International Donors and the exporting of 19th Century Poor Relief to developing countries

March 28, 2018

What does the public think about inequality, its causes and policy responses?

March 28, 2018

The UK Labour Party sets out its stall on International Development – here’s why you should take a look

March 28, 2018
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I’ve just been reading the UK Labour Party’s Green Paper on International Development (out this week). ‘Green Labour Party coverPapers’ are not about the colour (this one is actually red), but ‘designed to stimulate discussion and set the direction for the Labour Party’s programme for government.’

I work for an NGO, so a couple of minor gripes first: the party political point scoring is over-done (a bit of bipartisanship would have sounded a better note I think – for example, the Conservatives have done much better on aid volume than anyone predicted) and there’s a bit of hand waving in the section on ‘How Labour will Achieve This Vision’. But overall, there is a lot to applaud here – I hope it stimulates discussion, as intended, and not just within the UK.

Here’s some highlights.

‘Labour will wholeheartedly back the Sustainable Development Goals (SDGs). [It] will set a second twin objective for all international development work and spending: not only to reduce poverty but also, for the first time, to reduce inequality. Among other things, that will include measuring partner country progress against the Palma Ratio; evaluating all DFID work on the extent to which it reduces income inequality and other inequalities; and bringing like-minded countries together to champion faster action on inequality.

Labour Party fig 1To serve the twin goals of reducing poverty and inequality, Labour will deliver on five key and connected priorities:

  1. A fairer global economy
  2. A global movement for public services
  3. A feminist approach to development
  4. Building peace and preventing conflict
  5. Action for climate justice and ecology’

And there is substance beneath each of those five priorities. Here’s what it says on inequality:

‘To mainstream action on inequality across all DFID programme areas, we will take the following steps at the national level:

  • We will make reducing income inequality a key metric in the countries DFID partners with, adopting the Palma Ratio (the ratio of income between the richest 10% and the poorest 40%) and the Palma Premium (the extent to which the incomes of the poorest 40% are growing faster than the richest 10%).
  • All UK-funded international development projects and interventions will be evaluated on the basis of the extent to which they reduce inequalities, alongside other existing criteria.
  • We will go beyond simply measuring and addressing income inequality, and will work towards measuring and addressing inequalities in power and the exercise of rights to ensure that women and marginalised groups, such as indigenous communities, people living with disabilities and LGBTI people, are not left behind.
  • In order to promote these objectives, we will look to appoint a senior civil servant post to lead the government’s international work on reducing inequality.

We will complement these initiatives with global level advocacy:

  • In the first year of a Labour government, the UK will host an international summit bringing together likeminded countries and partners to champion ambitious action on inequality. Ideally, this will become an annual gathering to keep the issue as a top international priority.
  • We will encourage countries to sign up to more ambitious targets than those set in SDG 10, with the goal of halving their existing Palma Ratio by 2030 and achieving a Palma Ratio of 1 by 2040.
  • We will ensure DFID works with the Treasury and uses the UK’s influence to push for the World Bank and International Monetary Fund (IMF) to take action on inequality. That will include assessing the institutions’ policies to determine their impact on inequality, as part of a broader multilateral development review.
  • We will call for an international commission to explore the possibility of a global wealth tax, as proposed by economist Thomas Piketty.’

There is a similar level of specificity on the other four targets – well worth a skim.

Finally, there is a nice, clear table of commitments + milestones for the first 100 days, year and five years of Labour Party fig 2government.

I asked our in-house aid watcher, Gideon Rabinowitz, for a second opinion. He echoed my enthusiasm, but pointed to a few potential gaps:

    • ‘How will they reform international aid processes and global institutions to give the south more of a say? There are perennial questions about which institutions should be at the centre of global governance and how the governance of existing Institutions should change that must be addressed.
    • What about going beyond health and education in terms of a sector focus? There are other services and sectors that are important and need more emphasis, including WASH and agriculture, which are strangely not mentioned at all
    • What will they do on inclusive economic development programmes to make them “people” focussed, including an emphasis on women’s economic empowerment, small scale businesses and informal sectors? There is very little here, and they could be emphasising a truly inclusive, poverty focussed and gender-focussed approach
    • Focus on the poorest countries – Will it retain an emphasis on aid volumes going to the poorest countries – especially Least Developed Countries – and reverse recent cuts to these countries? Not much discussion on this
    • Localising aid – There was little recognition that delivering more aid through Southern and local providers will require reforming DFID’s procurement, reporting and management systems, which currently work against these providers.’

