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DAC Guidelines on Poverty Reduction
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The draft guidelines are submitted for review at the
6th Meeting of the Implementation Group
3-4 October 2000, OECD, Paris
DAC Informal Network on Poverty Reduction
DAC Guidelines on
Poverty Reduction
September 2000 Draft
Page 2
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TABLE OF CONTENTS
Introduction .................................................................................................................................................... 4
The global poverty landscape...................................................................................................................... 4
A renewed commitment across the international system to fight poverty .................................................. 4
An overview of the Guidelines ................................................................................................................... 5
Why is it useful to have these Guidelines? ................................................................................................. 6
How to use these Guidelines ....................................................................................................................... 7
Chapter I. Concepts and Approaches............................................................................................................. 8
1.1
Introduction ...................................................................................................................................... 8
1.2
Concepts of poverty ......................................................................................................................... 8
1.2.1
The widening meaning of poverty .............................................................................................. 8
1.2.2
Defining poverty: relevance and utility ...................................................................................... 9
1.2.3
Poverty, gender and environment linkages............................................................................... 11
1.2.4
Measuring poverty: adequacy and practicality ......................................................................... 12
1.2.5
Who are the poor? Poverty lines and social categories............................................................. 13
1.3
Tackling poverty: from definition to strategic policy design ......................................................... 14
1.4
Policy action for poverty reduction ................................................................................................ 16
1.4.1
Economic policy, growth and structural reforms...................................................................... 16
1.4.2
Empowerment, rights and pro-poor governance....................................................................... 17
1.4.3
Improving basic services and widening access......................................................................... 17
1.4.4
Mainstreaming gender equality ................................................................................................ 18
1.4.5
Promoting sustainable livelihoods ............................................................................................ 18
1.4.6
Human security: preventing and managing shocks .................................................................. 19
CHAPTER II. COUNTRY OPERATIONS PROGRAMMING AND MANAGEMENT.......................... 22
2.1
Introduction .................................................................................................................................... 22
2.2
Situating poverty reduction in overall development co-operation efforts...................................... 22
2.3
Basic principles and priorities governing country programming and management ....................... 23
2.4
The challenges posed by working in partnership ........................................................................... 25
2.4.1
What does it take to establish good poverty reduction partnerships? ....................................... 25
2.4.2
Gauging commitment and assessing partnership performance................................................. 26
2.5
Working in different country contexts ........................................................................................... 28
2.5.1
A typology of countries ............................................................................................................ 28
2.6
Key aspects of an evolving partner country strategy framework ................................................... 29
2.6.1
Working collaboratively through local planning and decision frameworks ............................. 30
2.6.2
Co-operation agency support for designing national poverty strategies................................... 31
2.6.3
Strengthening commitment and follow-through for local co-ordination .................................. 32
2.7
The continuing role of development agency country strategies ..................................................... 32
2.7.1
Grounding the country strategy in a good understanding of the poverty context..................... 34
2.7.2
Building focused and effective country portfolios.................................................................... 34
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CHAPTER III. EFFECTIVE DEVELOPMENT CO-OPERATION FOR POVERTY REDUCTION
WHAT WORKS AND WHY....................................................................................................................... 37
3.1
Introduction .................................................................................................................................... 37
3.2
Development co-operation at the country level ............................................................................. 38
3.2.1
Policy dialogue and programme aid ......................................................................................... 38
3.2.2
National capacity-building........................................................................................................ 40
3.2.3
Debt relief ................................................................................................................................. 40
3.2.4
Assistance for conflict prevention and humanitarian aid.......................................................... 41
3.2.5
Conclusion ................................................................................................................................ 41
3.3
Sector and area-based development co-operation .......................................................................... 42
3.3.1
Sector programmes ................................................................................................................... 42
3.3.2 Area-based
approaches ............................................................................................................. 46
3.4
Projects and poverty-focused development co-operation at the local level ................................... 47
3.4.1
Projects ..................................................................................................................................... 47
3.4.2
Co-operation with Non Governmental organisations ............................................................... 48
3.4.3
Poverty-focused support ........................................................................................................... 49
3.4.4
Conclusion ................................................................................................................................ 50
CHAPTER IV. DEVELOPMENT AGENCY INSTITUTIONAL CAPACITY AND CHANGE ............. 51
4.1
Introduction .................................................................................................................................... 51
4.2
An empirical basis for change: the findings of the DAC Scoping Study ...................................... 51
4.3
Tracking changes in institutional practices .................................................................................... 52
4.4
Gearing up for mainstreaming poverty reduction: institutional factors ........................................ 52
4.5
Mainstreaming the poverty reduction agenda throughout the agency............................................ 54
4.5.1
Mainstreaming poverty as a multidimensional issue ................................................................ 54
4.5.2
Accounting for performance..................................................................................................... 55
4. 6
Issues that affect country level operations ..................................................................................... 56
4.6.1
Aligning agency procedures with partner procedures .............................................................. 56
4.6.2
Decentralising to the field......................................................................................................... 56
4.6.3
Support for partner country strategy development ................................................................... 56
4.6.4
Working in partnership ............................................................................................................. 56
4.7
Organisational structures and mechanisms to strengthen policy coherence................................... 57
4.8
Cultivating institutional change and learning................................................................................. 57
CHAPTER V. POLICY COHERENCE...................................................................................................... 59
5.1
Introduction .................................................................................................................................... 59
5.2
Globalisation and policy coherence ............................................................................................... 60
5.3
Policy areas .................................................................................................................................... 60
5.3.1
International trade ..................................................................................................................... 61
5.3.2
Natural Resources and the Environment .................................................................................. 62
5.3.3
Agriculture and food security ................................................................................................... 63
5.3.4
Global capital movements ........................................................................................................ 64
5.3.5
Social issues.............................................................................................................................. 65
5.3.6
Governance and conflict ........................................................................................................... 65
5.4
Towards policy coherence: lessons from experience in OECD countries...................................... 66
5.5
Towards Enhanced Policy Coherence............................................................................................ 68
Figures
Figure 1.1. Interactive dimensions of well-being and poverty................................................................. 10
Figure 1.2. Trade-offs in measuring poverty dimensions ........................................................................ 13
Figure 1.3. The links between policy action, causes and poverty outcomes............................................ 15
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INTRODUCTION
The global poverty landscape
1.
Remarkable economic and social progress has been achieved over the past thirty years
throughout the developing world. Life expectancy in these countries has increased by more than 20 years
(from 41 to 62 years) during this time period. Infant mortality rates have been halved and primary school
enrolment rates have doubled. The share of rural families with access to safe water has risen from 10% to
over 70%. Average incomes, health and literacy improved more in developing countries during this time
period than they did in OECD countries over the past century.
2.
So far as income poverty is concerned, the picture is more nuanced. Recent evidence suggests
that the share of people in extreme poverty in the overall population of developing and transition countries
receded slightly over the past decade, from 28 per cent to 24 per cent. Unfortunately, however, despite
notable progress in East Asia, poverty made steady increases in most other regions of the world. And
extremely poor people continue to be heavily concentrated in certain regions, with South Asia accounting
for the highest proportion of the world’s poor (43 per cent) and Africa accounting for having the greatest
percentage of population living in poverty (48 per cent).
3.
Despite these recent gains, extreme poverty still ravages the life of one out of every four persons
(approximately 1.2 billion people) in the developing world. Poverty continues to be pervasive, intractable,
inexcusable. In the last 10 years alone, the ranks of the poor in Sub-Saharan Africa rose by more than a
third. One out of every three children in developing countries still does not complete 5 years of education -
- the minimum required for basic literacy. One out of every twelve children born this year will die of
disease or malnutrition before her or his fifth birthday. Unless strong and decisive actions are taken, these
statistics may well deteriorate over the next 25 years as developing country societies struggle to meet the
additional burdens that approximately 2 billion more people -- 97% of the expected increase in the world’s
population -- will create.
4.
The development progress that has been achieved over previous decades gives one confidence
that poverty can be overcome and development achieved. And yet, there is no cause for complacency.
Eradicating poverty will call for sustained, adequately resourced and co-ordinated actions across the full
spectrum of government policies and development co-operation actions. It will also call for the best efforts
of all development partners. These Guidelines, which distil the accumulated knowledge and experience of
the development community in addressing poverty reduction, are intended to inform these actions and
point the way to the future.
A renewed commitment across the international system to fight poverty
5.
In 1996, OECD development ministers adopted a path-breaking policy framework for
development co-operation. The OECD/DAC strategy Shaping the 21
st
Century: The Contribution of
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Development Co-operation set out a vision of development co-operation based on partnership around
development strategies owned and led by developing country governments and civil societies. The 21
st
Century Strategy also committed DAC Members to work with their partners towards achieving explicit,
quantifiable and time-bound international development goals (IDGs)
1
based on economic, environmental
and social development goals agreed upon by the international community during the UN-sponsored global
conferences of the 1990s
2
. Taken in their totality, these goals address many of the key dimensions of
poverty. As an important step in implementing the 21
st
Century Strategy, DAC Members subsequently
agreed to synthesise their collective knowledge and expertise on poverty reduction in this set of
Guidelines.
6.
In developing these Guidelines, DAC members have sought to put partnership into practice by
sharing Guidelines texts with a broad cross-section of poverty experts from government, civil society and
academia in a series of consultations held in Africa, Asia, Latin America and Europe. The insights,
concerns and views emanating from these exchanges have shaped the contents of the Guidelines and,
particularly, the prescriptions it contains for working in partnership.
7.
The result is a challenging agenda for the partnership era, calling for changes in the way agencies
think about poverty, plan and implement related assistance, organise themselves in the field and at
headquarters, and strengthen internal capacities to respond more effectively to the tasks at hand. At the
same time, in setting out the rights, responsibilities and obligations implicit in partnership approaches, the
Guidelines goes far in fleshing out the substance and delimiting the boundaries of the emerging partnership
compact DAC members signed on to when they endorsed the 21
st
Century Strategy.
An overview of the Guidelines
8.
These Guidelines are geared to helping development agencies mainstream poverty reduction
throughout all agency operations and translate policy to operations in the field. They detail the essential
building blocks of coherent, more effective approaches for reducing poverty. More specifically, they
clarify concepts and definitions, suggest priorities, and describe best practice policies, programmes,
instruments and channels for reducing poverty. They set out new directions in a number of areas,
including:
•
Common concepts and approaches for understanding, measuring, and focusing on
poverty. The opening chapter sets out a functional overview of poverty concepts and
approaches, developing a framework for thinking about and understanding the nature of
poverty. It aims to help the reader achieve clarity about the multidimensional nature of
poverty, who the poor are, and how anti-poverty measures can be shaped, combined and
monitored.
•
Reshaping country programming and management. A crucial challenge for the
development community remains the need to align development agency support squarely
behind the poverty reduction objective and partner government leadership. Chapter II
1
The seven international development goals to be achieved by 2015 or earlier include: reducing the
proportion of people living in extreme poverty by half; universal primary education; eliminating gender
disparity in primary and secondary education; reducing infant and child mortality by two-thirds; reducing
maternal mortality by three-quarters; universal access to reproductive health services; and implementing
national strategies for sustainable development. An additional goal subsequently set at the 1995 World
Food Summit calls for halving the number of undernourished people by 2015.
2
Including Jomtien, Rio de Janeiro, Cairo, Beijing and Copenhagen.
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deals with in-county planning and implementation processes in agencies and discusses how
they could be improved to sharpen poverty reduction focus and impact and to foster
genuine, more productive partnerships.
•
Effective policies, approaches, instruments and modalities for reducing poverty. Chapter
III focuses on improving the content of agency country programming efforts at different
levels of intervention and through different modalities. The chapter illustrates a wide array
of instruments and effective approaches, discussing their merits and challenges in the light
of evolving practice, the diversity of country situations and prospects for impact.
•
Institutional learning and change. The OECD 21
st
Century Strategy is creating a strong
impetus for development agencies to transform the way they conduct business in
accordance with the requirements of partnership, ownership and accountability. Chapter IV
focuses on the inner workings of development agencies, examining how their leaders,
organisational structures, management practices, and institutional cultures can be changed
to increase their capacity to contribute effectively to reducing poverty.
•
Ensuring that the full range of DAC Member policies are coherent with the poverty
reduction objective. Policy coherence across DAC Member governments (e.g. trade,
agriculture, and environmental policies) is crucial to ensure that DAC Members’ efforts to
reduce poverty are not undermined by the polices and actions of other parts of government
and to enhance Member country policy interactions with developing countries. The final
chapter of the Guidelines deals with coherence at the national level between aid and non-
aid policies and on coherence at the international level involving regional and global co-
operation.
9.
While the Guidelines specifically address the concerns and functioning of the OECD bilateral
development assistance community, they are of value to all development practitioners for the practical
information they contain and the insights they provide for understanding how development partners can
work together to reduce poverty. They are organised in two documents: an executive summary extracting
the main concepts, principles, priorities and conclusions contained in the Guidelines, and the Guidelines
themselves, a concise, policy-focused document highlighting key themes and issues for understanding
poverty and attacking it more effectively through partnership.
Why is it useful to have these Guidelines?
10.
By endorsing these Guidelines, bilateral development agencies do much more than simply avail
themselves of helpful advice for confronting poverty more effectively. They also adopt a common view
and understanding about poverty and appropriate approaches, frameworks and priorities for combating it.
Their efforts will consequently be more coherent and mutually reinforcing, both among DAC Members
and across the international system, given the full compatibility of the Guidelines with similar international
frameworks.
11.
They also make commitments to implement Guidelines principles and recommendations. These
commitments take different forms. Some relate to overall maxims, such as agreeing that poverty reduction
is the overarching objective of development co-operation programmes; ensuring that donor support is
demand-driven and non-intrusive; and ensuring that partner country authorities are given adequate time
and space to develop their own, widely shared poverty reduction strategies. Others focus on specific
practices or instruments, such as the need to decentralise donor decision-making to the country level, to
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organise and allocate assistance through medium-term expenditure frameworks, and to phase out funding
of ad hoc projects off-budget and parallel management structures.
