'The Donors’ Dilemma' - What is the future of International Development?

By Simon Maxwell - 06 January 2014

This column by Simon Maxwell is part of Global Policy’s e-book, ‘The Donors’ Dilemma: Emergence, Convergence and the Future of Aid’, edited by Andy Sumner. Contributions from academics and practitioners will be serialised on Global Policy until the e-book’s release in the first quarter of 2014. Find out more here or join the debate on Twitter #GPfutureofaid.

The future of development cooperation is in flux. In the OECD/DAC, donors debate the definition of official development assistance. In the UN, countries of all levels of income debate the financing of post-2015 development and environment goals, and, in separate fora, the financing of action on climate change. In countries, including Australia and Canada, radical action is taken to reshape the management of development cooperation, within foreign ministries.

Three questions arise about the future of international development, one easy, one hard and one very hard.

First, where are the limits of international development? That’s easy. Hint: the threads are longer than you think.

Second, what is the future of multilateralism when international institutions are imperfect and hard to reform.  That’s hard. Hint: keep trying, and be more ruthless in managing incentives.

Third, should development ministries (like the UK’s DFID) become ministries of global affairs, and in that case where does it leave ministries of foreign affairs?

That’s very hard. Hint: if development agencies do not want to follow CIDA and AUSAID into a kind of oblivion, then they need stronger networks across Government.

What are the limits of international development?

First, where are the limits of international development? We don’t need to argue about whether development is about more than aid. That line has been commonplace for decades, and is reflected, for example, in the Centre for Global Development’s Commitment to Development Index, or the EU’s work on policy coherence for development.  Some observers even argue that development is hardly any more even about aid at all – except in the small remaining number of low income countries. I have suggested that the EU, for one, is moving in that direction, in its recent policy on financing for development.

The more interesting question is where the thread ends. We can agree that trade, finance, disease control, intellectual property, tax havens, the war on drugs, security policy, CO2 emissions control and a myriad other items all influence welfare and human development in ‘developing countries’ (and we will come shortly to what that phrase might mean). However, those items in turn, sometimes more, sometimes less, are themselves embedded in wider geo-strategic landscapes.

For example, Mark Leonard, writing on China in a new book edited by Douglas Alexander and Ian Kearns, suggests that the proposed Transatlantic Trade and Investment Partnership (TTIP) is designed partly to create so valuable a market that it will corral China into accepting Western norms. Simon Adams, in the same book, writes about the imperative of the responsibility to protect: calling for fewer Security Council vetoes and a stronger International Criminal Court. I did not know, but learned from Adams, that R2P was designed as an ‘explicit rejection’ of the doctrine of ‘humanitarian intervention’ (Pg 218).

If TTIP is a device to ensnare China in a liberal world trade regime, and if R2P, backed up by force, is a means to build a political coalition to support transition in fragile states like Libya, and if the geopolitics comes home to roost in the Security Council or the G8, then the thread is long indeed. Theseus needed a whole ball of thread, provided by Ariadne, to navigate the labyrinth. We may be in the same position. To be effective in international development is to be able to ‘work the system’, not just in aid, but more generally.

What is the future of multilateralism?

Second, what is the future of multilateralism when international institutions are imperfect and hard to reform? It is easy to say that global problems require multilateral solutions. I have said that myself, many times. It is also easy to say that multilateral solutions would be easier to achieve if multilateral institutions could only be reformed, in this way or that. I have been guilty of that, too. Much more interesting and difficult, I think, is to focus not on the ‘why?’ or ‘what?’ of multilateral reform, but on the ‘how?’. The literature on global governance is elevant: see, for example, Ian Goldin’s recent book,  Divided Nations: why global governance is failing and what we can do about it’ – and my review, which contrasts the prescriptions of Ian Goldin with Ngaire Woods (WG classic), WG Plus and my own eight-point programme for improved global governance. Trust plays a big part in all these lists; so do incentives and disincentives to good behaviour.

This is probably not the place to discuss reform packages in any detail, but certainly we could do better on both the EU and the UN by being more sophisticated about the how as well as the why and what. In the case of the EU, and from a specifically development perspective, my money would be on building much better conversations among EU Member States, in order to create a broadly-based epistemic community. In fact, we are doing that through the European Think-Tanks Group and our work with European Change-Makers. I would also keep the Commission on a shorter leash, reducing the seven-year financial planning period to five years, and building in strong financial incentives to recognise change. In fact, I would treat the EU institutions much as they in turn treat developing countries: not with detailed conditionality, but by agreeing high-level results frameworks, backed up by significant rewards for good performance. A similar strategy would work for the UN: I would try to consolidate all funding into core budgets rather than trust funds, hold those budgets centrally for the whole of the UN, introduce medium term rather than short-term budget horizons, and use the financial weight of these changes to negotiate for institutional reform.

But, this is hard.

How should development ministries change?

The third question, and the hardest, is this: should development ministries become ministries of global affairs, and in that case where does it leave ministries of foreign affairs?

