals what European Commissioner Michel Barnier has called a “new era of transparency.”

BIG OIL BATTLES NEW RULES

The emergence of this new global standard, however, does not mean the campaign for revenue transparency is over. While the transparency train has clearly left the station, not everyone is on board. Major multinational oil companies have been trying to water down these requirements on both sides of the Atlantic. These companies have put their reputations in jeopardy by backing the American Petroleum Institute (API) in its lawsuit against the SEC to stop implementation of the U.S. rules. Now that the EU has joined the drive for disclosure, Big Oil faces a major problem in its assault on transparency.

The new EU disclosure deal undercuts a number of API’s arguments. API’s inflated estimates of compliance costs are now increasingly irrelevant, as major cross-listed companies, like Shell and BP, will have to comply with EU rules regardless of the lawsuit’s outcome. API’s claims that the SEC acted arbitrarily by adopting the U.S. rules - already questionable given that Congress mandated the rules and the SEC conducted an exhaustive public comment process during its rulemaking - are also undermined by the EU’s agreement to adopt very similar measures. The EU legislation will, in fact, encompass more than the U.S. rules as it covers large, privately held companies (and the timber sector), in addition to publicly listed companies.

And API’s argument that the rules cause competitive harm is even less compelling since the EU will apply analogous rules to companies under its jurisdiction, helping to level the playing field. Together, the U.S. and EU regulations will cover capital-markets listed companies, accounting for nearly 70 percent of the market capitalisation of extractive industry firms on the world’s most significant stock exchanges.

SECRECY DAMAGING REPUTATIONS

By continuing to support API’s lawsuit, companies are incurring significant costs defending opacity, not only pecuniary, but reputational as well. The public is becoming increasingly aware of their fight against transparency. While a few companies are taking some steps away from secrecy - Norway’s Statoil disavowed support for the API lawsuit - they are still the exception.

Shell, for instance, faced setbacks when Alan Detheridge, one of its former executives, openly criticized the company’s efforts to block U.S. and EU transparency, and the Dutch government pledged its support for strong EU rules consistent with U.S. law. The company has now started to change its tune, claiming it has supported mandatory reporting requirements all along - an assertion The Economist wryly noted contradicts Shell’s membership in API and refusal to disavow support for the U.S. lawsuit.

Oil companies should draw lessons from Shell’s mishaps, seizing the moment to actually “walk the talk” on transparency. Instead of litigating against transparency, companies should focus on complying with the U.S. and EU rules and enlist their lawyers to prepare for new reporting. Companies covered by the U.S. and EU rules should also join the global transparency movement to ensure these disclosure standards apply to all relevant companies. Obtaining a G8 commitment to mandatory disclosure at this year’s Summit would bring key countries like Canada into the fold. An effort to enact similar legislation in additional markets, including Australia and emerging Asian and South American economies, should follow.

The U.S.-EU legislative consensus on a global standard of transparency is a watershed moment for improving the governance of natural resources worldwide. Big Oil should not stand in the way. To restore their credibility and support good governance and development around the world, oil companies should publicly state their intent to comply with the new disclosure standards and urge API to drop its lawsuit.

Authors

Daniel Kaufmann

Publication: Reuters/TrustLaw

Image Source: © Beawiharta Beawiharta / Reuters

The Final Countdown: Prospects for Ending Extreme Poverty by 2030 (Interactive)

Laurence Chandy, Natasha Ledlie and Veronika Penciakova — Wed, 24 Apr 2013 10:21:00 -0400

Downloads

Download the full report

Authors

Laurence Chandy
Natasha Ledlie
Veronika Penciakova

Why Congress Should Care About the International Aid Transparency Initiative

George Ingram — Wed, 17 Apr 2013 15:41:00 -0400

As the long-dreaded sequestration process begins to set in, U.S. government programs that have already been feeling the heat of budget pressures are now starting to feel the pinch. Across all agencies and departments, there has never been such heightened vigilance to determine the quality, value, and effectiveness of taxpayer-funded programs in order to save them from landing on the proverbial chopping block. U.S. foreign assistance is no exception, and in fact, is likely to be a popular target despite notable progress over the past decade in how aid is delivered.

One basic tool to help circumvent arbitrary and needless cuts is to make information related to foreign assistance transparent, accessible and comparable with the activities of other international donors. Congress has the important responsibility of choosing how much to allocate for activities that seek to lift millions out of extreme poverty, fight disease, spur growth and restore human dignity. In this challenging budget environment, that responsibility is of even higher consequence, with the potential to affect lives all around the world, either for the better or worse. But to make informed decisions, Congress needs to have at its disposal comprehensive, reliable data that is timely and up-to-date.

The Foreign Assistance Dashboard— a public website launched a little over two years ago by the Obama administration to examine this data— demonstrates a strong commitment to aid transparency. However, compliance from agencies involved in U.S. foreign assistance has been slow; the site still only has partial information (budget plans, obligations and expenditures) for a couple of agencies (USAID and Millennium Challenge Corporation) and just planning data for the State Department, leaving out more than a dozen others as well as critical program and project data that lie beneath the aid-flow surface.

The U.S. made another major commitment to the transparency agenda at the 2011 High Level Forum on Aid Effectiveness in Busan, South Korea, by joining the International Aid Transparency Initiative (IATI). Meeting the IATI commitments, particularly the publication of comprehensive and timely foreign assistance information, is incomplete and moving slowly.

Congress needs to understand that the dashboard and IATI are the tools it has been searching for. Members continuously complain about the opaqueness of foreign assistance – how much assistance is the U.S. providing, to what countries, for what purposes, in cooperation with whom, to what effect? Where is the information to explain to constituents how their tax dollars are being spent? Together the dashboard and IATI will provide this information.

Even more importantly, while there are varying opinions over the best uses and purposes for foreign assistance, members of Congress, Republicans and Democrats, are united in caring that foreign assistance dollars are used well – that tax dollars are not wasted and that the assistance does help lift individuals and countries from poverty and promote U.S. foreign policy interests.

IATI is a critical tool in contributing to the effective use of foreign assistance funds – and not just government provided assistance, but also that which is provided by private entities such as NGOs, foundations and corporations. It is currently the only place for comparable aid information. While the dashboard is a valuable domestic resource, IATI allows a wide range of stakeholders to know what the U.S. government is doing alongside what others are doing. This is the full aid picture and what recipients want to know on the ground.

As of April 2013, 39 government and multilateral donors, and over 100 private organizations, have committed to IATI. When fully operative and with timely and comprehensive data from all donors, we will have the ability through one website to find all donor activity in a particular sector and a particular locale in a country – a virtual one-stop-data-shop for foreign assistance. So how will this improve aid effectiveness?

Let’s say you are: (1) USAID contemplating investing scarce assistance funds in education in region X of country Y; (2) a congressional staffer whose boss has asked whether donors are helping to expand education opportunities in that region; (3) an NGO contemplating working in that region; (4) a finance ministry budget expert in country Y trying to figure out which school districts are in the greatest need of resources in the next fiscal year. IATI will provide the data to help answer these questions.

Through IATI, USAID will know which other donors are engaged in the region, at what level of funding, with what specific focus, and with whom it might coordinate. The congressional staffer can tell his member what donors and at what level education is being assisted. The NGO can tell if this region is overrun by its sister organizations or ignored and with whom it might partner. The ministry budget expert can better allocate scarce resources and query the education ministry staff as to whether it is integrating donor activity into national education plans.

The administration is to be commended for taking the leading in bringing U.S. assistance into the age of data transparency. It is now time for Congress to become involved, by supporting the administration but also by pushing for more robust implementation. Congressman Ted Poe does this in his bill, the “Foreign Aid Transparency and Accountability Act”, which passed the House in the waning days of the last Congress but was held up in the Senate. It is expected that he will soon reintroduce the bill. Congress should act swiftly to enact it into law and recommend that IATI be the standard by which all agencies in the aid space publish their data.

Authors

George Ingram

Image Source: © Philimon Bulawayo / Reuters

The Sprint to the 2015 Development Goals: Reaching the Marginalized with Quality Education and Learning

Wed, 17 Apr 2013 09:00:00 -0400

Event Information

April 17, 2013
9:00 AM - 12:00 PM EDT

Saul/Zilkha Rooms
Brookings Institution
1775 Massachusetts Avenue NW
Washington, DC 20036

On April 17, the Center for Universal Education hosted members of the global education community for a public discussion on the two main challenges preventing the realization of universal education. As the clock winds down on the deadline to achieve the Education for All targets and Millennium Development Goals, there are still 61 million children out of primary school and another 71 million not enrolled in secondary school. There are 250 million children that have not mastered basic reading skills, and 200 million don’t have the relevant skills to support meaningful livelihoods. Evidence shows that education is one of the most effective ways to break the cycle of intergenerational poverty. Clearly, more must be done to ensure that all children are in school and learning, especially marginalized groups that are furthest behind.

The first panel examined issues related to financing education. CUE Director Rebecca Winthrop emphasized that although there is a $26 million financing gap for global education, donor support has stagnated and some countries like the Unites States, Canada, France, Japan, the Netherlands and Belgium have cut their foreign aid to education. Alice Albright, CEO of the Global Partnership for Education (GPE), pointed out that education ministers from developing countries are creating compelling education sector plans and working hard to improve their education systems. She stressed how important it is for governments and development partners to invest and support the efforts to help fund the $1.3 billion in pending GPE grants. She noted that innovative solutions could include financial transaction tax systems, local financing mechanisms, private sector partnerships and the use of technology. Nigel Chapman, CEO of Plan International, highlighted the importance of adding a gender lens to the issues of education. In an austere budgetary climate in many advanced economies where official development assistance is evaporating, it is essential that education is not forgotten because it requires complex and long term vision. Elizabeth King, director of Education for the World Bank’s Human Development Network, described the demand for education by countries, governments and communities. She highlighted how education is regularly cited as a top priority for people, even those living in fragile and conflict-affected contexts. King argued that this should send a strong message to the international community that education can play a role in building good citizenship within societies and can be a lever for growth and development. Therefore, it is important for resources to be used effectively and efficiently.

