Latest from Duncan Green's blog

I spent much of the Christmas break sneaking off to read chapters of Eric Beinhocker’s path-breaking 2006 book ‘The Origin of Wealth: Evolution, Complexity and the Radical Remaking of Economics’. There’s probably too much to cover in one post, so I’ll follow up this overview with some more specific reflections in the days to come.

The book starts by showing that the economy fulfils the ground rules for an evolutionary system, i.e. one that meets the basic conditions of ‘differentiate, select and amplify’. This goes far beyond the evolution of biological species, constituting a general purpose algorithm for creating ‘design without a designer’, and finding ‘needles of good design in a haystack of possibility.’

Economic evolution is the result of three interlinked processes: Physical Technology;
Social Technology (e.g. the rule of law, money, venture capitalism) and business designs, which turn physical and social technologies into economic reality. In each of them ‘evolution is at work, churning through possible designs, finding and amplifying ones that work, discarding those that don’t, and thereby creating the order that we see in our technological, social and economic worlds.’

In evolutionary terms, the economy is a ‘complex adaptive system’ , where the parts of a system adapt their behaviour in response to events, (other examples include ecosystems and the internet) and produce an overall system whose behaviour is much more than the sum of its parts. Complex adaptive systems exhibit oscillations, periods of calm punctuated by sudden spikes of change and ‘power laws’ – extreme events are more frequent than predicted by classical Gaussian (or normal) distributions. The mother of all spikes is the extraordinary take off in global growth since 1750 (see graph) – an event Beinhocker puts down to the combination of the Scientific Revolution and the creation of organized markets. Science accelerated the process of exploration and innovation; markets provided rapid means to select and amplify success. 

He contrasts the fact that the economy really is an evolutionary system with the way traditional economics has used physics as metaphor, which he thinks has led it up a blind alley. Economics started off as a branch of moral philosophy (e.g. Adam Smith), but in the 19th Century underwent a bout of severe physics envy. The key figure was the Frenchman Leon Walras, who in ‘Elements of a Pure Economics’ (1872) borrowed from physics the notion and mathematics of the study of motion and energy. At its heart lay the concept of ‘equilibrium’: the economy is like a ball in a bowl, oscillating before it settles at an equilibrium point. Mainstream economics for the next century portrayed the economy as moving from equilibrium point to equilibrium point, propelled by external shocks (technology, politics etc). It was an extraordinarily powerful metaphor, which has become deeply embedded in how we think about the economy.

But it is just a metaphor, and in many respects it is misleading. To enable him to use the mathematics, Walras had to make a number of assumptions that have bedevilled economics ever since, such as zero transaction costs, a single price for any given commodity, or that economic decision makers interact only through price, and usually through an auction mechanism. ‘Walras’s willingness to make trade-offs in realism for the sake of mathematical predictability would set a pattern followed by economists over the next century’ Beinhocker concludes.

As a result, economists have had to live with the discomfort of ‘cognitive dissonance’, a gap between what they see around them, and what they believe to be true. As Alan Greenspan once noted ‘a surprising problem is that a number of economists are not able to distinguish between the economic models we construct and the real world.’ Sometimes that dissonance was extreme – when the hedge fund Long Term Capital Management collapsed in 1998, nearly taking the US financial system with it, its baffled Nobel-prize winning founder, Robert Merton, explained ‘According to our models, this just could not happen.’

Beinhocker believes that ‘Complexity Economics’ offers the new paradigm that will allow economics to reinvent itself. In contrast to the vacuities of the ‘Third Way’ propounded by Tony Blair and Bill Clinton, ‘The Complexity approach to economics offers not just a muddled middle – it is neither Neoclassicism with a few market failures, nor socialism with a few market mechanisms – but a wholly new perspective. The fundamental question isn’t Left versus Right; it is how best to evolve.’

So what? What should we be doing differently? This is where Beinhocker rather loses his way – he has some good ideas on what it means for businesses (he does after all, work for the McKinsey management consultancy), and some random, not terribly convincing, thoughts on politics and policy. To be fair, he says at the outset that his is a ‘Sunday morning’ book, i.e. big picture, rather than trying to answer the usual ‘what do I do on Monday morning?’ question. But I think working out in more detail what this all means for policy, NGOs, our understanding of change etc is really worth exploring – I’ll have a go at some of these in the next couple of days.

