Pim Verhallen: Wide-ranging analysis, debatable conclusions (and some blind spots)

Development Policy05 Feb 2010Pim Verhallen

There is no doubt that the WRR has produced an important, in some aspects ground-breaking, analysis of the state of affairs in development cooperation. (I’d still prefer this usage: it is frivolous to qualify ‘cooperation’ as a salute to political correctness and go back to ‘aid’).

The report is a very timely and useful synthesis, especially in the historical and analytical chapters (for example when tracing the motivational roots of development cooperation), and also because the development community is facing increasing difficulties in seeing the wood for the trees. As the impressive list of literature reviewed shows, the number of research reports, books, and evaluative and other studies has grown over the years to such an extent that, in combination with the wealth of material available through the web, nobody can hope to keep abreast: information overload has become problem (also I suspect, for the WRR).

The report is also ground-breaking, not so much when proposing new elements for the architecture of aid (we’ve seen a lot of those during the last 30 years) but especially when introducing newer elements to the debate. That is the case, for example, when identifying in chapter five a very useful overview of the main challenges facing us, such as the absence of ‘an intervention ethic’ – a reflection on when to step in (and when to step back) and the need to understand and counter unintended consequences of aid and related issues. To my mind, other correctly identified problem areas include fragmentation (to which we could add the disastrous levels of bureaucracy, reflecting the loss of trust in the aid system), and globalization-related issues such as migration, financial instability and trade, which have yet to be integrated into development thinking.

One of the issues raised by the report that is guaranteed to generate much debate refers to the disparity between poverty reduction and aid ‘targeted at growth’: chapter six includes a paragraph vigorously pleading for more ‘aid for development’ i.e. economic growth. This seems to be based on various assumptions that need to reviewed. First, the editors illustrate this perceived gap with a graph (page 120) showing a substantial jump in ODA transfers for ‘social infrastructure and services’ (to the detriment of transfers for economic/production-related areas). This gap indeed started to grow in the middle of the 1980s. It is a pity the editors did not relate this to the effects of the neo-liberal structural adjustment programmes starting to be implemented around that time, when debtor states were obliged by IMF/World Bank conditions to sharply decrease their social spending. The resulting hardship for the poorer sectors in many cases threatened political stability, this leading to larger, compensatory transfers (the so-called social investment funds) for the health and education services, especially in the HIPC countries. Secondly, because the editors only focus on Dutch development transfers, they do not include the rather massive investments by the multilateral organizations and the regional development banks in the same time frame and in the economic/productive areas: it can hardly be their intention to put Dutch development aid in competition with those financial institutions. Thirdly, although rejecting notions of social engineering and large-scale ‘change scenarios’, they seem to hark back to the now thoroughly discredited notion of the ‘trickle-down’ effect of economic growth as part of the reasoning for more growth-related transfers. Finally, the report’s assertion that investment in health and education does little to contribute to ‘development’ (as ‘growth’) is rebutted by a wealth of serious research, by the World Bank and UNDP among others.

This brings me to another area in which I take issue with the editors of the report: the thoroughly de-politicized analysis of poverty. Although the report contains references to the political mortgages on development and poverty reduction (‘aid is a dirty business’), it does not carry the analysis through in the implications this reality should have on development strategies. As the report correctly states (about India), poverty is, in many countries, a problem of redistribution. Growing inequalities, often a consequence of globalization and neo-liberal policies both in the North and the South, constitute a very serious problem in terms of political stability (affecting economic investment) and social cohesion: as such, they should figure prominently in any analysis of challenges facing the development agenda.

The reports starts out by summarizing and discussing the basic motivations supporting the notion that richer countries need to assist poorer countries. It identifies three basic motives: Sen’s ‘freedom’ philosophy; notions of ‘a better world’ (coming close to the ‘A better world is possible’ slogan developed by the World Social Forum); and the notion of ‘rights’ or rights-based development. The complexities facing development and development aid are huge, as the report shows convincingly. In addition, political mortgages weigh down on development as ‘change’, growing inequality and its implications threaten political stability and social cohesion. And globalization induces increasing levels of interdependence but also discontent.

In the concluding chapter, the report pleads for the definition of a new measuring stick or criterion for Dutch involvement in development that does not only centre on aid. The report correctly warns of the dangers of the present ‘split’ between domestic demands and the needs of developing countries. Given all these issues and this timely warning, it is a pity that the report does not take a stand on what should be the proper motivational base used as a compass for Dutch involvement in development. That base should be found in the progress made in human rights institutions (the more so because the Netherlands, in Article 90 of its constitution, commits itself to upholding and strengthening the international rule of law) and the fact that the majority of states have, by signing up to the major human rights covenants, told their citizens what they can expect from the state and what the state can be held accountable for. A case can and must be made for the conclusion that, in committing itself to this process, the Netherlands is part of a worldwide system governed, in principle if not yet in practice, by formalized rights and obligations: in consequence, Dutch aid efforts must be understood and defended as belonging to the domain of international obligations. To make that real should be part of our ambitions for the coming years.