Thursday, February 14, 2008

"Step away from your busted-ass vehicle, and put your hands in the air!"

In this edition of The Occasional Ramble from Malawi: Further excuses for the extreme infrequency of updates; and we ask: who wants to be a development economist?

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From our pathetic excuses department: The Maradona has been pretty busy, but certainly not so busy as to be unable to draft even a phoned-in, cribbed-from-the-New-York-Times post. Mainly, my lack of Rambling has been because the problems I’ve been encountering at work have been the same ones I’ve Rambled about already in the last couple of years. I’m reluctant to repeat myself, so I’ve been silent. That, plus I’m lazy.

Recently, though, a new thought has occurred to me (I know, an original thought – whatever next?). I’ve talked a lot over the last two and bit years about why Aid doesn’t work, or at least doesn’t work all that well. And recently, I’ve found myself becoming more and more open in my criticism of Aid, and finding that the vast majority of people I rant to agree with me. This leaves me with a rather basic question I’d never asked before:

If so many people agree that Aid isn’t working, why does it continue to be managed this way?

It has become increasingly apparent to me, as I’ve made contacts further and further up the Aid food chain, that the structure of Aid relations is determined not by individuals, or even by committees, but by institutions and structural relationships.

This is a pretty important statement for how we understand Aid, so let’s go into this a bit deeper. Take a bilateral donor agency, one that represents a specific Government and provides Aid to a number of Governments (or NGOs) in other countries for development. Lets say that the civil servant who heads up this agency is that rare breed, a competent, insightful, intelligent chap, who recognises the primacy of socio-economic transformation as a subject for attention in the development process (btw – I’m not just sexist. Almost all senior civil servants I’ve met are men). Now, we’ll give him $100 million of tax money.

Unfortunately, he can’t just spend it, in conjunction with the host Government, on consolidating land-holdings or stimulating some medium sized enterprises to wrest control of others and create a large enterprise. His first responsibility is not to the host Government, but to the taxpayers whose money he is about to spend. As a result, he must create a portfolio of activities that reflects their vision of what development is, and more importantly, what they are happy to see their money spent on. As a general rule, people don’t really like having money taken from them to make others rich, which is what Aid used for capitalist development would achieve. Never mind that it’s the best way to reduce poverty in the long term, the immediate use of the taxpayers money would have them baying for blood. Thus, health, education, gender rights etc. are pushed to the fore. All wonderful, important things, but not the basis for a self-sustaining economic development process.

There’s more: taxpayers also require results. Naturally. Someone takes my money to spend on ‘the greater good’, they’d better do a better job than I would have done myself. Our intrepid civil servant now enters the world of impact and outcome indicators. These lovely little things essentially seek to quantify the effect of each funding stream on the population it seeks to help. So, fair so far. But scratch the surface and we see another insidious effect: how do you show a direct link between expenditure on trade policy analysis and reform to economic growth and job creation? In practice the best an evaluation of a donor funded programme in this area can show is a correlation between the programme and improved results. And if the programme is doing good but coincides with, say, skyrocketing prices of oil, you may not even get that correlation. Thus, our civil servant, to best show taxpayers that their money is ‘getting things done’ focuses on what can be measured with proven causality: build a new school and count the number of children who graduate from it, or a new hospital and show how many new people are treated for malaria. Again, all very important, but only one aspect of what development requires.

So, we’ve seen how our civil servant is actually presented with a limited menu of options, given the institutional structure he finds himself in. He’s not unique – all his colleagues in the other bilateral agencies are faced with the same problems. So certain sectors are over-crowded and others too sparsely populated.

Without going into the same level of detail, Multilateral agencies are also constrained, but in a different way. They are not accountable to taxpayers directly, but rather to the various Governments who provide them with their funds. They have to justify their expenditure not against a public perception of what development is, but against the prevailing economic and social theory of development. Again, this distorts the way Aid is spent. I won’t go into the details, as it’s well covered in my archives, but the prevailing thinking doesn’t place nearly enough emphasis on the transitional aspects of development.

Most of the seasoned development workers I’ve met recognise this characterisation of the major Aid organisations. This brings me to a second question. Why do so many people work in development when there are such structural impediments to their effectiveness? Well, to be sure, there are a number of people who believe that the current structures work, and that sustainable economic development should take a backseat to immediate poverty reduction. They’re probably a minority, however, especially once you get to the policy-makers. So what of them? I think most of these people are just trying to do the best they can in difficult circumstances and trying, in their own way, to change these structures. But if efforts to change the structure of development organisations fail, eventually we will have to ask some very difficult questions. For example, what would happen if there was no Aid? Or at least no Aid agencies? It’s a thought experiment that I’ll reserve for a future blog.