NEWSBYRANIL DISSANAYAKE

Development work takes as given that its ultimate aims are achievable.

I was recently in London, and one of the joys of that city is the second floor of Foyles bookshop, dedicated to history, international relations, economics and development. Browsing through the books there, I came across an arresting title: The Myth of Development. Written by the Peruvian Oswaldo de Rivero, it poses a startling question: what if the whole concept of development is flawed? What if the countries we refer to as ‘developing’ are not developing and will never develop?

The first part of this question is nothing new: I myself prefer the term ‘less developed country’ (LDC) to ‘developing country’ because the latter implies a progress that may not always be evident. What de Rivero postulates is that this might not be a temporary state, but that these economies will never develop.

His basic argument is that development as we know it is not inevitable or simply a matter of policy. Rather, a number of economies in different stages encountered conditions that, coupled with the right policies and some natural endowment, experienced massive material expansions that provided the basis of their modern economies. These circumstances sometimes involved violence and coercion: the slave trade, colonialism and so on. The world economy has also developed as these economies have reached ‘developed’ status; it in turn has reached a sort of maturity in which the developed and less developed countries interact according to specific power relations and rules that derive from these.

In many ways, Millennium Development Goal (MDG) #7 on environmental sustainability is the most complex to implement and the most difficult to motivate change in.

Though the headline brings to mind thoughts of climate change and deforestation, MDG 7 actually looks at four dimensions from bureaucratic practice to public health: the introduction of an environmentally sustainable approach to development planning; the reduction of biodiversity loss; the improvement of basic sanitation and access to safe drinking water; and the improvement of the life of slum-dwellers. Given this diversity, it’s not surprising that the United Nations Development Programme's most recent assessment demonstrates that performance on this goal is decidedly uneven.

Biodiversity loss has not shown any signs of reduction: instead it may be accelerating. Deforestation occurs at the mind-boggling annual rate of 13 million hectares and Ghana, for example, saw its area covered by forest decline from 33 percent to 24 percent in just 15 years. Meanwhile, the target on sanitation and drinking water has seen moderate progress, with some countries making great headway. A note of caution must be sounded, though, as the vast majority of those who remain without access to clean water are in rural areas, suggesting that future gains will be harder to come by as the easiest to service populations – the urban dwellers – have already seen improvements.

The big landmarks in the development field tend to be the things we get most excited about, but often, they signify little in the way of meaningful change.

Kenya’s new constitution, which Meredith Slater has written about for Change.Org here, is an important landmark in improving the functioning of democracy and rectifying some of the worst inequalities it suffers. Yet, as she notes, while it’s encouraging that the current regime has pushed it through there are reasons to be wary of celebrating too early.

Most African countries already have pretty good legal and legislative structures. They have independent judiciaries, an autonomous supreme audit body, anti-corruption laws and so on. Many also have decent policy frameworks: poverty reduction strategies that are broadly logical and have been agreed with donors and civil society. Yet we know that these haven’t often had the desired impact: many Governments remain corrupt; legal processes continue to take far too long to reach a conclusion; and too many policies exist only on paper.

Having these statements of policy and law is great: they give citizens, donors and reformist politicians and bureaucrats something to hold on to and push reluctant colleagues and Governments into change and good practices. They also provide notice of intent, and provide a basis for future good work: they are a sound foundation.

Yet too often, this foundation isn’t built upon. And unfortunately we can’t always blame the obfuscation and delaying tactics of sclerotic old politicians.

How should we measure development?

Over the past 20 years, since the Human Development Index was launched in 1990, it's been well-acknowledged that development means more than simple material wealth. It means better life expectancy, educational attainment, health status, gender parity and more. The HDI forced people to ask: What do we actually want out of development? What do people aspire to? And in doing so, the HDI helped people understand that what development should mean is is ‘a better life,’ not just a better average income.

In some ways, though, HDI may have been too successful in changing how people think about development. At this point, simple job creation and economic growth have slipped so far down the list of priorities that they've almost been forgotten. That's why I'm interested in the recent launch of the alternative groundbreaking Human Development Index, the Multi-Dimensional Poverty Index (MPI). Like the HDI, the MPI tries to create an aggregated index looking at ‘development’ through as complex a lens as possible. Doing so, though, continues to be a challenge — as some critics have noted, this new index tries to collectively evaluate gains to health, education, life expectancy and more, when it’s not at all clear what their relative weight should be.

But let’s be clear: the economy matters, and it matters a great deal. Focusing on broader health and education outcomes may make sense, but for developing countries, metrics like HDI actually aren't specific enough.

That's because the aim of aid is not simply to improve life expectancies, nutrition, education and so on — it’s to create the circumstances that allow these forces to be improved and sustained without reliance on constant handouts. If a country improves its health and education systems, but requires constant aid to maintain such gains, that's a qualified victory at best. Successful development means that any gains that aid may have kickstarted are maintained by the country's own government revenue and a domestic civil society robust enough to act on its own.

Recently, I spent two weeks in Cape Town for the World Cup. None of the pre-tournament fears I had heard were realized, at least not for me: it was safe, well-organised, beautiful and there was enough accommodation and transport to keep people happy. The odd robbery on the pitch was as bad as it got.

But Cape Town, as incredibly beautiful and exciting a place as it is, still leaves one lasting negative impression: the extent of inequality there is enormous. It's not like the inequality one encounters in, say Malawi, where the center of Lilongwe is moderately built up, and there are extremely rich individuals, though much of the population lives in poverty. Rather, Cape Town itself feels like a very prosperous, beautiful European city, with a couple of enclaves of poverty parked outside of it.