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I’m taking a two week break from the blog over Christmas, (should be long enough to get over any withdrawal symptoms). This blog was originally designed to help launch From Poverty to Power. That is largely done now - the book is in its 4th printing and doing fine, the Spanish edition is out, with Italian and Portuguese versions due out next year.

But I’ll keep the blog going on general development issues in 2009 because it promises to be a landmark year for development (and also because blogging is fun….). The financial and economic meltdown is likely to deepen, perhaps providing the kind of shock needed to galvanize leaders (e.g. at the G20 summit in April) into overhauling a system that has proved dangerously volatile and delivered far too little for poor people everywhere. In December in Copenhagen a new deal on the way the world uses and abuses carbon has to be struck if catastrophic climate change is to be averted.

I don’t really do oratory (more of a self-doubt and glass-half-full type of person), so I’ll leave the inspirational last (tongue in cheek) word to the people who do it best - Hollywood (thanks to Global Dashboard for the link). In fact a bargain 40 inspirational speeches in 2 minutes - can you name them all?  See you in 2009.

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I didn’t attend last week’s climate summit, but I’ve talked to a few Oxfam staff who did, and got to thinking about how the talks compare with other negotiations, especially on trade. (For a more specific debrief on the Poznan outcome see here).

It feels like Poznan represented a shift in dynamics, from aid to trade, or from New Testament to Old. Let me explain. In terms of political economy, the key difference between international negotiations on aid and those on trade is that trade talks are fundamentally a domestic issue – changing trade rules creates winners and losers within rich countries, who lobby hard for their interests. Politicians ignore them at their peril. In contrast, aid is primarily a broadly dispersed taxpayer issue, and quite a small one at that, so that negotiators do not come under the same degree of scrutiny and pressure.

And the biblical reference? Personal shorthand – aid is about ‘love they neighbour’, trade negotiations are more like ‘eye for an eye, tooth for a tooth’. Up until Poznan, the EU in particular appeared ready to behave in a somewhat disinterested, New Testament fashion. Both member states and the Commission seemed to be listening to the evidence, agreeing the aggressive ’20-20-20’ plan in January 2008 - a comprehensive climate and renewable energy package designed to reduce carbon dioxide emissions by 20 percent by 2020, increase to 20 percent by 2020 the renewable energy share of the energy mix, and improve energy efficiency by 20 percent by 2020. That, and the EU’s avowed readiness to channel significant funds to poor countries for adaptation, looked like the ingredients of a grand bargain on climate change.

That was then; this is now. Poznan saw a gathering backlash within the EU, which dragged its feet on helping poor countries to adapt (only a concerted barrage from developing countries and NGOs forced them to back down and allow developing country governments direct access to UN adaptation funds, rather than being forced to go through intermediaries like the World Bank), but then they blocked efforts to raise the amount of adaptation funds available, which currently fall pitifully short of what’s needed. Goodwill and trust took a battering, and it feels like the climate change talks have entered their hardball phase.

Why the shift? I find it helpful when thinking about these processes to look at the ‘three I’s’: Ideas, Interests and Institutions. In the case of the channel for adaptation finance, it looks more like a problem of ideas and institutions – EU officials basically don’t trust developing country governments to manage their own affairs. They eventually reversed their position on that, but on the volume of funding, interests also kicked in. With billions dependent on the outcome, an increasingly well-organized and experienced corporate lobby also ensured that back in Brussels, the EU watered down the 20/20/20 deal right in the middle of Poznan. Less money will be raised because polluting European industries successfully lobbied for many emissions permits to be handed out free rather than auctioned, and the reduced income that accrues will no longer be earmarked for adaptation. Public backtracking on that scale in front of the rest of the world unsurprisingly further soured the mood in Poznan.

The countervailing forces needed both within the EU and beyond will have to involve progressive industrial lobbies (eg the renewables sector), mass mobilization by civil society organizations and a much greater degree of courage and political leadership than was on offer in Poznan, including from developing countries. Where is the climate change Mandela? Will Obama pick up the baton so publicly dropped by Europe in Poznan? The road to the Copenhagen COP in December 2009, supposedly the culmination of the climate change talks, is looking a good deal steeper after Poznan.