The second panel explored the need for more equitable and better quality education. CUE Senior Fellow Kevin Watkins presented data on the large numbers of out-of-school children in sub-Saharan Africa, and the causes of non-enrollment and school dropout, such as early marriage, child labor, conflict and poor educational quality. He pointed out that one of the biggest failings of the international donor community is the lack of provision within national education strategies to reach the most marginalized. Watkins emphasized that the reason why progress has stalled is largely because the same interventions and strategies are being used for marginalized groups when new and different approaches are needed. Baela Raza Jamil, director of programs at the Center of Education and Consciousness, described her work with the Annual Status of Education Report (ASER) in Pakistan and how she has been able to mobilize country-wide attention to issues around deficiencies in quality education in Pakistan.

She discussed the large-scale household and school assessment tools that have been created to measure differences within districts and across provinces. Jamil also talked about a new program, “Learning for Access”, that targets youth literacy and numeracy. Sumaya Saluja of the YP Foundation discussed the critical role that youth can play in tackling challenges in the education system. She described her work to measure school quality and her efforts to change traditional mindsets about girls’ education in India. Albert Motivan, head of Education Indictors and Data Analysis at UNESCO Institute for Statistics, presented evidence to illuminate the macro-level challenges facing global education, including UNICEF’s Out of School Initiative, which shows patterns of enrollment and progression across different segments of the global population. He also discussed the newly released report by the Learning Metrics Task Force, which outlines the different areas of learning that need to be measured, including readiness to learn, literacy and numeracy, competencies around analytic thinking, problem solving and ICT literacy.

Video

Audio

The Sprint to the 2015 Development Goals: Reaching the Marginalized with Quality Education and Learning

Transcript

Uncorrected Transcript (.pdf)

Event Materials

Transforming Foreign Assistance

Rev. David Beckmann, George Ingram and Jim Kolbe — Mon, 15 Apr 2013 16:41:00 -0400

The amount of good our nation has done for poor and hungry people around the world over the last ten years is astounding. We have saved and improved millions of lives through programs like the President’s Emergency Plan for AIDS Relief (PEPFAR), which was launched by former President George W. Bush to battle the disease in Africa, and the Feed the Future initiative, which President Obama started to support small farmers and the growth of local economies in developing countries.

Behind these big ticket initiatives, our foreign assistance approach has also been transformed into a more rigorously evaluated, strategic and selective one that is focused on helping developing countries and citizens take control of their own future. Completing this transformation must be a foreign policy priority for Obama and his successors because effective and robust development efforts will have to play a larger role in U.S. foreign policy if we are to maintain a strong global presence as our major military engagements end.

Recently, the United States Agency for International Development released the results of an extensive internal evaluation that provided the first evidence that reform is making the machinery of U.S. foreign assistance work better. The USAID Forward Progress Report provides a look at how the agency is implementing the reforms that Obama outlined in his landmark Policy Directive on Global Development (PPD) in 2010. The PPD, the first government-wide development policy reform guidance ever issued from the White House, mapped out the transformation agenda and highlighted a “long-term commitment to rebuilding USAID as the U.S. government’s lead development agency and as the world’s premier development agency.”

In the years since, USAID has focused on reforming key areas:

Evaluation and Selectivity: The creation of both the new USAID Bureau for Policy, Planning and Learning and the position of Chief Economist have had clear impact on the agency’s ability to plan and to measure programs and thus make more strategic decisions. The report notes that since 2011, 186 in-depth program evaluations have been completed and published for public review. Furthermore, thanks to a more concerted use of strategic planning, the agency reduced total numbers of program areas by 22 percent and phased out agricultural programs and global health programs in 21 and 17 countries, respectively, where local institutions are in position to take charge.

Country ownership: USAID’s launch of a process to develop Country Development Cooperation Strategies (CDCS) – which involve close and cross-sectoral collaboration with recipient countries to set goals and adapt programs – is an important step towards giving partners and citizens more responsibility and accountability within the development process. Twenty CDCS processes were completed in 2012. Efforts to expand country ownership were further strengthened by the agency’s efforts to direct more resources to local institutions. The report notes a 50 percent increase in funding to local organizations since 2010, from 9.7 percent in 2010 to 14.3 percent this year.

Economic Growth and Innovation: The report outlines that strengthening the Development Credit Authority (DCA) has allowed USAID to leverage more private capital – $524 million in 2012 alone – to support entrepreneurship and growth in developing countries. A premium has also been put on new technology: six USAID missions are now actively using and supporting mobile applications to catalyze development.

Partnership: In addition to strengthening relationships with recipient governments, institutions, and citizens, USAID has developed new partnerships with universities and other private sector organizations in order to build local capacity and improve program outcomes.

Transparency: USAID has established a rigorous, multi-step risk assessment mechanism for determining host country governments’ readiness to receive government-to-government assistance from the U.S. If at any point in this process a government fails to meet those eligibility criteria, it is disqualified from further consideration. Similarly, the Obama administration launched the Foreign Assistance Dashboard over two years ago to make information about U.S. assistance more accessible to both American citizens and those of recipient countries, and has committed to publish its assistance data with the International Assistance Transparency Initiative (IATI).

In addition to increased diligence and resolve by the Obama administration and USAID, congressional engagement is needed to solidify these reforms. The president’s budget includes strong reform elements, including a proposal to reshape the inefficient U.S. food aid system to reach more people and save more taxpayer dollars, and we urge Congress to support this and other proposals, like transparency legislation introduced by Rep.Ted Poe (R-Texas).

Completing the transformation of U.S. foreign assistance will reposition the U.S. as not just the most generous, but also the most strategic, innovative, and effective player in global development. We have saved and improved millions of lives over the last ten years and our efforts have helped strengthen our image abroad: a new field survey of aid recipient countries by Oxfam America finds that 83 percent of respondents believe the U.S. is a better development partner now than five years ago. The opportunity at hand for the next ten years is to turn progress into lasting change by helping those people take control of their own lives.

Authors

Rev. David Beckmann
George Ingram
Jim Kolbe

Publication: Politico

Democracy and Poverty: A Lesson from Mongolia

Nyamosor Tuya — Tue, 09 Apr 2013 00:00:00 -0400

Later this month, Mongolia will host the 7^th ministerial conference of the Community of Democracies (CD), an intergovernmental forum of democracies formed in 2000 at the initiative of Bronislaw Geremek of Poland and Madeleine Albright of the United States. Several civil society events will accompany it.

The CD was launched at a conference in Warsaw in 2000, and its goals were announced in the Warsaw Declaration: strengthening democratic values and institutions, protecting human rights, and promoting civil society. The effort was to be undertaken both at the national level, by supporting one another in these endeavors, and at the global level through collaboration on democracy-related issues in international and regional institutions. The Warsaw Declaration also emphasized the interdependence between peace, development, human rights and democracy.

After 2000, however, despite a sustained schedule of meetings and statements, the CD never really took off. Democracy’s progress worldwide had slowed in subsequent years, as noted in a number of surveys, including one by Freedom House. Celebrating its 10^th anniversary in Krakow in 2010, the CD acknowledged this state of affairs and through its Act of Recommitment to the Warsaw Declaration pledged to intensify its efforts to transform itself “into a unique forum for the world's democracies to promote and strengthen democracy on a global basis.” To meet this objective, the CD began to retool itself by creating a permanent secretariat, launching a partnership initiative that focuses on assistance to specific countries and, on top of civil society, bringing young people, businesses, and parliamentarians into its dialogue on democracy.

The April 2013 conference in Ulaanbaatar will be an occasion for the CD to further reinvigorate its agenda. Mongolia, which currently holds the CD presidency, offers a number of lessons to offer that could contribute to the organization’s recommitment to its objectives, especially emphasis on the interdependence between poverty, development and democracy. This emphasis is important both as an immediate goal for the host country and as a larger goal for the CD as a whole.

The case of Mongolia on poverty and democracy is instructive. The country started transitioning to democracy over twenty years ago and, for almost as long, the rate of poverty has stood at 30 percent and above. In the 1990s, much of it could be attributed to the disruptions caused by changes in its political and economic system. Harsh weather has been an intermittent factor, too. But no significant progress has been registered in later years, when the economy has grown at an annual average of 9 percent in the past decade. The latest available figure (2011) shows that poverty still stands at 29.8 percent, despite the double-digit economic growth in the past two years. The gap between poor and rich has continued to grow, and infrastructure has languished in a chronically decrepit state. Corruption, on the other hand, has continued to increase. Between 1999 and 2011, while the economy was growing, the country’s corruption ranking has managed to drop from a place where it was comfortably ahead of some of its fellow post-communist countries in Europe to a dismal 120th place out of some 180 countries surveyed by Transparency International. The implications for democracy were grave: most reforms stalled, vote buying became a serious concern, and public trust in the institutions of democracy was shaken. In a survey conducted in June 2012, over 80 percent of respondents believed that government policies were “always” or “often” failing to solve their concerns, chief among them unemployment and poverty.