The center of town is decorated by beautiful apartments with views of Table Mountain, and as one drives out towards Cape Point, one sees some astounding houses with sea views and infinity pools. But outside of town, there are extensive townships, where the physical conditions of life aren’t even in the same planet as Sea Point. Some houses are made of a mish-mash of found materials, ingeniously held together and placed so closely beside each other as to form a labyrinth. The contrast could barely be starker.

This isn’t news to anyone who knows South Africa, and it’s clear that there is a great deal of work going on to address such an imbalance there. I’m not trying to make a point about how South Africa still needs to address issues of poverty: such a fact is well-known at home and abroad, and progress is being made. But it did make me start thinking about how in most of the developing world, this question of inequality has been muted in the last 10 to 20 years.

What's the best way to give aid in the developing world?

To break it down very simply, there are three ways donors agencies can give aid — differences that basically come down to trade-offs between user-friendliness and riskiness.

Let's start with one end of the scale: Project support. Such an approach ensures that money is spent only on finely specified activities in support of a particular goal (e.g., spreading bednets). Accordingly, it's the hardest to siphon funds away from. On the other hand, aid recipients don't like project funds much, mainly because they don't respond to changing priorities, and often wind up being difficult to use. After all, the controls that prevent them from misuse also often make it difficult to access the money even legitimately — which means that funds can end up getting too rigidly locked up.

For a middle way approach, there's the use of ‘basket funds,' in which donors pool their money, while the recipient government uses money from such a 'basket' to support a pre-agreed set of activities. Basket funds are slightly more vulnerable to misappropriation than project support, but the approach also makes the legitimate use of funds much easier. That's because people on the ground can decide what needs to be done when, and can access funds without jumping through too many complicated hoops (though restrictions on spending still do limit the flexibility governments have in responding to emerging issues).

These days, it's all about transparency. Most recently, the U.K.'s new Minister for International Development, Andrew Mitchell, has joined USAID Administrator Rajiv Shah in putting greater transparency about aid operations at the top of his agenda.

Which is great, right? Transparency is clearly a good thing: more information about how much aid goes where and what it achieves is useful. It’s for this reason that so many groups advocate for greater aid openness and organizations working to actually open the data up — like Publish What You Fund, the International Aid Transparency Initiative, AidData, etc. — exist.

We need to be wary, however. Getting more data to analyze isn’t a very good end result in itself. What's important is a concrete impact for developing countries and overall aid effectiveness. So we need to think carefully about how we can use transparency to improve aid — and just opening up data to the public won’t help. After all, in most donor countries, when it comes to the voting booth, voters don't care enough about aid. What's more, in developing countries, civil society often lacks the capacity to access and regularly analyze data. It’s also not clear how pressure from such developing country sources would actually influence donor aid priorities, anyway — there isn’t any direct mechanism for accountability there.

What’s more, the data that is being published is mainly on aid flows — not on effectiveness. In other words, we can easily see how much money goes where, but not what it actually achieves.

Today, the United Kingdom goes to the polls in the most closely contested general election in a generation. In the run-up to the election, each of the three main parties' leaders have engaged in a series of debates, including one on international affairs and foreign policy. Amazingly, not a single question or statement during this lengthy debate was raised concerning international development.

It’s not the parties haven't engaged with the issue, either. The Liberal Democrats are saying they'll go ‘Beyond Aid,’ and look at the developmental impact of trade, migration and so on; the Conservatives are throwing their weight behind the Cash on Delivery movement; and Labour has an outstanding track record on development, thanks to the Department for International Development (which they created). If we take a look, it's clear how each party wants to fight global poverty.

So why haven’t they been asked more about these issues? Why hasn’t it come up in the public debates? The answer, I believe, is that the electorate simply doesn’t care that much. The big issues are more domestic in nature: the economy, war, education, health. International development comes way down on the list.

No one wants to see aid money get diverted to completely non-developmental causes — for e.g., a birthday party, a new fleet of cars, or a $3 million wedding (to pluck just one example out of a hat).

The blogosphere was recently up in arms over an article from the Lancet, which suggested that aid money may actually encourage governments to simply cut back their spending in certain cases. I've discussed elsewhere why this isn't necessarily a bad thing: in many cases, it may simply be a case of balancing what resources a government has available and shifting them around in the best way it can.

That said, of course, no one wants aid money to fund lavish personal expenditures for government officials. So how do we deal with this possibility?

First off, even if donors don't like the prospect of working with a government in question, it's essential that they do. Development means economic change, which ultimately comes down to official policy. Bypassing the government is also impractical, because no other actor has the same ability to sustainably provide public goods, tackle development or coordinate various actors.

What if you knew that there was $9.3 trillion available to the developing world, but that such resources remained virtually untapped?

And we're not talking about oil reserves or diamond veins, either. We're talking about the assets of the poor: houses, businesses, machines. As Peruvian economist Hernando De Soto argues, the poor have assets, and lots of them. It’s just that most of these are held outside of the formal property system and thus constitute unrecognized, or ‘informal’ holdings.

I recently wrote a piece looking at how donors can support private sector development in developing countries. When thinking about poverty alleviation efforts funded by aid, it’s always useful to ask: how can we accomplish this without any aid at all? The question focuses on the root problems that lie below the need for more money, and helps ensure that we think about sustaining such work in the absence of aid.

So how can developing countries ensure that there is enough funding, enough capital, for their private entrepreneurs without appealing to aid? In 2000, De Soto set out to answer this question in his book The Mystery of Capital. He came to a surprising conclusion: the capital is already there. It just hasn’t been unlocked yet.