Session 2010-12
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CORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 616-i

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

INTERNATIONAL DEVELOPMENT Committee

The Future of DFID’s programme in india

Tuesday 11 January 2011

Professor John Toye and DR Andy SumNer

Professor James Manor and Professor Geeta Kingdon

Evidence heard in Public Questions 1 - 57

USE OF THE TRANSCRIPT

1. This is a corrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

2. The transcript is an approved formal record of these proceedings. It will be printed in due course.

 

Oral Evidence

Taken before the Committee

on Tuesday 11 January 2011

Members present:

Mr Malcolm Bruce (Chair)

Hugh Bayley

Richard Burden

Mr James Clappison

Richard Harrington

Mr Michael McCann

Alison McGovern

Anas Sarwar

Chris White

________________

Examination of Witnesses

Witnesses: Professor John Toye, Senior Research Associate and a Visiting Professor in the Department of International Development, University of Oxford, and Dr Andy Sumner, Research Fellow, Vulnerability and Poverty Reduction, Institute of Development Studies, University of Sussex, gave evidence.

Q1 Chair : Good morning and welcome. Thank you very much for coming in to speak to us. As you will know, we are undertaking an inquiry into the UK’s aid and development relationship with India, which is obviously part of the bilateral review. We’ve just had to change our plans slightly and we are delaying our visit to India until March, as opposed to the next couple of weeks, so there is a slight time lag. Perhaps for the record you could introduce yourselves, and then we can carry on with the evidence?

John Toye: I am Professor John Toye. I am part of the Department for International Development in Oxford, which is an academic centre for research and teaching on issues of economic and social development. I’ve been various things in the past, but I’ve forgotten them.

Q2 Chair : I’m sure they’ve accumulated to your sum total of knowledge, which you’ll share with the Committee. Dr Sumner?

Andy Sumner: My name’s Andy Sumner. I’m a Research Fellow at the Institute of Development Studies, based at the University of Sussex. I work in the Vulnerability and Poverty Reduction Team on aspects of, as the name suggests, poverty reduction, particularly around the MDGs, and in particular, most recently, around poverty in middleincome countries.

Q3 Chair : The starting point, obviously, is that India has graduated to middleincome status, although it is right at the bottom end in per capita income terms. Again, we know that the UK has committed its bilateral aid in the past to be 90% to lowincome countries, which obviously means that as countries graduate that’s a shrinking number. The question that immediately arises is: is that division between middle- and lowincome countries a good basis for deciding how you’re going to give aid, and if not, what would be the better way of doing it? And indeed, is the determination of what is middle and lowincome satisfactory?

Andy Sumner: The 90/10 and the lowincome/middleincome country was fine 10 years or so ago, but now I think the world has changed sufficiently, particularly the growing numbers of the world’s poor officially in middleincome countries. We can talk about the definitions that the World Bank uses. If the mission is poor people and poverty reduction, rather than poor countries, the LIC/MIC-lowincome/middleincome countries-thing which is about poor countries needs revisiting. So if you want to move over to something that’s more about where the poor people live, and DFID’s mission of poverty reduction, it might make sense to revisit that. There are various possibilities you could look at, and probably someone needs to look at the different options and suggest. You could look at the new UNDP Oxford Multidimensional Poverty Index. There were some data constraints, but I think it does a pretty good job. You could look at a formula that also perhaps looked at the Human Development Index, and that would give you a bit about per capita income as well as human development factors. You might well want some kind of formula that mixes together the domestic resources available, the capacity for taxation, foreign exchange reserves and a poverty indicator to give you some sense of how you allocate aid. The 90/10 thing dates from about 2002, and a very famous paper by Paul Collier and David Dollar, which you’re probably familiar with, and I wonder whether that does need revisiting, because the world has changed sufficiently to warrant a revisit.

John Toye: Yes, I agree that there’s no huge significance in the change from being at the top of the poor country league to being at the bottom of the middleincome country league. Nothing very much has to happen to a country for that line to be crossed. It is just indicative of a general process of growth and development in some of the countries that are receiving aid. That obviously has to prompt a rethink, which your Committee is undertaking, of whether commitments like the commitment of 90% to lowincome countries is a particularly sensible thing. I entirely agree with Andy Sumner that, given that India has now crossed this line, it would be sensible to think about that again. A lot of people would prefer it if the poverty target was related to people rather than countries.

Q4 Chair : Is it aggravated by the fact that the Government doesn’t have a strategy for middleincome countries? We, as a Committee, have asked them to do it and they’ve declined, basically. Or do you think that even that argument is superseded by the statistical changes that you’ve both just outlined?

John Toye: No. I think it’s sensible to ask the Government to think about how they’re going to relate to countries that are middleincome countries. There are a number of middleincome countries, not merely India, that have what are referred to as pockets of poverty. They’re rather large pockets if they’re rather large countries. You would want to have the Government think about how to deal with countries that are not, on average, any longer lowincome, but where there are quite a lot of lowincome people. That is a genuine problem, and they could exercise some grey cells on that.

Q5 Chair : We might want to explore this a bit more, but one of the arguments, depending on how you define middleincome and what the figures are, is that it implies that it’s the responsibility of the country to sort out its poverty. For a lowincome country the presumption is that it’s so poor that it doesn’t have the capacity to resolve its own poverty problem. Again, do you think that is a legitimate argument, or do you think, when you’re talking about $976 being the threshold, that at that bottom end it doesn’t make much difference? I think, Professor Toye, you’re implying that.

John Toye: I’m not sure. You take that one, Andy.

Andy Sumner: I’d say something about the moral responsibility issues. On DFID and MICs, very briefly, DFID, as you know, works in 27 middleincome countries, with a spend of over £1 million in each of those; about £1 billion of the bilateral spend in 20082009. I think probably, given the general shift in poverty towards middleincome countries, it’s starting to think about these issues, and realising that it does need a strategy of some kind for middleincome countries. You can’t approach them in quite the same way you think about lowincome countries.

On whose problem it is-that kind of issue-the Martin Ravallion work at the World Bank, which some of you may be familiar with, looked at the capacity to put in place taxation. The interesting thing about that was that Martin Ravallion asked the question: "What kind of marginal tax rate would you need on the rich those earning more than $13 per person per day - to end poverty in developing countries?" Two interesting things come out of that. First of all, there are some large middleincome countries with very large pockets of poverty: India, Nigeria, Pakistan, China. These would need marginal tax rates that are far too high to even conceive of going down that route, let alone taxation systems in developing countries and the various issues it raises about the capacity to collect that revenue. There were a number of smaller middleincome countries that nevertheless have poor people and could raise taxes. Indonesia was listed: it only needed a marginal tax rate of about 8% in order to end poverty in Indonesia. It might be worth looking into some of the tax aspects of this.

This is one route that a lot of donors are going down. I know the Norwegians are looking at technical assistance for taxation purposes in a number of Latin American countries, where they’re helping Governments talk about taxation with tax lawyers and their relationships with international companies. Ravallion’s work assumes that you don’t touch corporation tax, you just think about marginal tax rates on individuals. So there is scope in some smaller countries, but when the bulk of the world’s poor live in middleincome countries, there are just too many poor people to go down that taxation route. This suggests that there’s some kind of shared responsibility rather than one or the other. I don’t know if you want to add on the moral dimension?

John Toye: Whose responsibility is it? It is fair to say that the Government of India has always accepted responsibility, even at the point where it was very definitely a lowincome country. Again, I don’t think that any big change has occurred. The real question is to what extent countries like the UK should be involved in assisting them in that responsibility; not, as it were, removing the responsibility from the Government of India. I’m sure they wouldn’t accept that for a moment. How can aid donors best assist in that process without being politically intrusive in a way that wouldn’t be possible and wouldn’t be acceptable?

Q6 Mr McCann: Good morning, gentlemen. The Chair has already covered some of the issues, but if I could just probe a couple of them. Given the graduation of many lower-middleincome countries, can you tell us what you feel are the implications are for the wider donor community? The specific question is about DFID, given the 90/10 split, recognising the point you made a few moments ago about the extreme poverty that still exists in middleincome countries. Do you believe that that ratio should change, and, if so, what should the ratio be?

John Toye: Yes, I do. I don’t think it’s a particularly good target. Amending the 90% to some other number is not a particularly sensible path to go down. I would try and refine the target. I’d rather change the aim somewhat, rather than just alter the indicator in an existing target, because it’s clear that this is going to be a recurring problem as more countries graduate over this particular line. We don’t want to be coming back to this for some other country in five years’ time. We want to have an aid policy that, as it were, finesses, or sidesteps this particular target, by looking at how big these pockets of poverty are. What is the best way of assisting countries?

Andy’s suggested that possibly one could follow the line of Martin Ravallion in looking at taxable capacity of countries and the ability to remove these pockets of poverty with the existing taxable capacity. I’m not so convinced that that is a sensible way of going about it, because in fact redistribution policies don’t proceed on the taxation side of the budget. They proceed on the public expenditure side. So I found Ravallion’s work interesting, as one does as an academic when someone is biting into a new idea, but I didn’t, in the end, find it particularly practical.

Q7 Chris White: If I heard you right, you started your answer by saying, "Looking at how big these pockets are," as a primary position. We’re giving aid without knowing perhaps what the problem is. Is that, in your view, back to front?

John Toye: I was responding to the Chair’s question as to whether or not the Government ought to try to develop a strategy for aid in middleincome countries, and I was agreeing that I thought it was a good idea. I wouldn’t want to go so far as to say that people in DFID have no idea of what the size of the pockets of poverty are in the middleincome countries that they are relating to. That would be a step too far.

Q8 Anas Sarwar: Just moving specifically on to India, and where that fits into the discussion we’ve already had. Do you think DFID should be giving aid to India based on 450 million people living on less than $1.25 a day?

