Archive for the ‘MDGs’ Category

The MDGs and armed violence

1 October, 2010

A recent post on the Eldis conflict and security blog discusses how the growing global trend of non-conflict armed violence (NCAV) fundamentally threatens progress towards the Millennium Development Goals (MDGs). Violence within local communities strikes at the very core of development and progress, perpetuating poverty by destroying infrastructure and livelihoods, diverting resources, and contributing to loss of life. The cost of such violence is estimated to be a staggering US$163 billion, a figure that dwarfs the US$119.6 billion global spend on international aid last year. As such, violence can be said to potentially have a drastic impact on the very area that is crucial to achieving the MDGs – government spending on social services. Although the international community has been slow to tackle non-conflict armed violence, policymakers are beginning to recognise the need for more holistic and targeted development approaches to armed violence – as evidenced by the upcoming World Development Report on conflict, security and development. reducing violence in all its forms must now become a development priority. Although the MDGs did not target violence as a core objective, post-2015 there is real scope to integrate the aim of reducing violence into poverty reduction strategy papers, UN development assistance frameworks and post-conflict needs assessments. Whether the current politics of development permit such an innovation remains to be seen, particularly when considering the underlying causes of conflict and violence. See the full original blog posting here.

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The time for making poverty history is now

12 May, 2010

In rich countries a handful of dollars does not go very far, indeed most people in the UK wouldn’t think twice about spending this on a cup of coffee.  But one in five people in the world today has no choice but to survive on less than US$2 a day, and 1.5 billion people struggle to live on less than US$1. The vast majority of those affected are children, each an individual story of unfulfilled hope and potential.

Few would dispute that ‘a world free from poverty’ is the overwhelming challenge of the 21st century. The crucial issue is how to achieve this. In Just Give Money to the Poor:  The Development Revolution from the Global South (Kumarian Press, 2010), Hanlon, Barrientos and Hulme discuss a wave of new thinking on development that is sweeping across the South. Instead of relying on a large and expensive aid industry to find ways to ‘help the poor’, it is better to transfer money and resources directly to the households in poverty so that they are able to find effective the most effective ways to escape from poverty.

This is the premise behind social transfer programmes such as Mexico’s Oportunidades, Brazil’s Bolsa Familia, South Africa’s Child Support Grant, and India’s National Rural Employment Guarantee Scheme. They all provide regular transfers of money to households in poverty with the aim of improving their nutrition, making sure children go to school, and ensuring that expectant mothers have regular check-ups.

This does not rule out the need for investment in economic growth and basic services. Small transfers to very poor households help provide access to new economic opportunities and vital health and education services. Without such transfers, the costs of transport, school uniforms, medicines, and job search could well be prohibitive.

Social transfer programmes do not throw money from helicopters. They carefully select and monitor recipients, ensure they are well informed about objectives, and track outcomes. In Latin America, transfers are paid directly to mothers thus strengthening their voice within the household. The responsibilities of the government and the households are carefully discussed at registration.

Despite attempts by the aid industry to take credit for these initiatives, social transfer programmes are most often national responses to local problems. Brazil’s Bolsa Familia began as a municipal programme in Campinas in 1994/5 and is built on domestic learning and experience of what works to reduce poverty. India’s National Employment Guarantee Scheme, which guarantees one hundred days labour on demand to unemployed rural heads of household, also builds on a careful assessment of similar programmes in Maharashtra and elsewhere.  . Social transfer programmes have high set up costs and for this reason international assistance is important in low income countries. Nonetheless, sustainability and legitimacy requires domestic political support and finance in the medium term. Giving money to households in poverty is a ‘Southern project’, as the considerable diversity of programmes around the developing world demonstrates.

Important challenges remain, especially in low income countries lacking the capacity to design, deliver, and finance social transfer programmes. In many countries their institutionalisation is precarious. The existing social transfer programmes need to be seen as a first stage in the development of  strong and stable institutions,  able to protect poor and vulnerable populations in the South from the volatility and crisis of the global economy on. Acknowledging these challenges, the book makes the important point that knowledge on how to eradicate poverty is already freely available if only we care to learn from the South.