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And unfortunately, I mean killer, although there is progress to report too. This cup half full/half empty analysis comes from a new country study for Oxfam’s Essential Health Services Campaign.

The good news:

• Increased funding and new policies to ensure greater access to health care have resulted in some successes – with nearly a third more children able to see their fifth birthday today than eight years ago.
• Much of the progress is down to the Malawian government’s launch of a basic ‘Essential Health Package’ in 2002. This aims to provide free access to essential health care in government clinics in order to treat some of the main ill-health problems in Malawi, such as malaria, diarrhoea, and respiratory infections. This has been a major breakthrough - in one hospital in the Dowa district, making maternal care free resulted in a 30 per cent increase in antenatal visits, and a 44 per cent increase in assisted deliveries. The World Bank has cited the EHP as one of the key reasons why health provision is more equitable in Malawi than in other African countries.
• The EHP has been part of a four-fold increase in overall national health spending (including spending for HIV and AIDS), between 2002 and 2006, accounting for approximately 10 per cent of total government expenditure. The Malawian government is expected to exceed the Abuja commitment of spending 15 per cent of their national budget on health from 2007–2008.
  Close to 130,000 people countrywide are now on vital anti-retroviral therapy (ART) for HIV, up from virtually nil only five years ago.

But an awful lot of bad news remains:

• Life expectancy is 46 years.
• The infant mortality rate remains high and on average one woman in every hundred will die in pregnancy or childbirth.
• There are only 252 doctors for the entire population of 13 million. There are four qualified dentists working in the health system.
• The nursing to population ratio in Malawi is 1:3500, compared to 1:1000 in Africa as a whole, and 1:102 in Germany
• 25–30 per cent of health professionals will die of AIDS in the next decade,
• Per capita spending on health in Malawi is approximately $14 per year. Spending by households on health care is very high: approximately $4 comes from out-of-pocket expenditures, $4 from government, and $6 from donors. Funding for health is $20 short of the $34 dollars per capita proposed by the Commission for Macroeconomics and Health.

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After Monday’s fairly depressing post, I thought I’d add some good news, from an unlikely source. Perhaps because it can break free from its heavy ideological baggage of laissez faire, the further the Economist strays from economics, the better it gets. This week’s issue has some really nuanced reporting on the impact of the International Criminal Court (ICC), on the cluster bomb treaty, and some good news (so far) on Ghana’s elections.

When the ICC indicts someone like Joseph Kony, the leader of Uganda’s Lord’s Resistance Army, opinion usually splits down the middle between those who say such indictments can obstruct the search for peace, and others who argue that justice must prevail, whatever the short term political difficulties, and that in the long run, such cases will deter future generations of rights violators. The Economist’s anonymous correspondent (for some reason it eschews bylines – v annoying) argues that the impact has been more subtle and positive than this, often leading to hybrid processes that combine the ICC with national judicial proceedings. Rather than replacing or undermining national processes, the ICC can actually strengthen them. This has already happened in Sierra Leone, with convictions and 50-year sentences being handed out for war crimes. Similar exercises are under way in the Lebanon (to try the alleged assassins of former Lebanese prime minister Rafik Hariri) and Cambodia and could happen in Uganda.

On the cluster bomb treaty, the magazine argues that even though the US, along with Russia and China, did not sign up to the treaty in Oslo on 4 December, the political price of using cluster bombs has risen even for non-signatories (e.g. what happens if the US wants to deploy them in a NATO operation, and allies such as Britain, Germany or France that have signed the treaty oppose the move?) A similar thing happened with the 1997 landmines treaty, which was effectively observed by some countries that hadn’t signed it.

Both stories highlight the way that international law, although often legalistic, obscure and hard to enforce in any rigorous way, can nevertheless influence behaviours at both national and international level.

On 10 December, exactly sixty years after the Universal Declaration on Human Rights and after several decades of work and campaigns by human rights NGOs, the UN General Assembly adopted, by consensus, an Optional Protocol to the International Covenant On Economic, Social And Cultural Rights (ICESCR). Not exactly front page (or any page) news, but it establishes an international complaint mechanism that will also help develop the content of ESC rights and related States’ obligations, as well as give guidance to national courts and human rights institutions. It could mark another stage in the drip drip effect of international rights legislation in shaping values, norms and national law, perhaps offering hope at the international level for victims who cannot get redress through their domestic legal system.