John Toye: That is one indicator that can be used, although there are obvious problems with doing the accounting of that number. Clearly, the notion of living on $1 per day relies on some exchange rate ideas-what a rupee is worth in relation to the dollar, for example-and also what it is that constitutes the key consumption basket of the poor. What is it they have to buy in order to survive? That’s just one indicator, and Andy has suggested various other indicators in his previous answer. He laid out a range of possibilities for alternative indicators for counting the numbers of people.

Q9 Anas Sarwar: Put in another way, firstly, should DFID give aid to India? If so, what factors are there that crystallise that decision for DFID to give aid to India?

John Toye: DFID ought to be considering whether it can effectively give aid in ways that reduce the number of people in poverty. With the focus on people, you need a criterion-whether it’s the $1 a day criterion or some other-to count them, and then the question is, "Can something be done in relation to those people?" It seems to me the history of the aid relationship with India, which is now very extensive, indicates that there are plenty of things that can be done, even though the Government of India is very precise about what it will allow bilateral donors to do. These aid relationships are negotiated relationships. The Government of India will say what it will allow DFID to do, and DFID has to ask itself the question: "Within these constraints of what is agreeable to the Government of India, can we, in fact, reduce the number of people, however we’re counting them, in these pockets of poverty?" That’s the common-sense criterion for what DFID should be thinking about.

Q10 Anas Sarwar: I just wonder what your thoughts are on that?

Andy Sumner: I’m not an India expert, as I think you’re aware. I try to think through these arguments myself on middleincome countries, and John’s completely right: this is going to be increasingly an issue, particularly for DFID. I think DFID knows this, and this live debate is happening. Ghana’s probably the next country to upgrade next year, by the way, which will of course be a surprise to everyone, because it’s probably seen as a lowincome country, but they’ve recalibrated GDP. I did a blog to try and think through aid to India.

The arguments against having an UK aid programme in India are about the resources of the central Government: the $300 billion in foreign exchange reserves, the space programme, the nuclear weapons. Pakistan is a middleincome country with a lot of poor people and it has a nuclear programme, but noone’s saying we should think about revisiting aid to Pakistan. Arguments in favour are about onethird of the world’s poor living in India; 450 million poor people at least. If you use the kind of multi-dimensional poverty measures I’m talked earlier about, it’s a lot more poor people. DFID could work in different ways with poor people. It could favour disadvantaged groups or disadvantaged areas. It could think a lot more about the thorny issues around equity, and the fact that India now has what are quoted as Latin American levels of inequality. Again, there is a new study that’s just been put out on that.

DFID could also think beyond aid as a transfer of resources, and think about things like the debate about global public goods. Middleincome countries matter for those kind of debates around climate, tax havens, remittances, trade policy-all those beyond aid issues. However, there is also a bunch of issues around working to support the progressive, propoor actors, whether they’re in the state or in the nonstate sector, to try to influence as a role of aid as well, towards being more transformative. One reason why there might be quite so many poor people in middleincome countries is perhaps that a number of those countries haven’t yet gone through a major transformative change to a different type of economy, taxation system, governance structure-those kinds of things-but they’ve attained a certain level of per capita income. There’s a bunch of issues there that need unpacking.

Q11 Anas Sarwar: Just one last point. Just picking up on what Professor Toye said, should donor countries be allowed to dictate where we’re allowed to give aid? Is there not maybe a focus more on the people rather than what an individual donor Government would rather us do?

Chair : You mean recipient Government?

Anas Sarwar: Yes, sorry, yes. Should we allow them to dictate where the aid goes in terms of what you’re allowed to do and what you’re not allowed to do, particularly when you focus on the point that it’s 0.1% of India’s GNI. So they’re not an aiddependent country. Should we allow them to dictate to us where the money goes and where we’re allowed to go?

John Toye: You see, there are two ends of this aidgiving spectrum. At one end you’ve got the aiddependent countries, who we’re all upset about, and we think, "My goodness, are these people never going to get off aid?" On the other, you have the nonaiddependent countries, like India, which has got an excellent system for managing inflows of foreign aid. There’s a high management capability in India, and the question there is: "Do you want to give your aid to a country that has a high aid management capacity?" If you do, then they’ll have views about how those resources should be managed. You won’t have the problem that you’ve got some country that you can’t stop aiding because you’re providing so much of their resources.

If your resources are such a tiny percentage of their national income, then you have absolutely no leverage. If they say, "We wouldn't like you to operate in these 20 states, but you’re perfectly welcome to have projects in these particular states," then you haven’t got a lot of leverage to say, "We’re going to do what we think is right." There’s a question of political realities in this relationship. India is a country of a billion people. It’s not a question of being dictated to. It’s a relationship; it’s an international relationship, and there has to be negotiation. To view one country saying to another, "We’d like you to do this," as a form of dictation is not going to be very helpful, I don’t think.

Q12 Alison McGovern: Andy, I want to take you back to what you said briefly on supporting progressive propoor-you were alluding to some sort of policies or action. What would that look like on the ground? What are some examples of that? We understand the inequality that exists in India, and there’s a question about our role in health and education. My question is, how far do you think DFID aid can be effective in supporting the creation of the sort of welfare state that we would expect in a European developed country?

Andy Sumner: The first thing to say is that the Indians themselves are thinking about these issues, particularly around equity. I don’t think it’s necessarily a donordriven thing. In fact, recently Sonia Gandhi chaired a meeting of the great and the good to try and talk about these things for two days, with people like Joe Stiglitz and that kind of group. When I was talking about supporting progressive forces, DFID already does a lot of work with civil society. At a simple level it’s support of civil society, and this particular administration at DFID sees a strong role for that kind of-I wouldn’t want to use the words "big society"-but a greater role for civil society in calling to account government and social movements.

You could also support the collective organisations of the poor: farmers’ associations, producers’ organisations. They may well represent power hierarchies at a local level, but they’re important organisations in terms of advocating on behalf of the poor. How do these organisations try and influence policy processes in India, and how could DFID support civil society in India in that way? The trick is that one plays that role without alienating other actors in India by appearing to be too instrumental in the political economy. DFID has done a huge amount of work on governance and on civil societybuilding and civil societysupporting. I don’t know the exact details of DFID’s programme in India, other than that they work a bit through the central Government and in four states.

The underlying issue is: what is aid actually for? What are you trying to achieve? You could put kids into primary school next year, and that is good and important. But does aid have an underlying role as a catalyst for more transformational development, so that in 30 years’ time India may not need aid. You could argue that it doesn’t need aid now. It will graduate from IDA eligibility with the World Bank in three years’ time. That might be another time to review these questions. You’re talking about 39 lowincome countries left. Of those 39, my estimate is probably only 25 will be lowincome countries in about 10 years or so, and those 25 remaining are pretty much looking aiddependent forever. There’s an issue about what you do to support those countries, and what you do in those countries is probably quite different from what you do in middleincome countries. Does that answer your question, more or less?

Q13 Alison McGovern: Yes: I think we’ve just got to the nub of the point, which is: is aid for politics, or not?

Andy Sumner: Yes. What is aid for?

Q14 Richard Harrington: Professor Toye, I was very interested in what you said about the Indian Government setting conditions, which I knew about, but not the detail. One example you gave-I don’t know whether it was a theoretical or actual example-was which states can be recipients of aid. Are there examples of things that are more contentious than that, things that the British Government might find illogical; for example, aid to areas where it’s deemed it might be needed politically to help a certain political party to bring, effectively, income to a particular state? Or is it all fairly logical stuff to do with the logistics of different countries giving aid, and where the Indian Government’s strong and where it’s weak?

John Toye: I think it’s, broadly speaking, sensible. There are always points of irritation in any negotiation, or there will be moments when the donor will want to do one particular thing, and finds that there’s a lot of resistance from the recipient. The recipient isn’t happy with this, and you don’t understand why. Broadly speaking, the Indian approach to aid is a sensible one, from their point of view. They would prefer, in the first instance, to have multilateral aid rather than bilateral, because they have a role in the organisations that provide the multilateral aid. That’s their first preference. Secondly, they have a reasonable preference that the aid doesn’t distort the sectors of the economy or the economy of the states where they operate, because aid can have distorting effects.

As you can imagine, if somebody came along with a barrow-load of things that are free, people will want to use them or have them more than if you put a price on them. Aid is resources that are free, and if you unload them, a lot of people will say, "Oh yes, we’d like some of that," and what they’ll use it for is lowreturn projects. It’s rational from their point of view, because the resources are free, so the fact that returns are low isn’t a problem for them. The Indian Government therefore has a preference for seeing how the aid is allocated to particular states, and therefore it does say to particular donors, "You operate here"; another donor, "You operate there." It also doesn’t pass on the full benefit of the aid to the people who are deciding whether to use it or not. It only passes on part of the benefit to the actual user in order to try to stop people flocking in.

Let’s say that DFID has the idea that social forestry is a great thing. If you had no buffer between DFID and the users, you’d see a lot of people who didn’t think much of social forestry yesterday suddenly thinking it’s a great idea and coming up with lots of rather lowvalue social forestry schemes. The Indian Government doesn’t want their economy messed about in that way. That’s why they have these kinds of restrictions. Broadly speaking, yes, their approach to the use of aid is quite logical and consistent with aid effectiveness. There will always be cases and issues where the two sides in this negotiation don’t see eye to eye, and they can’t understand each other’s position.

Q15 Mr McCann: A followon, actually, on this point. Following on from Anas’s last question, and the point that Richard was making, about your ability to determine where the aid goes to, and the recipient country having a lot of power in determining those factors. The point that you made in an earlier answer to Anas was that, given the sum of money involved, they wouldn’t feel particularly pressured to change. Then, however, in your answer to Richard, you made the point that India prefers money through multilaterals rather than bilaterals.

John Toye: Yes.

