Imme Scholz: You can’t buy development

Development Policy26 Feb 2010Imme Scholz

More aid doesn’t make the game – you can’t ‘buy’ development. Instead, the pathway towards prosperity is different for each developing country (as it has been for each country belonging to the OECD today). Development policy should not therefore continue looking out for a new blueprint or silver bullet every so often – development policy has to learn to adequately support (and not reinvent or manage or steer) these manifold processes towards prosperity. And in order to do that, Dutch development policy should become more professional, decentralized and independent, and it should radically concentrate its activities on fewer countries and sectors. This approach also offers an option for making progress with the division of labour envisaged (but not implemented) by the EU.

Dutch NGOs should redefine their role – they should focus on monitoring Dutch policies and their implementation, at national and global levels. They should not serve anymore as channels for Dutch public support to NGOs in the South. This support should be given directly to Southern NGOs.

Development aid should focus on promoting structural development – it should focus on growth, on the middle classes, on education, as well as on research and development. Direct poverty alleviation is important, but it does not lead directly and swiftly to growth and increased incomes.

But national prosperity increasingly depends on global collective action – both in the OECD countries and in developing countries. Therefore, development policy has to acquire a new identity, beyond classic aid. And as China, India and other developing countries turn into powerful global players, OECD countries need to update and broaden their relationships with these countries. Classical development cooperation does not provide a role model for what is needed in order to invigorate political dialogue and cooperation across many sectors between the Netherlands and its partners, for a modernized and more effective global governance.

These are – from my reading of the WRR study’s conclusions – the main statements, and they are provoking in their clarity. Congratulations to the authors!

These recommendations will be a good basis for reforming Dutch development policy and cooperation. And they could also serve as an input for debates and reforms elsewhere. The WRR authors let themselves be inspired and advised by past and ongoing reform processes across Europe, particularly in Norway, Sweden, the UK and Canada – successful reforms in the Netherlands could inspire other donors to revise their policies and organizational structures as well.

From a German perspective, it is interesting to note that after integrating development policy into foreign policy, the pendulum seems to be moving again in the other direction, towards more autonomy, based on considerations of professionalism and the inherently endogenous character of successful development processes. At the same time, the WRR authors stress that any institutional reorganization needs to avoid the fallacies of donor dominance – therefore, the decentralization of decision-making is important in order to carefully consider country-specific conditions. But policy coordination with other ministries too is also important: in a globalized world, the traditional distinction between domestic and foreign policies becomes redundant, as the authors point out, and many ministries will want to develop active relationships with developing countries.

Of course, a modernized, multi-sector approach towards international cooperation leads to new problems of policy coordination. What would then be the role of development policy? The WRR authors give a double answer to this question. Its first duty would be to manage NLAid in a reduced number of countries (mainly in sub-Sahara Africa) and sectors, and its second task would be to develop a Dutch globalization agenda. But how should development policy do that, with knowledge and experience being restricted to only a few LDCs? And is it realistic that the ministry of development elaborates an agenda to be adopted and implemented subsequently by other ministries, say environment/climate, economy/trade, science/technology? If these ministries engage in cooperation with developing countries, wouldn’t they also want to elaborate the strategies and policies on which this cooperation is based?

A final consideration is given to finance. From a German perspective, the Netherlands are famous for having achieved the 0.7% target for ODA. It therefore seems – at first sight – strange that the WRR authors criticize this target as having become meaningless: some countries achieved it, others seem to never be able to do that despite political declarations, and money can’t buy development anyway … so why bother with this merely quantitative target? However, the authors then correct this first impression by saying that money is important – but that decisions on budgets do not substitute decisions on the content and priorities of development policy. Direct aid, structural development and the provision of global public goods are areas where development policy will have to be active. Systematic targeted action in these three areas may increase the overall effectiveness of development policy and thus increase its legitimacy – and then budget debates could become different. Who would not want to invest more money into a successful policy field?