Finally, given all the setbacks following elections in Kenya and Zimbabwe this year, there was some good news from Ghana, where elections on 7 December (the president John Kufuor is standing down voluntarily after two terms, so he’s a shoo-in for the Mo Ibrahim prize) were peaceful and fair, and produced no overall majority, leading to a run off on 28 December between the two leading candidates, Nana Akufo-Addo of the ruling New Patriotic Party (NPP) and John Atta Mills of the National Democratic Congress (NDC). The run off will test Ghana’s democratic credentials to the full, as will a much more systemic challenge – the discovery of large deposits of offshore oil, due to come on stream by 2010.

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Why are ‘change studies’ not a recognized academic discipline? Politicians, social movements and NGOs think about little else, and portray themselves as ‘change agents’, but the intellectual basis for thinking about political and social change seems particularly arbitrary and threadbare. In discussions on this issue at various book launches and seminars, a few people have asked for references, so here goes:

In an annex, From Poverty to Power sets out an initial framework for analysing change, arguing that it can be disaggregated into four kinds of components:

• Context (big picture stuff like demographics, new technologies)
• Institutions (both formal and informal)
• Agents (including active citizens and effective states)
• Events (economic crises, natural disasters, elections)

The book argues that understanding change involves unpacking how these different components interact and generate particular pathways of change. Here’s a graphic that tries to show the interaction with the core theme of the book, active citizens and effective states.

The book then applies this methodology to eight case studies:

• A revolution and land rights for Bolivia’s Chiquitano people
• Winning women’s rights in Morocco
• African success stories: Botswana and Mauritius
• Winning pond rights in the fishing communities of Tikamgarh, India
• South Africa’s Treatment Action Campaign
• India’s campaign for a National Rural Employment Guarantee
• The 1997 Mine Ban Treaty
• The 2005 Gleneagles agreements

Unfortunately, these are not available as separate PDFs, so you’ll have to download the relevant sections of the book here.

This work in turn draws on two main sources, an excellent background paper by Roman Krznaric, comparing the change models used in 14 different academic disciplines, and some pioneering work on ‘drivers of change’ by DFID. It’s also worth looking at Sue Unsworth’s paper for a recent ‘how change happens’ panel we organized at the Development Studies Association annual conference in London. I’ve also blogged before on shocks and change, and complexity, chaos and change.

I’m keen to develop this work further, not least because Oxfam GB has introduced a process of ‘national change strategies’ through which each country programme has to conduct a three yearly national change analysis on which its work should be based, and we need a decent toolkit for analysing change. All suggestions for further reading welcome!

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The futurologists (from NIC, ippr, and DCDC) have been busy, with varying degrees of success. The US Government’s National Intelligence Council has a good report out, ‘Global Trends 2025: A Transformed World.’  Media coverage has focussed on its predictions of US decline and the ‘rise of the East’, but it’s much richer than that. Here are a few examples from the two page summary table of ‘relative certainties’ and ‘key uncertainties’ (known knowns and known unknowns in Rumsfeld-speak):

Relative Certainty: The United States will remain the single most powerful country but will be less dominant.
Likely Impact: Shrinking economic and military capabilities may force the US into a difficult set of tradeoffs between domestic versus foreign policy priorities.

Relative Certainty: Continued economic growth—coupled with 1.2 billion more people by 2025— will put pressure on energy, food, and water resources.
Likely Impact: The pace of technological innovation will be key to outcomes during this period. All current technologies are inadequate for replacing traditional energy architecture on the scale needed.

Key Uncertainty: Whether global powers work with multilateral institutions to adapt their structure and performance to the transformed geopolitical landscape.
Potential Consequences: Emerging powers show ambivalence toward global institutions like the UN and IMF, but this could change, as they become bigger players on the global stage. Asian integration could lead to more powerful regional institutions. NATO faces stiff challenges in meeting growing out-of-area responsibilities with declining European military capabilities. Traditional alliances will weaken.

Couple of comments – as with many such reports, it feels more like an extrapolation of existing trends, and so more like ‘the world to 2015’ rather than 2025 – the further out from the present, the more unforeseen wildcards are likely to produce ‘unknown unknowns’, for example technological breakthroughs like the internet, political shocks like the fall of the Berlin Wall, or natural events, like a major climate change tipping point such as methane release or melting ice caps.

