Memorandum submitted by Dr Alan Hudson
"BEYOND-AID POLICIES AND IMPACTS: WHY
A DEVELOPING COUNTRY PERSPECTIVE IS IMPORTANT"
1. This submission focuses on what the Department
for International Development's 2007 Annual Report has to say
about the coherence of DFID's policies and practices with those
of other Government departments, the so-called Policy Coherence
for Development agenda. The author is a Research Fellow in the
Poverty and Public Policy Group at the Overseas Development Institute
(ODI). His work at ODI revolves around issues of governance and
accountability, particularly in the context of cross-border activities
and relationships. One of the author's primary streams of work
at ODI concerns Policy Coherence for Development; the other concerns
the role of parliaments in development. Prior to joining ODI in
October 2005, the author was for four years a Committee Specialist
with the International Development Committee.
2. DFID's 2007 Annual Report was published
on 15 May. As in previous years, the report outlines what DFID
has done over the past year to tackle global poverty. But this
time, in response to a demand from Parliament, a whole chapter
is devoted to "Working with others on policies beyond aid".
This chapter—along with sections of other chapters on fragile
states, conflict, the environment and climate change—sets
out how DFID has worked across Whitehall and with international
partners including the EU in an effort to ensure that UK and wider
international policies on beyond-aid issues are supportive of,
or at least do not harm, international development. This innovation
deserves considerable credit and scrutiny too, from the International
Development Committee.
3. The development trajectories of developing
countries are shaped by a wide range of issues, including "domestic"
issues of economics, natural resource endowments, governance and
politics, and a range of "external" issues which include
but go far beyond aid. Such issues include security, conflict,
trade, migration, investment, environmental issues such as climate
change, technology transfer, access to medicines, debt and corruption.
4. If governments in the (largely "northern")
countries which shape the policy environment for such issues are
serious about development, then they must ensure that their policies
on these issues are supportive of, or at least do not undermine,
their policies on international development. This is the so-called
"Policy Coherence for Development" agenda, an agenda
which has benefited greatly from the pioneering work of the OECD,
the Center for Global Development and their Commitment to Development
Index, the Global Development Network, and others. It is an
agenda which was addressed directly by the International Development
Committee's First Report of 2004-05 on "The Commission for
Africa and Policy Coherence for Development".
5. In July 2006, Tom Clarke MP's Private
Members Bill—the International Development (Reporting and
Transparency) Act—became law. In addition to requiring DFID
to report on progress towards reaching the 0.7% aid/GNP target,
the Act requires DFID to report on the actions of other Government
Departments which are relevant to development. Clause 5 of the
Act states that "The Secretary of State shall include in
each annual report such general or specific observations as he
thinks appropriate on the effects of policies and programmes pursued
by Government departments on: (a) the promotion of sustainable
development in countries outside the United Kingdom; (b) the reduction
of poverty in such countries". To my mind "as he thinks
appropriate" gives the Secretary of State too much room for
manoeuvre—perhaps weight should also be given to what developing
countries think is appropriate, an option which Sweden is exploring—but
it is a useful start.
6. DFID's 2007 Annual Report fulfils the
reporting requirements on policy coherence for development which
DFID and the Government have as a result of the 2006 Act. It provides
much useful information and is very welcome. Developing countries
along with NGOs and others have long argued that greater attention
needs to be paid to the development impacts of a wide range of
issues. DFID's Report demonstrates that such arguments are, better
late than never, acknowledged by the UK Government. The UK is
now—along with countries such as Sweden, Finland, Norway
and the Netherlands, and to some extent, the EU—amongst
the front-runners in taking policy coherence for development seriously,
at least on paper. DFID also deserves much credit for taking seriously
the Commitment to Development Index, and for noting that whilst
the UK is mid-table overall, it scores poorly on migration, technology
and security.
7. However, there are two issues about DFID's
reporting on Beyond-Aid issues which the International Development
Committee may wish to explore in an evidence session with DFID.
First, with a few exceptions, the analysis says very little about
the impacts in developing countries of beyond-aid issues and the
policies which drive them, despite the fact that Tom Clarke MP's
Act requires that information is provided about effects. And second,
the report does not acknowledge sufficiently that—because
developing countries are diverse—important efforts to ensure
that "northern" policies are supportive of development
will only get us so far. Impacts of beyond-aid issues and the
policies that drive them will be different in different developing
countries, because impacts are shaped by country context and a
country's engagement, through policy and politics, with beyond-aid
issues.