The lesson to be drawn from this experience is that, early on in the transition process, new democracies should put economic liberty and transparency on a par with other democratic values such as regular elections, rule of law, human rights, freedom of association and freedom of speech. Otherwise, a callous and corrupt government, sometimes voted in through dubiously “free and fair” elections, can use the trappings and rhetoric of democracy as a façade while behind the scenes they engage in rent-seeking practices that can lead to a systemic entrenchment of corruption. In such a system political power is used for economic gain and economic gain is used for buying political influence. Few or no dividends go to the general populace. This results in persistent poverty among a large percentage of the population coupled with poor social services. Public enthusiasm or support for democracy wanes, democracy is eroded, therefore human rights are violated, and eventually democracy breaks down. Such scenarios are an early and real threat to democracy because the impoverished populace does not have the necessary tools―such as education or access to information―to fight back and, in most cases, is simply unfamiliar with the concept of demanding government accountability and responsiveness.

Early on, the CD emphasized this problem by stating in Warsaw that eradication of poverty is an “essential contributing factor to the promotion and preservation of democratic development” (2000). This emphasis should now be renewed. To do so, recommitment to the concept of interdependence between democracy and poverty found in the Santiago Commitment (2005) is essential. The Commitment stressed that democracy cannot be sustained without persistent efforts to eliminate extreme poverty and, vice versa, that the strengthening of democratic governance was “an essential component” of the efforts to alleviate poverty. Rooting out corruption that “corrodes democracy,” as stated in Warsaw, is a central element of these efforts, and this stance was reaffirmed in the Krakow Plan for Democracy (2010). Poverty is as much a threat to a democracy as poor institutions in that it deprives people of their political voice preventing them from holding their governments accountable and responsive, and eroding public trust in the emerging institutions of democracy. The CD’s Bamako Consensus (2007) addressed the issue of public trust: “persistent inequality and poverty can lead to low public trust in political institutions and vulnerability to undemocratic practices both of which are threats to democracy.” Poverty is also an assault on human dignity which is why the Bamako Consensus also emphasized that democracy, development and human rights were mutually reinforcing.

This body of reasoning serves as a good foundation for the CD to contribute to the ongoing global debate on the post-2015 development agenda. This debate presents the CD with an opportunity to pursue its position that eradication of poverty and the consolidation of democracy are interdependent. The thematic session on Millennium Development Goals (MDGs) that is planned for the CD’s meetings in Ulaanbaatar could therefore be seized as an occasion to launch substantive discussions on collaboration, in the coming years, with international organizations and civil society on ways to incorporate democratic governance in the post-2015 development agenda, or mainstream anti-corruption efforts into it, and ensure that this agenda adopts a human rights-based approach, addresses inequality and promotes social inclusion. Discussions could revolve around the issues raised in papers and notes by UN bodies and agencies and other actors, especially civil society, that call for encompassing human rights, democracy and good governance in an inclusive development agenda focused on poverty eradication. The ideas expressed at the global consultation on governance and the post-2015 framework could also be taken up.

The experience of Mongolia could also be looked at. Mongolia is one of two countries that have voluntarily added a ninth goal to its MDGs: Strengthen Human Rights and Foster Democratic Governance. While a welcome initiative, Mongolia’s MDG 9 has not been a successful undertaking either in terms of its design and implementation; one of its targets, “zero tolerance for corruption,” has been, for too long, an embarrassing slogan given the deteriorating realities on the ground. The initiative did not target such central principles of democratic governance as government accountability, transparency and participation. Neither has the mutually reinforcing nature of the goals to reduce poverty, promote gender equality and improve governance been duly highlighted in the national MDGs framework. Mongolia’s case strongly suggests that the design of governance goals and the methodology of assessing and monitoring their progress should be given careful consideration. The country’s experience also suggests that it is important for national leaders in new democracies to fully embrace and own the goals and targets of poverty reduction and democratic governance -- and to lead. And they should be held accountable for the failures in the implementation.

The impending Community of Democracy discussions in Ulaanbaatar will provide Mongolian leaders both in government and in civil society with an opportunity to reflect on the current status of the country’s MDGs on poverty reduction and democratic governance and commit to their acceleration. It should be noted that the latest poverty figure shows a decrease―29 percent in 2011 versus 39 percent in 2010―but it is yet to be determined if this is attributable to government’s untargeted cash handouts of the past three years, or whether it points to a trend. Whichever the case, sustaining economic growth and expanding the opportunities offered by it, especially by reducing youth unemployment, will be essential if the country is to meet its goal of reducing poverty to 18 percent by 2015. The discussion will also help the thinking on the best ways to incorporate the “unfinished business,” or any unmet MDGs, into the country’s post-MDGs goals in a way that is mindful of the importance of the wider governance context for any success in the key areas of poverty, gender equality and environment.

After years of stalled reform that threatened to jeopardize the country’s democratic gains, it appears that the Mongolian government is now more willing to tackle its outstanding governance issues. It has laid out its plans to reform the civil service, judiciary and police, the institutions most frequently cited in past surveys as the most corrupt; wider policy deliberation and citizen feedback and participation are encouraged, including through the use of new technologies; democracy education is being debated; efforts to address corruption have been stepped up and a more robust national strategy to combat it is in the works. A recent survey showed a slight increase in the level of confidence that people place in the ability of the country’s anti-corruption agency to tackle the issue. In a promising sign, in a single year, the country moved up 26 places in its ranking of the Transparency International’s Corruption Perception Index (the effect of changes in methodology and lesser number of countries surveyed is unclear). The government has also expressed its intent to join the Open Government Partnership (OGP), a multilateral transparency initiative involving governments and civil society. Its OGP Action Plan is scheduled to be presented later this month.

The government’s commitment to accountability and transparency will be put to the test by its handling of the case of a former finance minister, whose failure to disclose his offshore company and a secret Swiss bank account, holding $1 million at one time, was brought to light last week by the International Consortium of Investigative Journalists (ICIJ).

If sustained, reform should improve government effectiveness and create an enabling governance environment for focusing on poverty eradication which should remain the government’s first priority. In the years ahead, the country’s significant extractive wealth will also have to be managed in an exemplary way so that its benefits go to the entire population in an equitable way. The CD’s position that eradication of poverty is essential for a healthy democracy should serve as a guiding principle for the Mongolian government for it to regain public trust and produce outcomes that ensure prosperity, justice and security for the people.

Since the next CD ministerial will take place in 2015, only a couple of months removed from the global gathering on development, the Ulaanbaatar CD ministerial is an opportunity for democracies to start working together to include the democratic principles of accountability, transparency and participation into the post-2015 poverty eradication agenda. A reaffirmation of the CD’s belief in the mutually reinforcing nature of democracy and development can also help re-shape the debate in Mongolia in a way that integrates eradication of poverty, equity and social justice into the broader project of democracy.

Authors

Nyamosor Tuya

Image Source: © Stringer China / Reuters

Can the Poor Be Organized? Evidence from Rural India

Raj M. Desai and Shareen Joshi — Tue, 26 Mar 2013 14:32:00 -0400

INTRODUCTION

There is significant evidence of the role collective action plays in reducing poverty. Effective coordination by the poor has been shown to strengthen property rights (Baland and Platteau 2003; von Braun and Meinzen-Dick 2009), increase bargaining power in labor markets (Bardhan 2005), improve access to fi nancial markets (Karlan 2007) and increase public investments in poor communities (Alesina et al. 1999; Banerjee and Somanathan 2007).

In light of this evidence, governments, aid donors and international NGOs have sought to expand their support to collectives in poorer communities. At the World Bank alone, more than $50 billion has been spent in the past two decades on “community-driven development” projects that expand participation of the poor in the design, implementation and evaluation of development (Mansuri and Rao 2012).

The question of where social capital originates remains poorly understood. Most analyses of how poor communities resolve coordination problems focus on simple, group-devised solutions that restrict access to common resources (Bowles 1998; Ostrom 1998; Henrich et al. 2001; Fehr and Gächter 2000; Ostrom 2000; Ostrom and Ahn 2009). Others examine “socialization” effects for group members in fostering collective action (Miguel and Gugerty 2005). Overall, this research suggests that, in the absence of common preferences, collective action is likely to emerge when individuals have low costs of information, the opportunity to coordinate their actions, the opportunity to engage in repeated interaction and the power to reward contributors and punish free-riders. Given that these constraints are often binding for the poor, it follows that almost everywhere, the poor demonstrate lower levels of organization and collective action (Narayan et al. 2000; Gugerty and Kremer 2008).

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Raj M. Desai
Shareen Joshi

Image Source: © Mansi Thapliyal / Reuters

The Impact of the National Agricultural Advisory Services Program on Household Production and Welfare in Uganda

Geofrey Okoboi, Annette Kuteesa and Mildred Barungi — Wed, 20 Mar 2013 15:08:00 -0400

INTRODUCTION

In the 1990s, developing countries, including Uganda, witnessed wide-ranging reforms in the agricultural sector. In Uganda, these reforms included, among others, liberalization of trade in agricultural inputs, services and output; privatization of state-owned enterprises that supported production and marketing; and downsizing of civil servants who provided extension services. The reforms had both positive and negative consequences. Some of the negative effects of the reforms were income inequality and an increase in the proportion of the very poor in the early 1990s (Muwanga 2001); the collapse of public extension, credit and marketing services (Semana 2004); and falling agricultural productivity, according to the Ministry of Agricultural, Animal Industry and Fisheries (MAAIF 2010).

To overcome the negative consequences of agricultural reforms, the government of Uganda, with support from the World Bank and other donors, restructured the country’s extension system, as part of the Plan for Modernisation of Agriculture (PMA), from unified public extension to a public-private partnership (PPP) extension system. The reforms of the agricultural sector culminated in 2001 with the establishment of the National Agricultural Advisory Services Organization (through an act of Parliament, the National Agricultural Advisory Services Act of 2001) as a semiautonomous agency of the MAAIF, to manage the 25-year National Agricultural Advisory Services (NAADS) program.