Armando Barrientos – Professor and Research Director, Brooks World Poverty Institute

Talk the talk – but not walk the walk

1 December, 2008

That’s the way Larry Elliott in The Guardian sums up the donors lack of urgency in meeting the MDGs. Commenting on the just released UNESCO Education for All report, he writes:

“… donor countries can talk the talk but not walk the walk. According to the Unesco study, the aid required for even the most basic primary education provision in poor countries is US$11 bn (£7.2bn) a year. In 2006, spending amounted to around $4bn, leaving a funding gap of $7bn. To put that figure into context, it is around 10% of what Britain spent this autumn recapitalising the banking system”.

Maybe they will walk the walk at the UN Financing for Development summit now underway in Doha. But I wouldn’t hold your breath. “When financial systems fail, the consequences are highly visible and governments act,” concluded UNESCO’s Director-General Koïchiro Matsuura. He added “When education systems fail the consequences are less visible, but no less real”.

I would add that education is the only investment you can be sure of getting at least some return on – provided it’s of good quality and children complete a minimum of 4 years primary education. Well-educated people earn more in the labour market, and find it easier to absorb new technologies and methods when they run micro-enterprises and farms. Education is a means to break the inter-generational transmission of chronic poverty (see this CPRC study for Bangladesh).

And even if it didn’t raise income much – which might be the case in economies that are growing only slowly – it certainly improves health status, especially of children, when mothers are educated. Educated mothers are 50% more likely to immunize their children than mothers with no schooling (go here). Gender inequality in education has high costs for both the family and society (see this IFPRI study).

So the chronic underfunding of education reminds me of that old quotation: if you think education is expensive, try ignorance.

Global Finance – Doha: What Chance of Success?

1 December, 2008

World economic turmoil sets the scene for the UN Conference on Financing for Development in Doha (29 November to 2 December), the most important conference on this topic since the UN’s conference in Monterrey back in 2002. Go here for UN updates.

The last quarter of 2008 has seen a lot of talk-talk on development finance. The long-awaited High Level Forum on aid effectiveness was held in Accra in September as well as the UN’s high level event on the MDGs in New York. Calling an event ‘high-level’ lets the international community claim that progress has been made – just by getting senior people together in one place.

What will Doha bring? Can it make headway against the very strong currents now running through the global financial system? Will rich country donors be able to afford aid? On this and other issues see my WIDER Angle article with George Mavrotas – Development Finance: New Opportunities for Doha. We explore the topic further in our new UNU-WIDER book Development Finance in the Global Economy: The Road Ahead (Palgrave).

Carbon Taxes Will Need to be Higher to Pay for Development

25 September, 2008

Jeff Sachs and Bono are blogging on the FT web site during this week’s MDG summit in New York (go here). Today, Jeff reports that some bold and creative proposals are coming from the EU, Mexico and Norway, among others. Carbon taxation is to the fore, in particular.

“According to the Swiss Government’s proposal, a $2 per ton levy on carbon dioxide would raise around $48bn per year, money that could play a critical role in helping impoverished countries to meet the Millennium Development Goals and to adapt to climate change. I believe that we’ll be hearing a lot more about carbon levies in the months ahead, as a practical approach to climate change control and development finance”.

Back in 2003, we took a thorough look at innovative sources of finance in a UNU-WIDER project led by Tony Atkinson of Nuffied College, Oxford (go here). The study concluded that many of the proposals were feasible, including carbon taxes. I chipped in with a proposal for a global premium bond to fund chronic poverty reduction – based on the successful UK premium bond scheme (Addison and Chowdhury paper here).

Amongst all the innovative finance proposals, carbon taxes get the most support among economists (more than the popular Tobin  tax: although that may be boosted by the present financial malaise). They not only reduce carbon emissions (a global bad) but also, as Jeff Sachs says, they generate a flow of revenues to finance a step-up in official development assistance (both multilateral and bilateral) as well as global funds to deal with the urgent challenges of climate change, conflict, and HIV/AIDs (to name but three).