Mr McCann: The question I was going to ask is: would the international community not have more strength if the resources for aid were pooled, and therefore the money wasn’t insignificant; it became significant? Therefore for the objectives they’re trying to achieve, for example on the UN Development Goals, there could be more pressure placed on the recipient to co-operate.

John Toye: There was a famous episode-and I’m sorry if I sound like I live in the Dark Ages-in 1966.

Mr McCann: I was two.

John Toye: Yes. When I was a child, India was part of the British Empire. When I was a teenager, this question of aid to India started, and I’ve been following it fairly closely ever since. In 1966, there was a concerted effort on the part of the multilaterals to use their leverage to get India to change its exchange rate. They wanted the rupee devalued. They felt that it wasn’t a market exchange rate, and they threatened to withhold aid. This was the World Bank; this was the multilaterals in what was called the Aid India Consortium. They said, "We really think you’re not running your economy properly. You’ve got the wrong exchange rate, and we’re not sure we’re going to continue to give you this stuff if you don’t devalue the rupee." Let’s just say the tactic didn’t work. Even the assembled multilateral and bilateral leverage in 1966, when India was in a much more precarious economic position, wasn’t adequate to get the rupee devalued by foreign pressure. I would counsel against anything that looks to the Indians like foreign leverage.

Q16 Mr McCann: With the greatest respect, this isn’t about trying to suggest they should be more advantaged economically. This is about looking at the problems the country has, and focusing aid in the proper areas. We’ve moved a long way from 1966, which was closer to the times of imperialism, and Britain had much greater control than it does now. What we’re looking at is trying to put objectives in place that will ensure that we take countries out of poverty and we move them on to that next stage. I just wondered, it wouldn’t be as difficult a negotiation, I would suspect, if you were dealing with the type of issues that I’m talking about, as opposed to asking them to devalue the rupee.

John Toye: I agree with you, and there are ways, therefore, in which aid can be used for the purposes that you’re considering. I think that the way to go about it, then, is to be looking at specific sectors and to use the aid for what I would call demonstration projects. There’s some new idea that the donor has about how to do education or health or maternal and childcare better than it is being done in India at the moment. Do it in a way that is more inclusive, that reaches out to the poor.

You can do this, and it’s been successfully done in India, with a combination of demonstration projects. You don’t need to cover the country with them, but you have to show that what you are proposing actually works on their soil, with their people. Then there is what’s called sectoral policy dialogue, where you then talk to Indians: "What did you think of that? Were you impressed in any way? Do you agree with us that it did, in fact, take a lot of people out of poverty? Can you see any snags about generalising this?" It is this kind of consultative and partnering policy dialogue at a sectoral level around demonstration projects, where you can say to people, "Look, we’ve done an evaluation., We’ve found out what it was like." You have to have a baseline study. "We went in there, we found out what the people were like before we did our project. Now we’ve changed the way that health is done."

Let’s say we’ve got better rural health clinics, and we haven’t got all the medical expenditure going into fine hospitals in urban centres, something like that. "Here are our results. We’ve evaluated it. After the project we find that this has happened: the number of poor people, or a number of people with diseases that are typical of poor people, has fallen." Using rational evidencebased demonstrations to talk to people, talk to the Government, about its own policies. You have to reason with them, and certainly to accept them as absolutely equal partners in the enterprise, and get them on board. That’s the way to go about it.

Q17 Chris White: Thank you for that very vivid example from history. It’s something we do all struggle over; how we use aid and what leverage it can get. You mentioned the space programme conundrum, and my question would be: do you think that India invests enough of its own money in aid?

Andy Sumner: As an outward donor, or in its own-

Chris White: To itself.

John Toye: Do I think that? Sorry, I have a slight hearing problem, that’s why I’m a bit hesitant at times. If you want my personal opinion, no, I don’t. I think that there is not the same espousal of the values of fairness and inclusiveness that we would like to think we have in this country. I personally would like to see that change, but I’m also well aware of the limitations of the methods that can be used to do that. I certainly feel that although there are strong propoor political movements in India, there are still widespread cultural inhibitions towards a Swedish notion of a fair and equal society.

Q18 Mr Clappison: Could you tell us a little bit more about these cultural inhibitions, as you see them, please?

John Toye: Cultural inhibitions are historically rooted, and certainly include clear caste prejudices and biases. With the development of the country, and its accession to middleincome status, and its greater urbanisation, these are gradually being eroded, but they haven’t yet reached the point where you could expect the general cultural values of the country to be of a Swedish nature.

Q19 Anas Sarwar: Just very quickly, it does seem from the discussion we’re having that it’s almost a political versus poverty argument. Are we doing the right thing that’s the political best thing for us to do in terms of our relationship with India, or is it more based on a poverty perspective? In the end, this is what it’s all about: we want people out of poverty and to have an opportunity in their lives. I wonder how that relationship fits in with the whole discussion of how the relationship works, about where you can operate, where you can’t operate, how much influence you have. That seems to focus on the political, and then the practical is where we’re actually doing projects and lifting people out of poverty and creating opportunity. Is there an argument for the UK, with other multilateral organisations, with other donors, to co-ordinate amongst themselves about where they’re doing aid programmes to lift people out of poverty, or should it be focused and co-ordinated by the Indian Government themselves? I just think there’s a grey line here about whether it is all about building political relationships, or about alleviating poverty.

John Toye: Let me just mention another dimension to all of this, which I’m sure the Committee will want to be aware of in its deliberations. One of the other donors that is giving bilateral aid is the EU. The UK has an opportunity, through its influence in the EU, to affect aid to India. Although you’re mainly concerned with the DFID bilateral programme, there is an EU programme of aid to India that is also operating, and the UK Government can attempt to influence its European partners as to how that bit goes forward as well. I have obviously mentioned quite a few political aspects to this relationship as well as the technical, practical, economic aspects, if you like.

I do that because simply approaching it on an economic/technical basis will not take you far enough. The larger political framework has to be borne in mind, and it operates as a discipline, if you like, on what it is possible for British, or even EU, aid policy to do. There is a question of collaboration with other parties. It is also a political question. It’s a question of the extent to which-I don’t want to put this very crudely-the donors seem to be in some way ganging up on India; giving the Indians the impression that they are approaching the problem mobhanded. That really wouldn’t be a very good idea. It would be a bit of a red rag to a bull. There is already something called the Aid India Consortium, which allows the donors to talk to each other about their plans and wishes and intentions, and that kind of, if you like, light co-ordination has worked pretty well over the last 30 years. I’m not sure there is a lot of mileage in more formal attempts to form a coalition of donors.

Chair : We need to get towards the end of this session, I think.

Q20 Alison McGovern: I’ll be very brief, Chair. You mentioned cultural inhibitions to equality and poverty reduction. It’s fair to say in this country, there used to be cultural inhibitions to poverty relief also-or at least the deserving poor and the undeserving poor, and all of that history that we have.

John Toye: Yes.

Alison McGovern: Could you just say, very briefly, how far you think that’s shifting, and are there things that are changing about those cultural inhibitions now that we should be aware of in the context of this Report and the decisions the Government are taking?

John Toye: I can only speak very broadly, and I’ll speak very briefly. The process of urbanisation is the main one that erodes these things. The worst aspects of all of this are usually to be found in rural areas, and as the population moves it becomes harder for the coercive aspects of the caste system to be maintained. I’m highly optimistic that we will see a change in values. We already have seen changes. We’re bound to see more, and so I’m optimistic about the future, but it’s not the case that these inhibitions have totally gone yet.

Q21 Hugh Bayley: I am optimistic, too, that India’s economy will develop and lift people out of poverty eventually, but I’m not persuaded at all that the 0.1% of GNI provided by donors is making a significant difference. You, Professor Toye, have said the caste system acts as a justification for inequality, and there’s clearly not the political will to tax the betteroff-there are as many middleclass people in India as there are in Europe-in the way we tax people in Europe in order to redistribute to the poor. Aren’t we fooling ourselves to believe that this tiny drop in the ocean, onethousandth of a country’s income, will really make a difference? Why don’t we target other maybe middleincome countries that are small enough for our aid to have some traction?

John Toye: I’m sorry I can’t answer this briefly, because to answer the question I would have to detail some of the successes that aid has had in various areas, like agricultural research-the green revolution in India-making available cheap, basic staple foods. I’d have to look at maternal and child health programmes, funded by aid, which have hastened what’s called the demographic transition, reducing the size of families. I’d have to look at aspects of housing, which have been supported by aid in terms of the upgrading of slums in India, and making them more habitable for the poor. There’s quite a long list, and if I’m to be brief, I couldn't get through it all.

Q22 Hugh Bayley: I think that’s a very good answer: look at where aid makes a difference. I don’t know India well, but I remember once travelling by train from Delhi to Agra, and the train moving at a walking pace for an hour through the city because everybody from the slums were defecating on the tracks because they had nowhere else to go. It seems to me unbelievable that a country that has an average income of $1,000 hasn’t got the will to dig a pit latrine every 100 metres through a slum. Is there anything our aid can do to change these cultural traditions that you talk about?

John Toye: I think I’ve said already that there are various social sectors where we can see the successes of aid, and that I think the method of proceeding is a method of demonstration projects and sectoral dialogue. This has, in a number of cases, changed policy in the Indian Government. It’s not that the Indian Government is completely static on these issues. They have made changes. There are still many changes to be made. I’ve tried to indicate both sides of the story-both the successes of aid, and the challenges that remain. If I can encourage the Committee to take a balanced view of the successes and the challenges, then I’ll be very happy.

Q23 Hugh Bayley: Here’s a question, if I may, for Dr Sumner-

Andy Sumner: Could I just add something to that? I was just thinking, over the last six or seven years, there seems to be a lot more investment in social policy in India. The poor being left behind became an election issue about six or seven years ago, and since then there’s been a National Rural Employment Guarantee scheme, a whole range of additional social investments. So maybe we’re more optimistic looking ahead-

Q24 Hugh Bayley: Driven politically?