12.
Adoption of the Guidelines also signals important messages about how the bilateral donor
community views emerging challenges -- in the world at large and, more narrowly, within their own
organisations -- that have growing significance for the fight against poverty. This includes working more
intensively and with greater resolve to address imbalances and needs arising from globalisation, global
public goods and the digital divide and to align their own institutions with the requisites of partnership.
How to use these Guidelines
13.
The Guidelines provide, in a condensed format, practical information about the nature of poverty
and how it is best tackled. They are thus of value to operational staff in the field and at headquarters. They
also provide guidance on appropriate policy formulations and priorities, how to work with different
partners in developing countries and the international system, and how agencies could best be led,
reconfigured and retooled to effectively mainstream poverty reduction and to work in partnership. This
information is of use to agency leadership, operational managers, and policy and human resource staff..
14.
At the same time, given space constraints and the vastness of the subject at hand, the Guidelines
remain broad and generic. Development practitioners will need to consult more comprehensive,
operational texts (such as the World Bank PRSP Source Book) in order to have a fuller grasp of the subject
and make more informed choices. The DAC will subsequently deepen the scope and substance of these
Guidelines by exploring key aspects of poverty reduction strategies and developing additional good
practice. A companion “living and renewable” volume reflecting evolving improvement of policies and
practices will be developed for electronic reference.
15.
While considerable effort has been expended to ensure the Guidelines reflect contemporary
research, knowledge and experience, they are not the last word. Indeed, in many respects -- such as in
promoting empowerment, better governance, participation and institution-building -- development
practitioners are at the incipient stage of knowing how best to act and interact in reducing poverty. Further,
each partner country is different and unique, defying a “one size fits all” approach to poverty. There is still
much to learn about good practice in this evolving area of development co-operation, including from
listening to -- and heeding -- the voices of the poor themselves.
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Chapter I. Concepts and Approaches
1.1
Introduction
16.
Strategic thinking about poverty reduction requires concepts and approaches that are clear and
consistent. Chapter I presents current notions of well-being and poverty in a conceptual framework that
links the objectives, expressed as desired outcomes, with the key causes of poverty and a range of priority
policy actions. It provides context for the more operational discussions of country strategies in Chapter II,
and of good practice in Chapter III.
17.
A strategic approach to poverty reduction involves six analytical stages:
i.
What is poverty? -- Clarifying and defining the concept.
ii.
How can poverty be measured? -- Assessing methods and data availability.
iii.
What is meant by poverty reduction? -- Specifying goals and indicators to be attained.
iv.
Who are the poor? -- Identifying poverty lines and social categories.
v.
Why is poverty persisting? -- Analysing its structural and dynamic causes.
vi.
How can the indicated goals be achieved? -- Formulating effective policy action.
18.
Any organisation that professes poverty reduction as an overarching or principal goal -- be it
government departments at different levels, bilateral or multilateral development agencies, or civil society
organisations -- needs to engage in thinking through these questions and produce answers based on the
evidence and experience that is available to them.
1.2
Concepts of poverty
1.2.1
The widening meaning of poverty
19.
There is now wide agreement on the importance of including several different dimensions of
deprivation in the concept of poverty. Hence, poverty denotes the condition of people who are unable to
meet minimum standards of human well-being, and involves a range of inadequacies in economic, social
and human security capabilities. The change towards the current multidimensional poverty concept is
solidly based on research results and debates, including major participatory studies of what poor people
themselves mean by well-being and poverty. The poverty concept may be absolute as in the International
Development Goals, or relative with reference to different perceptions in societies around the world.
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20.
A multidimensional poverty concept was assumed both in the 1995 Copenhagen Declaration of
the World Summit for Social Development and in the International Development Goals adopted in 1996.
In the same vein, the World Bank has defined poverty as unacceptable human deprivation encompassing
not only low levels of income opportunities as well as education, health and nutrition but also lack of
empowerment and security. And UNDP has introduced the concepts human development -- defined as a
process of widening the scope of people’s choices including notions of freedom, dignity, self-respect and
social status, and human poverty -- meaning deprivation of essential capabilities like long and healthy life,
knowledge, economic resources and community participation.
21.
Despite the consensus in the development community on a many-stranded approach, there is also
some concern that it may lead to fuzziness about fundamental objectives. It is not obvious how to identify
the poor and how to monitor progress using a poverty concept with many dimensions, since some of these
are difficult to measure and quantify. Moreover, it may facilitate re-labelling of projects and programmes
rather than really making them more effectively pro-poor.
22.
These Guidelines address both kinds of concern. A conceptually adequate as well as practical
poverty definition is presented and then placed within a broader analysis of causes of poverty and
approaches to poverty reduction. This framework emphasises the need to justify the choices made by
identifying the key causal linkages and assessing the likely effectiveness of different policy instruments.
1.2.2
Defining poverty: relevance and utility
23.
An adequate poverty concept should include all the most important dimensions of capability
deprivation as perceived in different societies and local contexts. The concept should also recognise the
causal interrelations between the key dimensions of well-being and poverty -- and the central importance
of gender and environment aspects -- as suggested by Figure 1.1.
24.
Economic capabilities include income or consumption -- the basis for setting poverty lines -- and
assets. Household surveys measure expenditures, which is insufficient to capture even the economic
dimensions of deprivation. Assets are of major importance for food security and social status. This is often
highlighted in poor people’s own assessments, as is access to financial and physical resources, i.e.
implements and animals as well as natural resources -- crop and grazing land, forests and fishing waters.
25.
Human capabilities include health, literacy, nutrition, water and shelter. These are ends of
development as well as means. Education, especially of girls, has been rated as the single most effective
factor for reducing poverty, excessive fertility and illness, especially AIDS. Disease and illiteracy are
major barriers to productive employment and well-being. Reading and writing skills facilitate
communication with others, which is crucial for social and political participation.
26.
Political capabilities include freedom, power, voice and influence over public policies.
Power/lessness is a vital determinant of other poverty dimensions. The politically weak have few
entitlements and cannot obtain public resources needed to lift them out of poverty. Empowerment of poor
women and men requires respect for human rights, a civil society with representative community
organisations, legitimate and accountable governance and the rule of law.
27.
Social capabilities refer to social status, dignity and other cultural expressions conveying a sense
of belonging in the context of a particular society or community. This sense is highly valued by the poor
themselves. Participatory assessments indicate geographic and social isolation as the main meaning of
poverty for people in many local societies, while other dimensions are seen as contributing factors.
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Figure 1.1. Interactive dimensions of well-being and poverty
PROTECTIVE
security
vulnerability
HUMAN
health
education
fertility
POLITICAL
freedom
voice
power
SOCIO-
CULTURAL
status
dignity
ECONOMIC
consumption
income
assets
28.
Protective capabilities with respect to security/vulnerability is also a key dimension of well-
being/poverty. Poor people themselves indicate hunger and food insecurity as a core concern along with
other risks such as illness, crime, war and destitution. Poverty is to a large extent experienced
intermittently in response to seasonal variations and external shocks at the household, community or
national level, e.g. natural disasters, economic crises and violent conflicts. Dynamic concepts of poverty
are needed to grasp the fact that people move in and out of poverty. Those who are poor today are only in
part the same people as the poor yesterday or tomorrow. Some are chronically poor or inherit their poverty;
others are in temporary or transient poverty.
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29.
The links indicated by arrows in Figure 1.1 are significant. Each box represents in itself an
important dimension of well-being/poverty while also affecting all the others. Thus, households may
consume little and be vulnerable partly because they lack assets, often because of inadequate income, poor
health and education and losses due to vulnerability to shocks etc. Vulnerability and social exclusion
hamper human and political capabilities, resulting in reduced incomes and assets. And vice versa etc…
30.
The fact that different poverty dimensions are tightly interrelated, while distinct and imperfectly
correlated, is a major reason for a multidimensional concept. For the sake of clarity however, the definition
of poverty cannot encompass every significant element in the complex of causes of poverty. This needs to
be analysed separately based on the definition of poverty.
1.2.3
Poverty, gender and environment linkages
31.
Poverty reduction, gender equality and environmental sustainability are complementary, mutually
reinforcing and crosscutting facets of development. Mainstreaming gender and environmental concerns are
therefore key to reducing poverty. At the same time gender equality and environmental sustainability are
international development goals in their own right.
32.
Gender inequality concerns institutional discrimination in all the above poverty dimensions.
Processes causing poverty affect men and women in different ways and degrees. Female poverty is more
prevalent and typically more severe than male poverty. Women and girls in poor households get less than
their fair share of private consumption and public services. They suffer violence by men on a large scale.
They are more likely to be illiterate as well as politically and socially excluded in their communities. In
these and other ways, women's capabilities to overcome poverty in its various forms are often different to
those of men.
33.
Women have a crucial role for the livelihoods and basic human capabilities of poor households.
Through their efforts to provide for the children, they also reduce the scope for intergenerational transfers
of poverty. However, women in general have less access than men to assets that provide security and
opportunity. Such constraints to women's productive potential reduce household incomes and, in aggregate,
economic growth. Gender inequality is therefore a major cause of both female and overall poverty.
34.
Gender-related time-poverty refers to lack of time for rest and economic, social and political
activities. It is an important additional burden with different meaning for women and men in many
societies due to structural gender inequality.
35.
Environment and poverty are linked in a variety of ways in both rural and urban settings. The
poor are affected the most by environmental problems. Unless long-term natural resource sustainability is
ensured, and the competing needs of different users reconciled peacefully and equitably, any progress in
reducing poverty could be short-lived.
36.
Land degradation, deforestation and declining fish stocks along with water and air pollution are
serious risks for the livelihoods and health of the rural poor. At the same time their dependence on
subsistence agriculture, cattle herding and woodcutting on fragile lands is often unsustainable and
aggravates soil loss. Increasing land and water scarcity also causes conflict and instability at local, national
and regional level.
37.
Another rural environment risk, which affects millions of commercial farm workers, is exposure
to hazardous chemicals such as pesticides. And in both rural and urban homes, indoor smoke pollution
causes health problems for the poor.
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38.
The urban poor often live in overcrowded and unsanitary conditions in the vicinity of
contaminated areas, industrial sites and heavy road traffic. High-density and poor informal urban
settlements are vulnerable to calamities like landslides and fire.
39.
In general, the poor in both rural and urban areas are highly vulnerable to extreme climatic events
with devastating impact such as droughts, floods and typhoons/hurricanes. The incidence and severity of
these may be aggravated by global climate change.
1.2.4
Measuring poverty: adequacy and practicality
40.
Having identified the most important conceptual dimensions of well-being and poverty, the next
issue is how to measure them. This is necessary in order to monitor whether policy goals have been met, to
assess the impact of particular policies and programmes, and to identify who the poor are. Poverty
measures can in principle be chosen within a range of varying complexity depending on data availability
and the purpose of measurement, but the less tangible dimensions are difficult to measure and quantify.
41.
In this regard, there is a trade-off between different purposes of monitoring poverty. The more
relative, complex, qualitative and multidimensional the measures are, the more adequate they are for
understanding a context-specific situation and intervening in it effectively -- but the less convenient for
comparisons, which require absolute, simple and quantified measures.
42.
This trade-off can be portrayed as a pyramid (Figure 1.2). At the top of the pyramid are single
income/food intake/ consumption measures with longitudinal data series available from household surveys
in a large number of countries. They enable comparative analysis of poverty over time in a country and
between different countries, which is very useful for overall poverty monitoring. In other words, the top of
the pyramid provides a bird’s eye view of global poverty.
43.
Descending the steps of the pyramid means adding successive other dimensions to the narrow
consumption measure of poverty
3
. The bottom of the pyramid is closest to the ground -- and to the people -
- and thus most adequate for detailed planning and monitoring purposes in each case. Data on human
development are routinely collected in surveys. For the remaining dimensions there are no good methods
to standardise and quantify measures that would permit comparisons. But several countries have
undertaken participatory poverty assessments, which provide very useful qualitative and multidimensional
poverty information.
44.
There are also composite indexes, including both economic and human capability dimensions of
poverty/well-being. The most prominent ones have been developed by UNDP in the annual Human
Development Report
4
. Such indexes may provide a more solid comparable quantitative measure than
single-dimension poverty measures. However, some arbitrariness is necessarily involved in choosing
which indicators to include and what weights to assign to them, and trade-offs between them are not
captured. Thus, discrete poverty measures are still more useful for specific planning purposes.
3
The order in which these dimensions appear in the figure is arbitrary and not an indication of priority.
4
The Human Development Index (HDI), the Gender-related Development Index (GDI), the Gender
Empowerment Measure (GEM), the Human Poverty Index (HPI-1 for developing countries and HPI-2 for
OECD and transition countries).
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Figure 1.2. Trade-offs in measuring poverty dimensions
Operational
Comparable
Simple
Complex
Human
Socio-cultural
Political
Assets
Consumption
Protective
Human
Political
Assets
Consumption
Human
Socio-cultural
Assets
Consumption
Human
Assets
Consumption
Assets
Consumption
Consumption
Socio-cultural
1.2.5
Who are the poor? Poverty lines and social categories
45.
The narrow approach to measuring poverty permits the identification and statistical analysis of
those households falling under an absolute poverty line, representing a minimum standard of nutrition and
consumption. This is necessary for monitoring the numbers as well as the proportion of poor people over
time and between countries
5
, and the depth and severity of poverty. The most common poverty lines for
international comparisons are USD 1, 2 and 4 per day for low-income, middle-income and transition
economies respectively.
46.
Poverty data should be disaggregated by gender and other demographic variables. They can then
be used to identify the characteristics of the poor on the basis of sex of household head, household size and
age distribution, ethnic group etc., geographical location (region, rural or urban area, etc.), and livelihood
characteristics (employment status and occupation of household head and members, etc.). Poverty
assessment work at country level has consisted mainly of constructing a “profile” of poverty in these terms,
using data from household surveys. This type of work is an essential tool of pro-poor planning, in
particular when indicators of human development -- such as infant mortality, fertility, literacy and
schooling -- can be used to crosscheck the conclusions reached.