All of these problems just get worse without early action: notably climate change, since a stock of carbon is already in the atmosphere, warming the earth — which we will have to adapt to — even as we attempt to reduce the flow of carbon from new emissions. But this is true of conflict and viruses too: war generates more war (notably in the Congo where violence is still endemic after the supposed ‘peace deal’) and viruses mutate to become deadlier (notably unchecked TB).

Given the high returns to taking action now on these global bads, it would be worth accepting a much higher levy on carbon than the Swiss proposal. This would send a clear signal to the market, encouraging a faster rate of invention and adoption of clean technologies. And the additional funds could be spent on peace-keeping and more research for the diseases of the poor world.

But I worry that the US is way behind Europe in all of this, California perhaps excepted. Dealing with the present financial crisis is vital, but it is also a huge distraction from the larger issues such as climate change. And the present administration has been adamant in its opposition to global taxes. Does anybody detect much of a shift in the US position, the occasional piece of rhetoric aside?

The author is executive director of the Brooks World Poverty Institute, University of Manchester.

Should Cash Transfers Come with Conditions?

1 September, 2008

Or in other words, do governments know best? Best, that is, for poor people. If so, then adding conditions to a cash transfer alters household behaviour in ways that might help them escape poverty faster. Linking cash transfers to school participation is an example. Conditional cash transfers (CTTs) are on the rise (see this new book by BWPI’s Armando Barrientos and David Hulme, as well as the CPRC Kampala conference on social protection next week).

One view is that households know what’s best for themselves. So adding conditions to cash transfers to poor households is redundant. But collecting information is costly (in both time and money). Therefore households are unlikely to have full information. If so, then conditionality could steer them in a direction that they would go if they were fully informed. For example: Governments are likely to have a better understanding of the benefits of immunization than households, so conditioning the transfer on immunization will help.

Knowing whether conditionality does deliver tangible gains is vital. One reason is that conditionality by its nature implies monitoring, and monitoring has a cost. If conditionality does not deliver a gain then the money spent on monitoring might better go to increasing the size of the cash transfer itself (and even if there is a gain, it needs to be one big enough to justify the administrative cost of imposing conditionality).

So how do we capture the behavioural effect? It’s tricky, because behaviour can’t be directly observed. A new IPC one pager reports on the latest work by Alan de Brauw and John Hoddinott which aims to get around this problem (go to IFPRI for the full paper). They found that some households in Mexico’s PROGRESA (now called Oportunidades) did not receive the forms necessary to monitor their children at school, so their cash transfers were in effect unconditional. Their school enrollment is compared to the (majority of) households who were monitored.

Result? If the household was not monitored then its children were less likely to attend school on average. This effect is significant but modest. However, the absence of conditionality really kicks in when children should be moving from primary to secondary school. School attendance was severely reduced when children were making the transition to lower secondary school. These effects are even stronger when the household head is illiterate. De Brauw and Hoddinott conclude that:

“… debates over “to condition or not to condition” are overly simplistic. In the case considered here, there is clearly little benefit to conditioning transfers based on enrollment in primary school. However, in terms of increased school enrollment, there are large benefits associated with conditioning transfers at entry into lower secondary school”.

Hence, you can get a lot more bang from your CTT buck by focusing in on situations where altering household behaviour has the biggest effects — in this case encouraging more households to send their kids to secondary school.

Add another 400 Million People to the Global Poverty Numbers

29 August, 2008

The World Bank has just upped its estimate for global poverty (go here). The Bank now estimates that 1.4 billion people in developing countries — one in four of the developing world’s population — were living on less than US$1.25 a day in 2005. The previous estimate was 985 million — the “bottom billion” (this was based on an international poverty line of $1 a day). The full paper by Shaohua Chen and Martin Ravallion is here.

What all this means is that poverty has been higher from 1981 to 2005 (the period covered by the Bank’s research). Poverty in 1981 is now estimated to have been 1.9 billion people (one in two of the developing world’s population at the time).

