International Development CommitteeWritten evidence submitted by Development Initiatives (DI)
About us
1. Development Initiatives (DI) is an independent organisation working for the elimination of absolute poverty. DI focuses on the analysis and use of data to promote poverty reduction. Our mission is to empower and enable people to make evidence-based and data-informed decisions that deliver more effective use of resources for poverty eradication.
2. We have a track record of providing objective, independent and rigorous data and analysis to governments, multilateral agencies, NGOs and foundations. We are relied upon for practical advice and support by the UK’s Department for International Development (DFID), the International Aid Transparency Initiative (IATI), the Good Humanitarian Donorship group, ONE, the William and Flora Hewlett Foundation and the Bill and Melinda Gates Foundation. We run programmes such as the Global Humanitarian Assistance (GHA) programme, which works to provide better visibility of the resources available to people in humanitarian crises, and aidinfo, which focuses upon increased transparency and accountability of aid and other resources. From 2000 to 2010, DI was a part of the Chronic Poverty Research Centre; using evidence to promote security, choice and opportunity for the poorest remains central to our work.
Summary
3. The eight Millennium Development Goals (MDGs) have focused international and country efforts on poverty eradication and, over time, have prompted an alignment of donor aid policies.i This has supported domestic efforts in prioritising human development and poverty reduction as well as stimulating new initiatives, with clear progress being made on the delivery of basic social services including health and education at a global level.ii
4. Success towards the MDGs, however, has not been universal, with Africa and South Asia making significantly slower progress on targets than China and Latin America and with certain sectors such as maternal health and sanitation falling behind.iii The MDGs have had more traction within the aid community than they have with either developing country governments or civil society organisations (CSOs). They have also focused overwhelmingly on deliverables, missing the opportunity to harness the opening up of information to empower the poorest people to overcome vulnerability and grasp opportunity themselves. If accelerated progress on poverty is to be achieved and sustained then a post-2015 settlement needs to empower citizens to exercise choice and control over the decisions that impact their lives.
5. Drawing on our analysis and programme experience, we believe that the post-2015 framework should incorporate the following:
Set 2025 as the target for the elimination of US$1.25 per day income poverty—as a necessary first step towards the eradication of chronic and extreme poverty which is multidimensional, excludes the poorest from basic services and secure livelihoods as well as resulting in intergenerational vulnerability and disadvantage.
All national governments to commit to a basic income guarantee supported by an international architecture that acts as a catalyst and backstop—supporting livelihoods and ensuring that, when livelihoods and self-insurance measures fail, the most vulnerable people are empowered through cash transfer schemes to better manage risk, make modest investments and take up opportunity
Access to information as a goal in its own right in the post-2015 settlement—empowering people to exercise their rights, hold governments to account, improve service delivery and reduce corruption.
Response to the Idc’s Consultation Questions
Lessons learned from the adoption of the International Development Targets and the Millennium Development Goals: in particular how effective has the MDG process been to date;
6. The MDGs have proved to be powerful tools, credited with mobilising additional aid resourcesiv and directing funding to specific sectors such as primary education. The MDG framework has the advantage of being clear and simple, with measurable targets and indicators. Over time, this has resulted in alignment of aid policy which, at least in some areas, has helped to increase the priority given to human development and poverty reduction.
7. Despite this, the MDGs have been criticised for being top-down in their approach, with inadequate participation in their formulation, a lack of specific commitments for developed countries and neglect of issues that are key to development such as inequality, climate change and productive employment. The MDGs have also had more traction within the aid community than they have with either developing country governments or civil society organisations (CSOs). Importantly, they have focused on deliverables to the exclusion of addressing structural factors that cause and perpetuate instability and vulnerability. It is these factors which, despite poor people’s hard work and desire for change, often cause the poverty of families and communities to be handed down to children and grandchildren.
How should the “Sustainable Development Goals” being established following Rio +20 relate to the development goals being considered by the High-Level Panel?
8. DI supports the view of Beyond 2015 that there should be a single unified process leading to the definition of the post-2015 framework and a single set of international development goals putting poverty eradication as the overarching focus of sustainable development.
The coverage of future goals: should they be for developing countries only or should progress be monitored in all countries?
