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September 26, 2017

Legitimacy: the dark matter of international development

September 26, 2017

Should the World Bank become more adaptive by weakening its safeguards?

September 26, 2017
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The World Bank wants to become more agile, to speed up its grant/loan-making, be less bureaucratic, leap on the

Philippines safeguards protest

Philippines safeguards protest

‘adaptive management’ bandwagon etc. In its rush to change direction, it hasn’t had too many discussions with NGOs, so I thought I’d raise some of the issues on the blog. Perhaps  the lack of discussion is because the Bank sees NGOs as a potential roadblock to reform. By insisting (and getting agreement) on a range of ‘safeguards’ on issues such as consultation or impact assessment, we are seen to have slowed down Bank procedures (and it’s probably true, to some extent, though we’d argue for good reason).

I spent an hour on the phone with some Oxfam colleagues last week kicking these issues around – I do like conversations about trade-offs, tensions and shades of grey. At the end of it we agreed I’d consult the FP2P hivemind for advice.

So who could possibly be against agility? Well, me, in some cases. What if speed comes at the expense of properly consulting local communities, or doing a rigorous impact assessment before you build the road or the hydroelectric dam on their land? One person’s bureaucracy can be another’s livelihood protection.

First of all, what’s the Bank’s motive for wanting to be more ‘agile’? Is it to speed up disbursements, recognize that flexibility and adaptive management is the key to working in complex systems, or to reduce the heavy transaction costs on staff and partners of all its procedures (see DFID’s transition to Smart Rules)? It’s probably all three, but the balance varies depending on who’s talking. It’s worth bearing in mind because different motives have different consequences for how ‘agility’ is interpreted.

Diagram-of-Safeguards1

 

 

 

 

 

From the point of view of systems thinking, this is about adaptive management: you can’t completely understand the system in advance, you will learn more about it as you go, and in any case it keeps changing. So what matters is building in feedback loops and mechanisms to respond/adapt your work as you learn by doing/failing – compliance approaches and tickbox thinking are so last year. In adaptive management you’re only as good as your feedback, but what makes for a good feedback loop?

Oxfam itself is keen to become more agile, and where we trust the Bank, we ought to support it to do likewise. But the upfront safeguards are there for a reason, to understand if a project is actually viable, to ensure appropriate resources are available for managing risk etc, but also partly because of lack of trust. If you don’t trust an institution or its officials, you pile on the regulations and procedures to try and stop them doing bad stuff.

Trust also determines how we see the role of the recipient government. If CSOs trust the government, they will support devolution of power and decision-making – having a responsive, accountable government in charge is infinitely preferable to a Washington bean counter, however well intentioned. But if the government has a track record of brutalising the poor, then we want to keep strong oversight in the Bank’s hands, where civil society can at least exert some influence over what happens.

Safeguards-photo-credit-International-Accountability-Project-option-2-554x370And some of the things NGOs care about do not lend themselves to fast-and-funky startup-style agility. Big projects in infrastructure or mining need to consult communities, find ways for them to participate in a genuine way in making sure the project helps (and doesn’t harm) local people. That takes time – shoving a load of data on a website may look like participation, but is more likely to be lip service.

That links to a second point. Adaptive Management sounds good – but who decides what needs to be adjusted and adapted? If it’s just some technocrats in Washington, what is to say the adapted project will help local communities more than the original?

The optimal balance of agility and procedural rigidity also depends on the topic. If the Bank’s dollars are going to help build a dam, a road or a gigantic mine, then if things go wrong, they may well be irreversible. That argues for sticking to the current system of high levels of upfront analysis and safeguards. If the project is less immediately disruptive, and can be tweaked before it does lasting damage, then adaptive management based on the right kinds of feedback loops could be a better option.

It also depends on the government receiving the loan. If it has a track record of accountability and responsiveness to community needs, then adaptive management and devolution of decision making could make a lot more sense than if it routinely crushes feedback (and people) it doesn’t like.

Given my fondness for 2x2s (though to my dismay, not all my colleagues’), you may already have guessed where this is going. I’m trying to construct a 2×2 which helps frame the situations in which you would want to stick with the current system of upfront safeguards, and others in which it would make more sense to jump into a more adaptive, iterative approach. How about this?