In the PPP arrangement, the government contracts out extension services’ provision to private individuals and agencies, which were hailed as an efficient means of delivering services to only those farmers who would demand the service, hence creating a demand-driven extension system that would minimize costs (World Bank 2001). Moreover, under the PPP extension system, it is envisaged that the central government will initially shoulder a greater share of the cost of extension services provision but later gradually shift the cost to the local government and the farmers through their organizations— thus making extension services demanddriven by the private sector.

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Geofrey Okoboi
Annette Kuteesa
Mildred Barungi

The Declaration of the Millennium Development Goals

John McArthur — Wed, 06 Mar 2013 00:00:00 -0500

More than a decade after the establishment of the Millennium Development Goals (MDGs), ample confusion persists regarding their genesis. In particular, many people misunderstand the relationship between the contents of the September 2000 UN Millennium Declaration and the original MDG Targets that were extracted from that Declaration. As recently as 2012, I have heard senior global policy figures state a belief that, “The Millennium Declaration did not establish any quantitative targets. Those were set afterwards.” This is not correct. All of the MDGs’ original formal Targets were established in the Millennium Declaration.

The roots of the misunderstanding probably lie in the U.S. government’s stance from mid-2001, when the MDGs were first used as a policy term, through September 2005, when President Bush first used the words “Millennium Development Goals” in public. During the interim period, U.S. officials would commonly state that, “The United States supports the goals of the Millennium Declaration but not the Millennium Development Goals,” or that “The United States supports Goals 1 through 7 but not Goal 8.” When looking at the actual contents of the Millennium Declaration and the original MDG Targets, neither statement is logical.

The following describes the issues through the form of an FAQ structure.

1. Which Targets were taken directly from the Millennium Declaration?
All of the original MDG Targets were taken directly from the Millennium Declaration. Following the September 2000 Millennium Summit, the UN General Assembly mandated Secretary-General Kofi Annan to prepare a long-term roadmap towards the implementation of the Millennium Declaration. Annan in turn commissioned Assistant Secretary-General Michael Doyle to coordinate a process to extract the development-related outcomes of the Millennium Declaration and thereby crystallize the priorities for follow-up.

In working through the prose of world leaders’ commitments embedded in the body of the Millennium Declaration, Doyle and his team (which included people like Jan Vandemoortele of UNDP and others from UNICEF, the OECD, World Bank, IMF, UNFPA and later WHO) identified a subset of 18 politically agreed commitments, which they categorized under eight overarching “Goals.” These 18 commitments were labeled as “Targets.” Ten out of the 18 Targets were quantitative in nature and nine out of ten set a deadline for 2015, the exception being the slum dweller Target for 2020. Table 1 lists the original 18 MDG Targets next to the relevant passage(s) from the Millennium Declaration. [The 18 Targets were later expanded to be 21, based on 2005 intergovernmental agreements, as described under point #6 below.] Appendix 1 includes the complete Development section of the Millennium Declaration.

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Own the Goals: What the Millennium Development Goals Have Accomplished

John McArthur — Thu, 21 Feb 2013 14:11:00 -0500

For more than a decade, the Millennium Development Goals -- a set of time-bound targets agreed on by heads of state in 2000 -- have unified, galvanized, and expanded efforts to help the world's poorest people. The overarching vision of cutting the amount of extreme poverty worldwide in half by 2015, anchored in a series of specific goals, has drawn attention and resources to otherwise forgotten issues. The MDGs have mobilized government and business leaders to donate tens of billions of dollars to life-saving tools, such as antiretroviral drugs and modern mosquito nets. The goals have promoted cooperation among public, private, and nongovernmental organizations (NGOs), providing a common language and bringing together disparate actors. In his 2008 address to the UN General Assembly, the philanthropist Bill Gates called the goals "the best idea for focusing the world on fighting global poverty that I have ever seen."

The goals will expire on December 31, 2015, and the debate over what should come next is now in full swing. This year, a high-level UN panel, co-chaired by British Prime Minister David Cameron, Liberian President Ellen Johnson Sirleaf, and Indonesian President Susilo Bambang Yudhoyono, will put forward its recommendations for a new agenda. The United States and other members of the UN General Assembly will then consider these recommendations, with growing powers, such as Brazil, China, India, and Nigeria, undoubtedly playing a major role in forging any new agreement. But prior to deciding on a new framework, the world community must evaluate exactly what the MDG effort has achieved so far.

WORKING ON A DREAM

The MDGs are not a monolithic policy following a single trajectory. Ultimately, they are nothing more than goals, established by world leaders and subsequently reaffirmed on multiple occasions. The MDGs were not born with a plan, a budget, or a specific mapping out of responsibilities. Many think of the MDGs as the UN's goals, since the agreements were established at UN summits and UN officials have generally led the follow-up efforts for coordination and reporting. But the reality is much more complicated. No single individual or organization is responsible for achieving the MDGs. Instead, countless public, private, and nonprofit actors-working together and independently, in developed and developing countries -- have furthered the goals. Amid this complexity, the achievements toward reaching the MDGs are all the more impressive. The goals have brought the diffuse international development community closer together.

Before the MDGs were crafted, there was no common framework for promoting global development. After the Cold War ended, many rich countries cut their foreign aid budgets and turned their focus inward, on domestic priorities. In the United States, for example, the foreign aid budget hit an all-time low in 1997, at 0.09 percent of gross national income. Meanwhile, throughout the 1990s, institutions such as the World Bank and the International Monetary Fund (IMF) encouraged developed and developing countries to scale back spending on public programs-in the name of government efficiency-as a condition for receiving support.

The results were troubling. Africa suffered a generation of stagnation, with rising poverty and child deaths and drops in life expectancy. Economic crises and the threat of growing inequality plagued Asia and Latin America. The antiglobalization movement gained such force that in November and December 1999, at what has come to be called "the Battle in Seattle," street protesters forced the World Trade Organization to cancel major meetings midstream.

The suspicions on the part of civil society carried over into policy debates. In the late 1990s, the Organization for Economic Cooperation and Development proposed "international development goal" benchmarks for donor efforts. The OECD's proposal was later co-signed by leaders of the IMF, the World Bank, and the UN. In response, Konrad Raiser, then head of the World Council of Churches, hardly a fire-breathing radical, wrote UN Secretary-General Kofi Annan to convey astonishment and disappointment that Annan had endorsed a "propaganda exercise for international finance institutions whose policies are widely held to be at the root of many of the most grave social problems facing the poor all over the world."

That proposal never got off the ground, but the international community made other progress in the lead-up to 2000 that helped set the groundwork for the MDGs. Most notably, G-8 leaders took a major step forward when they crafted a debt-cancellation policy at their 1999 summit in Cologne, Germany. Under this new policy, countries could receive debt relief on the condition that they allocated savings to education or health. This helped reorient governments toward spending in social sectors after many years of cutbacks.

At the 2000 UN Millennium Summit, which was the largest gathering of world leaders to date, heads of state accepted that they needed to work together to assist the world's poorest people. Looking at the challenges of the new century, all the UN member states agreed on a set of measurable, time-bound targets in the Millennium Declaration. In 2001, these targets were organized into eight MDGs: eradicate extreme poverty and hunger; achieve universal primary education; promote gender equality and empower women; reduce child mortality; improve maternal health; combat HIV/AIDS, malaria, and other diseases; ensure environmental sustainability; and forge global partnerships among different countries and actors to achieve development goals. Each goal was further broken down into more specific targets. For example, the first goal involves cutting in half "between 1990 and 2015, the proportion of people whose income is less than $1 a day."

In practical terms, the MDGs were actually launched in March 2002, at the UN International Conference on Financing for Development, in Monterrey, Mexico. The attendees, including heads of state, finance ministers, and foreign ministers, agreed that developed countries should step in with support mechanisms and adequate financial aid to help poor countries committed to good governance meet the MDG targets. Crucially, leaders set a benchmark for burden sharing when they urged "developed countries that have not done so to make concrete efforts towards the target of 0.7 percent of gross national income (GNI) as official development assistance to developing countries." At the time of the conference, the 22 official OECD donor countries allocated an average of 0.22 percent of GNI to aid. Thus, working toward a 0.7 target implied more than tripling total global support. The Monterrey conference established the MDGs as the first global framework anchored in an explicit, mutually agreed-on partnership between developed and developing countries.

THE GLOBAL CONVERSATION

These historic intergovernmental agreements have inspired much debate. Some NGO leaders, including participants in the annual World Social Forum, distrusted any agreement that involved international financial institutions and was negotiated behind closed doors. Human rights activists were dismayed that the MDGs excluded targets for good governance, which they considered a contributor to development and a key outcome unto itself. Some environmental activists were bothered by the narrow formulation of the targets, which ignored major issues, such as climate change, land degradation, ocean management, and air pollution.

To be sure, the MDG framework is imperfect. Several issues, such as gender equality and environmental sustainability, are defined too narrowly. The education goal is limited to the completion of primary school, overlooking concerns about the quality of learning and secondary school enrollment levels. In addition, some academics, such as the economist William Easterly, argue that the remarkable ambition of the goals is unfair to the poorest countries, which have the furthest to go to meet the targets, and minimizes what progress those countries do achieve. Sure enough, if the child survival goal were to cut mortality by half, instead of by two-thirds, 72 developing countries would already have met the target by 2011. Instead, the two-thirds goal has been achieved by only 20 developing countries so far. In addition, the MDGs' emphasis on human development issues, such as education and health, sometimes downplays the importance of investments in energy and infrastructure that support economic growth and job creation.

Nonetheless, the framework has provided a global rallying point. In 2002, with a mandate from Annan and Mark Malloch Brown, then the administrator of the UN Development Program, the economist Jeffrey Sachs launched the UN Millennium Project, which brought together hundreds of experts from around the world from academia, business, government, and civil-society organizations to construct policy plans for achieving the goals. Sachs also tirelessly lobbied government leaders in both developed and developing countries to expand key programs, especially in health and agriculture, in order to meet the MDG targets.