Secondly, the impact of climate change is in there, but the impact of the response to climate change is pretty thin (e.g. there is no breaching the taboo on discussing limits to growth if we fail to find a technological magic bullet in time).

For a non-spook thinktank version, there’s IPPR’s, sorry, ippr ’s (isn’t it getting a bit naff to try and look modern by using lower case for acronyms instead of upper case?) ‘Shared Destinies: Security in a Globalised World’, bringing together enough serious foreign policy and security heavyweights to justify the rather grandiose subtitle ‘The interim report of the ippr Commission on National Security in the 21st Century.’ Here, in slightly abbreviated form, are the Commission’s 13 perspicacious (if largely depressing) ‘observations’ about the state of world security. It then goes on to set out some general principles for responding to the new world order, and a series of more specific recommendations.

1. Globalisation is fuelling a massive redistribution of economic and political influence from the Atlantic seaboard to Asia and the Pacific, increasing interdependence between states, empowering non-state actors, and creating new opportunities for both legitimate and illegitimate action in a largely unregulated and uncontrolled global space.

2. A world population of 9.2 billion by 2050, only 1.25 billion of which will live in developed countries, means the end of the West as the pivotal region in world affairs, intense pressure on natural resources, an increasingly marginalised global majority, and increased migration flows from poor to rich states.

3. Climate change is likely to reduce and shift the availability of habitable land, food and water, to exacerbate inter-state tensions and to generate forced movements of people. Weak and failing states in Africa and parts of Asia will face serious challenges in attempting to respond to climate change. The phenomenon may even play a key role in shaping the character and outlook of major powers such as China.

4. Weak and unstable states outnumber strong and stable ones by more than two to one, and state failure and sometimes collapse will be a highly visible feature of the international security landscape for decades to come. 

5. Massive global poverty is a contributing factor to this development and when combined with inequality, particularly horizontal ‘between group’ inequality, acts to fuel violent conflict.

6. Conflict itself remains an enormous problem. While the figures indicate that instances of violent conflict are declining, the estimated number of people displaced by conflict is at its highest since the early 1990s, and campaigns of one-sided violence in which civilians (particularly women and children) are targeted and terrorised have become increasingly prevalent. Conflict and the pressures of poor governance, including weak or absent rule of law, are creating both ‘swing states’ in the struggle for international peace and stability, and the risk of ungoverned spaces that become havens for criminal and terrorist activity.

7. Transnational criminal networks have expanded their trafficking operations in drugs, arms and people and are undermining and corrupting state governance arrangements in many countries, facilitating and profiting from violent conflict in the process.

8. Since the end of the Cold War, we have entered a second and far more dangerous nuclear age in which renewed state proliferation is a major threat, stockpiles of dangerous nuclear materials remain insufficiently secure, and terrorist groups actively seek a nuclear capability.

9. Terrorism using conventional weapons remains the most likely challenge but the threat of technologically sophisticated chemical, biological, radiological or nuclear (CBRN) terrorism is real and no longer comes only from organised groups like Al Qaeda and its imitators, but also from lone individuals with relevant expertise and access to the necessary technological infrastructure.

10. Rapid advances in information technologies and biotechnologies are creating new vulnerabilities for national and international security. Cyber-crime and cyber-terrorism are already realities. New discoveries in biotechnology put to deadly purposes would have terrifying implications.

11. Humanity is increasingly vulnerable to infectious disease and to the possibility of new and devastating global pandemics. Population concentrations in urban centres in the developing world, global people movement on an unprecedented scale, an increased criminal trade in animals and animal-related products and the growth of drug-resistant diseases are combining to enlarge this threat.

12. Governments around the world own less of their critical national infrastructure and private sector organizations have become more important to delivering security and societal resilience as a result.

13. The UK is not and cannot be insulated from any of these developments and has a clear stake in ensuring that this does not happen.

Alas, as is often the way, the Commission’s diagnosis is more impressive than its recommendations, but both the NIC and ippr reports compare favourably with that of the UK Ministry of Defence’s Orwellian-sounding Development, Concepts and Doctrine Centre (DCDC). ‘The DCDC Strategic Trends Programme 2007-2036’ identifies the right issues: climate change, globalization and global inequality, but the analysis is boyzone stuff, focussing almost entirely on technology and warfare. This is perhaps not surprising since of the 29 people listed in the acknowledgements, 29 are men. Of the three ippr (surprise, surprise) gets my vote, despite the acronym - the Commission’s final report is out in June.