47.
Whereas national surveys thus provide useful aggregate data, they have very little information
about specific areas and contexts. The poor cannot be identified and reached through national statistics of
5
The difference is important: the International Development Goal for economic well-being refers to the
proportion of people under 1$ a day, which has been improving in the last decade. However, at the same
time the number of people under this poverty line has increased with population growth.
Page 14
14
income or consumption quintiles. The question “who are the poor?” needs to be asked about several
different levels of social organisation -- individual, household, community, district, region, etc. Practical
thinking about causes and remedies of poverty should aim to identify social categories with specific
attributes such as gender, ethnicity, religion/culture, and location as well as livelihood status. Statistical
indicators of consumption poverty are useful as a starting-point for this purpose, but multidimensional
poverty profiles with both quantitative and qualitative data are more adequate for designing policies and
interventions in particular instances.
48.
Despite the difficulty of precise measurement, knowledge from different sources can often be
used to identify the poor. A large majority of the poor live in rural areas, but urban poverty is growing
faster. Social groups that experience poverty or vulnerability on several dimensions are
indigenous/minority/marginal social groups, refugees/displaced persons, mentally/ physically disabled,
elderly widows and other unsupported female-headed households. These groups are the poorest of the poor
in many societies and require special attention in policy action for poverty reduction.
1.3
Tackling poverty: from definition to strategic policy design
49.
It is crucial -- and feasible -- to adopt adequate poverty concepts while being practical about
identifying groups of the poor for priority attention. Two further analytical steps are necessary in
formulating poverty strategies. The first is identifying and ranking the causes of poverty in a given country
or region -- deciding which links in the chain of causation are the critical ones for a particular dimension of
poverty. The critical causes include those that are themselves dimensions of poverty as well as other
factors.
50.
Ranking the most important causes of poverty in a country is far more complex than identifying
the key social groups among the poor, or simply recording the available descriptive poverty profiles. For
these reasons, it is relatively rarely attempted. It is nonetheless essential for effective poverty reduction.
51.
The second step is designing policy action to address these causes. Policy instruments may be
either individual actions that are likely to have an effect on critical causes of poverty, or sets of
complementary actions that engage with poverty’s multiple causes and dimensions.
52.
Analysis linking policy actions to causes, and causes to outcomes, is needed as a tool of strategic
thinking at the national as well as lower levels. This can be illustrated as in Figure 1.3. All national
poverty-reduction policies and agency assistance strategies should involve an effort at categorising and
assessing the causes of poverty -- the middle part of Figure 1.3.
53.
The next analytical step is to identify which links in the chain of causation of poverty are actually
amenable to change by policy intervention. Causes need to be linked to possible actions, and these have to
be prioritised in terms of their likely efficacy.
54.
Each policy action is linked primarily with one set of causes and outcomes, but also affects
others. Similarly, each poverty cause affects several poverty dimensions, and each of these depends on
several causes. And any set of causes can be affected by several types of action, and vice versa. For
example governance, economic structures and gender relations are causally linked to all poverty
dimensions.
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15
Figure 1.3. The links between policy action, causes and poverty outcomes
PROTECTIVE
vulnerability
security
POLICY ACTION
OUTCOMES
Demographic
patterns
Public goods
and services Entitlements
Social
exclusion
CAUSES
Empowerment,
rights and
governance
Improving
basic services
and access
Mainstreaming
gender
equality
Promoting
sustainable
livelihoods
Human security:
preventing and
managing
shocks
Economic
policy
reforms
SOCIAL/
CULTURAL
status
dignity
Shocks
and conflicts
ECONOMIC
consumption
incomes
assets
HUMAN
health
education
fertility
empowerment
POLITICAL
voice
Economic
structure
Environment
Gender
55.
Thus outcomes, causes and policy actions interact to a considerable extent. This complex of links
is conveyed in Figure 1.3. More detailed examples of causes and policy actions under some broad headings
are provided in the Appendix Table. Strategic planning for poverty reduction requires decisions on choices
and priorities. In this way, the ranking of policy instruments according to their likely impact makes the
difference between a robust approach to poverty reduction and a superficial re-labelling exercise.
56.
Formulating a poverty strategy involves a great deal of uncertainty. Managers, agency staff and
professional advisers need to ensure that their judgements are at least educated guesses -- that is, fully
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informed by the data and analysis that is available or could be easily commissioned at the country level.
Further guidance to agencies on country programme management, and on institutional learning and
change, is provided in Chapters III and IV.
1.4
Policy action for poverty reduction
57.
The previous analysis connected the dimensions of poverty reduction outcomes with the causes
to be attacked by policy intervention through six strategic and complementary entry points. There remains
a need to consider the most important aspects of these approaches to poverty reduction. A brief résumé
follows in the rest of Chapter I.
1.4.1
Economic policy, growth and structural reforms
58.
Lack of economic opportunities is both a cause and a dimension of poverty. Equitable economic
growth and reduction of income poverty are two sides of the same coin. Effective strategies for sustained
poverty reduction engender economic growth, and vice versa.
59.
A national economy can grow in different ways, some of which are more ecologically sustainable
or poverty reducing than others. There is no universal pro-poor growth strategy -- effective strategies will
differ between countries depending on resource endowments, levels of human capability and technology,
and the historical, institutional and socio-cultural context.
60.
Successful poverty reduction strategies usually combine three key features: i) improved access of
the poor to land, credits and human capital, ii) equitable economic growth focusing on sectors and regions
with the greatest poverty impact and iii) labour-intensive forms of production. Rural and urban problems
are in general different and require partly separate strategies, although the urban-rural distinction is not
always clear-cut. There are a variety of dynamic links between rural and urban areas through kinship,
migration, markets and remittances.
61.
Global poverty is predominantly rural, which makes ecologically sustainable pro-poor rural
development a key priority. Increased agricultural yields and incomes generate employment also in other
rural as well as in urban activities (e.g. commerce, handicraft, milling and mechanical workshops). Small-
scale rural, agricultural and service growth have a large impact on reducing poverty -- more than any other
form of economic growth. Where rural landholding is highly unequal, land reform is key for poverty
reduction.
62.
There is a multiple negative impact of inequality on poverty. Asset and income inequality --
whether by gender, ethnic/social category or region -- not only limits the poverty reducing effects of
growth, but also inhibits growth itself. Public policy aiming to reduce inequalities is a key challenge and
test for poverty reduction strategies, since it may involve conflicts of interest, which require tactful
political coalition building.
63.
An enabling policy environment within a good legal and institutional governance framework is
essential for the opportunity of poor people to rise out of poverty. Macroeconomic stability with limited
price and output volatility, efficient and competitive markets, and adequate investments -- private and
public --are key elements.
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17
64.
The process of integration with the global economy requires careful management. Opportunities
for trade-based growth need to be seized while controlling risks -- e.g. from capital flight, structural
unemployment and environmental degradation -- for sustained poverty reduction to be achieved.
65.
Private sector initiative is crucial, and needs to be pro-actively facilitated by public policy. There
needs to be a considered balance between the three main spheres of society: government, business and civil
society.
1.4.2
Empowerment, rights and pro-poor governance
66.
Poverty is associated with powerlessness, and with an inability to meet a society’s minimum
standards of social participation or belonging. These may be the result of lack of democracy,
discrimination or social exclusion. The relevance of the latter issues varies a great deal between countries,
but in some anti-poverty strategies they are likely to figure prominently. So are improved standards of
governance and popular participation in policy-making and programme design and implementation. These
factors have proven decisive for the efficacy of poverty reduction interventions.
67.
Empowerment means enhancing the capacity of the poor to influence state institutions and social
processes that affect their lives. Poor people can mobilise to empower themselves, if permitted under the
prevailing conditions for the exercise of human rights and the rule of law. Enhancing these framework
conditions for the empowerment of weak and socially excluded groups is a key strategic approach to
poverty reduction.
68.
To this end, there is increasing focus on the “rights approach”, which links empowerment to
international agreements on human and political as well as economic and social rights. Tackling poverty in
this way depends on strengthening institutions (e.g. a functioning court system) for good governance and
for the protection of universal civil rights, including the right to decent work and to organise trade unions.
69.
Governments that depend upon tax collection for state financing (rather than e.g. aid or mineral
extraction) are generally less corrupt and more effective at poverty reduction, regardless of the extent of
democratic accountability. Also, the linkage between pro-poor governance and formal democracy in a
country depends on the proportion of the poor and their relative political strength or social exclusion.
70.
Political devolution and administrative decentralisation are means to greater participation in local
or regional government -- i.e. empowerment -- and therefore facilitates pro-poor outcomes. There is
potential for decentralised government to reduce corruption and improve the efficiency of public service
delivery. However, decentralisation in highly inegalitarian societies with weakly developed social
organisation amongst poor groups may simply replace misrule by national elites with misrule by local
elites. Thus complementary measures are required in order to ensure a pro-poor impact of decentralisation.
1.4.3
Improving basic services and widening access
71.
Well-being means living long, healthy and gratifying lives. It requires access to good quality
services such as preventive and curative health services, formal or informal schooling, clean water and
decent housing. The poor are often deprived of access to adequate social services because of insufficient
allocation of public resources and weak governance capacity in the provision of social services.
72.
The shares of public spending allocated to primary education and health is often used as an
indicator of the poverty orientation of government policies in poor countries. While important, increased
resources will only help if accompanied by serious efforts to improve the efficiency of resource use at all
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18
levels. Serious efforts to improve governance by strengthening accountability and service orientation in the
social sectors need to be buttressed by changes in the incentive structure facing civil service staff.
73.
There is a need for special measures to encourage outreach and enhanced access for the poorest,
especially women, the elderly and the destitute, to basic services. In this regard, a pro-poor policy of
financing social services -- considering both taxes and user charges -- needs to be carefully elaborated in
terms of affordability, incentives and quality of services.
74.
Pro-poor growth contributes to human development both through raising the incomes of the poor
and providing resources for social sector programmes. Conversely, human development engenders
economic growth by increasing people’s productive capabilities. AIDS and other demographic health
shocks threaten economic growth, poverty reduction and social stability. Top-level political recognition of
AIDS as a critical development issue -- and of the importance of sexual and reproductive health -- are
necessary ingredients in a poverty reduction strategy.
1.4.4
Mainstreaming gender equality
75.
Poverty reduction strategies need to address the different capabilities of men and women
concerning all the causes and main dimensions of poverty. The outcomes are affected not only by the total
amount of a variety of material and intangible resources available to a household, but also on their
distribution within it. Research has established that gender inequality is prevalent in poor households as
well as at the community and national levels.
76.
Mainstreaming gender into policy can be a fruitful subject of dialogue and co-operation between
governments, civil society and development agencies. Together, they can reduce gender differences in
access to basic services, to economic opportunities and assets such as land and finance, to labour markets,
knowledge and technology.
77.
Effective poverty strategies need to take the pattern of gender relations into account, for example
women’s time-poverty due to their unremunerated productive and care activities. Governments need to
recognise gender exclusion when shaping legal, institutional and policy frameworks, e.g. in reviewing
public expenditure allocations. The work in several countries on a “gender budget” provides good
examples of benefits for household crop production, children’s health and education, and fertility change.
Gender budgets need to be carefully monitored.
1.4.5
Promoting sustainable livelihoods
78.
The livelihood concept comprises the capabilities -- both material and social -- and activities
required for securing socially adequate living standards. A livelihood is sustainable when it can cope with
stress and shocks without undermining its natural resource base. The means of livelihood available to poor
women and men include but are not restricted to land, labour and capital. These are affected not just by
natural endowments but also by economic and governance factors. For example, commodity prices and
agricultural policies influence the demand for farm labour in a variety of ways.
79.
Hence, understanding the policy and institutional mechanisms that influence the availability and
value of the resources on which poor women and men depend is critical to framing successful poverty
reduction strategies. This requires designing interventions based on research of all specific circumstances
affecting the livelihoods of actual groups of poor people, including power and dependency relations, rather
than making assumptions based on generalisations or compartmentalised sector policy.
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19
80.
A challenge of this strategy concerns the aspect of environmental sustainability. The sustainable
livelihood approach entails working in bottom-up fashion, starting from the perceptions and expressed
priorities of poor people. Conclusions reached in this way need to be reconciled with the views of agencies
and authorities that approach development policy from a wider sustainability perspective.
1.4.6
Human security: preventing and managing shocks
81.
Human security involves securing a level of basic human capabilities by protecting them from
deteriorating into a state of deprivation as a result of disruptions or shocks. Poor people rate insecurity both
as a major dimension and a principal cause of poverty. The risks facing the poor -- especially poor women
-- are substantial and come from varied sources. Vulnerability is on the rise with new sources of violent
conflict and crime, and possibly increasing risk of natural disaster from extreme climatic shocks and
seasonal variations.
82.
Inequality between ethnic and social groups is a major cause of armed conflicts. These in turn
cause and amplify poverty, both directly through the toll it exacts of dead, wounded, disabled and
displaced persons, and indirectly through its effects on infrastructure and other livelihood conditions,
macro-economic performance and the social fabric. Conflicts invariably destroy social capital and deepen
governance failure, sometimes to the point of state collapse.
83.
A human security approach seeks systematically to address the sources of risk that affect poor
people, breaking out of the increasingly artificial separation between conflict prevention and resolution,
post-conflict reconstruction, natural disaster preparedness and relief, and rights-based governance work. In
several parts of the world, actions that concentrate on reducing multiple sources of risk, and assisting poor
people to contend with them, are likely to remain an important approach to anti-poverty action.
* * *
84.
To sum up, being strategic about poverty reduction means achieving clarity about goals, and
then devoting attention to two further issues -- the identification of the key causal linkages and the choice
of the most effective forms of intervention. Poverty is multidimensional and needs to be understood in its
different dimensions in strategic planning of policies, programmes and projects. For purposes of
comparisons over time and between countries, a quantitative income or composite index is more adequate.
85.