Safeguards 2x2Unpacking the quadrants:

High irreversibility/low trust (due to track record of Bank or Government): Stick with current approach

Examples: Dams, roads, extractives, PPPs that saddle governments with decades-long contracts

High Irreversibility/high trust: Still needs proper impact assessment, but maybe spread consultation and participation out more into the implementation phase

Examples: ?

Easily Reversed/low trust: The safeguards need to be on process – how can we be sure the consultation is genuine, and the project/government/Bank will respond to the results?

Examples: results based financing

Easily Reversed/High Trust: get stuck in, pass power and decision making to local actors, keep an eye on feedback loops to make sure they are working

Examples: Citizen engagement; teacher training; financial inclusion; women’s economic empowerment

Thoughts? Anyone got better suggestions for the axes?

8 comments

  1. Duncan- very interesting piece and about time we start thinking about the safeguard issue in the DDD community. I agree that the different motivations you list can have quite different consequences and this is problematic and could have just the opposite affect of improving results for the most vulnerable and poor if this is not recognized. But your piece is also silent on the institutional context, process and incentives that drive quick, high disbursing loans/grants and assumes that there will be some independent measure applied by some very trustworthy group of who can trusted and who cannot. This is, I think, unworkable given the governance arrangements of the Bank and its Articles of Agreement.

    Wouldn’t a better place to start be to think about how to modify the Bank’s existing project cycle and processes so that the design stage is thorough and as lengthy as it needs to be, using the implementation stage as a pilot and learning phase and then only going to scale once there is a workable model? (see Figure 2 in my paper below). This would provides teams a) during design: the opportunity to consult, do due diligence on safeguards issues and go the extra mile in understanding underling problems, thinking seriously about TOCs and assumptions behind them, learn from local actors and support their coalitions in identifying solutions as well as ensuring they are in line with safeguard policies – perhaps in a more meaningful way than is sometimes achieved now given timing and budget constraints, b) during implementation: provide intensive resources to supervise properly and test assumptions, making course corrections where needed, with an exit strategy if needed, and c) if scaling is an option, then the opportunity to add additional resources and build on proven experiments, including ways to protect and safeguard. Another way to revolutionize country portfolios, providing the opportunity to use adaptive management for better results in complex settings while recognizing the business need of the Bank to lend money would be to allow for some flexibility across country portfolios while holding Country Directors accountable for impact, risk taking and learning as well as disbursements. Finally, if CSOs are to support the Bank in becoming more adaptive in the name of impact, rather than as a way to just lend more money and cut corners, tackling the budget and HR incentives that work against learning around small scale, sometimes risky experiments is needed. This requires conversations with donors, like the UK, who continue to use disbursement in dollar amounts as a major indicator of progress and which does little to ensure a meaningful approach to safeguards or impact. All of these are doable and there is some movement towards these within the Bank, I understand. Why not think about how to support these through EDs on the Board, IDA negotiations, discussions of CPFs etc. Nudging from outside has always been helpful to internal reformers and it has the potential to improve the Banks impact and its approach to safeguards. It is also more politically viable than thinking of a measure and body that would tell the Bank board who to trust and how they fit your 2 x 2 (although I do love them too)!
    https://www.odi.org/publications/10555-doing-development-differently-world-bank-updating-plumbing-fit-architecture

    1. Thanks Katherine, I hadn’t got as far as suggesting a third party trust-ometer, and agree it would be a pretty terrible idea! Just trying to find a way to depolarize the positions.
      A big emphasis on an extensive scoping/inception phase with lots of learning, adaptation etc before trying to take anything to scale makes sense from a systems perspective, but wouldn’t a lot of people at the Bank and its funders see that as just more bureaucracy, pushing governments to turn to less scrupulous lenders? I think that’s what’s driving the interest in adaptive management at least as much as systems thinking. What to do?

  2. Hi Duncan,
    Would you also consider the inclusion of market competition as driving this new direction of the World Bank? The role of Chinese development banks that tend to have weaker safeguards in Southeast Asia, Latin America and Africa…

  3. I would argue that you are getting at the heart of the challenge of adaptive programming. That is, if we are to work more iteratively and adaptively then we must address the various safeguards and rules in place. However, these rules and safeguards and procedures usually exist for a reason, even if collectively they limit the relevance and effectiveness of our work. At Sida, we are starting to come face to face with these trade offs between agile and adaptive programming on the one hand and having sufficient rules and requirements in place on the other hand. If we are to start to make real progress towards working adaptively, we need to more realistically look at these trade offs and how they can be managed. The challenge is even greater given that we work through so many levels of delegation, where each level must manage these competing interests. Seeing things in terms of a set of principle-agent relations is a useful starting point that can possibly lead to more realistic solutions (see for example ODI’s paper on contracts for adaptive programming: https://www.odi.org/publications/10575-contracts-adaptive-programming).

