Entries tagged with “World Bank”.


I’m late to this show – I was traveling last week when the whole Gates/Moyo throwdown happened. I was going to let it go, but I have received enough prodding from others to offer my thoughts – probably because I have offered extended critiques of Moyo’s Dead Aid (links below), while also noting that Gates’ understandings of the problems of aid and development are a bit myopic. So, here we go…

Bill Gates finally voiced what has been implicit in much of his approach to development – he sees aid and development critics as highly problematic people who slow down progress (or whatever Bill thinks passes for progress).  Honestly, this is thoroughly unsurprising to anyone who has paid any attention to what Bill has said all along, or indeed anything the Gates Foundation does.  There just isn’t much room for meta-criticism at the foundation or its work – sure, they evaluate their programs, but there isn’t much evaluation/consideration of whether or not the guiding principals behind those programs make much sense.  There is an assumption that Gates’ goals are somehow self-evident, and therefore critics are just problems to be solved.

Let’s just start with this part of what Gates said. To me, his comments represent a profound misunderstanding of the place of aid and development criticism – his comments represent critics as annoyances to be brushed away, implying that criticism is an end unto itself. I do not know a single aid/development critic for whom criticism is the end. Critical thinking, and any resultant criticism, is a means to the end of changing the world. Simply put, without critical thinkers to constantly evaluate, challenge, and push the thinking of those in the world of development policy and implementation, where would we be? Take gender, for example. Today, nobody questions the need to consider the gender of the beneficiary when we think about policies or programs, but in the late 1960s those who first raised this issue were critics, often viewed as “annoyances” who slowed down the process of designing and implementing projects with their silly concerns about the needs of women. Gates does his foundation, and the entire enterprise/discipline of development a disservice in this rather sad misrepresentation of the aid critic.

Had Gates simply said what he did about aid critics in the abstract, I think it would have passed without much comment. But he didn’t. Instead, he singled out Dambisa Moyo as an archetype of aid criticism. As a result, he gave a platform to someone who clearly loves the attention. I fear he also somehow made her the archetype for the aid critic, validating a writer whose “critical” arguments are rife with errors and problems (I detailed these in an extended review of her book here, here, here, here, and here). In short, Gates was rather clever here: he picked the contemporary aid critic with the greatest conceptual shortcomings and held her up as the problem, as if the rest of the critical thinkers shared her thinking, shallow arguments, and factual problems. Further, he (apparently rightly, given the reaction of twitter and the blogosphere) seems to have assumed that such critics should and would rally to her support.

Well, not me.

I am without question a critical thinker when it comes to development and aid. I have a hell of a paper trail to prove it. But I do not see myself as a colleague or contemporary of Dambisa Moyo. I’d prefer to be a colleague of Bill Easterly, Arturo Escobar, James Ferguson, James Scott, and Timothy Mitchell (all more senior than me), and I see myself as a colleague of Katharine McKinnon, Kat O’Reilly, Mara Goldman, and Farhana Sultana (all friends or colleagues of my generation).  All of these scholars have conducted extensive scholarly work on the problems of development, and backed up their work with evidence. I don’t think any of these scholars is perfect, and some have produced pieces of work that I see as deeply flawed, but all hold their work to a much higher standard than that I saw in Dead Aid.

The fact is that Gates was right: Moyo doesn’t know much about aid and what it is doing – Dead Aid made this rather clear (seriously, read my review of the book). On her webpage, she argues that she “dedicated many years to economic study up to the Ph.D. level, to analyze and understand the inherent weaknesses of aid, and why aid policies have consistently failed to deliver on economic growth and poverty alleviation.” First, a Ph.D. is no guarantee of knowing anything – and I say that as someone who holds two Ph.D.s! I have seen absolutely no scholarly output from Moyo’s Ph.D. work that supports any sense that she developed a rigorous understanding of aid at all. Indeed, her very phrasing – she sought to analyze and understand the inherent weakness of aid – suggests that her work is not analytical, but political. And after two years in D.C., one thing I have learned is that the political has very little to do with facts or evidence. In that regard, I can safely say that Dead Aid is a political book.

Second, being born and raised in a poor country does not mean that one understands the experiences of everyone in that country. Zambia is a culturally, economically, and environmentally diverse country, home to many different experiences.  Just as I cannot make any claim to understand the experiences of all Americans just because I was born here, majored in American Studies, and have lived in five states and a federal colony (D.C.), Moyo’s implicit claim that being born in Zambia allows her to speak for all those living in countries that receive aid, let alone all Zambians, is absurd.