Prioritising causes and choosing the most effective entry points for anti-poverty action is
difficult, but essential. A tool that may facilitate this set of tasks is a table (see Appendix) that invites the
user to select and rank poverty determinants and forms of intervention most likely to reach desired
outcomes, in the particular context -- global, (sub-) continental, national, regional or community level.
Agency staff need access to general guidance based on research and practical experience, and they should
be expected to be fully informed by the data and analysis that is -- or can easily be made -- available at the
country level.
86.
This chapter provides a background to the more operational guidelines on country policies and
assistance strategies in Chapter II, on good practice at macroeconomic, sector, area and project level in
Chapter III, and on institutional learning and change in agencies in Chapter IV.
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Appendix Table
Tackling the poverty complex:
An illustration of policy action, causes and outcomes
Policy action:
•
typical entry points
Causes:
Outcomes:
Capabilities to be built
•
typical indicators
Economic policy reforms:
•
good economic governance:
predictable, open policy making
•
macro-economic stability
•
measures to counter urban
bias/promote agricultural growth
•
pro-active management of global
integration
•
asset creation and redistribution
•
targeted measures to increase
access/
remove market distortions
Empowerment, rights and pro-
poor governance:
•
rule of law under democratic
governance
•
legal and advocacy work on
human rights
•
support for civil society and
citizenship rights
•
promotion of economic and
social rights of/for the poor
•
community capacity building for
enforcement of rights
Improving basic services:
quality and access:
•
prioritised national anti-poverty
and gender-sensitive budgets and
expenditure-management
•
intra-sectoral allocation of
resources and creation of
incentives to improve services
•
building political support for
social security and welfare
arrangements
Economic structures:
•
rates and sectoral patterns of
investment and growth
•
structure of world trade (donor
policy incoherence)
•
inequality of asset distribution
by class and region
•
unequal access to markets and
services
•
labour market rigidities
•
gender divisions of labour and
institutional biases
•
unsustainable resource use
Demographic patterns:
•
delayed demographic transition,
frequent pregnancies
•
AIDS
•
geographic isolation
Public goods and services:
•
delivery of public goods and
services is corrupt and
ineffective
•
class, gender and ethnic biases
in uptake of services
•
limited access and very low
quality services for poorest
Economic capabilities:
•
incidence, depth and severity of
household consumption-poverty
(household surveys)
•
asset portfolios of poorest
(household surveys)
•
consumption shares and time-
use of men and women (in-depth
case studies)
Human capabilities:
•
stunting and wasting
•
infant and child mortality
•
maternal mortality
•
HIV prevalence
•
community-based disease
monitoring indicators
•
literacy
•
gender balance in schools
Political
capabilities/empowerment:
•
self-assessed powerlessness
(participatory poverty
assessments)
•
ethnographic observation of
local power relations and their
dynamics
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21
Policy action:
•
typical entry points
Causes:
Outcomes:
Capabilities to be built
•
typical indicators
Mainstreaming gender equality
•
legal and educational work on
women’s rights, including sexual
and reproductive rights
•
poverty and ender-sensitive
outreach services in agriculture,
education and health
•
support for advocacy on time
poverty
Promoting sustainable livelihoods
•
bottom-up policy design
•
farmer-based research and
extension
•
implementing an environmental
action plan
•
good governance of commons
and local services
•
active monitoring and protection
of common property resources
Human security: preventing and
managing shocks and violence
•
support for peace building and
reconstruction
•
support for state security sector
reforms under democratic
governance
•
promoting social coherence
through civil society
development and multicultural
tolerance
•
building assets that provide
security against disasters and
economic shocks
•
safeguarding functioning social
protection systems
•
community-level work to
identify the socially excluded
and invisible
Entitlements
•
institutions block access to:
−
natural capital (water,
forests, land etc.)
−
physical capital (animals,
implements, equipment,
infrastructure)
−
human capital (health,
education)
−
social capital (benefits of
association)
−
financial capital (savings,
credit)
−
common-pool resources
encroached upon or
mined
Social exclusion
•
those excluded experience
cumulative limitations to access
•
erosion or non-existence of
mechanisms to maintain minimal
social functioning by poorest
(aged widows, the disabled)
•
distance and social bias silences
voices of poorest
•
economic poverty forces poorest
into livelihoods incompatible
with social dignity
•
patriarchal cultural and legal
patterns
•
alcoholism, domestic violence
Shocks and conflicts:
•
expulsion/displacement of
populations due to war
•
intra-state conflict
•
natural disasters
•
economic shocks
•
state collapse/social
disintegration
Social capabilities
•
analysis of local well-being
rankings (participatory poverty
assessments)
•
ethnographic observation of
social interaction patterns
Protective capabilities: security,
reduced vulnerability
•
population movements
•
sentinel site reports
•
self-assessed well-being
(participatory poverty
assessments)
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CHAPTER II. COUNTRY OPERATIONS PROGRAMMING AND MANAGEMENT
2.1
Introduction
87.
Achieving results in reducing poverty often pivots on what is done, and how, at the country level.
Development agencies have historically experienced great difficulty in “operationalising” poverty
reduction policies. This chapter is geared to bridging this gap by showing how development agencies can
best translate policy into more effective programming and operations in the field.
88.
The text begins by situating poverty within the broader context of development co-operation
efforts and setting out basic principles underpinning a change agenda for improving agency performance
on the ground. The scope then narrows to focus on good practice in building partnerships and dealing with
diverse partner country situations. The chapter concludes by describing how development agency country
strategies are best formulated and implemented to improve poverty reduction focus and impact.
2.2
Situating poverty reduction in overall development co-operation efforts
89.
Development assistance support for poverty reduction can potentially take many forms. For
example, resources for developing viable, competitive private sectors -- the primary engine of growth --
can give rise to jobs and higher incomes for the poor. In the same way, development co-operation efforts to
strengthen financial markets and monetary management can reduce the scope for financial crises and
inflation that have proved so costly for the poor. Debt relief can free up resources for investment in human
development. And efforts to reduce corruption, decentralise the public sector and improve the quality and
transparency of fiscal management can have important downstream effects on governance and
empowerment, key to engaging the dispossessed and disenfranchised. It remains important for
development agencies to integrate poverty reduction concerns and dimensions when formulating policies
in these areas.
90.
Increasingly there are other factors of a more global nature impacting on the poor that must be
addressed through development co-operation efforts.
•
While globalisation portends great benefits in terms of economic growth and opportunity,
at the same time it threatens to widen the gap between rich and poor nations. Development
agencies must work with partners to identify the policies, programmes and investments
needed to help the poor profit from globalisation, reduce the risks it may generate for them,
and help them offset the unavoidable costs that will arise.
•
Attention is increasingly being focused on the need for global collective action to deal with
cross-border problems such as conflict, AIDs, environmental degradation, and climate
change. Some global public goods, such as vaccines for tropical diseases and the
development of drought-resistant food crops, have considerable potential for enhancing the
lives and well-being of the poor. Development co-operation can play a key role in
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financing the development and distribution of international public goods having significant
benefits for poor people.
•
Rapid advances in information and communication technologies have created powerful
tools for accessing and managing knowledge and given rise to new, highly dynamic sectors
of economic activity. This phenomenon has, as yet, had little impact on the poorer
developing countries. It is essential for development co-operation to work to bridge the
digital divide by helping partner countries access these technologies and develop the local
capacities and institutions required to ensure their widespread use.
2.3
Basic principles and priorities governing country programming and management
91.
National and local ownership is essential for ensuring development effectiveness. Working in
ways that promote country ownership is a central priority for development co-operation, especially as
regards poverty reduction efforts. Policies and programmes addressing poverty are political in so far as
they seek to create opportunities for, and distribute resources to, particular groups of society. If they do not
carry the commitment of key national and local stakeholders, they are not likely to have a significant
impact. Indeed, domestic political factors often determine the outcome of economic and political reforms.
Thus, widespread ownership of pro-poor policies and programmes by partner stakeholders at both national
and local levels is of primordial importance. Practical priorities for agencies here include stronger
commitment to:
•
support country-owned, country-led poverty reduction strategies, and
•
ensure that county programming is a direct outgrowth of the partner country’s poverty
reduction strategy.
92.
In turn, partnership approaches are crucial to facilitating local ownership. Successful
development partnerships are characterised by certain requirements and modalities that challenge long-
standing development agency practices (see section 2.4 below). Partnerships based on a clear
understanding of the rights and responsibilities of the different partners and an agreed set of objectives and
ways of achieving them have proved most successful in achieving reciprocity and thereby recipient
ownership. The evolving Poverty Reduction Strategy Paper (PRSP) process is a key framework for
building strong country-level working partnerships for tackling poverty. Priority areas for agency focus
here include stronger commitment to:
•
reduce the burden development assistance creates for local partners by combining efforts
(e.g. joint missions, collaborative research, shared diagnostics, pooled funding, etc.),
easing administrative requirements (e.g. simplifying, streamlining and, where practicable,
harmonising paperwork and procedures), and co-ordinating agency approaches and
actions;
•
invest the time and resources needed to build genuine, reciprocal poverty reduction
partnerships and to sustain them through mechanisms and networks that are cost-effective
and efficient, and
•
adapt development agency structures and working methods to the challenges and needs
of poverty reduction partnerships (e.g. strengthen and deepen field presence; enhance
decision-making flexibility; accept “less-than-perfect” documents and strategies; increase
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24
transparency and accountability to other partners; lengthen programming timeframes;
develop staff “facilitation” and consensus-building skills).
93.
An emphasis on participation and empowerment has grown out of the realisation that the
political dimensions of poverty are vital to poverty and poverty reduction, in part due to the pro-poor
impact they have on economic and social dimensions. Participation at all levels and at all stages in
development co-operation is now seen as a basic precondition for better pro-poor policies, greater
accountability in implementation, and more sustainable outcomes through local ownership. Practical
priorities for agencies here include stronger commitment to:
•
work more intensively to develop human and institutional capacity (e.g. to improve
governance and promote empowerment, to enable partners to manage and account for
development assistance, to promote use of information and communications technology,
etc).
94.
Gender is a key vector for reducing poverty. Experience and empirical fact have demonstrated
the immense poverty reduction impact of activities supporting women’s rights, opportunities and
empowerment. Accordingly, all poverty-focused development co-operation must be engendered. The
effects of engendered development co-operation are both direct in terms of improved livelihoods and
reduced discrimination, and secondary with respect to growth, literacy, child nutrition, etc. Practical
priorities for agencies here include stronger commitment to:
•
include a gender perspective in all policies, programmes, instruments and modalities (as
opposed to having a discrete section on gender implications).
95.
Co-ordination and long-term commitment has proved to be important for poverty reduction.
There are no quick solutions for improving the social, political and economic conditions of the poor.
“Stop-and-go” policies and the use of policy conditionality is considered particularly harmful from a
poverty reduction perspective. Good practice, on the other hand, is long-term commitment within a clearly
and mutually defined framework. Practical priorities for agencies here include stronger commitment to:
•
adopt a multi-year timeframe for poverty reduction programming and funding
commitments as a complement to multi-year partner government fiscal planning and
budgeting efforts.
96.
For all types of development co-operation, the monitoring of development practices and
outcomes is important to secure and maintain pro-poor effects. Monitoring is needed not just to ensure that
the desired objectives are being achieved, but also to examine whether development efforts have
unintended consequences detrimental to poor people. Practical priorities for agencies here include stronger
commitment to:
•
assess development co-operation performance in terms of poverty reduction reach and
impact, and develop the requisite monitoring and evaluation systems and methodologies,
and
•
encourage the development of local poverty reduction indicators and targets and
strengthen partners’ statistical, analytical, monitoring and evaluation capacity.
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2.4
The challenges posed by working in partnership
2.4.1
What does it take to establish good poverty reduction partnerships?
97.
Sound, productive partnerships between governments, civil society and the development
community are based on trust, mutual accountability, and a shared commitment to the goals, objectives and
results to be achieved. They work most effectively when they are based on reciprocal relationships
characterised by clear understandings about the roles and responsibilities of the different partners and
where there is open, inclusive dialogue among all partners. Box 2.1 sets out some key parameters for
building effective partnerships.
98.
Working in partnership poses a number of challenges:
•
Using policy conditionality (especially in its more intrusive forms) is generally
incompatible with a partnership approach, which suggests a need for alternative forms of
influence and persuasion to promote policy change and structural reform;
•
Issues of substantial importance to development agency constituencies (such as
environment, gender and governance) should be integrated into the policy dialogue
without imposing an externally-driven agenda;
•
Genuine dialogue between central government and civil society (e.g. with local
government, the private sector, civil society organisations, women’s associations and
NGOs working on gender issues, and, as far as possible, poor people or their organisations)
on local poverty reduction strategies must be facilitated without undermining the
legitimacy of partner governments; and
•
Development effectiveness considerations strengthen the need for a selective and more
strategic approach to partner county allocation decisions based on objective criteria and a
long-term timeframe.
99.
Reciprocity is a crucial aspect of working in partnership. Development agencies need to decide
collectively, and in collaboration with developing country partners, how they will assess each other’s
policy commitments, spending plans and contributions to poverty-reduction outcomes. Performance
indicators should increasingly be applied to all partners, with development agencies being called to account
-- in the same way as governments -- for the reliability of their commitments and the consistency of their
policies.
100.
Successful partnerships will call for some important changes in the way development agencies
are organised, their practices and procedures, and their institutional cultures. Three key aspects for field
operations include:
•
Decentralising staff resources and decision-making to the field. This will help Members
improve their understanding of local poverty conditions, heighten their responsiveness to
changing local conditions, strengthen team-working across disciplines and promote better
dialogue and partnership through close and continuous interaction with other local
partners.
•
Deepening staff capacities (e.g. cross-disciplinary knowledge, negotiation and diplomacy
skills, facilitation abilities), their sensitivities (e.g. openness to local cultures and
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standards) and their motivations for achieving poverty-reduction results (e.g. reward and
incentive systems linked to performance).
•
Streamlining and harmonising reporting requirements, funding arrangements and auditing
practices.
