3HWHUYDQ/LHVKRXW5REHUW:HQW 0RQLTXH.UHPHU Less Pretension, More Ambition development policy in times of globalization AMSTERDAMA M S T E R D A M UNIVERSITYU N I V E R S I T Y PRESSP R E S S Less Pretension, More Ambition This book is based on a report that was published by The Netherlands Scientific Council for Government Policy (WRR). According to the Act of Establishment, it is the Council’s task to supply, on behalf of government policy, scientifically sound information on developments which may affect society in the long term, and to draw timely attention to likely anomalies and obstacles, to define major policy problems and to indicate policy alternatives. The Council draws up its own programme of work, after consultation with the Prime Minister, who also takes cognisance of the cabinet’s view on the proposed programme. The Council (2008-2012) has the following composition: prof. dr. J.A. Knottnerus (chairman) prof. dr. ir. M.B.A. van Asselt prof. dr. H.P.M. Knapen prof. dr. P.A.H. van Lieshout prof. dr. H.M. Prast prof. mr. J.E.M. Prins prof. dr. ir. G.H. de Vries prof. dr. P. Winsemius Executive director: dr. W. Asbeek Brusse Lange Vijverberg 4-5 P.O. Box 20004 2500 EA ’s-Gravenhage Tel. +31 70 356 46 00 Fax +31 70 356 46 85 E-mail: [email protected] Internet: http://www.wrr.nl SCIENTIFIC COUNCIL FOR GOVERNMENT POLICY Less Pretension, More Ambition development policy in times of globalization Peter van Lieshout, Robert Went & Monique Kremer Amsterdam University Press, Amsterdam 2010 Front cover illustration: © aleaimage Cover design: Studio Daniëls, The Hague Layout: Het Steen Typografie, Maarssen Translation: Andy Brown and Howard Turner isbn 978 90 8964 295 0 e-isbn 978 90 4851 388 8 nur 754 © wrr/Amsterdam University Press, The Hague/Amsterdam 2010 All rights reserved. Without limiting the rights under copyright reserved above, no part of this book may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) without the written permission of both the copyright owner and the author of the book. 5 contents Preface 7 1 Development aid in a changing context 13 2 The development aid split 25 2.1 Two basic motives for development aid 25 2.2 The moral assignment 27 2.3 Self-interest 31 2.4 Interdependencies 34 2.5 How to combine big and small 42 3 Understanding development 49 3.1 Defining development 49 3.2 Other starting points 54 3.3 Effective governments and path-dependent trajectories 57 3.3.1 Rediscovering the state 58 3.3.2 Antecedents and variety 61 3.3.3 What about Africa? 64 3.4 Political institutions 67 3.5 Social fabric 70 3.6 Own development paths 81 4 Measuring development 87 4.1 Is development taking place? 87 4.2 What does aid contribute? 94 4.3 Should we then focus on the micro level? 101 4.4 Does aid help? 103 5 Designing development aid 105 5.1 Narrowing down: development aid becomes poverty reduction 105 5.2 Fragmentation: more and more chaotic organization 112 5.3 Delusions of grandeur: the constant lure of social engineering 118 5.3.1 Capital and import substitution as a remedy 119 5.3.2 The Washington Consensus 122 5.3.3 Good governance and democracy as a remedy 128 5.4 Lack of intervention ethics 133 5.5 Compartmentalization: underestimating other instruments 141 5.5.1 New themes 142 5.5.2 Searching for coherence 147 6 less pretension, more ambition 6 The task ahead 153 6.1 Linking will become increasingly unavoidable 153 6.2 The task: to be more development-oriented, more specific and broader 158 6.3 The first consequence: being more development-oriented 160 6.3.1 Growth 160 6.3.2 What about water supply, education and healthcare? 167 6.3.3 And what about security and stability? 173 6.4 The second consequence: being more specific 177 6.4.1 Country and regional differentiation 177 6.4.2 Diagnostic approach 180 6.4.3 Choice of instruments 187 6.5 The third consequence: being broader 189 6.6 A dual strategy for development 192 7 Being more specific: professionalizing aid 195 7.1 Appropriate aid modalities 195 7.2 Supporting governments 197 7.3 Other actors: ngos for development 201 7.4 Other actors: businesses for development 207 7.5 Other actors: citizens for development 214 7.6 Programme aid 220 7.7 Doing good can and must be done better 230 8 A broader perspective: looking beyond aid 233 8.1 Multilateral aid 233 8.2 Coherence for development 240 8.3 International public goods 245 8.4 Global governance 251 8.5 Beyond ‘international cooperation’ 254 9Conclusion 259 9.1 Development more central 261 9.2 Professionally organized development 264 9.3 Beyond classical aid 270 9.4 Less pretension, more ambition 272 References 275 7 preface This book is about the future of development aid. In recent years there has been increased public