  4. I work at Accountability Counsel, a global, legal non-profit that works with communities that have been harmed by internationally financed projects. We train, advise and accompany communities as they seek justice using the accountability mechanisms at international financial institutions, including the World Bank. Our work is essentially creating accountability for the safeguards, making non-compliance meaningful for the banks and the projects they fund and growing a tool for recourse for communities.

    One of the ways that the World Bank is trying to be more agile (and expedient) while leveraging the private sector is to disburse financing through other private banks, often regional or local banks which have no safeguards and no accountability mechanisms for World Bank safeguards. Communities who are affected by the end results of this financing have no way of knowing that the World Bank, which does have standards for human rights and environmental protections, originated the funds. Using financial intermediaries obfuscates the accountability for projects to help and not harm people.

    I think you’re right on with results-based financing, but it is a matter of “whose results?” The incentives for management at the banks have to change dramatically. Right now, getting the most funding out the door (whether at the IFC or the IDA) is what gets bankers rewarded and recognized. What if promotion and financial incentives were tied to community buy-in and human rights outcomes? It’s thought leaders like you who can help push to redefine what “results” are for the bank and for the government and for the bankers themselves, especially in terms of meaningful consultation.

    Finally, when it comes to agility, we heard a lot about the World Bank’s “agile pilot,” and its new the multi-phase approach. From our perspective weakening the bank’s board oversight and removing the Inspection Panel’s jurisdiction for some the phases of a project can make accountability more difficult because the answer to the question “which safeguards are being applied?” could become opaque. Agility and flexibility are all in the service of efficiency and effectiveness. A project that hurts local communities because they’ve never been truly consulted can never been efficient without their buy-in and consent. A project made with the rights of local people in mind will last longer and be a more effective for economic growth in the long term.

    Multi-lateral development banks should continue take meaningful steps to protect human rights and the environment in their investments, through the safeguards and through meaningful accountability for compliance with those policies. As Amartya Sen said, “Globalization can be very unjust and unfair and unequal, but these are matters under our control.”

  5. This just in from DDD guru Graham Teskey (who prefers email):
    ‘two thoughts:
    · I don’t think AM / DDD / TWP or whatever we call it is primarily an approach for doing things more quickly. That may be the result in some cases and that may be good. But it is secondary. The primary objective is to take context into account far more seriously. This covers selection of the issue / problem identification, how possible approaches are implemented and how we learn – and respond as we go. So in some cases if the context requires it, safeguards may get even more attention, not less; and
    · I like your two by two. But it suggests that every initiative can be TWP’d. I disagree. If we take the list of characteristics of DDD / PDIA, they would be a disaster in your top left quadrant. You don’t build bridges by making a bunch of small bets and trying lots of alternative designs. Rather than DDD we should champion DDA – doing development appropriately. Sometimes yes lots of experimentation, sometimes none. I don’t want to experiment with dams. Of course it goes without saying that upfront PEA is required always and everywhere. But not all of the PDIA agendas. So does this mean that DDD is only applicable in policy reforms, organisational change etc not hard stuff? Maybe.’

  6. I wouldn’t agree more.
    I am a PhD student from Uganda in Sweden and I have recently been asked to give talk about my scholarship experience which I received from a political party here in Sweden.
    And I had similar thoughts about what to say at this meeting. Uganda continues to suffer grave human right abuses and poverty is ever increasing and yet we continue to receive massive aid with what I would call minimal care to see the real impact it has on the people of Uganda. Just recently, a bill to extend the 30year + president’s rule was tabled at the floor of parliament besieged by the army and the police, in what is now popularly know as “age limit amendment at gun point.” All this going on while the president is enjoying diplomatic treatment in Brussels-Belgium. Surely, do I need some rocket scientist to confirm my struggles-I am continuously struggling to believe that such aid is in-fact not intended to perpetuate and promote such injustices in low income countries.

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