Andy Sumner: Probably. There are a lot more social movements around the poor as well.

Q25 Chair : The election before last pivoted, really, on the poor biting back. That was fundamentally what produced the problems.

Andy Sumner: Yes, when it became an election issue.

Q26 Hugh Bayley: I suppose my question to you, Dr Sumner, is this: the relatively easy question for us to address is whether DFID should have a development strategy for middleincome countries. The answer, of course, is yes. But as someone who, I don’t know, 15 or 16 years ago introduced a Bill into this House introducing the novel proposition that aid should be used for poverty alleviation, rather than export promotion or currying favour, provoked by a £750 million aid project to Malaysia-

John Toye: The Pergau dam. Yes indeed.

Q27 Hugh Bayley: Exactly so. I used this motif of 90% to poor people in poor countries to refocus the aid programme. If one were to move away from that, what red lines would you need? Where would you put the red lines to prevent an abuse-or a dilution-of the aid programme but ensure that you continued to spend aid in the places, and in the ways, that pound for pound does the most to lift the greatest number of people out of poverty?

Andy Sumner: There are two aspects to your question. You could replace the 90/10 lowincome/middleincome country with another type of metric, like the Multidimensional Poverty Index, so aid had to go to countries with large numbers of poor people, or parts of those countries with large numbers of poor people. There’s a general issue about in what context do you get the most bang for your buck, with aid, in poverty reduction? We’ve put an awful lot into fragile states. There are longterm causes, and shortterm causes here, and we may want to take a more longterm timeframe, so rather than asking what will give us the most bang for our buck for aid over the next two or three years, we should ask what will actually lead to fundamental transformation, so in 20 or 30 years most countries are emancipated from aid. That takes us down quite a different route from just putting kids into primary school next year, and the MDGs, which, important as they are, don’t actually lead to fundamental transformation as far as we want them to. That kind of answers your question. The LIC/MIC would be replaced with something like the Multidimensional Poverty Index from Oxford and UNDP, perhaps, or some kind of formula based on numbers of poor people. We ought to find out what kind of tradeoffs there are around the cost of poverty reduction in the short term and long run in different types of context, particularly given the large spend on fragile states.

Q28 Hugh Bayley: This couldn’t possibly apply in India, because we just don’t have the leverage. They’re an enormous country, an enormous economy, and our aid, even if we hunted as a pack with other donors, doesn’t provide leverage. In other, smaller middleincome countries-you mentioned Ghana-the aid community could possibly leverage some policy change. The fundamental debate in this country in the 19th century was about whether you relieve poverty with dollops of charitable benevolence here and there, or whether you said the state had a responsibility to redistribute. In those countries where we do, perhaps, have leverage, is there sense in trying to make our aid conditional upon the middle class in those countries, and business, being contributors through the tax systems?

Andy Sumner: There is an ethical argument around shared responsibility, as countries get richer, that the aid budget contributes a certain amount externally, and domestically, as more and more resources become available, that the share of the financial burden could shift; whether you could develop an international norm around something like that, which the aid industry could use-like the one that’s been used in the humanitarian area, the responsibility to protect the poor-and extend that international norm into the aid industry. So you develop a new kind of partnership with middleincome countries, where there are substantial domestic resources, and there’s much more of a debate about what both sides can do, rather than, "Here’s a dollop of money." This also comes back to argument that maybe, for most developing countries it’s no longer about money transfers, it’s about influence, it’s around global public goods with middleincome countries. The aid industry itself is shifting, I think. These are the kind of debates that DFID is having, but it may want to put this all together in some kind of process that leads to a middleincome country strategy.

Chair : Thank you both very much. You can see that it’s stimulated a few questions that the Committee hadn’t considered at the start of the process. Thank you for exchanging those thoughts and ideas. It’s not, as you’ll appreciate, just about what we do in India, but perhaps the extent to which the aid relationship is changing across the world, with India being a very particular, big, definitive example of that. I thank you both very much indeed for the evidence you’ve given, and invite the other panel to join us.

Examination of Witnesses

Witnesses: Professor James Manor, Emeka Anyaoku Professor of Commonwealth Studies, School of Advanced Study, University of London, and Professor Geeta Kingdon, Professor at the Institute of Education, University of London, Chair of Education Economics and International Development, gave evidence.

Q29 Chair : Thank you both, also, for coming in to give evidence. I’d just make the point that we have three times as many questions, and the same amount of time, so perhaps we need to be brisk, both in our questions and answers, but I really appreciate the fact of your coming in. You have obviously been in for the previous session, but just for the record, could you introduce yourselves?

Geeta Kingdon: I am Geeta Kingdon. I am Professor of Economics for Education and International Development at the Institute of Education, University of London. My research interests are mainly in school education, particularly in developing countries, specifically South Asia, and more recently the work has been mostly on India.

James Manor: I am James Manor. I am Professor of Commonwealth Studies in the School of Advanced Study, University of London. I specialise in India, especially politics and development, with a lot of attention to the state level as well as the national level, and most recently made a major study of the National Rural Employment Guarantee scheme, India’s biggest poverty programme.

Q30 Chair : Thank you. You obviously will have heard some of the exchanges in the previous evidence session. Perhaps if I may, Professor Manor, start with that particular point about the relationship between DFID and the states. What does that constitute? If I’m not mistaken, to some extent the Government of India determines, rather than DFID. What is the balance between who decides what in relation to the states, specifically Bihar, Madhya Pradesh and West Bengal? When we push the issue of India versus China, for example, DFID’s response tends to be that we’re engaging in the poorest states, but in reality they’re also engaging with the Government of India. What’s the balance between central Government and the states, and what should it be?

James Manor: DFID is certainly engaging with some of the poorest states, and the Government of India and DFID, I think, don’t have much difficulty agreeing on the importance of these states. The Government of India wants lots of Indian states covered by various donors, so there’s a division of labour, and DFID’s four states are partly a result of DFID’s previous patterns, over decades in some cases. I don’t think there’s a serious difficulty here about who decides. I think there’s a general agreement and spirit of partnership on that particular issue. I should just say that these states are controlled by, I think, four different political parties-four different states-and there is no partisan political consideration in either DFID’s or the Government of India’s mind when donors are encouraged to go into particular states. Nor indeed is there much partisan consideration in the Government of India’s mind when resources are distributed amongst Indian states. That came up a bit earlier.

Q31 Chair : But that being the case, what is the split between the states and the central Government in terms of DFID’s relationship?

James Manor: The central Government probably looms larger in dialogues with DFID and in DFID’s mind as it engages with Indians. This is partly because one of DFID’s purposes is to try out experiments in various states, and then to extend them, if possible, beyond those states more widely. The Government of India regards the federal system as a laboratory in which different state governments generate constructive ideas. It can then take those ideas and apply them more widely. It is of a similar outlook. Everything significant that DFID does needs the agreement of the Government of India-quite rightly; it’s a sovereign Government-but I don’t think there’s a tension in the relationship. State governments in India change a lot; about every five years. They have changed, 70% of the time, every five years since 1980. The exact state government you’ll be interacting with will differ from one time to the next, and state governments are sometimes quite imaginative and responsive, and sometimes very difficult to deal with. The variations at the state level also make DFID more inclined to focus mainly in dialogue at the national level.

Q32 Chair : Do you have anything to add to that, Professor Kingdon?

Geeta Kingdon: If I may, I’d just add that roughly 40% of UK aid to India goes through the central Government, and 42% through the state government, the remainder being through multilaterals and through NGOs. It’s roughly half and half, state and centre. There is no evidence, as far as I’m aware, of the relative effectiveness of channelling aid via the centre versus via the state government. There are clearly advantages and disadvantages in both of these approaches.

Sometimes it’s perceived that giving aid through the state government is going to enable DFID to achieve more propoor targeting, but I don’t think that is inevitably the case. For example, the education programme-the Sarva Shiksha Abhiyan, the Government of India’s flagship primary education programme, a centrally funded programme, which DFID is assisting through the central Government-already has quite a lot of inbuilt redistributive or propoor mechanisms. Working through the states has certain advantages: in particular, you can have a more intimate relationship, you can have more contact time with the officials in the government, but it comes at the cost of more transaction costs, a greater degree of coordination, and a greater need for staff-staffing and resourcing implications.

There are these advantages and disadvantages, but I think for certain types of policy influence it is better to work with the central Government. For instance, education policy is made predominantly at the level of the central Government. Although education is both a centre and a state subject, nevertheless important policy decisions, for example about the assessment system or the curriculum framework, are decided at the level of the nation. If DFID wishes to have influence at that level, which then percolates through to practice in all the states, it is good for DFID to be working also at the centre, which it is doing at the moment. I think it’s a very good and balanced portfolio.

Chair : About right.

Q33 Richard Burden: Could we look a little bit at issues of governance and accountability, because in a sense you said that balance seems to work. If a particular programme or a particular area of work is centrally funded, you can still build in propoor mechanisms when it gets down to local level. In terms of improving capacity and accountability in government at the state level, or even below that, how effective has DFID’s work been there? Are there any pointers that you can give on what works in that area, or whether, paradoxically even, a more central approach promotes that at local level, and whether that undermines doing it at state level. What would your views be on that?

Geeta Kingdon: I have to admit that my experience with DFID’s work has been mainly in the education field, and that part of DFID’s aid is delivered through central Government. I’m not able to give you a clear example of instances where this helps governance in a better way, or less good way, than it would through the state government. But certainly, within the centrally funded programme, DFID has been able to bring considerations of accountability and governance into policy discourse, and ensuring its implementation in practice in some respects as well.