9. The key contribution of the MDGs has been to provide a global focus for action on the elimination of absolute poverty. The MDGs aimed to halve the proportion of people in absolute poverty. The post 2015 settlement should aim to complete the job of eradicating absolute poverty—in line with the 1995 assertion by world leaders in Copenhagen that the elimination of absolute poverty was possible and the Millennium Declaration.v This central focus on one clear objective should not be lost. Therefore we believe that the future framework should prioritise the poorest wherever they are. With Middle Income Countries having more poor people than the world’s low income countries, it becomes ever more essential that efforts and commitments towards the eradication absolute poverty do not only operate in selected countries. The framework should set out global goals, as well as contextualised national targets for both developed and developing countries.
The process: are the right voices being heard? What are the opportunities for and constraints to global consensus?
10. We believe that agree that a post-2015 agenda should be one that goes beyond a set of aid-inspired goals. This means getting beyond the aid world and engaging with new partners who can both hold governments to account and deliver on post-2015 priorities. As members of the Beyond 2015 campaign we are supportive of their central asks for a process that is UN-led, legitimate (open, transparent, participatory and inclusive) and accountable, with enforceable mechanisms for national oversight and independent review at international level.
Targets: was the MDG “target-based” approach a success? Should it be retained? How should progress be measured?
11. The primary purpose of a future framework should be to build on the success of the MDGs in providing clear goals as a focus for national and international action—and to encapsulate a shared, timetabled commitment to go beyond halving poverty to complete the realistic goal of eliminating absolute poverty. So to be very clear, the short answer to a target based approach is yes. Beyond this, we believe the points outlined below would provide practical guidance for shaping the post-2015 framework.
(a)
(b)
(c)
Financing global goals: are new mechanisms needed?
12. We believe it is necessary to introduce a reformed international financing architecture that underpins poverty eradication. To do so, international financing needs to be reformed to focus on extreme and chronic poverty where-ever it exists (not on one set of countries), to include all donors (not just the members of the DAC) and to be re-conceptualised as a global mechanism which ensures basic minimum livelihoods for all and protects against crises and shocks. We believe aid should increasingly be spent on investments with a probable, proximate and timely impact on the life-chances of the bottom 20% of the population, with private finance being more effectively harnessed to promoting inclusive growth. The Global Partnership that has emerged post-Busan must develop a clear role alongside the DAC—to more effectively balance recipient interests alongside the interest of the increasing range of donors, which include countries who themselves are addressing chronic and extreme poverty domestically. DI has a major programme of work identifying and quantifying all the resources available—and potentially available—for poverty eradication, and we would be delighted to put this substantial body of data and analysis at the disposal of the committee.
The role of the private sector and other non-state organisations
13. Whilst the primary responsibility for delivering commitments under the post-MDG framework must rest with national governments, we strongly support the view of Beyond 2015 in recognising the important contribution that all actors, including the private sector and other non-state actors, can make to their realisation. This underlines the importance of involving all of these actors in the consultation process, as means of securing broader buy-in, and ensuring that the future actions of all actors support, rather than undermine, the agreed framework. Over the last 15 years there has been a shift in some of the private sector from an almost exclusive focus on delivering a return to the shareholders to a realisation that companies can only deliver a sustainable profit if they play their part in promoting more equitable social and economic development. But we believe the post 2015 settlement should be clearer in challenging the private sector, as well as governments and civil society, to make a step change in their efforts to contribute to poverty reduction. The message should be “you don’t have to be an aid agency or spending ODA to make an impact on poverty”. This is not just an altruistic message—the demand for goods and services as a billion people get better off and contribute more to economic growth is very substantial.
Timescale: what period should the new framework cover? Was the 15-year timescale for the MDGs right?
14. Whilst overall timescales on the post-MDGs may be longer, we believe it is essential to set 2025 as the target for the elimination of US$1.25 per day income poverty. This milestone would be a necessary first step towards the eradication of chronic and extreme poverty which is multidimensional, excludes the poorest from basic services and which results in intergenerational vulnerability, exclusion and disadvantage. Currently, if current trends continue it will be 2080 before extreme poverty is eradicated.vii
The content of future goals: what would be a good set of global goals? What continuity should there be with the MDGs, and how should the unfulfilled MDGs be taken forward?
15. We see the principle purpose of the development agenda to be poverty eradication. Drawing on our analysis and programme experience, we believe that the post-2015 framework should incorporate the following:
Set 2025 as the target for the elimination of US$1.25 per day income poverty.
All national governments to commit to a basic income guarantee supported by international architecture that acts as a catalyst and backstop.
Access to information as a goal in its own right in the post-2015 settlement.