Box 2.1 Good practice approaches for supporting Poverty Reduction Partnerships
Working in partnership calls for fundamental changes in the ways development agencies interact with
other partners (e.g. government, civil society) and with each other (multilateral institutions, other
bilateral agencies). It also calls for important changes in the way they work at the country level. The
following list suggests practical ways of working in partnership.
•
Use the partner country’s poverty reduction strategy and the national budget as the framework
for all development co-operation efforts.
•
Be sensitive to government leadership.
•
Clarify the roles and responsibilities of the different partners (government, bilateral agencies,
international and regional financial institutions, United Nations agencies, private sector, civil
society).
•
Never work alone.
•
Invest in co-ordination mechanisms and activities (which should be country-led and used for
co-ordinating ex ante strategic planning and joint implementation), including working out the
details of how, when and where to interact with other external and local partners.
•
Promote and consolidate joint work (data collection, analysis, missions, evaluation,
management and accountability of aid flows) and to share information with other partners.
•
Simplify and rationalise development agency administrative and financial requirements (e.g.
reporting, tracking, procurement, auditing).
•
Facilitate local mobilisation, participation, monitoring and assessment.
•
Provide capacity-building to i) strengthen government leadership of poverty reduction co-
ordination and consultative processes and ii) enable civil society, including women’s
organisations and gender equality advocates, to engage effectively in the consultation process
and to actively monitor and evaluate poverty reduction policies and programmes.
2.4.2
Gauging commitment and assessing partnership performance
101.
Criteria for assessing partner commitment to poverty reduction Partnerships are likely to hinge
on the quality of governance and, in particular, government efforts to orient strategies in a pro-poor,
gender-aware direction. Efforts to gauge quality and commitment in these areas must be tailored to specific
country contexts (see Box 2.2).
102.
Other important criteria concern the quality of the policy dialogue and consultation processes. As
a general rule, accountability to domestic stakeholders, including elected officials, will be of critical
importance. Although in practice many national parliaments and local assemblies have serious limitations,
their existence implies a potential source of pressure against gross misuse of public funds and in support of
public spending priorities that reflect government’s poverty-reduction commitments. Policy dialogue
between government and development agencies should respect and strengthen local policy debate and
dialogue.
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Box 2.2 Assessing partner government commitment to poverty reduction
Assessing the quality of a country’s commitment to poverty reduction calls for difficult qualitative
judgements about the pace and scope of change processes. Responses to the following questions may be
helpful in assessing the extent and quality of government commitment and in identifying areas where
progress and/or agency support is needed:
•
Is there an agreed poverty-reduction strategy and medium-term action plan that has been
drawn up in a participatory way? Is there a significant role for the Parliament (or other elected
body) and its committees in strategy formulation?
•
How representative is the stakeholder consultation process outside of government (e.g. non-
governmental organisations, regions, private sector, press, social groups including women’s
groups)?
•
Is there visible commitment to ensure that poverty reduction efforts empower poor women and
increase their opportunities?
•
Is there a high-level committee for directing and co-ordinating poverty reduction actions and a
government unit clearly responsible for mainstreaming poverty reduction?
•
Are plans and budgets transparent, with full publication in a timely way?
•
Is adequate weight given to poverty reduction criteria in review procedures for country
investment and recurrent expenditure decisions?
•
Does the policy framework distinguish the needs of particular socially or geographically
disadvantaged groups? Does it identify specific measures to relieve the constraints they face?
•
What incentives are there for government departments to be aware of poverty criteria and
respond with improvements in basic services? What incentives are there for officials to work in
rural areas, especially remote ones?
103.
Criteria for assessing development agency performance in addressing poverty Development
agencies should also develop criteria for assessing their own performance in supporting poverty reduction
partnerships.
104.
Poverty outcomes are not primarily determined by development agencies. They are determined
by many factors. At the same time, a key criterion for evaluating agency performance will be to assess the
impact that the development agency’s country strategy has had on progress in achieving sectoral
development targets and/or on improving poverty indicators as set out in partner countries’ poverty
reduction strategies. This places a premium on developing appropriate evaluation methodologies for
assessing poverty reduction impact.
105.
Additional criteria might include the extent to which the development agency i) co-ordinates its
planning and implementation activities with other partners, ii) reduces the administrative burden it creates
for partner governments and iii) facilitates collaboration with other development partners (see Box 2.3).
Efforts to increase the flexibility and predictability of resources provided -- while recognising the
constraints some development agencies face regarding in-kind assistance -- may as well be considered a
performance measure. Co-operating agencies should also refrain from financing ad hoc projects off-budget
and other practices leading to parallel management structures.
106.
Finally, Member governments should be held responsible for the effectiveness of their aid (e.g.
progress in untying or increasing the proportion of local procurement) as well as their performance in
promoting policy coherence across their governments (especially as regards aid and trade policies) and in
improving access to information and technology.
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Box 2. 3 Assessing development agency poverty reduction efforts
Working in partnership means giving serious attention to assessing one’s own performance in measuring
up to agreed responsibilities and obligations. Reciprocity of this sort strengthens the trust and
commitment of other partners. The following indicative criteria can be used by agencies conducting self-
assessments in this regard:
•
Is the development agency country strategy based on the partner country’s own assessment and
strategy for addressing poverty?
•
To what extent does the agency’s country strategy address the multi-dimensional aspects of
poverty?
•
To what extent have the agency’s co-operation activities been carried out jointly with other
bilateral and multilateral development agencies (e.g. missions, appraisals, data collection and
analysis, etc.)?
•
To what extent have development agency administrative and financial requirements been
adjusted/harmonised with the partner country’s existing procedures and possibilities?
•
Has the agency supported and strengthened country-led planning, implementation and co-
ordination processes?
•
Has the Member helped facilitate civil society’s participation in debating and deciding on the
contents of the country’s poverty reduction strategy?
•
Has a commitment been made to provide resources over the same timeframe as the
government fiscal planning framework?
•
Have efforts have been made, and progress achieved, to improve policy coherence within the
agency and more broadly across the full range of government bodies?
2.5
Working in different country contexts
2.5.1
A typology of countries
107.
Achieving results in reducing poverty calls for establishing priorities as to how the development
co-operation budget will be allocated according to policy objective, partner country and instrument. Key
considerations here should be the extent to which a partner country is committed to reducing poverty, the
extent and depth of poverty in a country, and the needs of the poorest people. Allocation decisions will, to
some extent, be based on qualitative judgements.
108.
At a more general level one can broadly classify partner countries according to two criteria,
poverty reduction capacity and commitment, as a way of helping development agency staff tailor their
assistance decisions and approaches. Partner countries will generally fall into one of the following broad
categories:
109.
Large and/or non-aid dependent countries The role of development co-operation in reducing
poverty in these countries may be marginal given the overall magnitude of macroeconomic balances,
access to international capital markets and the fungibility of financial flows. Nevertheless, the needs of the
poor -- which may be very considerable in some countries -- must be addressed. A key priority will be to
ensure development assistance catalyses additional local resources and actions to reduce poverty. In view
of the reduced leverage of development co-operation in these countries, efforts to foster greater
commitment and resources for reducing poverty should focus on dialogue with partners and efforts to
strengthen the voice of civil society in policy formulation. Options for agency support include developing
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the private sector, upgrading public sector performance, redistributing assets, improving governance
structures and institutions (including at the sub-national level) and promoting policy coherence across
Member country governments (especially trade, agriculture and finance policies).
110.
Countries that have developed a poverty reduction strategy but that lack local implementation
capacity. In countries with a reasonably functioning policy environment and where efforts to overcome
remaining capacity shortfalls are being made, development agency strategies and programmes should be a
sub-set of the country-led strategy and public investment priorities. Development agencies should ensure
that their programming priorities and the resources offered are supportive of the partner government’s
overall strategy and medium-term fiscal planning. It will be important to agree on how to account
satisfactorily for results and outcomes of external financing without distorting national spending priorities.
Agencies assessing their support to countries in economic transition should factor in the time required for
social and economic change.
111.
Countries striving to develop economic strategies and social policies for poverty reduction who
also lack capacity and institutional mechanisms. In countries that are still striving to articulate a coherent
poverty reduction strategy, process indicators and intermediate measures of progress towards goals are
particularly important. Development agency country programming in these countries should encourage
domestic participation in the poverty analysis. Members should consider strengthening country capacities
to analyse and interpret data, including social, economic and political analysis that addresses the
importance of gender inequality and other forms of disempowerment and social exclusion.
112.
Countries transiting from conflict or natural disaster Where countries are starting to recover
from conflict or natural disasters, development agencies may focus on restoring damaged economic
infrastructure and basic services as a way to mitigate the impact of such calamities on the poor. In these
situations, taking actions to reduce the risks, vulnerability and insecurity associated with being poor can be
part and parcel of emergency relief, rehabilitation or peace-building efforts. At the same time, while a
credible commitment or track record on poverty reduction may be missing for such countries, development
assistance (particularly capacity-building support) may be critical to create the space for permitting
government to begin to focus on poverty reduction needs.
113.
Countries where government is not demonstrating adequate commitment to poverty reduction
Finally, in countries where poor governance, conflict, or the absence of a demonstrated government
commitment to poverty reduction prevails, the kinds of support development agencies can provide will be
severely limited. Serious governance, human rights and aid effectiveness concerns will prevent
government-to-government co-operation. Agencies can work with local authorities or through non-
governmental organisations to help relieve poverty among targeted populations. They can also provide
more general support to reduce vulnerability and satisfy humanitarian needs. Where governance is absent
or very weak, community-based approaches may be the only possible response. Finally, bilateral agencies
could consider how support to local structures, civil society and the private sector could foster “pathways”
for more serious country commitment to poverty reduction and development agency engagement in the
future.
2.6
Key aspects of an evolving partner country strategy framework
114.
Development agencies should shape their development co-operation support in the context of
local processes and frameworks for planning and implementing poverty reduction efforts. This section
describes ongoing efforts to develop country level strategic planning frameworks keyed to the international
development goals such as national Poverty Reduction Strategy Paper (PRSP) processes, the
Comprehensive Development Framework (CDF), National Strategies for Sustainable Development
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(NSSDs), and the United Nations Development Assistance Framework’s Common Country Assessment
(UNDAF/CCA). It also highlights the importance of working through Medium-Term Fiscal Frameworks
(MTFFs) as a way of structuring and allocating development assistance in a co-ordinated way under
partner country leadership. It concludes by describing additional concerns and focused support that
development agencies can usefully provide in these contexts.
2.6.1
Working collaboratively through local planning and decision frameworks
115.
Country-level strategic development frameworks There is widespread convergence in the
international community around the need for developing comprehensive, country-level development
frameworks integrating national anti-poverty strategies. A number of these closely related, often-
interlocking frameworks (e.g. PRSP, CDF, UNDAF, NSSDs) are now operative in developing countries.
Taken together, these frameworks are the operational mechanism for organising national efforts to achieve
national and international development goals and targets. Their common characteristics derive from
widely-shared principles: the primacy of national leadership and ownership, the importance of widespread
participation, and the need for a strategic view focused on achieving results. The development community
has pledged its support for these processes in a spirit of partnership.
116.
Effort should be expended to ensure that these country-level strategic frameworks are
comprehensive, coherent with one another, and supportive of poverty reduction. In a best case scenario,
these frameworks would coalesce into a single national plan integrating economic, social and
environmental priorities within a holistic, strategic policy framework geared to ensuring that overall
development -- including poverty reduction -- will be sustainable.
117.
Agencies should work in close collaboration with other partners in supporting development of
these strategies, including by strengthening local capacity for carrying out consultation processes and
conducting relevant research and analysis. Strategies developed in these frameworks, and particularly the
PRSP process, should be the point of departure for development agency country-based poverty reduction
programming and activities.
118.
Relying on the MTFF as a tool for shaping and co-ordinating development agency support
Strategic development planning should be carried out in co-ordination with partner governments within
local planning structures. An MTFF provides a useful framework for prioritisation and accountability in
relation to poverty objectives (see Box 2.4). It is typically a rolling expenditure and revenue plan reflecting
government policy priorities, costed plans for achieving particular outcomes, and the total “resource
envelope” considered consistent with macro-economic stability. The framework sets the basis for the
annual budget process, making this more outcome-based and less focused on financing a fixed set of
requirements on the input side.
119.
The MTFF approach is potentially helpful to poverty reduction because it links spending patterns
more closely to a government’s strategic goals. It also begins to make the budgets of different levels and
departments of government reflect their ability to meet agreed objectives. This will increasingly imply
establishing indicators and developing transparent processes to show whether spending has served the
intended beneficiaries and whether budget intentions have been converted into expected outcomes.
120.
Where possible, development agency funding commitments should be fully reflected in the
MTFF. One major benefit of the MTFF approach is that it can enable government to bring a greater
proportion of development agency resources into a framework for overall prioritisation. While in-kind
development assistance may not readily be integrated in the MTFF, efforts should be made to inform
government planning staff of such resource inflows. Subject to an acceptable policy environment,
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development agencies should be willing to use the MTFF process to signal the intended continuity of their
assistance.
Box 2.4 Making the most of partner country Medium-Term Fiscal Frameworks
The policy framework for the MTFF is, among other things, an opportunity to disaggregate variables by
gender and introduce new variables with a gender perspective. For example, it can be used to encourage
expenditure and revenue decisions that take account of women’s unpaid work. More broadly, it provides a
context for challenging underlying assumptions about the social and institutional context of economic
planning.
Periodic reviews of an MTFF can usefully include both external partners and domestic non-governmental
stakeholders. These may become important stocktaking exercises that provide an opportunity for
governments and their partners to review jointly their shared commitments to poverty reduction.
2.6.2
Co-operation agency support for designing national poverty strategies
121.
Assistance is often required for elaborating national poverty-reduction strategies and action plans.
The nature and timing of such assistance can be crucial. Examples of appropriate assistance include:
•
Help in developing diagnoses of the nature and causes of poverty to permit the most
effective design of public actions, including better understanding of gender-specific issues
and the implications for vulnerable groups.