In the lead-up to the 2005 G-8 summit, in Gleneagles, Scotland, advocacy organizations worldwide championed the MDGs. In developing countries, NGO leaders, such as Amina Mohammed, Kumi Naidoo, and Salil Shetty, encouraged civil-society leaders to hold their governments accountable for meeting the goals. In developed countries, organizations such as ONE, co-founded by the activist Jamie Drummond, the rock star Bono, and others, petitioned politicians and conducted public awareness campaigns to demand that world leaders step up their efforts to meet the targets. At the summit, British Prime Minister Tony Blair and Gordon Brown, then British chancellor of the exchequer, put the MDGs and foreign aid commitments at the top of the agenda. Leaders at Gleneagles committed to increasing global aid by $50 billion by 2010 and set the groundwork for larger commitments to be made by 2015. However, one powerful player on the world stage, the United States, remained hesitant to embrace the MDG agenda.

PLAYERS ON THE BENCH

U.S. President George W. Bush launched the Millennium Challenge initiative in 2002, promising a 50 percent increase in U.S. foreign aid within three years, with money going to countries committed to good governance. The initiative drew inspiration from the MDGs, as the name suggests, but confusingly, it did not directly link to the targets. Ten months later, in his 2003 State of the Union address, Bush launched the President's Emergency Plan for AIDS Relief, which has dramatically improved access to AIDS treatment in the developing world. This program was in many ways in line with the MDG effort but did not explicitly link to the goals. Bush even endorsed the UN Millennium Declaration and the Monterrey agreements, but he refused to support the MDGs, largely because his administration viewed them as UN-dictated aid quotas.

Holding a similar view, State Department officials regularly claimed that they supported the targets of the Millennium Declaration but not the MDGs, despite the fact that the MDG targets were drawn directly from the Millennium Declaration. U.S.-UN tensions over the Iraq war were a critical backdrop, with the Bush administration reticent to support a major UN initiative. Washington's aversion was so strong that many U.S. advocacy groups avoided using the term "Millennium Development Goals" for fear of losing influence. When John Bolton became the U.S. ambassador to the UN in August 2005, one of his first actions was to suggest deleting all references to the MDGs in the drafted agreement of the upcoming UN World Summit. The subsequent uproar from other countries and U.S. media outlets forced Washington to modify its position. In his summit speech, Bush finally endorsed the MDGs, using the phrase "Millennium Development Goals" publicly for the first time.

By refusing to directly engage with the MDGs in their early years, the United States missed an opportunity to highlight its contributions to development efforts and foster international goodwill. In the early years of this century, the United States helped revolutionize global health, a central pillar of the MDGs, first through Bush's AIDS initiative and later through efforts on malaria and other deadly diseases. Furthermore, by resisting a project on which most of the world was actively collaborating, Washington missed easy opportunities to build political capital for solving much thornier and divisive international issues.

Diplomatic tensions have subsided under the Obama administration, which has given much stronger rhetorical support to the MDGs and has continued the previous administration's basic development policies, in addition to launching a major initiative to reduce poverty by supporting small farms around the world. Nevertheless, many officials in Washington remain either skeptical or disengaged when it comes to the MDGs, most likely because of a long-standing aversion to fixed foreign aid spending, especially when defined by an international agreement. This fear, however, is baseless. The MDGs do not dictate any aid commitments, and the only related figure, the 0.7 aid target, which countries agreed to work toward in Monterrey in 2002, was endorsed by Bush. It was only later that some countries, such as the United Kingdom, made timetables to meet this aid target.

The World Bank has similarly missed out. Although the bank has championed the framework at senior political levels, it has not adequately facilitated MDG efforts on the ground. Early resistance was in part due to bureaucratic resentment of the UN for its having been given such a prominent role on development issues. In addition, as an institution dominated by economists, the bank is prone to prioritize economic reforms over investment in social sectors. Even more, there is widespread distrust among the bank's staff that donor countries will provide adequate financing for the MDGs. Such concerns are not without merit, as the G-8 ended up falling more than $10 billion short on its Africa pledges for 2010 alone.

Nevertheless, the bank, as a main interlocutor with the developing world, should have helped poor countries assess how they could achieve the MDGs and sounded the alarm about donor financing gaps. Furthermore, the bank has a self-serving reason to get onboard: the MDGs spurred a major budgetary expansion for the International Development Association, the branch of the bank devoted to supporting the poorest countries. Fortunately, the United States and the World Bank are coming around on the MDGs, attracted by the proven success of the framework.

IT'S A SMALL WORLD AFTER ALL

As of late 2010, five years before the deadline, the world had already met the overarching MDG of cutting extreme poverty by half. The estimated share of the developing-world population living on less than $1.25 per day (the technical MDG measurement of extreme poverty) had dropped from 43 percent in 1990 to roughly 21 percent in 2010. This statistic is somewhat skewed by progress that was under way in China and other Asian countries long before the MDGs were adopted. The framework is not solely responsible for all of the advancements of the past 12 years. Many other forces, such as the expansion of global markets and the creation of groundbreaking health and communications technologies, have helped the developing world. Moreover, the goals relating to hunger, sanitation, and the environment have not been met. Poverty reduction, however, has progressed in every region since 2000. Even excluding China from the global calculation, the world's share of impoverished people fell from 37 percent in 1990 to 25 percent in 2008, and forthcoming data should show an even greater drop.

Most important, the MDGs have kick-started progress where it was lacking, especially in Africa, where unprecedented economic growth and poverty reduction are now taking place. From 1981 to 1999, extreme poverty in sub-Saharan Africa rose from 52 percent of the population to 58 percent. But since the launch of the MDGs, it has declined sharply, to 48 percent in 2008. Much of this was likely driven by MDG-backed investments in healthier and better-educated work forces in the region. The global MDG campaign has also prompted support for small subsistence and cash-crop farms, which has boosted growth in many low-income countries, such as Malawi.

Primary education rates have increased around the world, too, with South Asia and sub-Saharan Africa experiencing particularly big jumps in enrollment. Much of this has been the result of funding from MDG-linked initiatives, such as the Global Partnership for Education, launched in 2002 by the World Bank and other development organizations to help poor countries "address the large gaps they face in meeting education MDG 2 and 3, in areas of policy, capacity, data, finance." These same efforts have helped nearly every world region achieve gender parity in classrooms.

The greatest MDG successes undoubtedly concern health. The MDGs have invigorated multilateral institutions, such as the GAVI Alliance (formerly called the Global Alliance for Vaccines and Immunization), which seeks to achieve MDGs "by focusing on performance, outcomes and results." The goals have also inspired a huge increase in private-sector aid. Ray Chambers, a respected philanthropist and co-founder of a New York private equity firm, first learned of the goals in 2005. Since then, working with Sachs and others, Chambers has coordinated a worldwide coalition of policy, business, and NGO leaders in an effort to help the developing world meet the goal for malarial treatment and prevention. Thanks in part to this global effort, malaria-related mortality has dropped by approximately 25 percent since 2000, with most of those gains probably occurring since 2005. Many pharmaceutical companies have also put forth major efforts to make their medicines more widely available in poor countries, and new initiatives are continuing to take shape. The MDG Health Alliance, founded in 2011, is comprised of business and NGO leaders around the world working toward the MDG health targets, including the elimination of mother-to-child HIV transmission.

The combined results of these campaigns are remarkable. For example, in Senegal, child mortality has plummeted by half since 2000. In Cambodia, it has dropped by 60 percent. Rwanda has recorded a ten percent average annual reduction since 2000, one of the fastest declines in history. Even China has seen a significant decrease in child deaths, possibly because the expanded global emphasis on health has encouraged the country's policymakers to pay more attention to relevant issues. Overall, despite rapid global population growth, there has been a decrease in children dying worldwide before their fifth birthdays, from 11.7 million in 1990 to 9.4 million in 2000 and 6.8 million in 2011.

No issue has been more closely interconnected with the MDGs than the HIV/AIDS treatment campaign. In 2000, nearly 30 million people were infected, the vast majority in Africa, where only approximately 10,000 people were in treatment and over one million people were dying every year from the disease. The next year, the head of the U.S. Agency for International Development publicly deemed large-scale AIDS treatment in Africa impossible. Undeterred, Annan launched the Global Fund to Fight AIDS, Tuberculosis and Malaria, which aims to achieve "long-term outcome and impact results related to the Millennium Development Goals."

Spurred by the launch of the MDGs, Jim Yong Kim, then head of the World Health Organization's HIV/AIDS department, introduced the "3 by 5" initiative in 2003, which aimed to have three million people living with AIDS in the developing world receiving treatment by 2005. By the end of 2005, only 1.3 million people were receiving treatment-fewer than half of the target. But thanks to the interwoven AIDS-MDG campaign, the notion of service delivery targets has sunk in globally, helping expand AIDS treatment by orders of magnitude: also in 2005, the G-8 and the UN General Assembly endorsed a target of universal access to treatment by 2010, backed by major financial commitments. The MDG movement has expanded the world's ambitions in tackling health crises and made extraordinary progress. In 2011, more than eight million people worldwide were receiving AIDS treatment.

NEXT-GENERATION GOALS

The MDGs have proved that with concentration and effort, even the most persistent global problems can be tackled. The post-2015 goals should remain focused on eliminating the multiple dimensions of extreme poverty, but they also need to address emerging global realities. These new challenges include the worsening environmental pressures affecting the livelihoods of hundreds of millions of people, the growing number of middle-income countries with tremendous internal poverty challenges, and rapidly spreading noncommunicable diseases.