Set 2025 as the target for the elimination of US$1.25 per day poverty
16. Poverty is multidimensional and sustained poverty elimination will require a wide range of interventions at national and international level, building on the existing MDGs in the areas of health, education and gender equity. Economic poverty (recognised internationally as incomes of less than the equivalent of US$1.25 per day) is both an outcome of, and contributor to, other measures of poverty, vulnerability and exclusion. Its elimination by 2025 presents a universally powerful, achievable and measurable milestone and is a first step towards the ultimate elimination of poverty.
17. Considerable progress has been made in reducing absolute poverty over the past two decades, with the number of people living on less than US$1.25 per day decreasing from 1.9 billion in 1990 to 1.3 billion in 2008. Even in sub-Saharan Africa, where progress has been slowest, poverty rates have fallen below 50% the first time despite rapidly rising populations. But in the absence of measures to build resilience to shocks, continued progress is not guaranteed. Recent food price hikes are estimated to have pushed another 160 million into poverty and have delayed progress in Africa by a further ten years.
18. We believe that the persistence of absolute poverty is neither inevitable nor acceptable and reliance on economic growth alone will not yield results within an acceptable timeframe. With sufficient political will and the implementation of targeted mechanisms to build resilience through a basic income guarantee (see below), absolute poverty can, as the World Summit for Social Development 1995 envisaged, be eliminated. We therefore believe that the post-2015 framework should set 2025 as the target date for achieving this goal to focus and unite a broad range of actors under a clear ambition.
All national governments to commit to a basic income guarantee backed by an international architecture that acts as a catalyst and backstop
19. A post-2015 settlement should include a commitment by all governments to incorporate an international minimum income guarantee as one of a number of policies aimed at protecting the lives and livelihoods of the most vulnerable and achieving the overall poverty elimination target. This guarantee would be set to ensure that as a minimum none of their citizens live on less than US$1.25 per day.
20. Delivery of this commitment will be achieved at national level through a variety of policy interventions chosen by the national government—including through creation of livelihoods, cash transfers, insurance and social protection schemes to protect the incomes of the poorest. This would be backed by an international architecture acting as a backstop to support governments who cannot afford the full cost of meeting this commitment independently. This would protect the most vulnerable people and ensure that they can better manage risk, make modest investments and take up opportunity.
21. Whilst it is for individual governments to determine how best to meet this basic income guarantee for their own citizens, we note that cash transfer schemes within broader social protection frameworks have played a key role in reducing poverty and vulnerability in over 45 countries,viii as the following examples from Brazil and Ethiopia clearly demonstrate:
Over a ten year period from 1999–2009, Brazil reduced the number of people in extreme (US$1.25 per day) poverty from 11.4% (19.6 million people) to 6.1% (11.9 million people). Much of this success has been attributed to two cash transfer programmes—Bolsa Família and Benefício de Prestação Continuada (BPC).ix Bolsa Família and BPC, which together account for about 1% of national income, accounted for a third of the fall in inequality. Bolsa Família alone brought about 20% of this decline.
The Ethiopian Productive Safety Net Programme (PSNP) is the largest social safety nets programme in Africa. Financed by the Ethiopian Government and by aid,x it successfully demonstrated a variety of comparative advantages over traditional humanitarian responses to food insecurity during the 2011 Horn of Africa food crisis. The PSNP response to the crisis cost an estimated US$53 per beneficiary compared with US$169 per beneficiary targeted through humanitarian response mechanisms.xi It also meant that consequences of the crisis were far less severe in the region. The PSNP is more responsive to early indications of crisis. It is therefore more efficient in ameliorating humanitarian crisis and is transformative in the medium term, lifting households out of chronic food insecurity.
22. Such schemes sometimes require a significant upfront cost but evidence shows substantial long-term benefits.xii, xiii They should be adopted as part of a broader poverty reduction strategy and be supported by an interaction of the national and the international, so providing resilience to countries that move into and out of vulnerable situations.
Access to information should be included as a goal in its own right
23. Our own programme experience and external evidencexiv has convinced us of the transformative power of information, and of the contribution that increased access to information can make to reducing poverty. We welcome recognition in the Rio+20 outcome document (The future we want) that stated:
“opportunities for people to influence their lives and future, participate in decision-making and voice their concerns are fundamental for sustainable development” ... “improved participation of civil society depends upon, inter alia, strengthening access to information, building civil society capacity as well as an enabling environment.”