•
Support for developing guidelines for poverty-focused sector-wide and integrated
programmes supporting decentralisation and an active role for local communities.
•
Resources for monitoring and evaluating poor people’s access to services within sector and
sector-wide programmes.
•
Strengthening capacity for generating and analysing information and statistics, including
funding for poverty assessments and the development of relevant statistical techniques and
tools.
•
Facilitating and building capacity for broader public participation in the strategy process,
for example by supporting the work of parliamentary committees or independent public
policy institutes.
122.
Every effort should be expended to ensure that partner country authorities are given adequate
time and space to develop their own, widely shared, poverty reduction strategies
123.
It is important for development agencies to work with and through government in this regard e.g.
they should not “flood” government departments with expatriate technical advisers. Long-term technical
advisers should be hired by, and be directly accountable to, government. Studies underpinning national
poverty reduction strategies, PRSP formulations or development agency country strategies should be
locally commissioned wherever possible, and efforts made to ensure that they genuinely contribute to
national capacity-building. Care should be taken to ensure that work is undertaken in accordance with local
priorities and that information generated through development assistance support is shared with local
partners.
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2.6.3
Strengthening commitment and follow-through for local co-ordination
124.
Co-ordination issues Aid co-ordination in the context of partnership is the responsibility of
government. In this enabling context, the PRSP and MTFF processes are very important for structuring and
co-ordinating development assistance. Bilateral agencies must make determined and sustained efforts to
share information and work with one another with a view to delivering coherent and consistent messages
and focusing on essential needs and collaboration opportunities. Increased delegation of decision-making
to field offices will provide the impetus and margin of manoeuvre necessary for spurring more and better
co-operation and co-ordination in the field. This co-ordination should include bilateral and multilateral
agencies at country, regional and international levels.
125.
The challenge for the development community is to find ways of collaborating that do not
undermine country ownership nor create additional burdens for partner countries.
126.
Consultative Groups and Round Tables are also mechanisms for aid co-ordination, while
simultaneously strengthening partner country capacity and ownership. These fora should now be driven by
the poverty reduction agenda. Efforts should be made to support partner country venues for these meetings,
in which high-level agency headquarters staff should participate.
2.7
The continuing role of development agency country strategies
127.
The trend towards partner country efforts to develop strategic frameworks for reducing poverty
should help focus development agency programming efforts. The long-term goal should be for
development agency country strategies (CSs) to diminish in importance. In best-case circumstances the
development agency CS will be a “business plan” for the implementation of partner-led national poverty
reduction strategies. Nevertheless, there is scant likelihood development agencies will abandon their
traditional planning frameworks when they confront the need to organise and fit their assistance within a
given partner country context. DAC Member country assistance strategies will continue to play an
important role, and this section describes how best to develop poverty-focused country strategies.
128.
Essential requirements for country strategies The way in which CSs are developed may be as
important as their content. Agency country strategies should:
•
be primarily focused on poverty-reduction goals and justified in terms of these, with
appropriate senior-management screening;
•
be aligned with the partner country’s poverty reduction strategy framework, which should
be the template for programming and implementation efforts by all partners;
•
reflect knowledge of what other development agencies are doing in the country and what
aid co-ordination mechanisms exist;
•
include specific measures to reduce gender gaps or empower women as one means of
reducing poverty, and
•
be genuinely strategic and informed by the best available knowledge of the poverty
situation in the country, including the results of gender and social analysis and
consideration of environment-poverty linkages.
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129.
Box 2.5 sets out a possible outline of a development agency CS. It illustrates the need for
agencies to make explicit choices and justify those choices at several distinct levels. The justification
should include how the agency’s priorities and intervention choices fit with or relate to the national poverty
reduction framework, where it exists or is expected to be built over a transitional period.
Box 2.5 Possible model for a bilateral development agency poverty-focused country strategy
I.
The country’s poverty profile (nature, causes, dynamics, identification/location of poor) 1/
II.
Description and assessment of the country’s commitment to poverty reduction 1/
III.
Summary of key elements of the country’s poverty reduction strategy 1/
−
Sectors
−
Governance
−
Participation/consultation
−
Targets, indicators, monitoring and evaluation
IV.
Proposed development agency strategy
A.
Issues for the policy dialogue (priorities, responsibilities, performance, governance, etc.)
B.
Review of relevant “lessons learned” and good practice from inside and outside the agency
C.
Components of support (justify in view of national poverty reduction strategy,
development agency comparative advantage, relevant capacity strengthening efforts)
− Support for pro-poor growth
− Key sectors
− Gender
− Empowerment
− Environment
− Capacity development for governance/accountability
D.
Modes of intervention and their financing
− Balance between budget support (general budget, Poverty Funds, sector support) and
project grants or lending
− Balance between direct/indirect focus on poor people (including targeting
mechanisms), indirect or inclusive actions for broad groups of people including the
poor (e.g. SWAPs) and wider structural actions to underpin pro-poor growth
E.
Co-ordination mechanisms
− Government
− External development agencies
− Local stakeholders
V.
Country performance indicators (agreed with partner government)
VI.
Development agency Country Strategy self-evaluation benchmarks (clear, monitorable and
time-bound benchmarks to track implementation)
1/ Information for these sections of the CS should be taken directly from the partner country’s poverty
reduction strategy documents
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2.7.1
Grounding the country strategy in a good understanding of the poverty context
130.
The CS should be based on the best available knowledge about poverty, and its preparation
should be geared to promote national production and use of statistics and other data. Partnership
considerations argue for two priorities in this regard:
•
Sharing openly and systematically with partner governments and other development
agencies all analytical work, which should be used to develop collective/shared poverty
assessments, and
•
Working closely with country institutions at all levels -- thereby taking advantage of scarce
skills, benefiting from synergies and promoting active learning -- to develop common
diagnostic frameworks.
131.
At the same time, concerted efforts are needed to strengthen local capacity, particularly in the use
of data for diagnostic analysis and policy prescription. Critical and analytical use of data is a weak area for
development agency CSs and national strategies alike. A key concern here is the need to match
development agency concerns about gender equality with better country-specific analysis of poverty-
gender linkages and their implications for action. Similar analysis and dissemination is required for
environment-poverty linkages.
2.7.2
Building focused and effective country portfolios
132.
General Poverty-focused development co-operation programmes and projects should address (in
varying measure) the three key pillars of poverty reduction strategies: i) support for pro-poor growth, ii)
measures to promote equity/social inclusion, and iii) governance and institutional changes that create basic
pre-conditions for improved poverty reduction. Special consideration needs to be given to the locus of
public expenditure (e.g. pro-poor growth patterns will be fostered if public investment is concentrated in
areas that are particularly poor) and the types of service provision from which the poorest groups might
gain disproportionately (e.g. rural roads or primary schools). Agricultural development, which impacts on
many different dimensions of the well being and opportunities of poor people, is a key sector for
development agency support (see chapter III). Gender analysis and related policies and programmes will as
well have robust impact on poverty reduction, which calls for greater efforts to specify more precisely
gender-poverty links.
133.
The key role of policy dialogue In the short term, especially in those countries still in transition
towards a fully articulated strategy with effective implementing institutions, intense dialogue between
development agencies and countries based on CS parameters is likely to remain necessary. Without this,
priorities and performance cannot be expected to move in a more pro-poor, gender-aware direction. There
is also likely to remain an important role for agency CSs in mobilising and maintaining support for
development co-operation programmes among constituencies in their home countries.
134.
Choosing appropriate development co-operation instruments and modalities Intervention
choices should reflect lessons learned and good practice (see Chapter III). However, the balance of direct,
indirect and wider actions
6
should flow from an analysis of the country’s needs as determined through
dialogue with country partners. It should not depend on internal agency dynamics. Preferable options
6
That is, (a) interventions directly and predominantly focused on poor people; (b) indirect or
inclusive actions for broad population groups including sector wide approaches; and (c) wider
structural or macro-economic actions underpinning pro-poor growth and country competitiveness.
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include the financing of a coherent set of projects, or “common basket” budgetary support linked to agreed
sector-wide priorities and outcome objectives. Alternatively, funds may be channelled through the national
budget, with special provisions to protect disbursements under poverty-reducing expenditure headings.
135.
Focusing on the poorest Greater focus is needed to ensure that assistance reaches the poorest
regions or districts and the poorest individuals or subgroups (e.g. the landless, tribal peoples, the
handicapped, refugees, single-parent families). This will require analysis and vigilance to reduce potential
“leakage” and benefit capture (especially in the productive sector, where people with assets are considered
better credit risks). It also underscores the need for innovative approaches leading to demand-creating
rather than supply-led interventions.
136.
Genuine participation is time-consuming and runs counter to rigid agency programming and
budget pressures that continue to prevail in development co-operation programmes and projects. The
participation and empowerment of women, socially marginalised and excluded groups, and the poorest of
the poor remain elusive objectives, suggesting that incorporating their interests into policy design and
operational guidelines remains an unfulfilled challenge. Effective systems of monitoring and feedback are
also required to secure these groups’ participation.
137.
The common denominator for agency choices: poverty reduction impact Agencies should
seek to justify their own choices in terms of expected impact and value for money in reducing poverty.
They should support government efforts to do likewise with respect to national poverty-reduction goals.
This is not an easy thing to do, given the complexity of the links between expenditures and outcomes, and
the lack of good evidence on impacts. However, more can undoubtedly be done to improve strategic
decision-making, for instance by integrating poverty-focused monitoring and evaluation activities when
designing and implementing assistance.
Box 2.6 How bilateral agencies can work most effectively with multilateral institutions
A number of bilateral agencies consider their collaboration with multilateral institutions as an important
way of leveraging the impact of their assistance programmes. Closer and more supportive relationships
among external partners are an important goal for all concerned, especially in the context of PRSP. Options
here include:
•
Identifying and agreeing with multilateral institutions on the respective roles, responsibilities
and obligations of the different external partners in country-specific PRSP processes.
•
Establishing feedback channels from the field to headquarters informing management of
implementation opportunities, challenges and problems.
•
Participating actively in bilateral/multilateral forums for co-ordinating assistance (e.g. SPA,
CGs, Roundtables).
•
Being aware of missions/policy dialogue opportunities and initiating early and prompt contact
with relevant multilateral staff.
•
Keeping periodic co-ordination meetings informal, operational and focused on results (e.g.
share experience, discuss options and possible scenarios, seek advice, co-ordinate activities
and research, etc.).
•
Looking for ways to streamline and simplify funding and disbursement arrangements (e.g.
having each development agency volunteer to fund a certain percentage of a programme, with
the government providing periodic financial reports).
* * *
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138.
This chapter has focused on process issues related to country operations programming and
management: how to best plan, implement and work with others on poverty reduction programmes and
projects. Development effectiveness at the country level, however, will be just as closely linked to the
substance of agency country programming: the types of support provided, good practice for designing and
implementing interventions at the macro, sectoral and project level, and approaches for ensuring synergies
and complementarities. The following chapter looks more closely at building effective country portfolios
for tackling poverty.
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CHAPTER III. EFFECTIVE DEVELOPMENT CO-OPERATION FOR POVERTY REDUCTION
WHAT WORKS AND WHY
3.1
Introduction
139.
The purpose of this chapter is to highlight good practices of development co-operation from a
poverty reduction perspective based on evaluations, empirical evidence and common knowledge. It
provides concrete guidance as to what works (and what does not work) in achieving poverty reduction
through the broad range of development co-operation activities. In order to facilitate the review and
assessment of good practice, the various forms of development co-operation have been organised into three
main intervention levels, as follows:
•
Development co-operation at the country level (wider or enabling action).
•
Sector and area based development co-operation (indirect or inclusive action).
•
Projects at the local level and poverty focused development co-operation (direct or focused
action).
140.
Given the diversity of political, economic and social contexts in partner countries, it is not
possible to state that one form of development co-operation will in all cases have a greater impact on
poverty reduction than another. However, it is clear that, in the right political, economic and institutional
environment, country support at the macro level has a greater potential for achieving large scale poverty
reduction than projects or focused action at the local level. Specific instances or causes of poverty are,
however, often addressed most successfully in the context of sector programmes, area based approaches
(meso level) or free standing projects (micro level). For activities on these levels to be sustainable,
however, they must really impact on the livelihoods of the beneficiaries and be institutionally and
financially compatible with the overall macro framework.
141.
It is also important to recognise the potential synergies that can be achieved from co-
ordinating different types of development co-operation at the macro, meso and micro levels. Given the
multi-dimensional nature of poverty and its consequent complexity, isolated support, which does not seek
to make horizontal and vertical linkages, has difficulties in embracing poverty as understood in this way,
and rarely does it have a significant and sustainable impact on poverty. Development agencies should,
insofar as possible, collectively agree with the partner country on a mix of assistance (financial/technical,
country/sector/project) best suited to support the poverty reduction objective. The country’s own poverty
reduction strategy should be the framework for this dialogue and for integrating development co-operation
activities.
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3.2
Development co-operation at the country level
142.
Following the adoption of the International Development Goals, poverty reduction is
increasingly seen as the primary purpose of development co-operation. The new emphasis on Poverty
Reduction Strategies will make it easier to address poverty as the overriding concern of the international
development community.
143.
Over the years, different modes of co-operation at the country level have been established to
enhance economic and social development. These include policy dialogue in combination with programme
aid, debt relief, capacity development and, in the case of emergency situations, humanitarian assistance.
Through their specific modalities, all these instruments ultimately aim at creating an enabling environment
for poverty reduction provided that good practice, in terms of enhancing their pro-poor impact, is applied
as highlighted below.
3.2.1
Policy dialogue and programme aid
144.
Policy dialogue involves a process whereby the transfer of financial resources in the form of
programme aid or debt relief is linked to economic, political and administrative reforms in partner
countries. It is often coupled with technical assistance for capacity development. As emphasised in Chapter
II, however, using policy leverage through disbursement conditionalities and associated pressure has not
generally been effective, particularly for a bilateral agency, when seeking to bring about policy and
institutional reforms.
145.