debate in the Netherlands, as in many other Western countries, about development cooperation – in terms of both the media attention devoted to the theme and the intensity of the positions taken. In a country which liked to see itself as one of the pioneers in the field, the self-evidence of development aid – about which there had long been broad political and social consensus – seemed to have come to a definite end. It was for this reason that the Dutch Scientific Council for Government Policy (wrr) undertook to examine this issue thor- oughly. The wrr is an advisory body to the Dutch government. Its task is to make propos- als, based on broad analysis and scientific insights, on the strategic direction of Dutch policy. To this end, the wrr submits advisory reports to the government several times a year on issues which merit specific attention. At the start of 2010, an advisory report on development aid was published in Dutch under the title Less Pretension, More Ambition. Academics, practitioners, policymakers and politicians engaged in all manner of debate about the report’s analysis and recommendations. The government started drawing up a detailed response on the consequences of the report for its policy, with the intention of debating it in parliament. In October 2010, the new Dutch government decided to use the report as the basis of a thorough modernization of the Netherlands’ policy. To make the Dutch report accessible to an international audience, it has not only been translated into English, but also adapted and amended. Details referring to the specific Dutch organization of development aid that are irrelevant for an inter- national audience have been removed. Only those from which wider lessons may be drawn have been retained. Secondly this publication has benefited from the responses to the report (more than 100 detailed responses were posted in the online debate organized by the website of The Broker alone; see www.thebroker online.eu). The changes made include coverage of new themes, more elaboration on specific lines of reasoning and more comprehensive analyses. The main argu- ment has not been changed. The result is a book aimed at a wider international audience, even though the examples chosen and the emphasis laid will undoubt- edly have a noticeable Dutch bias. The report was compiled by a project group headed by wrr member Peter van Lieshout. The scientific team comprised Robert Went (project coordination) and Monique Kremer. The team engaged in a long process of consultation and analysis. We drew significantly on the insights and information provided by the abundant scientific literature from various disciplines. We also talked with external experts 8 less pretension, more ambition from various backgrounds. Some were affiliated to Dutch universities, knowledge institutes, aid organizations, ministries and embassies, and others to foreign knowledge institutes or ministries. In addition, intensive consultations were held with experts at relevant international organizations (eu, World Bank, imf, oecd, wto, ilo, un organizations, etc.). In total, around 300 specialists were consulted over a two-year period. Some of these were also asked to elaborate their insights in the form of written texts. In May 2009 this resulted in the publication of the back- ground study Doing Good or Doing Better. Development policies in a globalizing world (Kremer, Van Lieshout & Went 2009; also available online at www.wrr.nl). In addition, the wrr invited a number of specialists (Nancy Birdsall, Ha-Joon Chang, Paul Collier and Dani Rodrik) to conferences in the Netherlands where we examined a number of key themes of development policy in detail. The discus- sions held in other Western countries on the future of development aid were also very instructive. We learned a great deal from those debates, as well as from visits to researchers and policymakers in various countries (including Belgium, Denmark, Germany, Norway, Sweden and the United Kingdom). A proper analysis of development aid cannot be made without including the views of the recipient countries. A number of specific country studies were therefore conducted, during which we talked extensively with policymakers, practitioners in the development aid field, members from the business community, and repre- sentatives from the academic world and the media. Country studies were carried out in Afghanistan, Bangladesh, Ethiopia, Indonesia, Nigeria, Uganda and Surinam. Extensive working visits were made to India and China, countries that in many ways have developed successfully and are now becoming increasingly important players on the development aid stage themselves. Singapore also provided valuable insights.