Finally, she argues that she has served as a consultant at the World Bank, implicitly suggesting this gives her great purchase on development thought. It does not. As I have argued elsewhere, working as a consultant for a donor is not the same thing as working as an employee of a donor. I too have been a consultant at the World Bank. Technically, I am currently a consultant for USAID. These are very different roles from those I occupied while employed at USAID. Consultants are not privy to the internal conversations and machinations of development donors, and have at best partial understandings of what drives decisions about development policy and implementation.  Moyo has no practical experience at all with the realities of development donors, a fact that comes through in Dead Aid.

So let’s divorce the two things that Bill Gates did in his comments. He completely misrepresented aid critics in two ways: first, in failing to recognize the contributions of aid criticism to the improvement of aid and development programs, and second in lumping aid critics into the same basket as Dambisa Moyo.  This lumping is pretty egregious, and the overall characterization represents a significant flaw in Gates’ thinking about development that is likely to come back to bite his foundation in the ass in the near future – without criticism of the overall ideas behind the foundation, it’s programs will wither and die.  We can separate this first problem from Gates critique of Dambisa Moyo, which aside from characterizing her as doing evil (which is just going too far, really), pretty much got the assessment of her thinking right.

In short, let’s push back against Bill’s thinking on development criticism, but not valorize Moyo’s crap arguments in the process.

A while back, I was musing about the end of IDA, especially given the interesting work of Andy Sumner on the “New Bottom Billion” and the increasing rate of country “graduation” from IDA eligibility.  For those unfamiliar with the term, IDA is the International Development Association, a branch of the World Bank Group focused on assistance for the world’s poorest countries.  Countries eligible to receive support from IDA have access to low- or no-interest loans that can be paid back over long periods of time – this is justified by the assumption that IDA-eligible countries will not have access to other forms of credit on reasonable terms, mostly because of conditions in the country that would drive away commercial lenders and other sources of credit.  Of course, IDA loans often came with significant conditionality – terms that recipients had to agree to in order to receive the funds, ideally intended to remedy the problems that kept traditional creditors away.  While these conditions were meant to help recipient countries, they often proved disastrous (structural adjustment had a lot of collateral damage among the people it was meant to help) and certainly challenged recipient country’s sovereignty, as the conditions effectively moved economic policy decision-making out of the national government and into multilateral donor organizations.  Both situations created a lot of tension between the multilaterals and the IDA-eligible countries.

Today, for a lot of reasons, it seems that IDA might be coming to a close in much of the world.  Countries are moving beyond the GNI per capita thresholds between low-income and middle-income status all the time (Ghana recently did so), and thus losing eligibility for IDA loans.  Further, ever-cheaper sources of capital have been extended to nearly every country in the world, a process that seems to have accelerated since the recession in the Global North (I surmise this has something to do with the fact that the giant pool of global money that no longer resides in real estate speculation needs somewhere else to go).  In any case, for most low income countries IDA is no longer the only credit game in town, and considering other sources of credit, especially the Chinese, put very few conditions on their loans, IDA is less attractive all the time.  There is still a need for IDA, for a very few countries, but it seems that the tide has turned against it.  This is good news – after all, in development our job should be to put ourselves out of business.  I think there is significant debate about whether IDA put itself out of business (considering attribution of graduation to IDA assistance is weak, at best), but at least we are seeing a situation where a development institution might finally be losing its purpose because good things have happened in the world.

Having worked for USAID, and now working with the World Bank, I have had the chance to sound out a lot of people in the donor world about this shift.  Most people I talk to who have given it any thought recognize that this is part of a much broader shift, one in which the days of “development as financial assistance” (IDA or otherwise) are coming to an end.  Going forward, it is clear that development assistance will increasingly be about technical assistance and less about lending (the Obama administration’s pick of Jim Kim as head of the World Bank is a clear signal that they see the World Bank of the future as a technical assistance organization, not a lending organization).  It is a fascinating transformation that, among other things, is going to obviate a lot of traditional critiques of aid, which revolved around the economic imperialism that aid dollars allowed – the conditionalities of lending that enabled structural adjustment and its many disastrous outcomes.

But the question of graduation is, of course, a tricky one.  Andy’s work, at least when I have been present for his presentations, has drawn questions about what seems to be the arbitrary nature of the lines between low-income and middle-income countries – that is, the movement to “middle income status” might represent a real shift in economic activity, but not a significant change in people’s lives.  I’ve expressed concerns about the robustness of “graduation”, as what appears to be a positive income trend in many countries might not have the strongest of foundations, or might be compromised by the impacts of climate change going forward.

