Memorandum submitted by the International
Institute for Environment and Development
1. PROGRESS AGAINST
THE PUBLIC
SERVICE AGREEMENT
DFID's focus on the MDGs—getting the
perspectives of the poor. Although the MDGs have been internationally
agreed, they cannot entirely describe the development challenge
of any one country. They need interpretation into locally relevant
objectives and targets. They also need complementing with other
targets—especially to address underlying causes of poverty
and other country-specific constraints. Local monitoring capacity
will be needed. Otherwise there is a risk that MDGs become yet
another international precept that will fail to distinguish between
different needs. For example, $1 per day is widely acknowledged
not to be the best measure of poverty, but is used by the MDGs.
DFID should help ensure the international targets are widely discussed
and questioned at the local level. It is difficult enough to manage/inspire
a debate on MDGs at the national/ministerial level, but if it
only takes place at that level then civil society will be excluded
and the goals will certainly fail.
Effective mainstreaming of the environment
"pillar" of sustainable development. There is an
environment MDG, but this includes only a few targets. The PSA's
Africa/Asia objectives do not mention environment. DFID states
that "environmental quality matters to the poor", and
claims to have mainstreamed environmental concerns. For instance
at an earlier IDC hearing on Climate Change, DFID said it would
support efforts at capacity building in the LDCs. What progress
has been made? Many institutions in developing countries have
not yet mainstreamed key environmental issues. DFID needs to ensure
that its poverty reduction focus is not accompanied by environmental
damage which will make the poor poorer, or set up increased poverty
for future generations. DFID needs to ensure there are consultation,
research, planning, capacity development and monitoring systems
in place in DFID to effectively mainstream environment. Do these
exist? And what, perhaps most importantly, can DFID do to help
developing countries build such systems?
DFID's Policy Division reorganisation—will
this really help to implement the PSA? The massive reorganisation
of the Policy Division seems not to have been done in consultation
with DFID's development partners—neither developing countries
nor service delivery bodies. There is some threat to the continuity
of past effective work—partners cannot now see where they
"fit" with the new structure, and there are big transaction
costs even of keeping in touch. Certain civil society, research
and service delivery groups are experiencing severe financial
problems in the current transition period. The new approach of
cross-cutting teams does present some potentials. However, it
is not clear how the new structure can enable better achievement
of the MDGs, and support current effective working relations.
DFID should use the new structure to support UK/international
centres of excellence which have built up expertise over many
years for the benefit of its own decision-making and the effective
tackling of global poverty and equity issues. While it is accepted
there is no free lunch for NGOs and CSOs key MDGs will be missed
or moved without the active engagement and experience of the voluntary
and civil society sector. In our view there has been an overemphasis
on meeting targets, which, in the scale of things, can slip a
bit, at the expense of investment in a solid understanding of
the issues, with well grounded and long-term research contributing
to well-informed, rather than off-the-cuff policy choices.
Finally, what kind of monitoring and evaluation
has there been of DFID's restructuring, and what kind of documentation
exists in terms of costs, effectiveness and improved systems,
that would enable us all to learn the lessons from what appears,
to many DFID partners, to have been unnecessarily disruptive and
awkwardly achieved?
2. DFID AND DIRECT
BUDGET SUPPORT
The notion of solid, no-strings budgetary support
to governments that are committed to poverty reduction, sustainable
development and the MDGs is very sound. But there are three sorts
of problems with direct budget support in practice:
— Countries left out of the favoured
list—many countries do not have the fortune of such committed
governance, yet may have both high priority poverty and environment
problems and the potential means within civil society to address
them.
— People left out within the favoured
countries—it is a major leap of faith, in countries where
there is central government commitment but weak institutions,
to believe that priority marginalised groups will be reached through
direct budget support compared to support for local institutional
development. Engaging the poor, and enabling them to participate
in expenditure decisions, when you are a local or national civil
servant, is far from easy, even if it is desired.
— Sectors left out that could have
pioneered the solutions—in the quest to move to direct budget
support in a range of countries, important sector work is being
cut just at the point where it might bring major returns. Pioneering
work within sectors to find solutions—which, after all,
is what we all hope direct budget support will be able to mainstream—is
being sacrificed in the rush. Key initiatives in natural resource
access and governance—the leading governance challenge for
rural Africa for example—are being terminated whilst evidence
shows that such work can lead the way to better governance across
the board.
3. DFID POLICY
ON POVERTY
REDUCTION STRATEGIES
How to build PRSPs on "what works"
locally. It is clear that a strategic approach to poverty
reduction is necessary, and that the approach must be suitable
to many stakeholder groups in the country in question. However,
the generic strategy framework adopted—the PRSP—has
been designed by the World Bank (and partly to suit it). The result
is invariably an ambitious master plan—which often the Bank
appears to have taken too much of a lead role in "preparing":
it is all too easy for the Bank to co-opt local stakeholders and/or
do the work for them. There is also concern that environmental
issues are not really being addressed in PRSPs, and many groups
from developing countries have been extremely critical of the
lip service that has been paid to participation.
If PRSPs are to be central to DFID's work, they
need to be as realistic and robust as possible, reflecting many
stakeholders' aspirations, capacities and needs. They should not
be a document reflecting "planners' dreams", but rather
a local, participatory system to put poverty reduction on the
agenda, set priorities, innovate, learn from experience and continuously
improve. Work by the OECD and eight developing countries, co-chaired
by DFID and implemented by IIED, showed how to develop effective
country-driven strategies. The resulting guidelines on participation,
analysis, financing, monitoring and review have much to offer
the PRSP endeavour. Because the guidelines were addressed to "sustainable
development strategies" (broader than poverty reduction,
but including it) they can also handle the environmental aspects
of poverty. Because they built on the lessons of what systems
have proved practical and what has had good local "ownership"
in eight developing countries, they can mitigate the World Bank
"flavour". DFID must build developing countries' capacities
to be strategic, rather than making them jump through hoops to
prepare a plan. So is DFID using the OECD guidelines on sustainable
development strategies? If PRSPs turn out to be weak or unrealistic
in practice, what will DFID do?
CONCLUSION
Ever since its Greening of Aid initiative in
the 1980s DFID has been recognised as a leader among bilaterals
in sustainable development. We hope that the IDC will support
DFID to further improve its pursuit of poverty reduction, linked
to environmental security in its broadest sense, to the advantage
of all.
10 June 2003
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