I can discuss examples of that. For instance, the Government of India itself acknowledges-and in fact I will cite what they say about it-their own perception about DFID’s contributions in terms of central negotiations focuses exactly on these technical issues, and issues of accountability, probity, improved management and so forth. A Government of India document, which is cited in a paper by Professor Christopher Colclough and Dr De in the International Journal of Educational Development in 2009, cites the following: "It is important to note that, as well as Development Partner money, the external agencies are also providing advice and guidance on pro-poor targeting, greater accountability for outcomes, attention to quality and improved financial management. In addition, the Development Partners have also helped to increase the level of discipline in programme supervision and monitoring and to also raise the quality of technical analysis by bringing in to the policy dialogue international experiences from the developed and developing world … Development Partners are adding most value by bringing more rigour into the monitoring and review process, particularly the Joint Review Missions. The Development Partner contribution is also helping to focus Government efforts on sustainability issues through a dialogue on planning, financial management and community involvement." By its own admission the aspect of donor aid that the Government of India appears to value most is precisely in the area of improving probity, financial management systems, and monitoring of the use of aid monies.

Q34 Richard Burden: If I have understood you correctly, the examples you’ve given and the focus of that paper was on central programmes delivered locally. It’s establishing, or promoting, a more robust relationship and accountability with the central funders and the responsiveness of central funders to what works on the ground.

Geeta Kingdon: Yes.

Q35 Richard Burden: What about at state level? Have you got any sense about where the relationship is at state level, either directly or through experts, funded by DFID or other donors but working at state level, and how that has worked in terms of improving accountability and governance issues?

James Manor: I would just second what Geeta just said, by the way. I was seven weeks in India recently and working with the Ministry of Rural Development, Planning Permission and the Prime Minister’s office. I asked them, since I knew I was coming to see you, "What do you think of DFID?" They stressed that they valued DFID’s capacity to assist in promoting transparency, accountability and responsiveness of government. This is partly because DFID is quite effective at acting as a conduit of ideas from enlightened Indian civil society organisations into the higher reaches of the Government of India. DFID has a lot of former civil society people on its own staff in Delhi, and it’s in contact with a lot of others. This trend of listening to progressive forces in civil society has been very strong since 2004, when Sonia Gandhi, the Congress President, started this herself, systematically.

At the state level, the welcome for DFID’s efforts to promote, say, accountability, transparency, responsiveness, bottomup participation, depends on the outlook of the state government. That changes with changes of government, so that in Madhya Pradesh, for example, one of DFID’s states, the governments of both Congress and BJP have been reasonably open, especially the Congress government, to this kind of facility that DFID can offer. But in some other states there’s more of a topdown approach to things; control freakery from the apex of the system in some cases. That certainly is predominant in Orissa today, for example. There’s a different kind of control freakery under the Left Front government in West Bengal, which is about to be defeated at a state election for the first time since 1977. It’s a situational issue when you get to the state level, and there isn’t a straightforward answer.

Q36 Mr Clappison: Can I ask you a very broad question about the attitude of India’s Government towards poverty? We’ve been briefed that, notwithstanding the very high growth rates that we’ve seen in India, the Millennium Development Goal to eradicate hunger will not be reached until 2043. India is apparently home to onethird of the world’s malnourished children. If I can ask you a very broad question, what’s your view on what the Indian Government is doing itself to tackle these issues?

James Manor: Geeta has quite specific ideas on malnutrition, but let me give you a seatofthepants response before she becomes more specific. I differ from John Toye’s comments earlier about political will and the Indian Government’s commitment to tackle poverty. The Government of India, between 2004 and 2009, spent in excess of $57 billion on poverty programmes; probably well in excess of that. It’s difficult to measure some of this. This is serious money. This is vastly more money than any previous Indian Government has spent on these issues. They did it partly because they think it’s good politics. They think it pays to be progressive and redistributive in this way. The Government’s attitudes are actually more agreeable than John, with whom I’ve worked for a long time, was suggesting.

The cultural impediments to this kind of programme, and to antipoverty activity, are diminishing, and have diminished quite substantially. This is because again, in contrast to what John says, since about 199495, we’ve had very solid evidence from good anthropologists and sociologists working in different parts of India to indicate that the power of caste hierarchy has declined markedly in rural areas, which was its traditional bastion. Caste is increasingly coming to denote not hierarchy but difference, like the difference between ethnic groups. This creates tension and some conflict, but it removes some of the cultural impediments that long stood in the way of serious efforts at redistribution and social justice.

Geeta Kingdon: Yes, I would agree with that, and I would also add that the antipoverty programmes of the Government of India have existed for a very long time, for example the Integrated Rural Development Project, the Jawahar Rozgar Yojana, which was an employment programme, and so forth. There has been a change-perhaps one could somewhat optimistically call it a sea change-I perceive, in the last five or six or seven years, particularly since the enactment of the National Rural Employment Guarantee Act, which guarantees any citizen of India who wishes to selfselect into the programme 100 days of employment under this programme in any given year. That has really made a lot of difference to those people who are landless, who, during the lean agricultural season, do not have access to any source of income. These are public works programmes that the Government of India is getting these people to work on, and it’s a selfselection programme. That has really helped in the reduction of poverty, and we are beginning to see that reflected in the data.

Q37 Mr Clappison: Against this background, can I ask you both briefly what you see as the remaining obstacles to alleviating poverty?

Geeta Kingdon: On the NREGA, it’s not the panacea that we would hope for, because we know that there are certain obstacles to its effectiveness. One of the obstacles is the leakages and the corruption in the system. However, the Government of India has got smarter on these issues. For one thing, the Supreme Court has seen to it that there is better implementation of this programme through its Commissioners. There’s an Office of the Commissioners of the Supreme Court that ensures that its directives in this area are being followed. Secondly, the social order of the scheme, unlike in previous schemes, like the IRDP and others. There is greater reason to be optimistic that this antipoverty programme is going to be more effective, and the obstacles will be tackled. I know that James has some points about some of the ways in which NREGA has been implemented that reduce the scope for corruption, for instance through paying the monies to the people who work in these programmes through bank accounts, so you can’t shortchange them. One of the problems in the past, with all antipoverty programmes, has been huge leakages; the fact that people are given less than what they’re entitled to under the programme.

Q38 Mr Clappison : When you say leakages, where is the leakage going to?

James Manor: I’ve been living with this one for a while. The leakages, until two years ago, were going to the elected chairpersons of village councils and to bureaucrats at higher levels, and, to some extent, elected politicians at higher levels, stealing money in different ways. We identified 18 different ways to steal money from the programme. I should say, before I go any further, that it’s harder to steal money from this programme than from any other programme that the Government of India has ever run, because of transparency mechanisms that are built into it, but leakage was still there. Twelve of the 18 devices used to steal money from the programme were more or less stopped as a result of the requirement that workers be paid through bank accounts and not through cash handouts. Now, the elected chairpersons at the village level find it almost impossible to steal significant money from this programme, because of the bank account. Therefore, the squeezing that’s going on, the stealing, takes place at higher levels, the subdistrict and district levels, with sometimes money going at the state level. But you can’t steal money from workers’ wages from this programme, which is 60% of the programme. You can only steal money from the 40% that is committed to the purchase and transport of materials-cement, sand, whatever. That kind of theft is difficult under this programme. The leakages are there, but there’s far less leakage in a proportional sense than in any significant programme of this kind in the past. If a man or a woman today, in Madhya Pradesh-and almost half the workers are women-goes to work for one day on this programme, they’re paid 88 rupees. That is enough to buy subsidised food, from the Chief Minister’s subsidised rice and other programmes, to sustain a family for about two weeks, with two solid meals a day, which is a huge difference from the past. The potential impact of this kind of programme on things like malnutrition is very substantial.

Q39 Mr McCann: Could I move on to education? We know that many more primary schoolaged children are attending school in India. To whom do you attribute that success?

Geeta Kingdon: One strong driver has been the increase in demand for education. That is driven by the fact that the economic rewards of education have increased in India, particularly at the higher levels of education. There is a stronger economic incentive to acquire education, but I think that’s not the only factor, because if it was frustrated demand, we would not see greater levels of children. The fact that the demand could be satisfied was because the Government supply response has also been good. Part of the reason for increased or improved education can be attributed to Governmentfunded programmes including the donorassisted Sarva Shiksha Abhiyan programme.

Q40 Mr McCann: In terms of DFID and other donors’ input to both federal and state education, what is the significance of those funds? What proportion are they in terms of the direct Government input and the aid?

Geeta Kingdon: If we look at the Government of India’s flagship education programme, the SSA programme, donor assistance is 10% of total expenditure under this programme, and DFID’s contribution within that is of the order of 3%. So, in other words, 3% of the total expenditure by the central Government on this programme is from DFID. On the impact of this aid on the education sector outcomes, my colleague Paul Atherton and I have done a study, in fact commissioned by DFID, looking at the value for money that the British taxpayer has got through its investment in this programme. As part of this study we did a rate of return calculation of the investment that has been made by DFID. We came up with the estimate that the rate of return on this investment has been in the order of 12% to 14.4%, depending on some adjustments for data issues. That is a fairly good rate of return compared with most alternative potential uses that that money could have been put to. There has been a positive and robust return on DFID’s investment in Sarva Shiksha Abhiyan.

Q41 Mr McCann: You’ve just secondguessed my second question, which was: how effective is DFID’s contribution? So thank you for that as well.

Geeta Kingdon: No, that’s okay.

Q42 Jeremy Lefroy: Thank you very much. Inequalities based on wealth and other matters are continuing to keep children out of school. What effort is the Government making at the moment to address these inequalities, and how successful do you think they are?

Geeta Kingdon: It is absolutely correct to say that there are inequalities in education. They are smaller today than they were, let’s say, 15 years ago, when the District Primary Education Project started-again, a donorfunded project, including DFID assistance-but nevertheless they are enduring, and some of them are rather difficult to do away with. The aspects of the education programme of the Government of India, with which DFID is assisting, that seek to address those inequalities are, as I mentioned earlier, the propoor elements of it.