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My predecessor at Oxfam, Kevin Watkins, went off into the labyrinth of the UN system where he has produced a series of monumental reports. At UNDP he led (i.e. wrote) a series of landmark Human Development Reports on International Cooperation, Water and Sanitation and Climate Change. From there it was off to UNESCO where his latest tome, the Education For All (EFA) Global Monitoring Report 2009, has just been published.  It offers a fantastic overview of the state of education provision in the developing world.

The Report’s main message is in its subtitle ‘Overcoming Inequality: why governance matters’. It acknowledges what it calls the ‘remarkable progress’ made since the World Education Forum in Dakar in 2000, for example in the accelerating improvement in net enrolment rates in primary school (from 1999 to 2006 these went up from 54% to 70% in Sub-Saharan Africa, and from 75% to 86% in South and West Asia). But unsurprisingly, it mainly focuses on the ‘glass half empty’ part. Its key findings include:

The need to think beyond primary to pre-school and secondary and tertiary education, where massive gaps persist between rich and poor countries and people (at age 20, 30% of OECD citizens are in education, compared to 2% in sub-Saharan Africa).

The importance of addressing inequality of provision (both quantity and quality) within countries. Poor children, girls, ethnic minorities and disabled kids often receive no or inferior schooling which holds them back for a lifetime.

In a manner similar to the ‘Social Determinants of Health’ report, it highlights the need to address other areas of deprivation – nutrition, public health, social protection etc – if children are to make the most of access to education.

There is a strong two-way interaction between good quality education and other development goals, such as growth with equity, and increased support for multiparty democracy and active citizenship

Quality: in sub-Saharan Africa, fewer than 25% of grade 6 pupils could read properly, and only 10% in six others

Quantity: sub-Saharan Africa needs to recruit 3.8 million new teachers between now and 2015 if it is to achieve universal primary education; low income countries are still spending significantly less on education as a proportion of their GDP;

Aid: levels of aid to education are stagnating; the Fast Track Initiative has failed to galvanize new money and could be facing a $2.2bn shortfall by 2010.

Governance: decentralization and/or transferring responsibility to communities or the private sector is not a panacea, especially in terms of equity – ‘central government should retain a strong role in equalizing the distribution of education finance …. There is no substitute for fixing public basic education systems.’ Moreover, ‘private schools with state subsidies do not register any advantage over municipal schools once adjustments are made for socio-economic status.’

All this dotted with Kevin’s signature combination of killer facts and punchy graphics (a couple included here). Well worth a look.

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From Poverty to Power is explicitly not official Oxfam policy, but its combination of literature review, programme experience and extensive discussions, both within Oxfam and beyond, highlights a series of challenges to ‘business as usual’ in the development sector. In response to a number of requests, Penny Lawrence (OGB International Programmes Director) and I put together this initial short-list.

1. What difference does inequality make? Using inequality, rather than poverty, as your starting point takes you in different and potentially more interesting directions. Inequality is about relationships – within households, communities, countries. Reducing inequality by rebalancing power, opportunities and assets is central to development. But how different is that from what we are doing already? If we applied an ‘inequality lens’ to our work, what would we do less/more of? Progressive taxation? Land reform? Birth registration?

2. Do we have a religious blind spot? Religion is a key driver of active citizenship (both good and bad) in many communities. While many believers work in development agencies, and figure prominently among their supporters and overseas partners, the development industry remains largely secular. How could we improve our understanding of the links between faith, religion and development, and engage more constructively with different faith groups?

3. Is it time to go urban? For the first time in history, the world’s population became majority urban in 2007. Burgeoning shanty towns are home to a billion people now, rising to 2 billion by 2030. Yet a glance at their websites will show you that many development agencies continue to focus on rural areas. They argue that this is because most poor people still live in the countryside (and are predicted to do so until 2040). But the shanty towns will probably be home to the new social and political movements in the years to come: urban change is a messy affair, involving some familiar issues - water, education, health and some unfamiliar ones - housing, crime and property rights; do rural-centric development agencies need to follow the migrants into the shanty towns?