So how can we productively track this change in the world’s financial needs and ensure that development takes a relevant shape as we seek to address the evolving needs of the world’s poor (wherever they might be)?  Perhaps another, more productive way to think about “graduation” is to examine the point at which investment dollars provided by donors is swamped by private investment such that the aid dollars are no longer effective means of leveraging change.  One million dollars can effectively leverage 10 million dollars of investment, but can 1 million dollars leverage 100 million dollars?  In most cases, probably not.  It would be interesting to look at various countries where aid dollars are of declining importance (Ghana, Zambia, etc.) and determine a) if their situation vis a vis aid investment has shifted such that donor dollars no longer effectively leverage other investments and b) when and under what conditions that shift occurred.  It seems to me that this would be a more effective marker in terms of thinking of transitioning from aid as investment to aid as technical assistance, as opposed to a largely arbitrary line in the GNI sand, one subject to rather large margins of error in its calculation.   Further, understanding the conditions of a transition from dependence on donor investment to stand-alone FDI recipient would be a key lesson for transitioning other countries out from aid dependence.

This is a rough sketch, but it seems to me this could be done.  It would require a bit of research in a couple of key places, but organizations like the World Bank are well-positioned to conduct such research and disseminate the findings.  Academia stands ready to help…

In part 1, I argued that most academics who study development and aid have a very weak understanding of the processes they critique and seek to influence . . . and the only real way to build that understanding is to engage more seriously with development agencies.  Why, then, have so few academics in the social sciences sought out such engagement – that is, why do so few academics work in development agencies as part of their training/research/practice?  I think it has something to do with an unachievable desire to alter development practice and outcomes without unsettling ourselves.  For example, many academics limit themselves to the critique of development practice to preserve some distance between themselves and the messy world of practice and policy.  However, limiting oneself to critique still invokes an ethics of engagement, for if these critiques come too late to be acted upon, or do not speak to the institutional context from which these practices spring, the end result will be writing accessible only by other academics that has little if any benefit to those with whom we work in the Global South.  This de facto extractive knowledge industry can hardly be seen as progressive, and its existence should upset us.

At the same time, holding ourselves apart from development practice out of a concern for being co-opted by (or used to legitimize) problematic political-economic agendas only makes sense if we treat development organizations as largely unchanging monoliths.  This is a terribly ironic failure for a body of critical scholarship that otherwise spends so much time identifying and celebrating difference.  Development agencies are not monoliths.  For example, within these agencies are individuals deeply concerned about the rights of those affected by new forest carbon programmes, who object to the framing of development objectives in terms of economic growth, and who lament and struggle against the historical amnesia that marks the cyclical re-emergence of problematic and failed development initiatives.  When we see development organizations as sites of contestation, unsettling questions arise.  What is the point of critically-informed scholarship if not to provide support to individuals in their struggles to reshape policy, budget and programming into something more productive?  What good will the most progressive, community-level effort come to if it can be plowed under by a single bad Country Development Cooperative Strategy (USAID) or Poverty Reduction Strategy Paper (World Bank)?  What is the point of studying development, if not to intervene?

We cannot alter development without unsettling ourselves, as development requires us to think about the ideas of change and progress, and our role in both.  I wrestle with this when I find myself arguing that the application of critical social theory to ‘development challenges’ can result in different and arguably more productive empirical understandings of events in the world (see here, here, here and here).  This struggle helps me evaluate of my own positionality, motivations and expectations for such interventions.  It is not a struggle that will come to a neat resolution.  If indeed the path of the critical development geographer is between the equally untenable poles of uncritical self-justifying judgement and self-promoting intellectual resource extraction, then it is a path that is constantly fraught with tension.  If you are unsettled, it means you are paying attention to this tension and trying to address it.  If you are uncomfortable, you are probably doing it right.

It appears that the World Bank, at long last, is going to really make a huge portion of its data publicly available.  The New York Times has a story that outlines some of the trials and tribulations that brought us to this point, some of which will probably seem arcane to the development outsider.  However, as a development researcher/practitioner hybrid, I cannot tell you how exciting or important this is – the Bank is sitting on a giant pile of interesting data.  Not all of it is going to be high quality (a lot of data from the Global South is not – see chapter 9 of Delivering Development or a parallel discussion in Charles Kenny’s Getting Better).  But until very recently the data you could easily access from the Bank was worthy of a lower-division undergraduate project – and getting to the really interesting stuff was brutally difficult.  The new datasets are more detailed and comprehensive, but still not everything the Bank has.  Andy Sumner has been trying to get at the Bank’s core data to refine and test his ideas about the New Bottom Billion (which you should all be reading, by the way), with little success because of security requirements.