In particular, there are several subcomponents of this massive education project that are specifically aimed at encouraging girls’ education. For example, there is the Kasturba Gandhi Balika Vidyalaya programme, whereby every district in India has been provided with a school for girls that come from scheduled caste and scheduled tribe families. These are secondary schools, addressing both gender inequalities and castebased inequalities, in one dimension. Another component of Sarva Shiksha Abhiyan that addresses gender inequalities in education is the Mahila Samakhya programme. This is a wider programme that has to do with women’s empowerment, gender sensitisation, assertiveness training, and so forth, but it has a strong component of girls’ education, as well. There is another programme, MPEGEL, which I can’t remember the full name of, but it is another component.

In addition to that, there are certain propoor subsidies, for instance, conditional cash transfers that are given, within this programme, specifically to children from scheduled caste and scheduled tribe backgrounds. There are also certain other incentives such as free uniforms and free textbooks given to girl children and children from these lowcaste backgrounds.

Q43 Jeremy Lefroy: Thanks very much. Following on from that, does the Government of India, or indeed state governments, encounter obstacles to implementation at the local level? How do they go around this? Do they use the courts? What can they do?

Geeta Kingdon: I think you’re right; they do face problems in these. For example, one of the programmes under the Sarva Shiksha Abhiyan is the provision of the midday meal to children, but historically, for reasons that have been mentioned in the earlier session as well, there are sensitivities around caste. Inequalities in caste are a very powerful reason, a lingeringly important reason, particularly in rural areas. Sometimes we hear of cases where the parents of highcaste children refuse to allow their children to sit together and eat a meal with the lowcaste children, or sometimes, where the cook is of a low caste, children of highcaste parents refuse to eat that meal. So yes, there are obstacles of that nature, and there is legislation in place against such discriminatory behaviour. I’m not aware of particular instances of how they have sought to deal with this kind of behaviour, but most of the time it is dealt with through administrators coming and saying that this is not going to be acceptable. I’ve seen it dealt with in that way, but I am not aware of any cases that have reached court level and been dealt with in a legal manner.

Q44 Jeremy Lefroy: Finally, on that, there’s been quite a lot of concern about bonded labour and particularly child labour. What’s your perspective on that, and whether the initiatives that state governments and the Government of India are taking are having an effect on that? That’s quite a major concern in this country.

Geeta Kingdon: It is certainly a very concerning issue. The Government of India does have some policies against child labour, with a view to encouraging the children who are child labourers to enter school instead. What you hear of-through the popular press, for instance, but also this is consistent with Government policy-is that the police will often find, for example, children from rural Bihar doing that kind of work in Maharashtra, in Mumbai in particular. You will hear of instances where the police have escorted children back to their home, their native state, and put them back in schools, but often this is unsuccessful because the children are found a few months later back in Mumbai, working. I think that the reason for the inefficacy of this policy is partly that the schooling system is not functioning at a level of quality that really attracts these children to stay on. The economic returns perceived to be gained from such lowquality schooling are not seen to be worth the while to spend their time in school, quite apart from the opportunity cost of spending time in school if you are near destitution levels of poverty. There are some complex issues there that are not directly addressed through the education programme, except in so far as it tries to improve the quality of education.

James Manor: Could I just add, on that front, that I think economic growth is making a significant difference in reducing the incidence of bonded labour and child labour. Some of the poverty programmes that the Government of India and state governments have developed have reduced the migration of families. Many families used to migrate from Orissa, one of the poor states where DFID has worked, to the brick kilns of Andhra Pradesh, a kind of hellish, Dickensian place to work. The entire family would work there, and then migrate back again, and the kids didn’t get any education. The kids were basically working. They weren’t bonded labour, in this case, but they were working. The earnings from the National Rural Employment Guarantee Scheme, and other things, have substantially reduced the outmigration, what’s sometimes called distress migration, from states like Bihar and Orissa, to places for this kind of work. I think they were also having an impact.

Q45 Jeremy Lefroy: Just finally on this, what do you both believe are the most helpful approaches from donors to address these entrenched inequalities? Clearly they’re very sensitive issues, cultural differences and so on, but clearly they also have to be addressed if we are going to see progress.

Geeta Kingdon: A better, more nuanced Government policy can go a long way in redressing these issues. For that, donors like DFID can actually assist the Government of India most through research and analysis. For example, a recent research paper by Dr Anjini Kochar of Stanford University pointed out something that nobody else had noticed, but with hindsight is pretty obvious. There is the wellintentioned Government of India policy of providing guaranteed education in small habitations, so that those children who are stuck in remote areas in small habitations, the poorest areas, will have access to schooling. It was a very wellintentioned policy, but spatial patterns of settlement are such that lowcaste people are usually marginalised in habitations a little bit outside the village, half a kilometre outside the village. So they’re a small habitation, and they get a school of their own, as part of the education guarantee scheme, but it ends up segregating children on the basis of caste, and these schools are often lowresourced, and so on and so forth. Wellintentioned policies can have unintended negative consequences. This research study alerted the Government of India to this fact. This is the kind of thing that donors can do.

This probably goes back to some issues that were raised in the morning session: it’s quite right to say that DFID’s assistance is such a small part of the totality of social sector expenditures in India that one might say: "What difference does it make?" From my point of view, the difference that I think it makes is not in the quantum of aid that is given, but more in the catalytic nature of it. This tiny amount can nevertheless provide the research and analysis base, put evidence on the table, sponsor surveys, sponsor research studies, and have conferences to inform Indian policymakers about international findings on these issues. It can do the analysis for India itself, and put that before the Indian Government so that policy on these issues is not based on hunch or opinion or ideology or political expediency, but based on evidence. That, I think, will be the value added.

Jeremy Lefroy: Thank you.

James Manor: My response echoes this. DFID’s role as a catalyst amongst the donors-because DFID has a much more sophisticated understanding of poverty and development issues in India than most of the donor agencies in New Delhi have got-is very important. It plays that role, and it is also a source of constructive, fresh ideas, perhaps for experimentation, with the Government of India and state governments itself. It is able to do that because it works with enlightened civil society organisations, which are immensely formidable in India; much more formidable than almost all other lessdeveloped countries. It draws them into the policy process. The Government of India is now happy to have that happen. It used not to be, but it is now. These are constructive things.

The other thing that DFID does is that it focuses on poverty not just in economistic terms, as a severe shortage of assets, incomes, etc, but in a broader sense, of poverty as a severe shortage of opportunities, of political capacity. Poor people tend to have very little political capacity, very little confidence, very little skill, very little in the way of political connections, very little political awareness. Participatory policies, that give people a chance to participate and enhance their political capacity, so that they can operate appropriately in the public sphere, are a way of tackling another dimension of their poverty, which reinforces the economic shortages. DFID is very good on these fronts, and it should be encouraged.

Q46 Hugh Bayley: DFID has been increasing the amount it spends on health over the last few years, working on some national programmes and strengthening health systems in the target priority states. Does that make sense, and should health remain a priority for DFID in years to come?

Geeta Kingdon: I don’t feel very qualified to answer that question, because I’m not really an analyst of health sector issues at all. But in common-sense terms, health is an extremely important aspect of human capital. It affects people’s productivity, it affects their wellbeing in a fundamental way. There are a range of efficiencybased reasons as well as equity or moral reasons why one should want to invest in health, particularly in a country where we know malnutrition levels are absolutely abysmal. According to the Global Hunger Index, which is produced, I think, by IFPRI, in Washington, DC, there are 22 subSaharan African countries where malnutrition levels are lower than they are in India. On those bases it is critical to invest in health. I am not really able to say much more than that; that there is this developmental case for this investment.

James Manor: Like Geeta, I’m not an authority on health, but I do know that state governments, and the central Government, have generated some extremely promising ideas for improvements in the health sector in recent times. These are very popular politically, which encourages politicians to stay committed. This is an area in which DFID could make a contribution, but a vast amount of health service delivery, in rural areas especially, is produced by the private sector, and not the public sector. This makes health a rather different kind of sector in which to work from some of the others. The health professionals, and especially bureaucrats who specialise in health ministries, tend, to my certain knowledge, to be more openminded towards constructive ideas for change than bureaucrats in other Indian Government ministries, for complicated reasons.

Geeta Kingdon: Might I just add a sentence?

Hugh Bayley: Please.

Geeta Kingdon: We know that, in India, user fees for health care have not been done away with, which is an absolutely critical reason why half the women in India do not have access to even the most basic health care at the time of childbirth. What DFID could be doing in that area is, again, providing technical assistance to do an analysis of how this kind of health care provision, which is free of user charges, can be provided, using international practice, perhaps in partnership with the WHO, but bringing that kind of evidence to bear to produce some policy options to consider. That is what is needed.

Q47 Hugh Bayley: I sense that India is reluctant to look at the aid relationship as a gift relationship, and wants to develop the idea of partnership with other countries. Where in the field of health care is there a basis for partnership? We’ve relied, obviously, for many years in this country on doctors being trained in India and practising medicine here. India is an aid donor to countries in Africa. Maybe we should be working with them to deliver our aid programmes in Africa? They’ve got a big pharmaceutical supply industry, if not a pharmaceutical research industry. Where are the areas, using health as an example, where we ought to be looking at twoway technical co-operation?

James Manor: If the examples you want are from the health sector, the two of us are probably not equipped to provide them.

Hugh Bayley: Okay.

Chair : That’s a fair and honest answer.

Q48 Chris White: It depends on what you’ve just said, really, but it was just that you clearly recognise that health is such a fundamental matter to development. I was just wondering whether you think-as clean water and sanitation is one of the most important things to support health-that the 1% of aid going into sanitation and water from DFID was sufficient?

Geeta Kingdon: Did you say 1% of DFID aid is going into that area?

Chris White: Yes, 1%.

Geeta Kingdon: Again, not really being an expert in that area, I’d prefer not to comment on that.