24. We agree that increased access to information is key to empowerment, and we know from our work, and that of partner organisations, that when citizens gain access to information and use it to demand change, the results can be dramatic. For example:
In the late 1990s, the Ugandan Government initiated a newspaper information campaign to boost the ability of schools and parents to monitor the government’s handling of a large school grant programme funded by a group of donors. As a result the amount of money reaching schools increased from 20% in 1995 to more than 80% in 2001, when information was published detailing where the money was going.xv
In South Africa, the Treatment Action Campaign made use of publicly available budget information to campaign successfully in the courts, in the media and on the streets for increased allocations for antiretrovirals, enabling 1.4 million people to access lifesaving drugs. In South Africa, approximately 75% of resources for HIV/AIDS are now generated domestically.xvi
25. Conversely, we know from our own research that lack of adequate information carries with it real costs to real people.xvii We also recognise that information and communications technology is improving the flow of information between governments and their citizens, with benefits to both sides. Initiatives such as the Open Government Partnership seek to make government more transparent, accountable and effective, with institutions that empower citizens and are responsive to their aspirations, but more could be done.xviii
26. Increased access to information clearly has the potential to play a critical role in moving the task of poverty elimination beyond the aid world, engaging new partners who can hold governments to account. We therefore believe that a post-2015 settlement should include access to information as a goal in its own right ensuring that international effort is focused on empowering people to exercise their rights, hold governments to account, improve service delivery and reduce corruption.
October 2012
References and Resources
i The number of times the phrases “GDP per capita” “Human Development Index” and “Millennium Development Goals” have been mentioned in books published between 1980 and 2006 (as scanned by the Google Books Project)
Kenny, C & A Sumner, 2011, More Money or More Development: What have the MDGs achieved?, CGD Working Paper 278, Washington DC: Centre for Global Development
ii The target of halving the proportion of people without access to safe drinking water has been met, increasing access from 76% to 89% of the global population over 1990-2010. Primary education enrollment ratio has increased from 82% in 1999 to 90% in 2010 and gender parity in primary classrooms is now a reality. Preliminary data highlight that both the poverty rates and the number of people living in extreme poverty have been falling in all regions. The latter fell from 47% in 1990 to 24% in 2008, a reduction from 2 billion to 1.4 billion.
[Above information and statistics on the MDGs sourced from: United Nations, The Millennium Development Goals Report, 2012: http://mdgs.un.org/unsd/mdg/Resources/Static/Products/Progress2012/English2012.pdf]
Aid from OECD to education sector, 1995-2008 (US$, millions)
Source: OECD DAC figures.
Melamed, C, 4 January 2012, After 2015 Contexts, politics and processes for a post-2015 global agreement on development, ODI.
iii Poverty has been falling globally, but it is still marked in sub-Saharan Africa and South Asia, with proportions of people living with less US$1.25 per day still equaling 47% and 34% respectively in 2008. Conversely, China provides a remarkable example of poverty reduction, with rates falling from 60% to 13% over 1990-2008. The MDG target has been met in Latin America and the Caribbean as poverty rates fell from 12% to 6% in the region.
Estimates for the numbers of people living below $1.25 per day as follows:
India: 426 million.
China: 173 million.
Sub-Saharan Africa: 376 million.
South Asia: 546 million.
Latin America and the Caribbean: 35 million.
Brazil: 26 million.
(Sources are Sumner 2012, taken originally from the World Bank’s povcal database)
Meeting health targets is a challenge. Child mortality has fallen by more than one third, but the target of reducing by two thirds the under-five mortality rate risks being unmet. Whereas the Latin American region almost reached its target, developing countries as a whole only reduced the rate from 97 deaths over 1,000 live births to 63 over 1990-2010.
Maternal health is at risk globally. Reducing maternal mortality by three quarters on 1990 levels (440 deaths per each 100,000 live births) would require cutting the current maternal mortality ratio of 240 deaths per each 100,000 live births to 110 before 2015.
[Above information and statistics on the MDGs sourced from: United Nations, The Millennium Development Goals Report, 2012: http://mdgs.un.org/unsd/mdg/Resources/Static/Products/Progress2012/English2012.pdf]
iv The 2012 MDG monitor report shows that ODA growth between 2000-10 has been the biggest one when compared to previous decades
World Bank, 2012, Global Monitoring Report, Food Prices, Nutrition and the Millennium Development Goals, p.136
v Resolution adopted by the General Assembly 55/2, section III. 11 “We will spare no effort to free our fellow men, women and children from the abject and dehumanising conditions of extreme poverty, to which more than a billion of them are currently subjected”.
