Aid’s segmented future
This piece was written for a blog discussion on the future of aid, which will double up as a Global Policy ebook, organized by Andy Sumner’s new outfit, the Kings College International Development Institute, King’s College London. It’s all part of the build up to their launch conference on Emerging Economies and the Changing Global Order, 7-8 November.
One of the most pressing challenges for the aid community over the next few decades is segmentation. The scale and nature of aid will become increasingly differentiated by purpose and recipient. This is currently happening in an ad hoc, piecemeal way, but would benefit from a more systematic approach.
Traditionally, aid’s imaginary ‘ideal recipient’ can be caricatured as a politically stable, low income country able to absorb and benefit from large dollar flows of aid. Such countries do still exist, but they are an endangered species. Stable countries are growing their way to middle income status, and an increasing percentage of the poor live in fragile and conflict states (FCS). The Tanzanias and Malawis of this world are becoming the exception, not the rule.
That means that the business of aid is going to become harder. On one hand, aid to FCS will grow, bringing with it a slew of unreliable and/or venal state ‘partners’ and higher chances of failure. Donors will need to move from a high volume/low knowledge to a low volume/high knowledge model: as recent research from the ODI and others has shown. in areas such as governance, good aid in FCS involves building up a deep understanding of the political and social context, and an approach characterized by ‘convening and brokering’, bringing together dissimilar, and often antagonistic players to build trust and find context-specific, ‘hybrid’ solutions to collective action problems. Big volumes of aid can be counter-productive in such contexts.
This means investing more in staff and intellectual partners, and proportionately less in programme spend. It means reducing the frenetic pace of staff turnover so that aid professionals get a chance to really put down roots in a country without having to sacrifice career prospects for doing so. This is the opposite of the current state of aid, with its 2 year staff rotations and the ‘do more with less’ mantra constantly intoned by its political paymasters.
So if brains not bucks are what’s needed, what to do with the excess cash? Big Aid needs to find avenues of ‘political sterilization’, whereby the introduction of large volumes of cash does not undermine political processes. Direct cash transfers are one promising avenue, but there may be others, such as cash on delivery. In the poorer countries, there will still be a case for funding essential services, as long as it doesn’t mess with the political process – not sure what the implications of this are for the future of general budget support, but I suspect, they are not good.
The other side of the coin is what to do in middle income countries, where the main barrier to poverty reduction is one of inequality, rather than absolute shortage of resources. Here the challenge of development is both one of ‘predistribution’ – pursuing labour-intensive, inclusive forms of economic growth, and of ‘redistribution’, through progressive tax and spend policies, as well as redistributive regulation on everything from land tenure to competition policy.
Such issues are a potential minefield for donors. Inequality (let along redistribution) is a far more touchy political topic than poverty. How can donors engage in it without being accused of political interference and shown the door? Should they adopt a more arm’s length approach, working through intermediaries? The alternative (popular with many donors) is exit, but as Andy Sumner has pointed out (with great persistence), that means abandoning a large percentage of the world’s MIC-based poor, and consigning the aid business to an increasingly marginal global role.
One aspect of the future of aid involves less, not more, segmentation. The rise of the South and the increasing importance of inequality and redistribution should finally lead to the abolition of an increasingly unhelpful division of the world into North and South. In its place, the aid business should find it easier to move into some more interesting and potentially more fruitful terrain.
First, there will need to be a greater focus on global public goods – solving increasingly pressing collective action problems such as climate change or tax evasion, which require a truly global solution to get over the problem of free riders.
Second, and linked, the ‘policy coherence for development’ agenda will need to focus much more deliberately on ‘how to stop powerful countries and players inflicting harm’. This could cover unfair trade and investment treaties, corporate malpractice, intellectual property rules that prevent knowledge transfer, migration rules that seek to curb one of the most effective and growing flows of resources to poor people around the world – remittances, climate change and potentially catastrophic responses to it such as geoengineering – the list is long.
Suppose we started with a blank sheet of paper, and decided which issues to spend aid money on based on two criteria – a) how much death and destruction does a given issue cause in developing countries, and b) do the rich countries actually know how to reduce the damage?
If you followed this exercise, you would end up with a radically different aid agenda, with (fearlessly mixing metaphors) a whole series of Cinderella issues coming in from the cold.
These are global figures, and I don’t have a breakdown by developed/developing. That would be important on obesity, but on other issues, the majority of impact is clearly in poor countries – alcohol, tobacco and road traffic for example. And they are precisely the areas where the rich countries have lots of experience in reducing the damage. It’s certainly a lot more straightforward than inventing/discovering new vaccines, or indeed promoting economic growth (hardly the forte of most traditional aid donors in recent years). When researchers put signs in Kenyan minibuses (matatus) urging passengers to criticize reckless driving, injuries and deaths fell by a half (for paper see here).
Yet such subjects currently languish on the outer margins of the development agenda. Where’s the campaign on booze and fag dumping by large corporations in developing countries? Or international seat belt conventions, backed by technical assistance to help governments ratify and implement? Working on such issues would entail aid agencies acting as a dating agency, linking up developing country governments with the relevant centres of expertise at home (state, private sector or academic).
Some final thoughts on the intellectual direction of travel. Firstly poverty is increasingly understood as a multi-dimensional state of identity,
characterized by shame and anxiety as much as by low income. But the pioneering work of OPHI and others has yet to carry across into the kinds of debates on aid and poverty that are the focus of this blog. In addition, the debate on inequality is still largely carried on in terms of income and (at a stretch), assets and access to services. Multidimensional inequality is an essential next step.
Second, our understanding of development increasingly sees it as a complex system, in which change is unpredictable and often unattributable to any given intervention. Yet currently, the operating model of aid funding and evaluation is highly linear – there seems to be every chance of a titanic intellectual clash between the results community and the complexity thinkers. My gut feeling is that the complexity people will lose, because the results people have the ears of the funders – it is therefore important that political scientists and others abandon any lofty ‘it’s all too complex, and measurement is futile’ attitudes, and start helping the results people move from a self-defeating insistence on attribution to a ‘plausible/good enough’ narrative of change. In terms of metrics, this means learning to ‘count what counts’ in terms of empowerment, agency, governance etc.