Chris White: My apologies.

Q49 Richard Harrington: I just wanted to ask a couple of questions on malnutrition, particularly amongst children, but I suppose it’s to do with the whole aid system in India, because it seems to me everyone says that child nutrition is a priority. There are a lot of programmes, and yet I read in the press-not even things from people doing proper research like yourself-about red tape and bureaucracy stopping aid to young children getting through. There was that issue with the nut, the Plumpy’Nuts, which I’m sure you’ve heard about, where it was just deemed, for no logical reason, as far as anyone could tell, by the Indian Government to be unsuitable. I’m not talking about middleincome stuff at all, I’m just talking about children and malnutrition. Could you comment on why, after all this, hunger and malnutrition still endures so much in the subcontinent, and to what extent is this lack of progress the fault of the Indian Government, as far as you can say?

Geeta Kingdon: Again, not too much expertise in this area, but just one or two quick comments. One is that it’s absolutely true that malnutrition is at an alarming level. If you look at a survey such as the National Family Health Survey, of which we have three-we have a survey for 1993, 1998, and 20052006-there has been hardly any change in malnutrition over time. Roughly 46% to 47% of children under the age of five are wasting, i.e. are underweight, in both these years. It seems somewhat of a puzzle as to why it is that despite this apparent rapid economic growth, malnutrition levels have been so high.

Jean Drèze and Professor Angus Deaton of Princeton University, in their study, say that one of the reasons, though certainly not the only reason, why this may be the case is that growth in consumption perhaps is not as high as we think it is. There are two ways of calculating consumption increases. One is the National Accounts System, which is quoted in the FT and in the Indian press and so on. That shapes our perceptions about India’s economic growth rate and consumption increases. However, there is an alternative source of data on this, which is the National Sample Survey data. According to the National Sample Survey data, growth in consumption has not been nearly as high. There’s quite a lot of discrepancy between the National Accounts Data and the National Sample Survey data.

Outside that, because it seemed like an important thing, Drèze and Deaton say that one reason, although certainly not the only reason, that other things are not improving at the rate one might expect, things like malnutrition and so on, in such a rapidly growing economy is that the economy is not growing quite as rapidly as the data show. I think that that really has to be taken into account as a potential explanation. I’m not an expert on these data, or an expert on poverty, but to the extent that consumption has not been growing as fast as we hear in the press, that could be one reason why malnutrition has not been addressed. Other than that, I am not sufficiently an expert and knowledgeable.

James Manor: Another important element in the explanation of this kind of problem is appalling inertia in sections of the bureaucracy, both in the central Government bureaucracy and in state government bureaucracies, especially in the middle and uppermiddle reaches of the bureaucracy. There is a kind of breathtaking complacency and occasionally a tendency for bungling. One then has to ask, how does this ever change? How do we get to grips with this? What we’ve seen in India since 1989, when it became impossible for any party to win a majority in Parliament, is a massive redistribution of power away from the Prime Minister’s office to a lot of other institutions at the national level, and to state governments. Some of those institutions at the national level, the Supreme Court-and the High Courts at the state level follow suit-but also investigative institutions, like the Comptroller and Auditor General’s office, certain Parliamentary Committees in New Delhi, etc, have begun to probe into the horror stories, but also into the basic problem of complacency and inertia in the bureaucracy. The word gets to the media. The media, as you will see when you turn on your television, are constantly shouting about outrages of one kind or another. This builds a fire under some of these bureaucrats. I think the redistribution of power has made the system work better, even though it looks worse, because you hear more about the bad things that are going on, because the media is now more assertive. That’s changing things, but we have a long way to go.

Q50 Richard Harrington: Do you think there’s anything DFID should be doing on the malnutrition front that it’s not?

James Manor: Not that I know of.

Geeta Kingdon: Can I just add a sentence to what James has just said? I would agree with that, and also say that, drawing a parallel, the functioning of the public sector, whether in health or education, is not hugely different-

James Manor : Yes.

Geeta Kingdon: -in the sense of efficiency and complacency and so on. Certainly in the education sector, if we look at surveys such as the absence rates among public servants, a survey done by the World Bank in nine countries, in India absence rates among health sector workers was extremely high, probably the highest among the nine developing countries on which the survey was done. That just substantiates James’s point about the complacency and the lack of accountability, and this is true in the education sector as well. The reasons for this are really to do with the political economy of the country. These are endemic, longstanding problems: high teacher absence rates, high public health sector worker absence rates. The reasons appear to be that, although there are some accountability structures and procedures that can be brought to bear, public servants are never actually hauled up if they are frequently absent or chronically lax in their work. It seems that unions are a strong part of it-labour unions, teachers’ unions, health sector worker unions-and these are seen as lobbies that one must satisfy. They act as an obstacle to being able to successfully bring to book lax work on the account of public workers.

James Manor: DFID have supported programmes, and they have people who know how to support programmes, which undercut absenteeism in the health and education sectors in mainly rural areas, for complicated reasons. They have supported schemes, for example in Madhya Pradesh, to give elected local councils at the village level the control over releasing the pay of school teachers and health workers in the locality. When local councillors can withhold pay when the workers don’t show up for work, then absenteeism declines radically.

Just on your question of malnutrition and what DFID can do, I should caution you. This issue of nutrition is a very hot political potato at the moment, because the Supreme Court of India, which is very powerful, has challenged the Executive of India over its failure to release sufficient food grains in a time when malnutrition is a serious problem and the food grains are plentiful. This is very embarrassing for the Government of India, and a very difficult one politically. The kinds of issues DFID needs to avoid are those which are inflamed politically, because then the Government of India will be even less likely to listen to DFID or anybody else from outside if it’s a touchy issue.

Geeta Kingdon: I have to slightly disagree, James, with your statement about how local government can now withhold pay from public servants if they’re not deemed to be performing properly.

James Manor: They should be able to. I’m not saying they can.

Geeta Kingdon: Yes, because, for example, the original draft of the Right to Education Act, which was enacted a year ago and implemented as from April 2010, contained a provision, which was taken out before it was enacted, that would have given school development management committees and village education committees the right to do precisely that-to withhold payments from teachers if they were chronically absent, and so forth. That provision was taken out from the Act before it was enacted. What political pulls and pressures led to the taking out of that particular provision, we shall not know, although we know there was lots of union lobbying and so forth that went on. This really is a political economy constraint that affects not only the health sector, but also the education sector.

Q51 Jeremy Lefroy: As far as I’m aware, the evidence is quite clear that malnourishment or being underweight has considerable impact on personal development, education and health. Given that, do you feel that malnourishment or nutrition is being treated too much in a silo and not as something that should be dealt with directly together with education and, to a lesser extent, health? Following on from that, I noticed that almost the major cause of death among underfiveyearolds from WHO statistics from 2008 is pneumonia. A couple of us were in Uganda last week, and it was very clear to us that pneumonia is a major problem there. Pneumonia, when treated early, should not be a cause of death, at all. I just wondered if you had any particular comments on that.

Geeta Kingdon: Not on pneumonia as such, but on your previous point about whether malnutrition, or nutrition, as an issue has been treated as a silo, I think it’s a very correct perception. The synergies that exist between, for example, health, nutrition and education have not been exploited. These responsibilities sit in different Government Departments and the overlaps and the benefits are not being sufficiently realised. That is being addressed, to some extent, by the fact that school is now being used as a site for delivery of the school midday meal programme. That has certainly been a very positive step, but school as a site for vaccination, for instance, is not something that is being done at the moment, but could be.

Q52 Jeremy Lefroy: Sorry to interrupt, but is that something where DFID could make a specific contribution through research on that? You think about, say, the Progreso programme in Brazil, which I think has elements of that in it.

Geeta Kingdon: Indeed.

Jeremy Lefroy: Would it be possible for them to have a look at that and advise in relation to the Indian context?

Geeta Kingdon: Absolutely. That is precisely the sort of thing in which DFID can bring value added and make its mark and its contribution. Other than that-of course, the Progreso programme was a conditional cash transfer programme-

Jeremy Lefroy: Yes.

Geeta Kingdon: -which is not the same as the Government of India’s Sharva Shiksha Abhiyan programme, but there are certain elements of conditional cash transfers even in the SSA programme. There are lots of other examples in addition to the Progreso programme that can also be brought to bear on this issue. I agree that there is not sufficient research in this area. For example, there is very little research in India; in fact, I believe that my study, together with my coauthor Courtney Monk, is the only paper that looks at the impact of nutrition on children’s learning achievement levels. We need more research as well.

James Manor: One reason why pneumonia is a real threat is that poor village people-especially poor village women, because women are the gatekeepers between the household and the wider world on issues of health and to some extent education-are extremely reluctant to take their children to health centres. In health centres, doctors wear strange white garments, and carry things like needles, which look very intimidating. DFID has done work with state governments that supports strengthening elected local government in ways that make an impact on this. The state health bureaucrats in states where local councils are strong, which is not every state, indicate that when local councils are strong, the uptake on health services increases. Elected village councils contain women representatives, who learn about the things that go on in health centres, and realise that ante and postnatal care reduces mortality, that vaccinations are a good idea, etc, etc. These elected village councillors, who are just local women, are much better able to explain the utility of health services to ordinary poor people in the villages, their neighbours, than are the health professionals. The health professionals speak a different kind of language and are middleclass people for the most part. The uptake increases quite substantially when democratic decentralisation is allowed to flourish. DFID has assisted in enabling it to flourish. This has made a significant impact on infant mortality and no doubt on pneumonia.