This is currently a question of some global interest. The UK, of course, still retains an independent Department for International Development, led by a minister of cabinet rank. This was always the exception rather than the rule, and has become more so. Canada and Australia have recently made significant changes to their aid administrations, merging aid administration into foreign affairs. In those countries, and in others, like Denmark and the Netherlands, development is also closely linked to trade. In the Netherlands, for example, Liliane Ploumen is Minister for Foreign Trade and Development Cooperation. France has a Minister for Development within the Ministry of Foreign Affairs, but the technical functions are embedded in a ‘Directorate-General of Global Affairs, Development and Partnerships’, which includes work on business support and international economics. Germany, we were told at ODI’s Changemakers’ conference in June, ‘is considering two options: a ministry for global issues, based on cooperation rather than aid, and covering issues such as food security, technology, poverty, resource efficiency/management and agriculture; or a strengthening of international departments in all the relevant sectoral ministries’. The EU is engaged in a debate about the role of the External Action Service, and the remit of the Vice President/High Representative, who leads the EEAS, vis-à-vis the Development Commissioner: this will need to be settled before a new Commission takes office in 2014.

Underpinning these actual and potential changes is a sense that aid, while necessary for now, is an instrument of declining relative, sometimes absolute, value. This is because other instruments are growing, not least trade, remittances, other financial flows, and more general cultural links; but also because the number of low income countries that can be considered potential aid recipients has declined quite rapidly and will decline further. There are currently only 36 low income countries on the World Bank list, and that number will inevitably decline. If development were only about aid, then someone would be bound to ask whether we need a Cabinet-level minister to manage aid to twenty or thirty mostly small low-income countries.

More important, if development is about more than aid, someone is bound to ask where the boundaries of the constituency lie: do development ministries deal with aid and non-aid issues only for low income counties and fragile states, or for some wider group, and if wider, how defined? Are upper middle income countries in Latin America included in the development remit, for example? And how, then, does the development minister work with colleagues dealing with trade, defence or foreign affairs more generally?

Personally, I think there are two options.

The first is to merge independent agencies like DFID back into the ministry of foreign affairs. There would have to be some conditions if this were to happen: preserving the poverty-focused purposes of the aid programme, as defined in the UK by the International Development Act of 2002; protection of  skilled cadres; a senior ministerial post; and probably a redefinition of the purposes and culture of the ministry of foreign affairs, to make it more focused on delivering global public goods. The last condition is not trivial.

This option is worth discussion, but is politically difficult, and quite high risk.

The second option is to draw on German and French ideas, maintain the development agency as a Cabinet-level department, but re-focus its work on global issues, with a remit to work in partnership across Government. In practice, in the UK, this is what already happens. DFID is represented on the National Security Council. It has many joint programmes with other ministries, like the Conflict Pool, shared with the FCO and the Ministry of Defence, or the International Climate Fund, shared with the Department of Energy and Climate Change and the FCO. At some periods, it has shared ministers with other Departments, as when Gareth Thomas was a minister in both DFID and the then Department of Trade and Industry. As Alex Evans and David Steven remarked in a monograph for Chatham House in 2010:

‘ .. .  international departments’ mode of operation is becoming more complex. Risks cut across issue and organizational silos. Few can be managed effectively without collaboration between complex networks of state and non-state actors. ‘

The question for the future is what it would take to do this well. I commented on this earlier this year in response to the annual report of the Independent Commission on Aid Impact, which looked at the Conflict Pool, and also at cross-departmental collaboration during the Arab Spring. To cut a long story short,

There seem to be several elements conducive to success, apart from goodwill and flexibility: a clear cross-Government strategy, an effective inter-Departmental Board, a dedicated Secretariat, a series of Programme Boards on different topics, and specialised in-country teams.

. . .

Some further questions also follow:

  1. It would be interesting to ask what the difference is between a joined-up pool and a forum or mechanism for coordination between ministries? And when is one preferable to the other?
  2. How does ministerial leadership and accountability work when cross-cutting programmes are established? Does it work better when the National Security Council is involved? Are Cabinet committees the right mechanism? Or is there some advantage in having a shared minister?
  3. Is there a reason why DFID cannot just implement all programmes – it has much better capacity and experience than the FCO and in some ways the British Council. Would this not guarantee better joined-up thinking?
  4. Are there other cases where it would be useful to consider a joint approach – for example, Nepal, where DFID seems to have acted independently.
  5. Finally, one is left asking what the case is for cross-government initiatives. If they are important on e.g. conflict, why not also trade, migration, technology, finance, and many other issues.’

Looking at this list with the benefit of hindsight, I could have added to the questions. For example, what kind of staffing is needed, in numbers and competences, to fulfil a networking role? Remember my work back in 2005 on the archetypes of development professional: ‘spyglass, spigot, spoon or spanner. This option also does not quite settle the question of the geographical and substantive boundary between DFID and the FCO.

Anyway, it seems to me that settling this issue is key to delivering international development in the future.

Simon Maxwell is a Senior Research Associate of the Overseas Development Institute, the UK’s leading independent think-tank of development and humanitarian policy. This contribution is based on a review of Influencing Tomorrow: Future Challenges for British Foreign Policy, edited by Douglas Alexander and Ian Kearns.

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