I’d welcome other views.

7 comments

  1. Though the paper is mainly for discussion, and much of this will come out in the wash, there were a few things i reflected on after an inital, brief look:

    – The focus on inequality is good, but inequality is only very partially a development issue. Asking for evidence of how inequality has been addressed in all interventions seems like it would be very hard. As a guiding principle it’s strong though, especially alongside other progressive areas like climate, divestment from fossil fuels.
    – Revolutionary change to a bureacracy might be a good thing, and certainly we’ve seen the disbenefits of trying to do small, incremental things, but it can also completely paralyse an organisation.
    – Any new policy, if it’s going to be done properly, will take a huge amount of time and effort, and its value will only be properly visible after some time. Even taking one aspect – a feminist development policy – this will need to be completely conceptually thought out, then factored into all aspects of programming. The same is true of having a completely new approach to effective delivery. With these, and other aspects, I can easily foresee how this just becomes manifested in more bureaucracy with no discernable difference.
    – It would be good to recognise the cultural-bureaucratic challenges to making DFID and development work better. The Smart Rules are there, and could be used, but aren’t referred to unless i missed it.
    – The fact is that empowering DFID at the same time as reviewing mandate, staffing and fitness for purpose won’t align well. Any review like that will inevitably lead staff to expect major changes and quite possibly staff reductions. That’s not very empowering, unless it’s done properly.
    – And increasing cross-departmental working and ODA spend across departments, at the same time as freezing funds that don’t meet the effectivenes criteria seems hard to reconcile.
    – Widening access to healthcare is clearly vital, but framing it as being based on NHS goes against the idea of finding what works, and makes this area incredibly politically contentious.
    – And yes as you note some of this is doing shiny but seemingly fairly hollow things, or things that already happen, but no harm in saying it again i spose.

  2. A few observations from out left and in addition to Gideon’s astute observations. This paper is far too partisan to encourage a balanced debate unfortunately. I am wondering how the Labour Party actually got together a balanced team on this so that they moved away from the ‘save the world from the greedy elite’ narrative to what can we really achieve with aid in a sensible period of time.
    I know it is picky but it is factually incorrect that poverty reduction is the only objective of the current UK Aid Policy/Strategy. There are 4 at least. The paper makes scant reference to how they will support the governments of target countries – budget support? No mention of this. There are silly contradictions – eg pg 29 “Whereas DFID has operated primarily as a department primarily responsible for “commissioning” others to do work, it is likely that DFID will need to develop additional functionalities, either in-house or by subcontracting”. I thought subcontracting was commissioning! The level of ambition is sky high – and pays little attention to the absorptive capacity of those it seeks to help. The vision may stay a vision unless the implementation is clearly thought out. How it all works for FCAS embroiled in complex political is not clear at all – other that the notion that the UK will take principled approach – for the first time ever?? Which leads onto the most difficult issues to tackle, that of seeking coherence in govt policy – we already know that is not possible, I can hardly think of a single example of a ‘whole of government approach’ by any government anywhere – how will Labour manage that?

  3. Interesting paper (and blog). Great to see prioritisation of a focus on inequality. But is it going to be possible to measure a DFID programme or portfolio impact on income inequality? Are there just too many external variables determining relative wealth?

  4. I agree that Labour’s Green Paper is unduly partisan in its attack on everything Tory, but it’s very good that it backs the SDGs, aims to reduce both poverty and inequality, and sets out to target the many not the few. In this context it’s extraordinary that there’s no mention of agriculture (as Gideon points out), and almost none of food production and nutrition which are both the strengths and the primary needs of the majority of the rural population (at least in Africa) whom Labour wants to reach.