So why has the Bank changed its numbers? Mainly because the cost-of-living in the developing world is higher than previously estimated. The International Comparison Project (ICP) has been collecting price data for years, and has released new estimates. This led the Bank to recalculate its poverty numbers. Previously 1993 cost-of-living data was the latest available and was used to generate the 985 million number.

Comparing the prices of goods and services across countries is tricky. Using current exchange rates is unsatisfactory — because currencies move relative to each other for all kinds of reasons. Hence the ICP calculates ‘purchasing power parities’ (PPPs). So the release of new PPPs led to the revised poverty estimates. However, Sanjay Reddy reckons the Bank’s poverty estimates are still too low (go here for his critique). As Duncan Green says: “Pity the Poor Number Crunchers”.

All this is before the recent run-up in food prices which is driving many into chronic poverty. The Bank is taking urgent action in Bangladesh. But expect many more people to join the world’s poor by the end of the year.

Sharing Poverty Information through IPC

8 August, 2008

This just in from the folks at the International Poverty Centre.

“IPC is pleased to announce a new section on its website: Poverty Networks. This new resource brings together web-based platforms that share development-related publications and initiatives. You will be able to access IPC’s collaborating networks on this website”.

Tax Food Speculators to Subsidize the Poor

8 August, 2008

Tax food speculators, and use the money to subsidize the poor. That’s the conclusion of ‘Investors Punish the Poor’ in today’s The Australian. Raghbendra Jha of the Australian National University argues that the huge spike in rice prices over the last year is mostly due to speculation.

A steady upward trend in food prices is driven by the switch of cropland to biofuels and other structural factors (including the rising demand associated with growth in China, India and the other emerging economies). But the huge jump in prices from late 2007 accompanied the credit crunch in financial markets: hedge funds and others shifted from stocks and bonds into commodoties — which have relatively fixed supplies in the short term, and so prices take most of the (upward) adjustment).

The price spike hits the poor hard, and threatens the MDGs. Raghav concludes:

“This eruption of food prices represents the most regressive form of taxation…. This also represents a significant shift in the global distribution of income and calls for the taxation of speculative profits and the subsidisation of the poorest consumers”.

We agree. So how best to organize the tax? And how best to get the poor the help they need? Suggestions please.

Where did all the aid go?

8 April, 2008

The latest figures on aid released by the OECD are less than encouraging. The overall levels of aid fell for a second year running, from US$104.4bn in 2006 to US$95.6bn in 2007 (adjusting for inflation), representing a fall of 8.5% in real terms. Part of the reason for this is the particularly high levels of aid over the previous few years as large amounts of debt for Iraq and Nigeria were written off. The UK’s figures do not make good reading, with aid standing at $9.9bn in 2006 (once debt relief is removed) falling to US$8.8bn in real terms in 2007. This despite the pound rising against the dollar, which will serve to inflate the dollar value of the UK’s 2007 figures.

This pushes us further away from the target of aid reaching 0.7% of GDP. Some countries continue to do well, notably Norway at 0.95%, Sweden at 0.93% and Luxembourg at 0.90%. The UK has reached half-way, at 0.36% of GDP. Though they give the most in absolute terms (at $21.8bn), the US languishes at the bottom of the chart with only 0.16% of GDP given to aid. A number of European countries have pledged to reach the 0.7% target, notably Belgium (by 2010), Finland (2010), France (2012), Spain (2012) and the UK (2013), but on current trends this may seem like empty words. Furthermore, as Oxfam have pointed out, the G8 countries pledged at the Gleneagles summit in 2005 to give an additional $50bn in aid by 2010, but look likely to miss this target by as much as $30bn.

If there is to be any hope of achieving the Millennium Development Goals, aid budgets will need to increase. The UN is currently organising a follow-up conference to examine progress since the Monterrey Conference of 2002 on finance for development. Perhaps the opening session should ask why, when only one of eight regional groups is on track to meet all the MDGs, aid from the rich countries is declining.