Policy dialogue should be approached by way of building confidence and forging longer-term
partnerships around shared objectives. This implies a more integrated and holistic approach to addressing
poverty through a combination of policies and programmes at national, sector and local levels. In this
context, the dialogue with partner countries on poverty reduction strategies provides an essential venue for
integrating the different dimensions of poverty into the general policy formulation. As presented in Chapter
I section 1.4, the main areas of a poverty-focused policy dialogue should include the following:
•
Reallocations of public spending in favour of programmes and sectors that produce
services benefitting the poor. (This requires knowledge of and agreement on who are the
poor, what are their concerns, what are the main causes for poverty and how public
spending can be oriented to reduce poverty.)
•
The importance of gender equality, human rights, good governance and sustainable
development in poverty reduction strategies.
•
Pro-active social policies as a core element of poverty reduction strategies, not just safety
net mechanisms that protect vulnerable groups.
•
Policy actions to expand income-generating opportunities for the poor.
•
Institutional instruments through which the concerns and interests of the poor are
integrated in policy formulation and implementation.
146.
Increased financial resources in the form of programme aid (e.g. balance of payment support,
budget/public expenditure support, commodity aid) affect the prospects for economic growth and poverty
reduction in several ways. For instance, it allows for increased public expenditure for human and social
development and may reduce public borrowing which, in turn, can raise the amount of savings available
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for investment by the private sector. These are all factors that are known to contribute to enhanced
economic growth and thereby also to increased employment opportunities and a better foundation for pro-
poor fiscal policies. Good practice in this regard also implies giving preference in the allocation of
programme aid to countries with good institutional, social and economic policies. Programme aid also
opens the way to a policy dialogue on macro-economic reform and good governance which can support the
design and implementation of pro-poor policies in the following critical areas of public intervention.
3.2.1.1 Macroeconomic support
147.
Macroeconomic policies have an important role to play in assuring macro-economic stability,
which is a necessary, but not sufficient, condition for sustained economic growth. In addition, reforms in
the following policy areas can contribute to create the necessary economic environment for poverty
reduction:
148.
Fiscal management reform. Fiscal policies are crucial for promoting a pro-poor allocation of
resources, e.g. between richer and poorer regions, between urban and rural areas, between sectors, and
within sectors. In this context, it is crucial for development agencies to channel financial resources through
national or local government budgets. Reform measures can include (i) support for public expenditures
reviews to achieve a more effective and pro-poor utilisation of fiscal resources; (ii) tax policy reform
leading to improved resource allocation (e.g. reducing certain forms of taxation that have undesirable
redistributive effects, improvement of tax collection); and (iii) institutional reforms, (e.g. tax legislation,
setting up revenue authorities, strengthening public accounts offices).
3.2.1.2. Governance
149.
Good governance can play a particular role in promoting social inclusion through participation,
reduced corruption and increased efficiency in public sector management. The issue of governance in
relation to poverty reduction is mainly about the poor having greater influence in policy-making and
greater access to basic services. Policies to increase the participation of the poor include civil service
reform, decentralisation, judicial and legal reform, improved national and local accountability, facilitation
of civil society and land reform as well as a range of other measures in support of democratisation.
•
Decentralisation can raise the quality and access of services that benefit the poor but it
also involves clear risks: local government can be captured by local elites, regional
disparities can be deepened, or central government can ‘disown’ responsibility for the
poor. Thus, the extent and phasing of decentralisation needs to take into account the
special national, and sometimes sub-national, circumstances in a given country. The link
between decentralisation and poverty reduction lies in the involvement of representatives
of the poor in public policy, thereby enhancing its pro-poor nature, its accountability and
effectiveness, and the sustainability of its outcomes.
•
Support for civil society is vital for poverty reduction. It is a way to generate fora where
organisations and representatives of poor people might achieve influence and forge
alliances with enlightened elites to pursue poverty reduction objectives (e.g. by fostering
national support for the achievement of universal basic education).
•
Land reform emerges as a necessary condition for poverty reduction in many agrarian
economies. Good practice includes using land taxation and market-based instruments;
combining security of tenure and legislation on size of landholdings with public-private
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partnerships to provide support for agricultural production (particularly credit, irrigation,
training and technology); and linking the implementation of land reform to the process of
government decentralisation.
150.
Country political analyses, and not least assessment of the political impact of policies and
programmes, are essential in the identification of short-, medium- and long-term strategies for development
agencies in this area.
3.2.2
National capacity-building
151.
[Text to be drafted]
152.
Capacity-building initiatives at the national level must also take into account the strong advance
of the HIV/AIDS epidemic in many poor countries, which hits the poor harder both through the decimation
of national planning capacity for poverty reduction and through depriving poor households of their
breadwinners.
Box 3.1 Building Statistical Capacity : The PARIS 21 Initiative
Poverty Reduction Strategies can only be fully effective if they are informed and shaped by timely,
accurate and reliable information. Information such as who and where are the poor? what is the nature of
their poverty? and what are the actions required to alleviate their poverty? is essential. This type of
information is most effectively used to inform policy when it is collected by nations themselves, on the
basis of their locally defined needs for information. A combination of donor-led statistical activities,
weak local demand for information and very limited resources have undermined the national statistical
systems of many partner countries and led to a weakening of institutional structures required to inform
and shape effective policies.
The PARIS21 consortium was set up in 1999 to address this problem by forging a new global
partnership amongst those needing, producing, funding and using statistics, whether they are national
policy makers, representatives from multilateral and bilateral aid agencies or local citizens and NGOs.
The partnership intends to work through a process of nationally owned information strategies, with a
sequence of long-term co-ordinated development agency support to build local statistical capacity. This
will include the capacity to produce and use both quantitative statistics and other qualitative information.
More information is available at http://www.paris21.org
3.2.3
Debt relief
153.
High levels of external debt are a crushing burden on economic and social development in many
of the poorest countries. Debt service payments in hard currency divert scarce domestic resources away
from investments in basic education and health. Debt relief, therefore, is an integral part of the
international community’s contribution to poverty reduction. Through the enhanced HIPC
7
initiative,
donors pledge to provide for broader, faster and deeper debt relief with the specific objective of releasing
funds for poverty reduction. Implementation of this unprecedented effort depends, on the one hand, on
progress made by HIPC countries to develop comprehensive country-owned poverty reduction strategies
through a participatory process involving civil society and, on the other hand, on donors securing the
7 .
HIPC: Highly Indebted Poor Countries
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required financing without reducing other aid flows. . At the same time, it is important not to lose sight of
the assistance needs of countries with good policies that have avoided serious debt problems.
3.2.4
Assistance for conflict prevention and humanitarian aid
154.
Pervasive poverty, extreme socio-economic disparities, unbalanced distribution of the benefits of
growth and systematic lack of opportunity are destabilising factors which contribute to fueling and
perpetuating conflict situations. In helping to prevent violent conflict, development co-operation should
focus on addressing poverty and inequality as root causes of conflict while simultaneously engaging in
long-term support to strengthen governance and build the appropriate institutions and democratic
mechanisms for resolving tensions without violence.
155.
In the case of acute emergencies, violent conflict or natural disasters, humanitarian assistance
provides a quick response, often on a large scale, concentrated on saving lives and relieving suffering.
Since poor people possess the least means to avoid crises, this kind of assistance is by definition poverty-
focused. It may, however, undermine poverty reduction objectives by creating dependencies and impeding
the problem-solving and self-governing capabilities of afflicted communities. Good practice in this respect
includes planning such assistance so that it i) integrates the long-term needs of beneficiaries and the coping
strategies of the poor; ii) incorporates gender analysis as standard practice; iii) does not undermine local
production and service delivery by flooding local markets with foodstuffs, and iv) supports local capacities
to take over management of relief operations as soon as possible. The DAC Guidelines on Conflict, Peace
and Development Co-operation (1998) provide detailed guidance for development agencies in this area.
3.2.5
Conclusion
156.
Taking poverty reduction as the starting point for planning and implementing development co-
operation should not only be the first priority of all country level programmes, but also the basis for
dialogue with partner countries. Where there is political support, a country’s capacity to implement pro-
poor policies appears to hinge on three important conditions:
•
Adequate information on the incidence and causes of poverty that can enable a realistic
poverty reduction strategy to be developed.
•
Sufficient room in the national budgets to allow for a re-allocation of budgetary resources
in a pro-poor direction. (In many of the poorest countries this will only be possible if the
burden of servicing foreign debt is reduced).
•
Sufficient political commitment, leadership, capacity and willingness within the
administrative system to implement the proposed reforms.
157.
Pro-poor development co-operation at the country level should take these constraints into
account. A first step in poverty reduction support, therefore, is to assess:
•
The capacity to understand and to link poverty concerns to governance, economic and
social policy, in particular with respect to gender and other institutional systems that shape
entitlements.
•
Development co-operation needs including the debt servicing burden and possibilities for
debt relief.
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•
The possibilities for increased domestic resource mobilisation.
•
The access to and quality of public services and pro-poor resource allocations within and
among sectors.
•
Local capacity for implementing specific policies and for monitoring outcomes.
158.
As highlighted in Chapter I, a comprehensive understanding of the nature of poverty is an
indispensable point of departure for country level development co-operation. The strategic development
frameworks (PRSP,CDF, NSSD) as outlined in Chapter II provide the context for development co-
operation, which should be targeted at enabling the poor to share in the benefits from growth, increase their
capabilities and well-being, and reduce their vulnerabilities to risk. The actions and coping strategies of
different groups of the poor are key considerations in pro-poor development co-operation. Long-term
reduction of poverty must build upon the efforts and actions of the poor. Whether formal or informal,
individual and collective, or in political, social and economic spheres, the actions and strategies of the poor
are central to the sustainability of interventions, to their ownership, and to broader concerns including
accountability, effectiveness and efficiency in development.
3.3
Sector and area-based development co-operation
3.3.1
Sector programmes
159.
Under the new label of Sector-Wide Approaches (SWAPs), sector support
8
is emerging as a key
development co-operation instrument because of its potential for enhancing local ownership, strengthening
partnership approaches, and establishing a conducive institutional environment for development and
poverty reduction. The sector programme approach generally entails a move towards co-ordination,
decentralisation, involvement of the private sector and civil society participation.
160.
In essence, the SWAp is a mechanism by which country partners and external agencies can
support the development of a sector in an integrated fashion through a single sector policy and expenditure
programme, under government leadership, using common management and reporting procedures to
disburse and account for all funds. Most programmes, even quite well established ones, are still striving to
achieve these objectives while addressing the challenges of institutional reform and stakeholder
involvement.
161.
As implementation proceeds, the distinct advantages of sector support in terms of improving the
environment for poverty reduction also need to be realised. Sector programmes are not a quick and easy
route to poverty reduction. The multiple concerns with forging real partnerships, stimulating ownership,
building capacity, and supporting the development of national sector frameworks attract considerable
attention in sector support and may thereby be seen to divert focus from the poverty reduction objective.
However, success in the ownership dialogue is also a good basis for making it clear that poverty reduction
is expected to be a primary concern for the partner government. It is important to recognise and address the
following challenges while increasing the poverty focus of sector support based on emerging good
practice.
8 .
Different terms are used for the same concept: Sector-Wide Approaches (SWAPs), Sector Investment
Programmes (SIP) or other sector support programmes.
The term SWAp is often used in the health sector,
whereas in agriculture SIP is more common. Other variations are (Agricultural) Services Sector Programme or
(Agricultural) Sector Management Programme.
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162.
A major rationale behind sector programmes is to overcome the fragmentation of uncoordinated
investments, in particular of donor supported and often donor managed projects, by bringing together all
sector activities within a common framework
9
. This is leading to considerable progress in co-ordination
around country-owned sector policies. However, sector support has as yet tended to focus exclusively on a
Box 3.2 Dealing with poverty in sector support: the example of education in Uganda
The Ugandan Universal Primary Education programme provides a good example of an Education Sector
Wide Approach (SWAp) -- as development agencies call it -- which draws together the key elements of
partnership with a focus on poverty reduction.
•
The sector programme was initiated by strong leadership from a Head of State committed to
universal primary education.
•
There has been a broadly participatory process in developing policy, including some
consultation with civil society groups and, at a later stage, representatives of the poor.
•
Government ownership of this initiative attracted strong support from donors who share the
priority given to primary education.
•
High level political commitment was reflected in budget allocations to the sector, which
were increased and protected as part of the Poverty Action Fund within the budget.
•
The design of the sector programme was directly informed by the poverty analysis from
household surveys and participatory poverty assessments which feed into into expenditure
priorities via the medium-term budget framework.
In addition, the Uganda education programme provides a partial model of good practice for organising
the budget process to address poverty issues. Key features include:
•
The central location of poverty analysis and monitoring within the powerful Ministry of
Finance;
•
Involvement of parliament, civil society and donors in both policy decisions and monitoring
of the education programme implementation.
•
Strong focus on transparency to enable users of education services to hold the providers to
account through multiple sources of information and feedback channels for improvement.
•
Actions to address problems of diversion of resources (directed to schools but being absorbed
by districts).
•
Efforts to empower communities through representation on school committees, including
some financial responsibility.
single sector. Opportunities for co-ordination and synergies with other sector policies and programmes are
often missed. This is particularly important in relation to poverty reduction as poor people “do not live in
9 .
The sectors most often concerned are health, education, agriculture and infrastructure.
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sectors”. Poverty cuts across sectors and needs to be tackled in an integrated manner. This is a real
challenge given that co-ordinated action among line ministries is extremely complicated, disrupting
ingrained routines and taxing the limited institutional capacity of the different bureaucracies. Good
practice, therefore, is to make concern for the poor and solutions to their problems, as defined in a wider
and integrated strategy an explicit priority in all sector programmes.
163.
In this connection, evidence points to the importance of relying on poverty assessments, which
embrace both quantitative and qualitative indicators, disaggregated by gender, and covering geographical,
cultural and socio-economic dimensions (see Chapter I). In this way the multidimensional nature of
poverty and its causes can form the basis of sector-wide approaches and provide essential links to the
country’s overall poverty reduction strategy.