4. Is building effective states part of our remit? What is the role of international NGOs in building states (identified in the book as critical to development success)? Do NGOs have an anti-state bias – how many staff see the state as part of the problem, not part of the solution? In both effective and ‘fragile’ states, do we need to work with local government institutions, often following decentralization processes? Where has this been successful? Or should NGOs stick mainly to supporting active citizenship, and their ‘convenor’ role, facilitating dialogue between citizens, states and other actors, such as the private sector?
 
5. Are we biased against waged labour? Experience suggests that what poor people often want more than anything else is a regular wage: job creation is one of the most effective ways to reduce poverty. Yet NGOs can often be ambivalent about labour markets – they support (and campaign for) modern, formal, unionised labour, but in other situations, seem to prefer peasants to casual labourers. Would we rather have no jobs or bad jobs? What determines our view? How much are we listening to the communities we work with?

6. How do we integrate humanitarian and development work better? The book gives added urgency to this organizational chestnut, stressing the role of shocks in driving long-term social and political change and pointing out that many of the emerging issues in development (climate change, social protection) sit between the two camps. These may eventually prompt a wholesale restructuring away from separate ‘humanitarian’ and ‘development’ departments, but in the meantime, perhaps the best way forward is to identify the best forms of integration across different types of emergency and at different stages of the humanitarian cycle. These would require incorporating issues such as partner strengthening, social protection, institutional and policy reform into our humanitarian work as an emergency develops.

7. The future of INGOs: Although the book avoids large doses of navel-gazing on our role, it does raise some difficult issues on accountability (why have agencies often demanded less of themselves than they have of many corporates?) and political engagement (we need greater clarity on e.g. what it means to be ‘impartial but not neutral’; the difference between becoming more politically literate, and becoming political actors)

8. National v global: The book argues that development remains primarily a national process, born out of the interaction between citizens and states. Global forces, including rich world activists and INGOs, can help or hinder, but they are not the main actors in the drama. That analysis holds implications for how we design both our national programmes and our international campaigns (e.g. Make Poverty History), where big “global” messages can seem incompatible with the analysis of where change really happens.

9. We need a better way to analyse change: Oxfam, along with many other NGOs, describes itself as a “change agent” – but agreeing and making explicit our understanding of how change happens is difficult. From Poverty to Power’s annex on change builds on DFID’s ‘drivers of change’ work and proposes an analytical framework covering both drivers (context, institutions, agents, events) and dynamics (e.g. path dependence, lightbulb moments, alliances), which it applies to eight case studies from individual grassroots struggles to the Gleneagles G8 Summit. However it is still pretty abstract and needs to be refined through experience.

10. And finally, (cheating on the ‘10 challenges’ format here…) three other candidates for the short list:
· Migration: we need to understand better its role in development (both internal and international migration) and what policy or programme actions can increase the benefits to both sender communities and migrants themselves
· Democracy: we have a default preference for democracy, but how central is it to development? Does it distort our understanding of active citizenship and development in countries like China and Viet Nam?
· Technology: critical to development, yet many NGOs are instinctively ‘anti’ – stressing issues of risk and control over access to knowledge, and seldom supporting any new technologies (except renewables).

It would be great to hear your views on these (whether you work for Oxfam or not). What stands out? What have I missed? Over to you.

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I’m no apologist for the Cuban government, but it’s noteworthy that despite its much lower GDP per capita, Cuba keeps beating much richer countries in social and environmental league tables drawn up by some highly respectable NGOs. In the aftermath of Hurricane Katrina, Oxfam America contrasted the carnage in New Orleans with Cuba’s extraordinarily effective disaster response. Then the Worldwide Fund for Nature’s 2006 Living Planet report identified Cuba as the only country that achieved high levels of human development while living within its environmental footprint. Now Save the Children UK has developed a new Child Development Index (CDI) and sure enough, there is Cuba at number 20, the highest placed developing country and three slots above the USA.

Launched today, the CDI builds on the UNDP’s work on the Human Development Index (indeed Terry McKinley, formerly of the UNDP’s International Poverty Centre and now based at SOAS in London, was involved in both). It combines three indices of child deprivation: non-enrolment rates in primary school, moderate or severe malnutrition and infant mortality to give countries an overall score. Of the 137 countries with reliable data, Japan comes top, Niger comes bottom, So what did all this number crunching reveal? In a seminar on Tuesday, SCF UK’s head of policy David Mepham gave his three headline findings as:

1. Nutrition is a massively neglected issue in development: progress on malnutrition is slower than on the other two indicators, malnutrition accounts for 3.5 of the 9.2 million child deaths every year, and some countries perform worse on child nutrition than their GDP per capita would suggest. India for example has child malnutrition rates approaching one child in every two.

