Session Leader/Presenter: Graham Brown (CRISE)

Session VI: Aid Session Leader/Presenter: Graham Brown (CRISE) Discussants: Sakiko Fukuda-Parr (The New School), Emily Jones (Oxfam), John Ohiorhenuan (UNDP) Notes: Proochista Ariana (QEH)

Graham Brown - PowerPoint presentation  Aid is exacerbating HIs - programmes may be captured at the local level leading to an exacerbation of HI  Case study of aid policy in Nepal: - Historically deep HIs (institutionalized in law which were officially abolished but still exist in practice) - Nepal is a poor country heavily dependent on aid whose development is financed by aid - There is strong evidence for a link between HI and conflict - Donors began to take HI seriously after the conflict intensified  Aid policies to correct HIs: - Mapping HIs - Country aid allocation  Aid potentially important for correcting HIs  Issue of willingness v. capacity

Sakiko Fukuda-Parr - PowerPoint presentation  Conflict prevention as a policy objective of aid  Paradigm of aid today doesn’t look at conflict prevention  Donors don’t have adequate willingness to consider conflict prevention  Consensus is to decrease poverty - explicitly achieving MDGs and implicitly accelerating economic growth  Idea that economic growth would help achieve MDGs reflected in the literature on aid effectiveness and allocation priorities  There is considerable work on conflict-poverty linkages to support conflict prevention as a means of achieving MDGs  There is also recognition of the importance of conflict prevention as an end in itself  Need both peace AND development. However, peace and development don’t always go together  MDGs worse performing countries largely affected by conflict or vulnerable to conflict or have high HIs  Not all development is good for preventing conflict. It is implied that increased income will reduce conflict but this is not necessarily the case  In poor, emerging from conflict countries, aid has large influence on policy development and priorities (e.g. Nepal, Liberia, Guatemala)  dominance of one group, environmental pressures over land, food insecurity, week state capacity, high distrust of state by people  Access to justice is much more fundamental  Role of donor important in shaping development policies. Policy strategy should emphasize growth. Poverty reduction part focused on education and health but not much attention to creating employment (incomes and jobs).  There are efforts to improve governance but not really enhancing corporate social responsibility  Are donor policies part of the problem? Denial of risks; the basic economic development model remains the same despite reports on social exclusion. There is a disconnect between the two types of analysis; rootedness in neglect of issues in way donors look at development strategies. It is difficult for donors to take proactive policies  Importance of academia in raising such points  A lot needs to be done to fill the gaps between research and policy and between policy and implementation

Emily Jones  Links between trade and aid  W. Africa (aid dependent region) - aid is driving HIs and constraining governments from addressing them  Aid and trade agreements in W. Africa - EU paying for trade negotiations - Aid implicitly plays a big role in the negotiations (the high dependence on EU aid translates into an unwillingness to stand up to the EU in the trade negotiations)  Content of EU proposals (trade agreements) involve areas that could exacerbate inequalities - liberalization of tariff in trade coming from EU (half imports from EU) is likely to hit the poorest countries (leading to regional inequalities). Food subsidies will not hit the export sector leading to internal disparities and at the household level there will be disparities between men and women  Who decides which sector is protected will increase HIs - Tariff revenue- high government revenue will exacerbate regional inequalities). The impact of the trade agreement will influence international division of labour.  Aid can also constrain governments from tackling HIs - Regulation of investments - Strict regulation of government procurement - Service sector regulations (i.e. NAFTA)  Many don’t think through the economic framework and HIs. How are governments constrained by implicit conditionalities of aid and HIs?

John Ohiorhenuan  HIs important in conflict prevention  If economic and political HI go in opposite directions can reduce conflict  Furthermore, a decrease in HI would lead to a more free and inclusive society.  To what extent can we use aid to overcome disadvantage of heterogeneity? Is it even desirable to have heterogeneous societies act as homogeneous ones (i.e. Canada)?  There has been an emphasis on dealing with HI in Nigeria but it has not resulted in more homogeneity. Homogeneity is not necessarily a good thing.  Are MDGs a useful framework for dealing with the needs of conflict countries? - HI important but what is its significance relative to other issues  The role of aid in influencing policy is a big question - What ought real decision makers be doing and how can aid facilitate that? Questions from the floor

Jeremy Stickings  Re: Need for donors to address directly conflict prevention and not just he MDGs. DFID does recognize this (Conflict Policy Paper March 07 about conflict sensitive work). Even in countries not currently affected by conflict (i.e Rwanda), aid facilitates exclusions but nevertheless scoring high in development achievements. Need to engage with conflict.  Re: political sensitivity mapping of HIs - there is considerable donor experience in what has worked and what not

Jen Stuttle  Are there clear indication so what aid instruments to use to address HIs?

Thandika Mkandawire  What aid regime are we talking about? In the current aid regime, donors are not very politically savvy to cope with conflict.  Aid denies government instruments for dealing with conflict issues. Strengthening market forces, privatization etc encouraged by aid regimes and they don’t take seriously the preoccupations of states (i.e., in managing ethnic relations)  If mapping ethnic inequalities but unable to pose a solution, this may create more problems (preference for exit over voice in conflict countries).

Alexandra Trzeciak-Duval  Important for academia to keep aid agencies informed but in period of rapid change, multitude of priorities and implementation of aid activities in stable societies let alone conflict (or conflict prone) countries.  In DAC we attempt to simplify the complexities. Jointly put ownership on table and make it possible for countries to leadd the process. In fragile states, other issues that make aid effectiveness itself a problem.  Good international engagement is needed in fragile states (i.e. prioritized intervention)  Donor community is trying to react to rapidly changing and complex scene. DFID doing well in leading these efforts. We cannot keep shifting gears. Trying to build principles without changing gears all the time. We can add information for research to enhance the linkages between policy and implementation. How do we get field operators into account? How to give them the tools they need to be consistent in goals and refined instruments?

Stan Thekaekara  What would happen if use HI across countries? Would our language change? Would the donor community be considered the elite and their shifting needs indicate the trade rules. How much are donor countries actually receiving? Lots of political questions in aid.

Frances Stewart  Much more in rhetoric than papers allow for and much less on what is happing on the ground. Some instruments prevent countries from taking action - problem of priorities (way of doing old things but differently).  Re: cross-country workCRISE cannot take on international justice/injustice. How internal inequalities impact international and come back local. Multi-layered situation.

ANSWERS:

Sakiko  Why people not able to implement. Real obstacles. Not just a matter of adding to a guide. Some things done unwittingly creating problems. Doing well in terms of poverty reduction but suddenly get conflict. Need to learn lessons to avoid backward development.

Emily  HI opens up black box for state vs. market. Need for coherence between aid agenda and trade agenda

John  Reorientation and reprioritization but what does that mean?  lets look at world from the perspective of busy policy-makers who is concerned with development of country. What is the practicality of our message?