The new goals also need to be matched with resources. Without the Monterrey agreements of 2002 and the financial commitments made at the Gleneagles summit in 2005, the MDGs might well have faded from the international agenda. It is crucial that the post-2015 negotiations not be left solely to foreign and development ministries. Finance ministries will need an equal say on many of the most central issues and therefore need to be included from the beginning. Other relevant ministries, such as those that deal with health and environmental issues, should be consulted regularly. Additionally, in preparation for 2015, multilateral organizations, such as the World Bank and UN agencies, should conduct independent external reviews of their contributions to the MDGs and identify benchmarks for post-2015 success based on the results. And the United States needs to join the international community in making a solid commitment to long-term, goal-oriented foreign aid.

The MDGs have helped mobilize and guide development efforts by emphasizing outcomes. They have encouraged world leaders to tackle multiple dimensions of poverty at the same time and have provided a standard that advocates on the ground can hold their governments to. Even in countries where politicians might not directly credit the MDGs, the global effort has informed local perspectives and priorities. The goals have improved the lives of hundreds of millions of people. They have shown how much can be achieved when ambitious and specific targets are matched with rigorous thinking, serious resources, and a collaborative global spirit.

Looking forward, the next generation of goals should maintain the accessible simplicity that has allowed the MDGs to succeed and also facilitate the creation of better accountability mechanisms both within and across governments. In addition, the new goals need to give low- and middle-income countries a greater voice in shaping the agenda. Most important, momentum matters. Just as progress in individual MDG areas has inspired other campaigns, so work done now, in the final stretch, will affect what happens in the future. The results achieved by 2015 will mark an endpoint, but even more, they will provide a springboard for the next generation of goals. There is no time to lose.

Authors

John McArthur

Publication: Foreign Affairs

The United States and Global Development: An Approach in Transition

Tue, 19 Feb 2013 14:00:00 -0500

Event Information

February 19, 2013
2:00 PM - 3:30 PM EST

Saul/Zilkha Rooms
Brookings Institution
1775 Massachusetts Avenue NW
Washington, DC 20036

As President Barack Obama begins his second term, the U.S. global development community is taking stock of the reform efforts that began in 2010 to elevate development—joining defense and diplomacy—as a core pillar of U.S. national security and foreign policy, while advancing proposals for what the administration should focus on going forward. In January 2013, the Modernizing Foreign Assistance Network (MFAN), a reform-minded coalition that is focused on advancing the effectiveness and impact of U.S. global development efforts, submitted its recommendations to President Obama.

On February 19, the Development Assistance and Governance Initiative at Brookings and MFAN co-hosted a discussion on the current status and future of the U.S. global development reform agenda. Panelists included: Sheila Herrling, vice president, department of policy and evaluation at the Millennium Challenge Corporation; Steven Radelet, distinguished professor in the practice of development at Georgetown University; Susan Reichle, assistant to the administrator at the Bureau of Policy, Planning and Learning at the U.S. Agency for International Development; and Connie Veillette, former director of the Rethinking U.S. Foreign Assistance Program at the Center for Global Development. Brookings Senior Fellow George Ingram moderated the discussion.

Clicks into Bricks, Technology into Transformation, and the Fight Against Poverty

Laurence Chandy, Kemal Derviş and Steven Rocker — Tue, 12 Feb 2013 09:42:00 -0500

The last century has witnessed dramatic global improvements in the quality of life. Many of these improvements can be attributed to the discovery and spread of new technologies and ideas, ranging from vaccines and antibiotics, to improved hygiene, to the agricultural reforms of the Green Revolution. Today there is growing excitement about a new set of technologies that could further improve the lives of poor people around the world. Mobile technology is giving poor people the capacity to use their cell phones to send, receive and store money. Connection technologies such as open source software have allowed people in Haiti and Pakistan to collect and analyze information about, and then respond to, violence, corruption and natural disasters. “Green growth” innovations are expanding access to electricity and increasing agricultural yields around the globe while also reducing harmful emissions.

The 2012 Brookings Blum Roundtable was convened to discuss how the role of technology and innovation in global development can be promoted. Development practitioners and thought leaders from the public, private and non-profit sectors came together to examine the constraints that prevent the take up of creative technologies and how these constraints can be lifted. A critical question for the roundtable was what role the U.S. government should play in this agenda and how it can crowd in greater private sector activity.

This report highlights 10 issues raised at the roundtable where either particular proposals were advanced and debated, or new perspectives and analyses were shared. In each case, we summarize the roundtable discussion or explore the issues raised.

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The video below chronicles M-Pesa, the leading mobile money service in Kenya, and delves into the question of why its success has not been easily replicated elsewhere. For more information on M-Pesa, read Chapter 2 of this report.

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South Sudan: Searching for a Credible Development Path

John Mukum Mbaku — Mon, 04 Feb 2013 15:14:00 -0500

Framing the issue

South Sudan’s independence from the Republic of Sudan on July 9, 2011 was met with joy, trepidation and many challenges. Despite the fact that South Sudan is endowed with significant amounts of natural resources, the country faces many obstacles. These include a population suffering from significantly high levels of poverty and deprivation; extremely low levels of human capital accumulation; food insecurity; poorly developed economic infrastructure; pervasive bureaucratic corruption; a failure to deal with various internal security problems, some of which arise from violent mobilization by groups that consider themselves marginalized by the government in Juba; and continued conflict with the Republic of Sudan, especially on border issues. Although today, February 4, marks the stated completion date of the withdrawal of South Sudanese forces along its border with Sudan, South Sudan has failed to remove its troops.

South Sudan’s independence provided the new country with many opportunities to improve human development. However, in order for the peoples of South Sudan to translate these opportunities into sustainable development, the new government must bring about genuine institutional reforms. At independence, citizens of the new country had hoped that Juba would provide the wherewithal for all of the country’s relevant stakeholder groups to build and adopt institutional arrangements capable of adequately constraining state custodians (i.e., civil servants and political elites) and preventing them from behaving with impunity. Unfortunately, the government is yet to undertake the necessary reconstruction and reconstitution of the anachronistic and dysfunctional state structures inherited from the Khartoum-based regime. South Sudan’s civil society, which is supposed to pressure the government to undertake the necessary institutional reforms, remains extremely weak and fragile and is currently unable to adequately serve this critical role. While a private media is gradually developing, it has not yet achieved the ability and independence to function as an effective check on government, as well as put pressure on the government to fully perform its constitutionally assigned functions.

The failure of South Sudanese citizens to engage in democratic institutional reforms to provide themselves with institutional arrangements that guarantee the rule of law has left the government unable to effectively manage ethnic and religious diversity, minimize corruption and public financial malfeasance, and provide the enabling environment for the creation of the wealth that can be used to fight poverty and enhance human development.

The failure of South Sudanese citizens to engage in democratic institutional reforms to provide themselves with institutional arrangements that guarantee the rule of law [1] has left the government unable to effectively manage ethnic and religious diversity, minimize corruption and public financial malfeasance, and provide the enabling environment for the creation of the wealth that can be used to fight poverty and enhance human development. One, of course, can argue that the type of institutional reforms being suggested can only be accomplished with time. While that may be true, it is still the case that South Sudan cannot progress without appropriate institutional arrangements.

At a recent forum on oil and gas management in East Africa, held in Kampala, Uganda and organized by Brookings’ Africa Growth Initiative in cooperation with partners in Africa—the Economic Policy Research Center (Uganda), Kenya Institute for Public Policy Research and Analysis (Kenya), and the Center for Strategic Analyses and Research (South Sudan)—participants considered “constructive engagement” between government and a country’s relevant stakeholders as the most important way to enhance efficient and equitable management of natural resources. However, for such engagement to be productive, all parties have to be fully informed and that requires, at the very least, that government operate in an open and transparent fashion. Such engagement is especially critical for South Sudan where continued distrust of the government by various groups has fueled violent and destructive mobilizations. Some of this ethnic-induced violence is responsible for the country’s inability to attract investment and place itself on the path to sustainable development.

Grand corruption: a manifestation of institutional failure

According to an article by David Smith, published in The Guardian on June 5, 2012, South Sudan President Salva Kiir sent a letter dated May 3, 2012 to “75 current and former senior government staff” accusing them of stealing as much as $4 billion from the national treasury. In the same letter, President Kiir demanded that the money be returned and reminded the officials of the sacrifices made by many South Sudanese during the struggle for independence. According to Smith’s article, Kiir had declared: “We fought for freedom, justice and equality,” unfortunately, “once we got to power, we forgot what we fought for and began to enrich ourselves at the expense of our people.” The president added that “[p]eople in South Sudan are suffering and yet some government officials simply care about themselves.” Economists have long recognized self-interest as an important motivator for the behavior of individuals, whether they are in economic or political markets. As argued by Brennan and Buchanan in The Reason of Rules: Constitutional Political Economy, “man’s natural proclivity is to pursue his own interests and that different persons’ interests almost invariably come into conflict.” Thus, each society must design and adopt rules or what Adam Smith (1887) calls “laws and institutions” that coordinate the activities of individuals and provide for the peaceful resolution of any conflict arising from socio-political interaction. Perhaps, more important, is the fact that these laws and institutions serve as constraints on the state and effectively minimize the ability of civil servants and politicians to engage in any form of opportunism (e.g., corruption and rent-seeking). One cannot depend on the capacity of individuals—specifically those who serve in government and have responsibility for managing public funds—to love and care for their fellow citizens as a mechanism to prevent corruption and public financial malfeasance and enhance efficient public financial management. As President Kiir has already discovered, appeals to nationalism and patriotism are not sufficient as incentives to prevent public officials from engaging in corruption and other extra-legal schemes to enrich themselves. On the other hand, openness and transparency in government operations and communications would have a greater impact on corruption than the appeals that are coming out of the presidency. Unfortunately, South Sudan authorities continue to follow a policy of opacity, supposedly for reasons of national security.