2. Growth is not enough: growth is a very blunt instrument for improving children’s wellbeing (back to Cuba v US again)

3. Equity matters: issues of rights, power, discrimination and exclusion are crucial in understanding children’s wellbeing (or lack of it).

 The index, which comes along with a nice interactive map on the website, could become a very useful addition to the range of measures of development. So far, so good, but I think SCF could have gone further in two areas: firstly, it would have been interesting to make an explicit comparison between country performance on child development, compared to its ranking in the Human Development Index or GDP per capita league table, to assess which countries are particularly child (un)friendly. Cuba, for example, is only number 51 in the HDI league table, presumably reflecting its lack of economic dynamism. But what other patterns emerge?

Secondly, it could have tried to include measures of inequality, or even trickier issues such as children’s voice, agency and enjoyment of rights. These are harder to measure, but figure prominently in the International Convention on the Rights of the Child, which guides SCF’s work. Of course, adding equity would have meant Cuba ended up even further in front of the USA!

Which brings me back to the dangers of an excessive focus on indicators. I’ve agonised about this before on the blog, so I won’t repeat myself. Instead, I’ll end with a joke: One night a policeman saw a macroeconomist bent double scouring the gutter beneath a street light. He asked him if he had lost something. The economist pointed to a spot a hundred yards down the road and said, “I lost my keys over there in the alley.” Unsurprisingly, the policeman asked him why he was looking for them under the street lamp. “Because this is where the light is,” explained the economist. For light, read data – its availability draws us inexorably away from the keys and towards the streetlamp like (to mix a metaphor) moths to a flame. But what if those were the keys to development we were looking for?

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I’ve always been a bit of a Tobin Tax sceptic, which made for interesting domestic dynamics when my wife Cathy was director of War on Want, one of the main TT advocates in the UK (she’s since moved on to become a psychotherapist – I say it’s a natural progression from NGOs; she doesn’t think that’s funny). Now, however, even Dani Rodrik is weighing in on the issue, so it’s time to have another look.

The Tobin Tax, just to remind you, was first advocated by economist James Tobin in the 1970s, and consists of a very small tax (typically something like 0.1%) on the huge number of currency transactions that take place every day on global markets. And I mean huge – the latest figure from the Bank of International Settlements is that the daily global turnover on currency markets in 2007 came to $3.2 trillion – 90 times the volume of global trade. Even a small tax on that large a volume could raise significant amounts of cash ($3.2 billion a day in fact, except that the amount would probably be less than that since the tax should reduce arbitrage - large, short term capital flows seeking to make a profit from tiny anomalies in exchange rates).

The trouble is, Tobin Tax advocates claim it would ‘kill two birds with one stone’ by also damping down currency speculation and that’s the bit I don’t buy. A  0.1% tax is not going to deter a George Soros-type speculator who scents a massive windfall from a speculative attack on a given currency, (Soros made an estimated £1bn on ‘Black Wednesday’ by forcing the pound out of the European exchange rate mechanism in 1992). It really is very hard to kill two birds with one stone (try it sometime). Some Tobinites have refined the proposal to provide for a much higher second tier tax (the so-called Spahn tax) which kicks in when a speculative attack is under way. But that’s really just suspending currency transactions by imposing a prohibitive penalty during periods of speculative attack, and dressing it up as a tax.

Back to Rodrik. A recent piece on his blog arrives at the Tobin Tax by a very different route. He argues that an emergency injection of cash into the US economy by the government will not generate US jobs and investment (but will merely lead to increased imports and a deteriorating trade balance) unless one of two things happen: either the US government has to increase trade barriers so that the cash stays in the US economy, or there has to be a simultaneous fiscal stimulus across all the globe’s major economies. How to pay for it? You guessed it – step forward Prof Tobin. And while we’re at it, a Tobin Tax could pay for some of the other big bills that are falling due, like the $50bn a year needed to help developing countries adapt to climate change that is not of their making.

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