Poverty alleviation and participation in German development policies

Poverty & Inequality11 Dec 2009Klemens van de Sand

In the late 1980s, in response to the increasing criticism of the ineffectiveness of German development programmes, a number of new approaches and principles were included in German policies relating to development cooperation. Examples of these approaches include:

— the concept of the participatory fight against poverty, which requires the poor to be proactive in developing their own productive capacity;

— reaching target groups with the support of self-help organizations within the framework of bilateral government-to-government development cooperation;

— broadening the impact through structural development assistance;

— promoting financial and institutional sustainability;

— involving target groups as autonomous implementers of development programmes ; and

— promoting institutions to improve the underlying political and legal conditions for development.

The criteria for development cooperation adopted in 1991 (recently modified, but still applicable) are representative of the conceptual turning point in German development cooperation. These criteria made explicit the inherent human rights-based approach of the participatory fight against poverty. To the first three criteria (respect for human rights, involvement of the population in the political process, safeguarding the rule of law) indicators were assigned which were taken from the UN Human Rights Conventions.

With these new concepts and instruments, in the 1990s, the German Federal Ministry for Economic Cooperation and Development (BMZ) assumed a leading role in the international development discourse. Over the last decade, important initiatives arising from international development cooperation, further raised the profile of the participatory fight against poverty on the development policy agenda also in Germany – the Poverty Reduction Strategy (PRS) for implementing debt relief agreed at the 1998 Cologne G8 Summit, the United Nations Millennium Declaration in 2000 and the Millennium Development Goals (MDGs) based on the Declaration in the following year.

The BMZ responded to the Millennium Declaration with the ‘Action Programme 2015’, which outlined ten approaches that were to serve as ‘global structural policy’ under the ‘over-all goal of the fight against poverty’. Many of these topics are included in a similar form in the 2009 Coalition Agreement signed by the partners in the newly elected government of Germany.

Practical application: achievements

1. In recent years the project documents of German development agencies have increasingly come to terms with questions such as who are the poor, why are they poor and how the proposed measures will help to reduce their poverty. Significantly greater emphasis is also placed on concrete indicators of success in reaching targets.

2. The development cooperation for the benefit of women, who represent the largest group of the poor, has clearly been strengthened over the years.

3. The greatest successes are to be found in the area of financial system development. Since the pioneering promotion of the Grameen Bank, Germany has climbed ahead of the World Bank in its position as the world’s largest promoter of microfinance institutions, attaining top grading in international peer reviews of the Consultative Group to Assist the Poor (CGAP).

4. The Poverty Reduction Strategies (PRS) have broadened the political discussion. Participation is now to be based not just on projects, but rather is addressed as a problem of legitimacy and representation of relevant sub-groups in the entire national political system.

Practical application: deficiencies

1. A large obstacle lies in unsatisfactory methodologies. This applies to the analysis of the many dimensions of poverty, to the assessment of social, political and economic power structures and to measuring the effectiveness of poverty-reduction measures.

2. The political leadership of the BMZ has displayed a lack of interest in implementation, which is a substantial drawback. Many politicians appear to have a tendency to confuse making high-profile statements of goals with concrete policy.

3. In the practice of development cooperation, the role of institutions is still not being given the consideration it deserves. How else to explain the ease with which the Ministry tolerates the European Union budget support to over 40 countries, even though in many of these countries the required minimum of institutional pre-conditions obviously does not exist.

4. In most countries, the participation of civil society and of parliaments in preparing and monitoring the national poverty reduction strategies is limited, at best, to the provision of information and some form of consultation. In only very few countries one can claim that there is real participation of institutions truly representing the people.

The current discussion of the role of poverty reduction in German development policy

Globalization presents immense challenges for development policy making. Fighting poverty on a sustainable basis is becoming more difficult worldwide – including within Germany. It is markedly counterproductive to pit the supposedly altruistic goal of fighting poverty against Germany’s own political interests. As Chancellor Angela Merkel noted a few months ago, it is a unique feature of development policy to incorporate the interests of developing countries in the political decision-making process in Germany. This does not at all mean that development policy may not consider German interests, for example, in the areas of security or foreign trade. Furthermore, the protection of global public goods lies in the collective self-interest of all countries.

Of course conflicts of interest may arise. The BMZ’s unique goal of fighting poverty in developing countries distinguishes it from all other ministries. This holds true even though in the process of globalization further areas of responsibility are being added to the field of development policy, such as environmental protection, adaptation to climate change, energy security or promoting peace and human rights. These are all closely related to fighting poverty, but are legitimate areas of responsibility for development policy even without this relation.


It does not help the cause to run away from complex problems and seek refuge in simplification. Three such ‘attempts to escape’ are apparent in the present discourse about the future of development policy:

First, there is a move away from cooperation with (especially African) governments by assigning to all of them the blanket label of being corrupt toward cooperation with civil society organizations at the grassroots level. These are virtually glorified as knights in shining armour, as if no lessons had been learned in the last 25 years that the success of strategies aimed at fighting poverty does not depend solely on the ability of the poor to help themselves, but also on underlying national and international conditions. This multi-level approach, in conjunction with the multi-stakeholder approach, is a trademark of German development cooperation, which must not be given up. It is capable of changing structures, in that investments in what often turn out to be pilot solutions to local problems are tied to policy counselling and capacity building in government administration and service institutions at the national level. Yet, there still remains too much ‘stand-alone’ government counselling and too many local pilot projects without structural orientation.

The second movement is in the opposite direction, involving an interpretation of global structural policies that is too restrictive. In the last few years, the trend has been to transfer large sums to global funds, without giving sufficient consideration to the different impacts of the global crises on specific local conditions, while neglecting the participation of the people afflicted..

The third movement again conjures up the neoliberal mantra of economic growth by overemphasizing the role of the market and understating the role of the state. Anyone relying solely on economic growth forgets that the ‘trickle-down’ effect to the poor evidently does not work, even in democratic countries such as India. Enrichment is not possible without empowerment – and vice versa. If the poor become economically organized e.g. in self-help organizations like trade unions, user associations or cooperatives, they will also gain political power, which in turn is key to successfully pursuing their economic interests.


Fighting poverty and adapting to climate .change must be aligned. The financial architecture to do so is still largely open, at both the international and national levels. The ministries involved must ensure together that the experiences gained in implementing development policies are fully taken into account in planning and implementing climate protection and adaptation measures.

The following lessons learned from the participatory fight against poverty, have thus gained new relevance:

1. The productive potential of the populations affected must be the starting point and the objective of measures aimed at adaptation to climate change.

2. The influence of institutional and socio-economic conditions on the success of such measures is at least equal to that of biophysical factors.

3. The involvement of the people affected and their organizations must be assured by institutions. In order to be representative, participation, to the extent possible, should be institutionalized via organizations and self-help movements that are supported by their members.

4. What is needed are not only climate-related adaptation programmes, but integrated approaches that range from climate protection to e.g. supporting agriculture up to fair trade, depending on the situation.

Globalization has highlighted the political dimension of the fight against poverty. More than ever, what we need are comprehensive approaches and policy coherence, especially between development cooperation and adaptation to climate change. The current conflict between the relevant German federal ministries (and, likewise, within the European Commission) with regard to responsibilities for financing development cooperation and climate adaptation is counter-productive – above all for the poor in developing countries.