Resumption of oil production

Shortly after South Sudan gained independence, the new country suspended production in its rich oil fields because of disagreements with the Republic of Sudan over charges for using Sudanese pipelines to transport the oil to export markets. South Sudan and the Republic of Sudan signed an agreement on various post-secession issues, including the common border, security and economic relations, according to the United Nations News Center, on September 27, 2012. The Government of South Sudan subsequently announced that oil production would resume by year’s end. However, various problems continue to prevent both South Sudan and the Republic of Sudan from resuming oil production. First, the two countries have still not withdrawn their armed forces from the disputed border area, effectively preventing South Sudan from getting its oil to export markets. Second, while in September 2012, both countries had agreed to set up a demilitarized buffer zone around the oil fields located on the border, this has not yet been accomplished and the area remains heavily armed. Third, Khartoum continues to insist that it would not resume oil production until all security arrangements between the two countries are completed. Finally, Khartoum has accused Juba of providing support to the Sudan People’s Liberation Movement-North (SPLM-North), which had supported South Sudan during its fight for independence and which now controls part of Sudan’s side of the border. Many observers, including important players such as the President of Nigeria, Goodluck Jonathan, have stated that direct talks and cooperation between Juba and Khartoum are critical for the achievement of the peace necessary for the resumption of oil production and the promotion of economic growth and development. However, there is progress. In mid-January, Juba announced a withdrawal of its military forces from the border area and hoped to complete the process by today, February 4, 2013. Juba hoped that Khartoum would act similarly, allowing the buffer zone to be established and, should that happen, the way could be cleared for oil production to resume. Unfortunately, South Sudan has not even begun to withdraw.

Given the fact that oil revenues account for as much as 90 percent of public revenues for the Government of South Sudan, resumption of production should significantly increase the flow of revenues into the national treasury. This development would have significant implications for public financial management, an area that is traditionally ripe with opportunities for corruption and other forms of malfeasance. Unfortunately, the country’s present set of institutional arrangements is not capable of adequately constraining civil servants and politicians and preventing them from plundering oil royalties. In the short run, the government must fully implement and pay fidelity to the Extractive Industries Transparency Initiative. This will require the country to abandon opacity and, instead, follow a policy of openness and transparency in public financial management. Such an approach would significantly enhance the ability of the government to minimize the various forms of grand corruption, which are usually endemic to public sectors characterized by significant levels of secrecy. However, in the long run, the government must provide all relevant stakeholders with the facilities to engage in comprehensive institutional reforms to create governance institutions that guarantee the rule of law.

A new anti-corruption campaign?

The government of President Kiir has launched a new anti-corruption campaign, which has included a decree demanding that all public officials submit a declaration of assets to the country’s anti-corruption commission. One can immediately recognize two problems with this program: First, presidential decrees—an essentially top-down approach—are not the most effective way to deal with as pervasive a problem as corruption. Like many other problems that this young country faces, dealing effectively with corruption requires the adoption of a participatory and bottom-up approach to policy design and implementation—this is part of the constructive engagement that participants at the AGI-sponsored Kampala forum spoke of. Second, during the last several decades, many African countries have taken similar elite-driven, top-down approaches to corruption control, including asset declaration and the prohibition of public officials from engaging in entrepreneurial activities while in office, and none have worked. In fact, civil servants and political elites in these countries have been able to easily subvert these constraints, by, for example, placing their assets in the names of relatives and forming business enterprises in which they remain silent partners. With the advent of electronic funds transfer, it has become relatively easy for civil servants and politicians to place their ill-gotten gains outside the purview of the government. In fact, as President Kiir’s letter indicated, a lot of the money stolen from South Sudan’s national treasury has “been taken out of the country and deposited in foreign accounts,” as noted in the Smith article in The Guardian. It is generally believed in Juba that a lot of the stolen money either now resides in Kenyan financial institutions or has been used to purchase real property there. In any case, the money is out of the reach of South Sudan authorities and, unfortunately, Juba does not have the capacity to recover these badly-needed funds.

The challenge for 2013

South Sudan faces a lot of challenges in 2013. Despite the agreement signed between the two countries in September 2012, the border issue remains essentially unresolved. However, the decision by Juba to unilaterally withdraw its army from the border should improve opportunities for setting up the buffer zone, which is necessary for the resumption of oil production.

Minimizing destructive ethnic conflict, achieving food security, providing employment opportunities for restless urban youth, improving the country’s economic infrastructures, diversifying the economy and reducing its dependence on oil, and generally placing the country on the road to sustainable economic growth and development remain major problems. It is important, however, to emphasize that South Sudan will remain in its underdevelopment trap until such a time that it provides itself, through democratic (i.e., bottom-up, people-driven, participatory and inclusive) constitution-making, with institutional arrangements that guarantee the rule of law. For, without a set of laws and institutions that adequately constrains civil servants and politicians, the latter will continue to consider themselves above the law and behave with impunity. Hence, the most important challenge for the government of South Sudan in 2013 is the reconstruction and reconstitution of the post-colonial state through democratic constitution making to provide institutional arrangements that (i) adequately constrain the state (and hence, prevent its custodians—that is, civil servants and political elites—from engaging in the various forms of opportunism), (ii) provide effective mechanisms for the management of ethnic and religious diversity, (iii) create an enabling environment for entrepreneurial activities and the creation of wealth, and (iv) generally improve the country’s ability to participate in and benefit from the global economy.

Footnote

[1] While the “rule of law” is a complex concept, some of its important elements include “supremacy of law”—that is, all citizens are subject to the law, including those who serve in executive, legislative and judicial positions; judicial independence; openness and transparency in government operations; and protection of human rights. If, for example, there is a constitutional guarantee of the supremacy of law, then those who serve in government (e.g., civil servants and politicians) would find it difficult to act with impunity and engage in behaviors such as corruption and rent-seeking to enrich themselves.

References

Boswell, Alan, “American Expelled from South Sudan for Anti-corruption Work,” The Miami Herald, August 20, 2012, accessed on November 1, 2012, http://www.mcclatchydc.com/2012/08/20/162893/american-expelled-from-south-sudan.html.

Brennan, Geoffrey Brennan and James M. Buchanan, The Reason of Rules: Constitutional Political Economy, Cambridge, UK: Cambridge University Press, 1985, ix.

Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations, London: T. Nelson and Sons, 1887, 40.

Authors

John Mukum Mbaku

How Effective Is the World Bank at Targeting Sub-National Poverty in Africa? A Foray into the Murky World of Geo-Coded Data

Laurence Chandy, Natasha Ledlie and Veronika Penciakova — Mon, 04 Feb 2013 14:11:00 -0500

How efficiently is aid allocated to reduce poverty? This question was explored over a decade ago in a paper by the economists Paul Collier and David Dollar. Their definition of a poverty-efficient allocation included, among other elements, the simple maxim that to maximize poverty reduction, “aid should be given to countries with large amounts of poverty.” When actual allocations were analyzed, it was shown that donor agencies paid heed to this rule. (Donors did less well at giving aid to countries with good policies, which, the authors argued, resulted in poverty-inefficient allocations overall.)

Intuitively, we would expect this maxim to apply at the sub-national level too: aid will contribute most to poverty reduction in a country when it is allocated to its poorest regions. An examination of sub-national aid allocations could therefore lead to greater understanding of donors’ commitment to poverty reduction. However, the limited availability of sub-national data on both aid and poverty incidence has precluded this level of analysis.

This is starting to change. As part of its “Mapping for Results” initiative, the World Bank has geo-coded its entire project portfolio of 2,900 active projects across 30,400 sub-national locations in 144 countries. Meanwhile, IFPRI’s Harvest Choice initiative has gathered together sub-national poverty data (using the international poverty line of $1.25 a day) from recent household surveys in 24 sub-Saharan African countries to draw detailed poverty maps covering half the continent. Both datasets contain, at a minimum, information at the first-order administrative level, meaning the province, state and governorate.

By combining these two datasets, we can begin to explore the allocative efficiency of aid with respect to poverty at the sub-national level—albeit for a single donor, in a subset of countries, at a particular point in time. The 24 countries we study contain 359 World Bank projects, which together are valued at nearly $19.3 billion.

By combining these two datasets, we can begin to explore the allocative efficiency of aid with respect to poverty at the sub-national level—albeit for a single donor, in a subset of countries, at a particular point in time. The 24 countries we study contain 359 World Bank projects, which together are valued at nearly $19.3 billion.

Our findings suggest that the World Bank rarely focuses its aid in the poorest regions in a country. However we refrain from casting judgment on the appropriateness of the Bank’s allocations due to unresolved questions concerning how targeting is measured, when targeting is appropriate, and how it can best be brought about.

Our point of departure is to consider the different ways in which aid can target the poor at the sub-national level. One approach is to devote aid to regions that have the largest number of poor people. At the country level, this would be equivalent to giving aid to India which is home to hundreds of millions of people living in extreme poverty. Alternatively, regions with the highest poverty rates could be prioritized. This compares to giving aid to Liberia where four in five people live below the poverty line.

For each approach we construct a poverty targeting index. This weights World Bank allocations within each country to generate a measure of how far they deviate from a poverty-neutral scenario in which aid is allocated equally across the country’s sub-national regions on a per capita basis. A positive score means that more aid is allocated to poorer regions within a country whereas a negative score implies a bias against poorer areas. (Note that allocations at a country level are assumed to be fixed; we do not consider the possibility of reallocating aid between sub-national units across national borders. We are also interested only in the incidence of poverty, not the distance of individuals from the poverty line.)

The results from the two indexes are illustrated in Figure 1a and 1b. As might be expected, the two sets of results diverge. For instance, in Kenya, the World Bank is effective at targeting sub-national regions with large numbers of poor people, but avoids those regions with the highest poverty rates.