Q53 Chair : We have just two or three more questions; we have to hold a quorum, so if we can be brisk. You, Professor Manor, have praised DFID and the quality of their staff, and several times pointed out their connections with civil society, civic society. In a sense, I think you also, Professor Kingdon, quoted the Indian Government as saying that DFID’s value to them is openness, transparency, accountability and so forth. This gives the impression that, effectively, DFID is almost like a resource for the Indian Government. Indeed if a high proportion of its staffing is recruited locally, you could almost get to the point of wondering, is DFID a British Government agency, supporting the Indian Government, or is it an Indian Government agency financed by the British Government? I’m not saying it is there, but it’s somewhere in between the two. Do they have the balance right? Can they move further down the Indianisation of DFID, or would that be confusing?

James Manor: They do have the balance reasonably close to right. DFID Delhi is a British Government institution, manned substantially, or populated substantially, to be politically correct, by extremely gifted, knowledgeable, constructive Indians. DFID is hugely shrewd in taking this line, because the truth is that the Indian staff members in New Delhi tend to make a more constructive contribution than the British staff members. The bungling that occasionally one encounters with DFID, in the cases I know about, is the result of action by the British staff members. It’s certainly not an Indian Government agency. It’s an agency of the British Government, consisting predominantly of Indians, which is, for that reason, immensely constructive. I wouldn't say they need to go much further down the road, but if they’re going to tip the balance, they should tip it further in favour of Indians.

Geeta Kingdon: I would just add that I do not see it as Indianisation of DFID. I’m not aware of the proportion of the staff at DFID who are local staff, versus the ones who go from the UK, but whenever I’ve been there as a consultant and sat in the offices, it doesn’t seem that there is such an imbalance or a preponderance of one group or the other. A more substantive point is that DFID maintains its independence, and indeed the Indian Government makes sure that it maintains its distance from DFID. Access to Indian officials is very, very precious. It’s very difficult, because of the number of obligations and duties that they perform. It is necessary therefore that that distance is maintained. It is not the case that they have access to, and that it is a cosy cabal with, the Indian administrators. It’s not like that at all. That distance is maintained, and I think that DFID is not Indianised in the sense that, from what I have seen of DFID’s work, it is bringing new ideas. It is bringing ideas from the whole of the international community to the notice of the Indian Government, rather than having become-I don’t know what the word is for it-somebody that sees the local situations and responds to them locally. It is looking at the situation in India and the problems of India, not only with the local context in mind, but always keeping an eye on what the rest of the world is doing, and how that can inform what India does.

Q54 Chris White: What is DFID’s role with the wider donor community? Supplementary to that, what is the Government of India’s approach to the donor community in a wider scope?

Geeta Kingdon: The Government of India’s approach to the donor community seems quite positive to me, despite the occasional grandstanding, which may be consistent with national selfpride, statements in front of the media and so on, occasionally, or before an international audience. Despite the occasional grandstanding of that nature, it is clear that the Government of India values DFID aid. There are several instances that prove this. We know that it has recently asked for DFID assistance of at least £90 million for the secondary education programme, the RMSA. We know that it has put on record its appreciation of the donors, which I read out earlier. The Government of India welcomes DFID aid through NGOs as well, by permitting civil society organisations to receive this aid. I think it wants that aid. It has a very positive attitude towards the donors. There was a previous Indian Government, the BJP Government, which had a different stance, but that, historically, has been a very unusual stance. Historically, India has always welcomed assistance.

In relation to DFID’s relationship with the other donors, from what I have seen in the education sector work, that relationship is extremely collaborative. It’s bringing people, and the different agencies, on to a common platform, and providing a service to the Government of India that is a unified approach. It reduces transaction costs. I’m not saying that they’re providing exactly the same kinds of inputs, or the same kinds of resources; the quantum of resources is different from the EU, the World Bank and DFID. The areas of focus are also sometimes different, but by and large they are co-operating very well. I’ll give you an example. DFID has jointly funded a survey of 1,400 schools-aided schools and private schools-which the World Bank carried out. DFID is funding the PISA study, with the encouragement and support of the other donors, as well. There are quite a few areas in which there is joint funding of projects, and when you sit in the Joint Review Mission of the Sarva Shiksha Abhiyan project, it seems a collegial and smoothly functioning relationship. When you go and present papers at these forums you get good feedback. There are always people present there doing joint conferences and sponsoring events together. It’s a very positive dynamic between the donors.

James Manor: I tend to agree, but I would just stress that DFID is a significant source of sophistication about India and about development to other donor agencies, some of whom know they lack sophistication and some of whom don’t. Much of the sophistication that DFID brings to that relationship is sophistication that it gleans from ideas within India. India is immensely productive of constructive ideas for development in general. Because DFID is in India, gleaning those ideas, DFID Delhi is a resource of significance for DFID globally. Most other countries don’t generate the kinds of constructive ideas that India does.

Chair : That brings us on to our final questions, relating to the UK’s developing role in India across the whole piece.

Q55 Richard Harrington: Very much so. We need to expand it across the whole geopolitical relationship between India and the United Kingdom. Obviously the Prime Minister went to India, and we hear a lot about increasing the ties, commercial and otherwise, between ourselves and India. It would seem to me that DFID is the lead agency in doing this. I wondered if you’d like to comment on the role that aid plays in the overall relationship. We know it’s of no financial significance, compared with the total, but is it of real political significance? Also, would you mind commenting on how you think DFID works with other Government Departments such as the Foreign Office and UKTI, and whether the aid gives the UK much influence in India, compared with the other commercial efforts and everything like that.

James Manor: I don’t know much about how DFID interacts with other UK agency representatives in India. I really wouldn’t know where to start on that.

Richard Harrington: Fair enough.

James Manor: DFID earns the UK huge respect and warmth amongst the political establishment in India, because of the work that it does. If you begin to appear to connect DFID’s activities to some of these wider concerns, you may undermine the trust that DFID generates in the Indian establishment. You may put at risk the wider benefits that DFID’s relationship yields for Britain. I would be quite scrupulous about separating.

Q56 Richard Harrington: It’s almost because it’s nonpolitical and noncommercial that it has the influence and effectiveness that it does?

James Manor: Yes. It’s also sophisticated, and there are all of these very bright Indians working for DFID who are respected by the Government of India. Some of them are former Government servants, Government servants on secondment. There’s a level of trust, and if you begin to give the appearance that aid to India, or DFID in India, are instrumental to another, ulterior purpose-

Richard Harrington: Part of another agenda. I understand.

James Manor: -you might undermine both DFID and the ulterior motive. Brits are very good at being subtle and sophisticated, and handling these things. I think you’ll be all right.

Geeta Kingdon: DFID is really part of this bigger picture of this relationship that goes from cricket to the Commonwealth to the British Council to trade and all of these things. DFID’s presence there confirms the notion that Britain is an ally, a friend, and a wellwisher. I would agree with the wider comments that James has made in this regard.

Q57 Chair : Just a final point on that. I had the advantage of being in India in September, and met with our High Commissioner and also the Deputy Foreign Minister. I take your point entirely about the importance of keeping the separation, but equally I think Professor Kingdon is right in saying that it is a very inclusive relationship. When you’re engaging with interlocutors, all of these other things will come into play. It’s important to have that backdrop. In the context of DFID, what should we be looking to achieve five years from now? By that time India will firmly have graduated out of IDA. It will be in a different space, if its growth continues, and the aid relationship will clearly therefore move into a different space. What should we be hoping to achieve over the next five years?

Geeta Kingdon: In the next five years, DFID should firstly continue the very good work that it has been doing so far. I think it has been outstanding; certainly in the education sector the work has been very, very good. The area where DFID can make most contribution is in this catalytic role, in sponsoring research, funding the production of new information and the generation of data, bringing that data to the table of discussion and dialogue, and thereby helping to improve policy-making. I think that is the major route for influencing policy in India. It’s best done at the national level, without reducing the scope of work that DFID is already doing at the state level. That is where DFID can really make its contribution.

As well as saying that it should do what it’s done, there are certain things that it should do better. For example, in the generation of new evidence, it is important to engage new, robust methodologies that are capable of establishing causal impacts from policies on to outcomes. DFID’s research portfolio needs to be modernised a little bit and made more relevant, and utilise more modern techniques; for example, doing studies of what works and what does not work, using methods that are now known to produce good results.

James Manor: I broadly agree with what has just been said. DFID should continue to emphasise poverty reduction as an exceedingly important goal, and to attempt to do new things, based on new ideas it’s getting from Indian civil society and academia in that vein. A couple of minor points: one, it contracts Indian organisations to do studies or to do projects, civil society organisations in particular, but also Government agencies, to some extent. DFID, I think, should be a little more restrained. It occasionally seems rather intrusive, seeking to investigate and micromanage all the time. This seems insensitive and counterproductive to the very good people that DFID locates to conduct these projects. I would probably hope that DFID did a little less of that, and that DFID was a little less inclined to be enchanted by technocracy in India. The principal person in DFID’s recent history who was utterly enchanted by someone purporting to be a genius at technocracy was Clare Short, and she made some very serious mistakes in Andhra Pradesh by going in whole hog. She was hoodwinked by a charlatan. That sort of problem is not so severe as it used to be, but there is a tendency for DFID representatives to be taken in by people who purport to be extraordinary technocrats, and they should beware.

Chair : Very salutary advice, now all our Labour colleagues have left.

Geeta Kingdon: Can I just add one more point? Another area of strong value added by DFID is in technical capacity development. I’ve seen this work very well in the education sector, or at least I’ve seen the need for it; the desperate need for India to join modern international practices of assessments, impact evaluations and so forth. This is an area in which DFID has started recently to provide technical assistance, and these are slightly longer term projects. Technical assistance projects and capacity development projects have somewhat longer gestation periods for showing results, but I think they’re very important.

Chair : Thank you for that. That’s consistent with some of our own recommendations about the role of DFID’s research and its wider accessibility. Thank you both very much. You’ve been very well informed and very insightful from our point of view. It’s slightly unfortunate that we’re not now going to India in two weeks’ time, but more like six or eight weeks’ time, but this is all on the record and will still be extremely helpful to us. Thank you.