I really like a quote, at the end of the NY Times piece, from Bitange Ndemo, Kenya’s permanent secretary for information.  When asked if there would be resistance to public dissemination of government data, he argued that transparency was inevitable because:

Information is valuable, he says, and people will find a way to get it: “This is one of those things, like mobile phones and the Internet, that you cannot control.”

Otaviano Canuto, the World Bank’s Vice President for Poverty Reduction, had an interesting post on HuffPo yesterday in which he argues that we cannot understand the true cost of climate change until we can better measure poverty – “as long as we are unable to measure the poverty impact of climate change, we run the risk of either overestimating or underestimating the resources that will be needed to face it.”  I agree – we do not have a particularly good handle on the economic costs of climate change right now, just loose estimates that I fear are premised on misunderstandings of life in the Global South (I have an extended discussion of this problem in the second half of my book).

However, I find the phrasing of this concern a bit tortured – we need to better understand the impact of climate change on poverty so we can figure out how much it will cost us to solve the problem . . . but which problem?  Climate change or poverty?  Actually, I think this tortured syntax leads us to a more productive place than a focus on either problem – just as I am pretty sure we can’t address poverty for most living in the Global South unless we do something about climate change (which I think is what Canuto was after), I don’t think you can address climate change without addressing poverty.  As I argue in my book:

Along globalization’s shoreline the effects of climate change are felt much more immediately and more directly than in advanced economies. More and more, as both climate change and economic change impact their capacity to raise the food and money they need to get through each day, residents of this shoreline find themselves forced into trade-offs they would rather not make.

For example, most of the farmers in Dominase and Ponkrum agree that deforestation lowers the agricultural productivity of their farms, due to both the loss of local precipitation that accompanies deforestation and the loss of shade that enables the growth of sensitive crops, such as cocoa. At the same time, the sound of chainsaws can still be heard around these villages every once in a while, as a head of lineage allows someone from town to cut down one of the few remaining trees in the area for a one-time payment of a few hundred dollars. These heads of family know that in allowing the cutting of trees they are mortgaging the future fertility of this land, but they see little other choice when crops do not come in as expected or jobs are hard to find.

From a global perspective, this example may not seem that dire. After all, when one tree falls, the impact on the global carbon cycle is minuscule. However, if similar stresses and decisions result in the cutting of thousands of trees each day, the impact can be significant. All along the shoreline, people are forced into this sort of trade-off every day, and in their decision- making the long-term conservation of needed natural resources usually falls by the wayside.

Simply put, we have no means of measuring or even estimating the aggregate effect of many, many small livelihoods choices and the land use impacts of those choices, yet in aggregate these will have impacts on regional and global biophysical processes.  When we fail to address poverty, and force the global poor into untenable decisions about resource use and conservation, we create conditions that will give us more climate change.  If we don’t do a better job of measuring poverty and the relationship of the livelihoods and land use decision-making of the poor (something I have addressed here), we are going to be caught by surprise by some of the biophysical changes that persistent poverty might trigger.

 

Hoorah!  The World Bank is officially recognizing that environmental impacts are an example of a colossal market failure, and moving aggressively to get the cost of these impacts built into country’s national accounts.  To quote World Bank President Robert Zoellick:

“We know that human well-being depends on ecosystems and biodiversity,” said Mr Zoellick.

“We also know they’re degrading at an alarming rate.

“One of the causes is our failure to properly value ecosystems and all they do for us – and the solution therefore lies in taking full account of our ecosystem services when countries make policies.”

Well, super.  We’ll see how this goes over when a bunch of countries see the accounts they use for planning head into the toilet – my guess is massive pushback from countries that can (China, India, pretty much the entire Global North), which means the only countries that will be forced to deal with this revaluation are those in the Global South too small to resist World Bank pressure.  Enforcing this change in accounting unevenly will be remarkably unfair, if this is how it plays out.  Think I’m a bit alarmist?  Continue reading the article, right down at the end:

The draft agreement ministers are considering in the main negotiations here calls for “the values of biodiversity” to be integrated into countries’ development and poverty reduction strategies.

But delegates are still arguing over whether to call for integration into national accounts.

Only developing countries have to create poverty reduction strategies and development strategies.  So if these values are used in these strategies, but not in national accounts more widely, we are going to be hitting the poorest countries pretty hard while doing nothing ourselves.