While both these indexes capture something important, neither provides an adequate account of poverty targeting on its own. We therefore create a composite index which rewards aid allocations to regions where both the number of poor people and the poverty rate is high. At the country level, this would be equivalent to allocating aid to Nigeria, which accounts for the largest number of poor people in sub-Saharan Africa and has a high poverty rate of 68 percent. This index is illustrated in Figure 1c. In only 5 of 24 countries does the World Bank favor poorer regions as reflected by a positive score.

The indexes described thus far invite comparisons between countries as to where the World Bank is most or least assiduous in targeting poverty. However, such comparisons must be made with care as a score recorded in one country may not be achievable in another. This is because the potential for sub-national poverty targeting—the scope for deviating from a poverty neutral scenario—varies from country to country.

This potential is determined by imagining two extreme scenarios in each country: where all aid is reallocated to the poorest sub-national region and the richest sub-national region respectively. The extent to which these two regions differ from others and the country as a whole determines what potential there exists for donors to differentiate themselves from a poverty neutral position.

In our final index, we take the scores from our composite index and express them as a share of the maximum or minimum possible targeting score in each country. This index is illustrated in Figure 2. In only 1 of the 24 countries—the Gambia—does the World Bank approach anywhere near the maximum degree of poverty targeting. Interestingly, we find no relationship between the potential for sub-national targeting and the degree to which that potential is fulfilled.

There remain a number of limitations to our analysis. Not least is that the significance of our findings hinges on the extent to which differences between sub-national units provide an effective lens for viewing the underlying level of inequity in each country. The risk is that our results are more indicative of the design of our indexes and the idiosyncrasies of the data that they capture.

Nevertheless, we believe that measures of poverty targeting can serve as a useful tool in supporting aid effectiveness and poverty reduction efforts. Furthermore, analyses of this kind are likely to become more common. We are on the verge of an explosion in publicly available geo-coded aid data as donors respond to demands for greater transparency and seek to harness information technology solutions for improved coordination and accountability. (The most immediate constraint for poverty data is procedural: standardizing the reporting and collection of sub-national data from household surveys, consistent with the treatment of country-level data.)

Rather than supporting sweeping judgments about donor intentions and performance, the value of poverty targeting assessments comes from their being combined with other sources of information and informing dialogue between donors and partner governments. However, even for this more modest purpose, there remain some significant challenges.

Our analysis points to a number of questions that are likely to emerge in future discussions regarding the use of aid to target the poor, which we outline below. In anticipation of more frequent, sophisticated and complete analyses of poverty targeting, we believe these deserve proper attention.

What is the salient level of analysis for assessing the allocative efficiency of aid? The ability to drill downwards in assessing the allocative efficiency of aid need not stop at the immediate sub-national level. In the future, better data could allow analysis at the village, household or individual level. Indeed governments and donors are taking advantage of breakthroughs in biometric identification and cell phone ownership to design increasingly sophisticated social protection schemes that target poor individuals—a feat that the aid community considered a pipedream only a few years ago. However, just because individual targeting is possible does not make it appropriate for all types of aid; neither is sub-national targeting always appropriate, even where aid projects can be accurately geo-coded (for instance, the creation of an industrial park). The aid community should avoid the reductionist view that poverty impact can be equated with proximity to the poor.

What level of inequality or poverty is necessary for targeting to be an efficient strategy? The case for sub-national targeting is greatest when there is a danger that the benefits of aid will be captured by the non-poor. This seems less likely in countries where poverty rates are very high or where inequality is very low. In these settings, the transaction costs incurred in micro-level targeting may exceed the efficiency benefits of discriminating between different beneficiaries.

How should poverty targeting efforts be coordinated? A true assessment of an aid agency’s allocative efficiency in a country requires an understanding of what other organizations are funding, including the partner government and other donors. The prospects for poverty reduction are almost certainly higher if aid agencies heed the wishes of the partner government rather than each unilaterally deciding to concentrate their efforts in the country’s poorest region. Poverty targeting measures should be used to promote, rather than to evade, a greater division of labor, led by partner governments.

Authors

Laurence Chandy
Natasha Ledlie
Veronika Penciakova

How Education Fits into the Discussions of the UN High-Level Panel: Puzzle Piece Monrovia

Allison Anderson and Lauren Greubel — Fri, 01 Feb 2013 16:17:00 -0500

This week the United Nations secretary-general’s High-Level Panel of Eminent Persons on the Post-2015 Development Agenda met in Monrovia, Liberia for their second in-person meeting to reflect on what the Millennium Developments Goals achieved, where they fell short, and what a post-2015 framework that will eradicate global poverty and respond to the global challenges of the 21st century should look like. This panel of 24 eminent people of diverse backgrounds from across the globe, chaired by three global leaders—President Susilo Bambang Yudhoyono of Indonesia, Prime Minister David Cameron of the United Kingdom, and President Ellen Johnson Sirleaf of Liberia—had identified three overarching themes with which to grapple: social equity, environmental sustainability and economic transformation.

The High-Level Panel is just one of the pieces in the multi-layered puzzle that is the post-2015 process. In addition to the recommendations the High-Level Panel will make to the U.N. General Assembly in their report this coming September, consultations are currently taking place to engage a broader range of stakeholders in the process. U.N. agencies are convening 11 thematic e-discussions through the end of February, including one on education. These online consultations allow all interested parties—civil society, donors, private sector, youth, academia and others—to voice their opinions on what the next development agenda should look like in light of each thematic area. Simultaneously, national consultations will take place in over 50 countries to not only further foster an inclusive, multi-stakeholder process, but to also shape a post-2015 development agenda informed by national and local priorities. The outcomes of both the thematic e-discussions and the country consultations will be incorporated into the final report that the High-Level Panel will deliver to the U.N. General Assembly in September.

An intergovernmental Open Working Group on Sustainable Development Goals was launched earlier this month and will hold its first meeting in February. While there are thirty official members of the Open Working Group, many of those are shared by two to three different countries. These countries are tasked with designing Sustainable Development Goals (SDGs), as agreed at the Rio +20 conference—though the question of the role of the SDGs in the post-2015 framework is an open one that both the Open Working Group and High-Level Panel will be discussing. To add to the layers of this puzzle, a Sustainable Development Solutions Network, launched under the auspices of the U.N. secretary-general last September, will provide technical support to the High-level Panel. It will also convene global expert Thematic Groups on key sustainable development challenges, including one on early childhood development, education and transition to work that will identify common solutions and highlight best practices.

The agenda for the High-Level Panel’s meeting this week was focused on the topics of sustained prosperity and sustainable development, which are critical in order to eradicate poverty. While education was not explicitly on the agenda, it is a national building block for sustained prosperity and sustainable development and must be included in the discussions around achieving post-2015 development challenges.

Every child must have the opportunity to develop the competencies and skills they need to become active and engaged citizens, to secure a job, to contribute to economic growth and job creation, and to build shared prosperity in their nations. The collective success and well-being of all learners will only boost national economic prosperity. Indeed, of the factors that lead to economic prosperity, one of the most essential is education. First and foremost, economic development and poverty reduction depend upon an educated and skilled workforce. An estimated 75 million youth are unemployed worldwide and underemployment rates are twice that number. Recent research by McKinsey & Co. found that 57 percent of employers surveyed felt that there are not enough qualified entry-level candidates. Investments in human capital to reduce unemployment rates and address the skills mismatch are crucial steps achieving economic prosperity—and quality education is what will get us there.

Equitable social development is also dependent on education to empower learners and to maximize their capacities, resources and opportunities to fully participate in society. Education is essential to environmental protection through teaching and learning environmental stewardship, a topic both the High-Level Panel and Open Working Group will be discussing. Environmental instability and climate change has the potential to be a game-changer in countries’ ability to drive economic growth over the next decades. Harrowing statistics suggest that the rate of natural disasters is expected to increase by 320 percent in the next 20 years, on top of the doubling in numbers over the last two decades. Environmental and climate change education promotes new attitudes and skills for environmental protection and diversity and also helps people change consumption and production patterns. In addition, access to quality, relevant education that empowers all—including the marginalized—to utilize environmental resources sustainably is essential to equitable social development and a necessary foundation for sustainable development.

The Communiqué from the High-Level Panel meeting in Monrovia highlights the fact that achieving structural transformations through a global development agenda will involve sustainable growth with equity, creation of wealth through sustainable and transparent management of natural resources, and partnerships. In particular, the Communiqué recognizes the “indispensability” of opportunity for all, including “ensuring universal learning.”

Achieving quality education for all remains a pivotal goal for global development. While there has been considerable progress in increasing primary school enrollment around the world over the last decade—due in large part to the Education for All and Millennium Development Goals on educational access and equality—children too often leave primary and even secondary school without acquiring the basic knowledge, skills and competencies needed to grow into healthy adults and lead safe, productive and sustainable lives. In short, there is a global learning crisis underfoot, which affects out-of-school children and youth with limited learning opportunities and also those in school but not learning the skills needed for their future. Marginalized groups, like girls from poor, rural households and children and youth living in conflict-affected areas, are particularly missing out. The failure to improve the quality of education will hinder whatever the overarching goals of the post-2015 development agenda are.

This week’s meeting in Monrovia is the midway point of the consultative process. As the High-Level Panel prepares for its next meeting, in Bali from March 25-27, we urge members to remember the critical role that quality education plays in economic growth, social inclusion and environmental protection. And as the Open Working Group on Sustainable Development Goals begins its work this month, we will work to ensure that learning for all is viewed not only as a development challenge in itself, but also as a linchpin to achieving all other development goals.

Authors

Allison Anderson
Lauren Greubel