vi Chart showing international resources to developing countries in 2010
Total estimated resource flows to developing countries: USD 1.75 trillion
Caveats:
Data on DFIs, NGOs and Foundations is partial at best:
DFIs – data collection is still underway and the figure of USD 190 million is an early estimate
Foundations – good data is only available for US foundations; European and other foundations are not included
NGOs – no comprehensive dataset exists; this data is based on a model we have constructed (& which is still a work in progress)
Data on innovative finance and climate finance is still being collected and is not included in the pie chart
There are possible duplications between some series – e.g. FDI and debt flows (as some FDI is funded by debt)
vii Graph showing World Bank projects on extreme poverty. Assuming the same pace as over 2015-2025, extreme poverty will not be eradicated until 2080.
viii Joseph Hanlon, Armando Barrientos, David Hulme, Just Give Money To The Poor The Development Revolution from the Global South, Chapter 10.
ix Percentage of people in extreme poverty (US$1.25 per day) in Brazil from 1999-2009
Millions of people in extreme poverty (US$1.25 per day) in Brazil from 1999-2009
Source: World Bank
x Of the $2.1 billion 2010 – 2014 budget for the PSNP, the Government of Ethiopia is expected to provide around US$183 million (c. 8.4% of total costs). The remaining costs will be met by a coalition of donors: The World Bank, the World Food Programme, the Governments of the United Kingdom, Canada, Ireland, Sweden, Netherlands and the United States, and the European Union. The US provides the majority of the programme’s food aid, with the other partners funding the cash payments. US, the World Bank and DfID are the major donors, together providing more than two-thirds of total funding. Development partners and the Ethiopian government have so far provided over $1.9 billion for the project.
xi Based on our own calculations
xii World Bank evaluation of Cash Transfer. See here.
xiii The Kalomo social cash transfer scheme is a pilot programme initiated by the Zambian Ministry of Community Development and Social Services (MCDSS) and supported by GTZ in 2004. The cost of the scheme for 1000 households in two agricultural blocks in Kalomo was $106,000 including administration fees. If this was scaled up to include the poorest 10% of all households in Zambia, the cost would be $21.2 million. [Chronic Poverty Research Centre, July 2005
http://www.chronicpoverty.org/uploads/assets/files/cpupdate3.pdf]
Zambia received US$109 million (constant 2010 prices) of development food aid between 2004-10 (gross disbursements from all donors). If humanitarian food aid and nutrition aid is included then the value rises to US$159 million between 2004-10.
xiv Reinikka and Svensson (2005) found that in 1995 only 20% of a primary education grant program to rural Uganda actually reached its intended target. But by 2001 - after officials publicized information about where the money went - fully 80% of the funds made it to the schoolhouses. Björkman and Svensson (2009) followed up on this study with a compelling randomized controlled trial testing the effects of transparency on health care in Uganda. The experiment randomly assigned community health clinics to receive published "report cards" and NGO-organized public meetings on the quality of the clinics’ health care.
The results of this transparency “treatment” rivalled the effects of the best health interventions involving expensive new medicines, equipment, and procedures. Waiting time for care decreased, absenteeism among doctors and nurses plummeted, clinics got cleaner, fewer drugs were stolen, 40-50% more children received dietary supplements and vaccines, health services got used more, and, powerfully, 33%fewer children died under the age of five. This amounted to 550 saved lives in a small area of Uganda encompassing merely 55,000 households. This is strong evidence that transparency about development finance can save lives.
xv Ritva Reinikka, R and Svensson J, 2004, Fighting corruption to improve schooling: evidence from a newspaper campaign in Uganda. See paper.
xvi International Budget Partnership, From Analysis to Impact: Partnership Initiative Case Study Series. See here for further information.
xvii aidinfo conducted a series of case studies in 2008-09 looking at the demand for better information to support effective aid management and coordination at country level. In Rwanda, we were told that when planned aid disbursements did not arrive when they were expected, this had led to an unplanned drawing down of reserves, leading to liquidity problems in the Central Bank and unplanned government borrowing. In Malawi, we were given examples of planned education and health programmes being cut when the projected figures originally given to line ministries by donors did not match those given by the Ministry of Finance. Less immediate but nonetheless important, research by ODI, WaterAid and IHME aimed at increasing the long-term impact of aid spending on poverty reduction was consistently hampered by lack of adequate data. The synthesis paper is available here.
xviii From open budgets leading to a reduction of corruption in Brazil, to the publication of heart surgery data in the UK leading to a 50% increase in survival rates, or to citizens in Tanzania texting government providers when taps run dry to get the water flowing again, there is clear evidence that increased access to information empowers citizens to demand change.