    This omission seems to me particularly regrettable in light of DFID’s latest “Conceptual Framework for Agriculture” (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472999/Conceptual-Framework-Agriculture2.pdf ) which looks directly in the opposite direction. The Conceptual Framework categorises the farming population in a pyramid, each segment of which (DFID suggests) needs different treatment:
    • The top 5-10% are commercial or small-scale commercial farmers, with large holdings and accessing commercial sources of finance and markets;
    • The next 30-40% are potential small-scale commercial producers, who can be helped to “step up” to the fully commercial segment;
    • The remainder (more than 50% of the rural population in most countries of Africa) are “subsistence farmers” or landless households who, in DFID’s formulation, should be helped either to “hang in” pending transformation of the economy to a broader industrial base (these are the JAMS – the just about managing – to use Theresa May’s terminology) or to “step out” of agriculture altogether and move into non-farm jobs in manufacturing and services.

    The flaws in this concept are:
    • that it would increase rather than reduce rural inequality, probably leading to accumulation of large holdings by a few commercial farmers at the expense of the many small producers;
    • that the non-farm jobs to which subsistence farmers and landless households would be encouraged to move do not exist (most poor countries already having massive urban unemployment), so the poorer segments of the rural population, far from stepping out of agriculture into urban employment, would be more likely to drop out into destitution;
    • that it ignores the evidence from many countries that small farmers, provided they have secure tenure, receive essential services (access to inputs, finance, markets, appropriate production technologies, research and extension) and organise themselves appropriately for overcoming diseconomies of scale, can be much more productive than larger-scale producers.

    Hopefully DFID under a Labour Government will adopt a strategy for development assistance in poor countries which targets agriculture, small farmers and the support services they need, giving practical meaning to the admirable target of reaching the many not the few.

  5. Interesting to see such focus on inequality, but I am curious how well UK does on Palma ratio and Palma premium, and the record of other countries likewise. When we think of development policies, we should make sure that our own polities would accept them before we consider mandating them as part of development advocacy and programming.

  6. Migration. Massively boosts incomes far more than any aid programme.

    Yet missing from the Labour vision. And curiously from this blog too…?

    I can understand the politics around the former, but surprised by its absence here…?

  7. I’d echo Gideon’s point about small scale businesses and the informal sector. If we are to tackle the huge levels of unemployment, this is critical. Inequality needs people to have increasing incomes at the bottom and middle. Most of the debate tends to be about avoiding ludicrous incomes and tax avoidance at the very top, or poverty alleviation at the very bottom of the income scale
    There is plenty of focus on micro-enterprise and microfinance but whatever you think about microfinance, at best it is poverty alleviation and it creates very few genuine job. At the other end of the scale, there is capital from the likes of CDC, impact investors or other financial organisations but they are looking for established larger businesses to invest in. They are not interested in providing any of the other support services that a small enterprise might need or tackling wider infrastructure issues such as transport. (Hard to grow your business if you can’t get to markets outside of your village…) There is next to no focus on small and medium and enterprise and how to grow and support small enterprises to create the jobs that are desperately needed, as well as the wealth and the tax base that a country eventually needs to fund decent public services. (And yes Im well aware of wider tax issues). A healthy economy has what one might call an ecosystem of enterprises, from small to large – poor countries typically have just large and very small. Much trade is actually business to business as bigger companies need medium and small companies to supply them with materials and distribute their products and services.
    At the moment, the development sector and NGOs tend to be woefully lacking in understanding what is involved in building small enterprises and for many it is an anathema and too capitalistic. At the other end, the financial sector and those with the funds are also surprisingly ignorant about what is needed to establish and grow small businesses (the same could be said of financial institutions and small business in the UK). Filling that gap is going to require some partnerships across sectors and organisations, to bring in all the expertise and resource that is needed. Its also a long term, systemic activity. Simplistic, one dimensional, short term interventions typically offering just training courses are not the answer.

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