However, there is a larger problem here – the valuing of everything via markets.  While this is an interesting effort, neither the science nor the economics are very well worked out, so the value of many ecosystem services (the goods and processes we get from ecosystems) is hard to calculate.  So, will we end up only dealing with this in ecosystems where the economics and science is further along (forests, for example – and temperate forests, at that)?  Or will we risk arbitrary valuations that lead to their own kinds of market failures?  The first option runs into the uneven enforcement problem I raised above – not every country has well-understood forests, so only some countries would have to deal with this revaluation.  The second is not an improvement on the current situation – indeed, it would give us the false impression we know what we are doing, when we do not.

Watch this space . . .

So, the Center for Global Development, a non-partisan think tank focused on reducing poverty and making globalization work for the poor (a paraphrase of their mission statement, which can be found here), has issued a report that more or less says that USAID’s quality and effectiveness of aid is very low when compared to other agencies.

Well, I’m not all that freaked out by this assessment, principally because it fails to ask important questions relevant to understanding development needs and development outcomes.  In fact, the entire report is rigged – not intentionally, mind you, but I suspect out of a basic ignorance of the difference between the agencies being evaluated, and an odd (mis)understanding of what development is.

For me, the most telling point in the report came right away, on pages 3 and 4:

Given these difficulties in relating aid to development impact on the ground, the scholarly literature on aid effectiveness has failed to convince or impress those who might otherwise spend more because aid works (as in Sachs 2005) or less because aid doesn’t work often enough (Easterly 2003).

Why did this set me off?  Well, in my book I argue that the “poles” of Sachs and Easterly in the development literature are not poles at all – they operate from the same assumptions about how development and globalization work, and I just spent 90,000 words worth of a book laying out those assumptions and why they are often wrong.  In short, this whole report is operating from within the development echo chamber from which this blog takes its name.  But then they really set me off:

In donor countries especially, faced with daunting fiscal and debt problems, there is new and healthy emphasis on value for money and on maximizing the impact of their aid spending.

Folks, yesterday I posted about how the desire to get “value for our money” in development was putting all the wrong pressures on agencies . . . not because value is bad, but because it puts huge pressures on the development agencies to avoid risk (and associated costs), which in turn chokes off innovation in their programs and policies.  And here we have a report, evaluating the quality of aid (their words) in terms of its cost-effectiveness.  One of their four pillar analyses is the ability of agencies to maximize aid efficiency.  This is nuts.

Again, its not that there should be no oversight of the funds or their uses, or that there should be no accountability for those uses.  But to demand efficiency is to largely rule out high risk efforts which could have huge returns but carry a significant risk of failure.  Put another way, if this metric was applied to the Chilean mine rescue, then it would score low for efficiency because they tried three methods at once and two failed.  Of course, that overlooks the fact that they GOT THE MINERS OUT ALIVE.  Same thing for development – give me an “inefficient” agency that can make transformative leaps forward in our understandings of how development works and how to improve the situation of the global poor over the “efficient” agency that never programs anything of risk, and never makes those big leaps.

Now, let’s look at the indicators – because they tell the same story.  One of the indicators under efficiency is “Share of allocation to well-governed countries.”  Think about the pressure that places on an agency that has to think about where to set up its programming.  What about all of the poor, suffering people in poorly-governed countries?  Is USAID not supposed to send massive relief to Haiti after an earthquake because its government is not all we might hope?  This indicator either misses the whole point of development as a holistic, collaborative process of social transformation, or it is a thinly-veiled excuse to start triaging countries now.

They should know better – Andrew Natsios is one of their fellows, and he has explained how these sorts of evaluation pressures choke an agency to death.  Amusingly, they cite this work in here . . . almost completely at random on page 31, for a point that has no real bearing on that section of the text.  I wonder what he thinks of this report . . .

In the end, USAID comes out 126th of 130 agencies evaluated for “maximizing efficiency.”  Thank heavens.  It probably means that we still have some space to experiment and fail left.  Note that of the top 20% of donors, the highest scores went to the World Bank and UN Agencies, arguably the groups that do the least direct programming on the ground – in other words, the “inefficiencies” of their work are captured elsewhere, when the policies and programs they set up for others to run begin to come apart.  The same could be said of the Millennium Challenge Corporation here in the US, which also scored high.  In other words, they are rewarding the agencies that don’t actually do all that much on the ground for their efficiency, while the agencies that actually have to deal with the uncertainties of real life get dinged for it.

And the Germans ended up ranking high, but hey, nothing goes together like Germans and efficiency.  That one’s for you, Daniel Esser.

What a mess of a report . . . and what a mess this will cause in the press, in Congress, etc.  For no good reason.