8. For instance, as DFID's report acknowledges,
whilst reducing agricultural subsidies in the EU would no doubt
be "development-friendly" overall, such a move, along
with associated steps towards further trade liberalisation, will
be of most benefit to large exporting countries such as Brazil,
India, China and South Africa (this is where aid-for-trade comes
in, building the capacity of a wider range of countries to benefit
from trade liberalisation). For migration too, the impacts of
particular policies are likely to vary depending on the developing
country in question. For countries where there are more people
than jobs, and where government policy encourages the inward flow
of remittances and their productive use, emigration and the resulting
flow of remittances may provide a net benefit, whereas for other
countries emigration may constitute a damaging "brain-drain"
and a net cost in terms of the country's development.
9. External factors, including aid and the
wide range of issues and policies which go beyond aid, lead to
different outcomes in different places. As such, whilst "northern"
governments must not be allowed to evade their responsibilities
to ensure that policies are as supportive of development as possible,
attention also needs to be paid to the ways in which country-context
matters, and to the different ways in which developing countries
do and might—through country-owned policies—engage
with beyond-aid issues.
10. A useful approach to getting a handle
on impact, and on the ways in which country-context and forms
of engagement matter, would be to take a developing country/countries
starting point and to analyse the impact of that country or countries'
engagement with a range of external issues. This would complement
the approach taken by the Commitment to Development Index which
focuses on policy inputs. There are big methodological challenges
involved in moving in this direction, including the difficulty
of identifying impacts and assessing them in a manner which allows
comparison across issues and countries, but the potential pay-offs
in terms of understanding and improving the trajectories of developing
countries, and their progress towards poverty reduction are huge.
11. Such an approach would however provide
a better evidence base both for informing "northern"
policy discussions, and for informing "southern" policy
discussions about how developing countries might—perhaps
with the support of donors' aid—best engage with beyond-aid
issues. It would also provide a better basis for establishing
development partnerships and systems of mutual accountability
which go beyond aid to encompass the wide range of issues which
shape the development trajectories of developing countries. Not
least, it would enable voices from developing countries to participate
more fully in policy discussions about what needs to be done to
enable them to survive and prosper in an increasingly globalised
world. This would provide a useful counterpart to the current
focus on understanding and enhancing developing countries' "domestic"
politics and governance.
12. This is an agenda which ODI and other
organisations such as UNDP are engaged with, and which DFID is
supportive of. It is to be hoped that subsequent DFID Annual Reports
will say more about the impacts of beyond-aid policies and issues
and about the ways in which developing countries engage with such
issues. This would provide another useful angle on questions of
policy coherence for development, and build on the progress which
DFID has undoubtedly made in this area in recent years.
SUGGESTED QUESTIONS
FOR DFID
(a) The International Development (Reporting
and Transparency) Act requires DFID to make observations about
the effects of policies and programmes. What challenges—[methodological,
political?]—did DFID face in seeking to comment on the effects
of other Government departments' policies and practice, on development
and poverty reduction?
(b) DFID's 2007 Annual Report acknowledges
that countries such as Brazil, India, China and South Africa which
have the capacity to produce goods for export will benefit most
from trade liberalisation. Does DFID accept that the same logic
applies for other issues—that is, the impact of policies
put in place in multilateral fora, and by the developed world,
will vary amongst developing countries, depending on the country
context? If DFID accepts that policy impacts vary, depending on
country context, what then are the implications for efforts to
achieve greater policy coherence for development?
(c) To the extent that the impacts of a
particular policy (global or otherwise) are mediated by country
context, it would seem sensible to collect evidence about impact
at the level of particular countries. Such country-level evidence
could be used to inform policies in developing countries and in
the developed world. It would also give developing countries a
louder voice in multilateral policy discussions. Will future DFID
Annual Reports make use of country-level evidence about policy
coherence for development and beyond-aid issues? Might DFID go
a step further too—as Sweden is considering—and solicit
the views of developing countries on the development impact of
UK policy and practice?
3 July 2007
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