164.
National governments may be assuming increased responsibility and control of sector
programmes, but this does not necessarily imply greater ownership by stakeholders below the national
level or outside the public sector. For instance, as a result of the strong focus on line ministries and on
central authority, local governments, which tend to take a more multi-sectoral approach to resource
allocation and to be more responsive to local needs, tend to loose influence. Pro-poor sector-wide
approaches, therefore, should seek to support better co-ordination of local and national governments
particularly in the context of decentralisation processes, which aim at the empowerment of local
government authorities.
165.
The participation of civil society in sector programmes is vital. Efforts towards better
participation need to aim at a broad-based stakeholder representation including representatives of the poor
and their organizations, from the early stages in sector policy design and throughout programme
implementation and monitoring. Policy dialogue is a crucial instrument for influencing political and
administrative processes in a specific sector to be more responsive to poor people’s needs and demands.
Sector programmes may also take up issues such as the rights of the poor (including issues of gender
discrimination within that particular sector) to a much larger extent than projects are likely to do.
166.
The implementation of sector-wide approaches requires substantial institutional reforms
including the need to redefine roles within the political-administrative hierarchy and to identify how
responsibilities can be shared between the public, the private and the community sectors. Lack of capacity
in the public sector as well among private and civil society actors can create major bottlenecks. For this
reason, capacity-building is a priority and, to make sector programmes povertyfocused, it is essential. This
suggests that sector-wide approaches may usefully extend the preparatory phase and add capacity-building
and participatory components to secure a well-grounded policy that most stakeholders have had the
opportunity to discuss. Without constituency building and strong stakeholders participation,
implementation is also likely to turn initially pro-poor policies into outcomes with little poverty reduction
effect.
167.
Good practice in pro-poor sector programmes depends on the sector in question, the context-
specific nature of poverty, the instruments chosen to target the poor, and the country’s social and economic
situation. As illustrated in the boxes, a focus on social sectors and specifically on primary education, basic
health care and AIDS prevention is well documented as a good practice for poverty reduction. Social
services address both major objectives of poverty reduction and some of the major impediments (e.g.
illiteracy and sickness) which prevent the poor from exploiting economic opportunities. Good practice
includes an emphasis on gender inequalities, strong local participation in priority setting, and exemption
from user fees for basic health and education services for the poor. Experience shows, however, that,
generally, barriers to access for the poor are not easily overcome. For example, gender-poverty issues such
as girls’ education or legal reforms to improve women’s access to productive assets (land, credit,
infrastructure) must be specifically targeted to ensure effective action.
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Box 3.3 Promoting Pro Poor Health Programmes
Given that health is vital to reducing poverty and promoting social and economic development, three of the
seven International Development Goals for 2015 focus on health outcomes: reduce infant and child
mortality by two-thirds; reduce maternal mortality by three quarters; and achieve universal coverage of
reproductive health services. Recent analyses of the causes of growth have also called increased attention
to the role of better health and lower population growth.
To realise these goals, it is critical to give much higher priority to protecting the health of the poor, which
is their asset for sustaining their survival and livelihood. The following have been identified as good
practice for enhancing the poverty focus of health sector programmes:
•
Make health systems more responsive to the needs of poor people. This requires: (1)
providing quality health services; (2) establishing affordable and equitable payment systems
(with pre-payment/insurance instead of user charges); (3) training health staff to respect the
poor’s dignity; (4) addressing the causes of particular deprivation such as gender, social
exclusion or geographical isolation.
•
Focus on the health threats perpetuating poverty. This includes major diseases prevalent
among the poor (malaria, diarrhoea, tuberculosis) maternal morbidity and mortality,
environmentally-related illnesses, violence and accidents, and the recent pandemics of AIDs
and tobacco. Health risks need to be assessed at a local as well as national level and should
highlight the specific risks faced by men, women and children. Disaggregated health data by
income, age, sex and locality should be complemented by participatory research that
documents the expressed health needs of the poor.
•
Mobilise commitment, partnerships and resources for pro-poor health. This includes efforts
to: (1) bring health at the centre of the dialogue on poverty reduction strategies; (2) identify
policies outside the health sector that can improve health;; (3) expand partnership to involve
civil society and the private sector (e.g. as is being done for polio eradication); and (4)
increase the very low level of aid to health (about 6% of ODA) in support of country-owned,
poverty-focused health sector programmes.
In addition, action at the international level is needed to stimulate the development of global public goods
in health (e.g. vaccine)
3.3.2 Area-based
approaches
168.
Despite a historical legacy of inefficiency, area based approaches have recently re-emerged in
relation to poverty reduction. Area-based approaches are integrated approaches covering many different
sectors. Often with an emphasis on agricultural production (crops, livestock, fishery, forestry,
conservation), area development projects seek to support public services like water supplies, health and
education as well as infrastructure (e.g. rural roads) and small-scale off-farm employment opportunities.
Area development projects can be powerful instruments for creating an enabling local environment for
poverty reduction provided they are partner-country-driven and maintained at a financially sustainable
level. This is achieved through:
•
focused technical and financial development co-operation limited to a specific
geographical area;.
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•
efforts to strengthen local institutions and capacities;
•
increasing sensitivity to the range of issues relating to popular participation, such as
empowerment and inclusion of the poor in local political processes and structures.
169.
There is, not much available evidence from evaluation results discussing the actual impact of
area-based or other integrated approaches on poverty. Nor is there evidence addressing criticisms that
integrated approaches are donor-driven, administratively complex and suffer from problems of financial
and institutional sustainability. It would appear that positive experience with contemporary integrated
approaches is related to the increasing adoption of various participatory methods for identification,
planning and implementation of activities.
3.4
Projects and poverty-focused development co-operation at the local level
3.4.1
Projects
170.
Projects have a long history as a traditional instrument of development co-operation. They have
the advantage of selecting a manageable set of problems from a complex and confusing reality and
prescribing specific inputs needed to achieve change and foster local development. Although projects have
frequently failed to make lasting positive pro-poor contributions in terms of their substantive content
(income-generation, health, education, or water), there is a recent noticeable shift in project modalities
which holds potential for more sustained outcomes and greater poverty impact.
171.
The emphasis is now on empowerment-type projects, which stress ownership, participation
and sustainability. These projects aim at raising awareness and increasing local capacities to organise,
mobilise, discuss problems and demand action. They focus on fostering leadership by stakeholders in all
aspects of project planning and implementation and laying the foundations for financial sustainability. Two
of the most important factors in this respect are the compatibility of the project with the surrounding
institutional and cultural framework and the acceptance of the project by local and central public
authorities and civil society. These new approaches stand in marked contrast to the top-down, donor-
controlled projects which too often tended to characterise projects of the past. These types of projects were
seldom found to be sustainable after the withdrawal of donor funding or to have been particularly effective
in reducing poverty.
172.
Good practice in terms of poverty reduction involves support which addresses the multiple
concerns of the poor (income, dignity, security, etc.) and simultaneously encourages and strengthens their
abilities and capacities to achieve sustainable livelihoods. This includes: identifying the poor and their
condition through poverty assessments and beneficiary needs assessments; using participatory approaches
to involve the poor in the identification and design of projects as well as in implementation and
monitoring; and elevating gender to a primary rather than secondary concern throughout the project cycle.
Box 3.4 Ensuring a poverty focus in infrastructure projects
In order to improve the environment for poverty reduction and to ensure a poverty focus in projects,
activities should be reviewed with respect to each of the following issues: technique, area, focus and
organisation. The following illustrations are drawn from infrastructure projects.
•
Technique: Labour-based methods are often more pro-poor than equipment-based
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approaches. In road construction, labour-based methods are often cheaper and provide
important forward linkages to the local economy. If wages are kept low to keep the better-off
from taking the jobs, the poor (albeit not the poorest), may benefit substantially. When
employing a labour-based approach, it is also important to direct attention to women’s access
to the jobs offered as recruitment procedures, etc. may create gender-based constraints for
women.
•
Area: Support should be directed to geographical areas or regions where the poor
predominate. For instance, rural electrification will be more pro-poor than urban
electrification, and infrastructure improvements in slums are more poverty focussed than
general urban development.
•
Focus: Secondary and feeder roads are often, though not always, more important to the poor
than primary roads. To access markets, the rural poor typically need better roads and more
frequent transportation opportunities and since the rural poor are often spacially scattered, a
fine-meshed net of secondary roads is more important than high-quality inter-city
transportation. Moreover, the latter is not a great concern to the urban poor. Another question
pertaining to focus relates to the financing of investments and recurrent costs. In particular
situations, the latter may be of greater importance to the poor than the former, but agencies
have generally been reluctant to finance recurrent costs.
•
Organisation: Local identification of needs and priorities is important to consider in
infrastructure support. While infrastructure improvements often have been approached from a
national, technical perspective, it is widely acknowledged that the participation of poor
communities substantially influences the long-term functioning and sustainability of
infrastructure. Also, consideration of specific opinions of poor people on infrastructure
programmes may help increasing their poverty reduction effect. The development of pro-poor
sector programmes should accordingly strengthen and institutionalise the links between the
poor and programme activities.
3.4.2
Co-operation with Non Governmental organisations
173.
Many development agencies operate on the assumption that NGOs are good at reaching the poor
and at working on the basis of the actions and strategies of the poor. NGOs are also known to attach a lot
of importance to popular participation, local ownership, self-help and the empowerment of vulnerable and
marginalised groups. Evaluation studies on the impact of NGO poverty alleviation projects, however,
provide a more nuanced picture regarding a number of issues.
174.
Most NGOs appear to work without any socio-economic analysis of the nature of poverty. While
they target the poor, most projects fail to reach the poorest. In spite of efforts to integrate gender
dimensions, results are modest in terms of enhancing the status of women beneficiaries. While NGOs
perform better in social sectors -- leading in some cases to marked improvements in health status --
whatever good individual projects achieve, they are insufficient to enable the poor to escape poverty. At
best, successful projects are likely to represent a minimal contribution in a process of developmental
change that will require other, complementary, inputs from both inside and outside the beneficiary
community.
175.
Generally, project NGOs fail to look, beyond the project, at the wider context and tend to play
down the external factors which often are critical in achieving impact. NGOs which engage in more
politically relevant work and work towards enhancing political capacity in poor communities are having
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impacts on poverty. Northern NGOs are also successful in building functional partnerships with Southern
NGOs. Supporting the advocacy role, lobbying and networking of local NGOs representing the poor is a
good practice to maintain an enabling environment for poverty reduction by giving “voice” to the poor.
This proves particularly effective in promoting citizenship, not least in countries in the transition to
democracy and countries pursuing post-conflict peace and reconciliation.
176.
Increasingly development agencies work with local NGOs as organisations that can help specific
groups of the poor to overcome the political, cultural and economic barriers that prevent them from using
and influencing social services. Given their political nature (relationship to state and beneficiary), local
NGOs are well placed to take up the needs and interests of politically marginalised groups (ethnic
minorities, women, landless farmers, slum dwellers). Good practice lies in relying on the comparative
advantages of NGOs as actors in civil society and influential agents of change.
177.
Support for poverty reduction also takes place through decentralised North-South, and South-
South co-operation between municipalities, schools or friendship associations. While this kind of co-
operation rarely focuses on poverty reduction as an explicit objective, it is frequently based on solidarity
and a willingness to learn from cultural encounters. The promotion of solidarity between groups with
targeted support to poor communities can be a means to promote poverty reduction.
3.4.3
Poverty-focused support
178.
Social protection interventions aim at assisting poor communities to reduce their vulnerability to
risks (whether structural due to chronic poverty or transitory owing to short-term shocks). As part of
partner countries’ social protection policies (which include national legislation and specific government
programmes), donors traditionally support a variety of poverty-focused interventions such as social funds,
micro-credit schemes, targeting and safety nets.
Social funds
179.
Social funds are grants provided by development agencies to finance small-scale projects
managed by poor communities. They seek to empower the poor by actively engaging them in identifying
their own development priorities (primarily in the health, education and water sectors), managing project
funds and maintaining facilities and services beyond project completion. Experience with social funds is
mixed. Social funds face sustainability problems and are problematic where they deviate from a poverty
focus and are used to promote local political goals. They may bypass an already agreed upon budget
prioritisation process within a given sector (e.g. supporting the establishment of new health centres which
are not in line with the national health sector programme). Experience is positive where the funds have a
clear poverty reduction mandate, concentrate on activities at the local level, and complement government-
initiated activities without distorting established priorities.
Targeting
180.
Targeting is strongly associated with poverty reduction impact. It is a useful way of ensuring that
projects take a point of departure in the actions and strategies of a specific group of the poor (landless,
slum dwellers, female-headed households, etc.). There are different ways of targeting the poor.
181.
Geographical targeting may take place at different levels from regions and districts to villages
(selected on the basis of a hardship index). Positive experience exists where particularly vulnerable groups,
such as workers on commercial farms, are targeted or where the entitlement of the poor with respect to
natural resource management is the focus of attention. However, it is preferable to go beyond geographical
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targeting because the poor and the not-so-poor are so intermingled that this approach may approximate to
no targeting.
182.
Self-targeting is another practice that has proved effective, but only on a limited basis. For
example, food-for-work projects, because of the low level of benefits they provide, appeal primarily to
poor people, keeping away, by self-selection, those who are better-off. Where self-targeting is not feasible,
participatory targeting is an effective alternative, which relies on neighbourhood groups and local
organisations to help determine who the poor are and why. This participatory approach, grounded in an
understanding of the context-dependent nature of poverty, helps to highlight aspects of poverty which
outsiders overlook, and helps to differentiate between various layers of the poor.
Micro-credit schemes
183.
Micro credit schemes are geared to reducing the vulnerability of poor households by widening
their income-earning options and increasing their productivity. They are often designed with the objectives
of achieving poverty reduction, financial sustainability and female empowerment. However, micro-credit
alone rarely increases incomes sufficiently to raise people out of poverty. It has greater impact when
combined with assistance to develop business and marketing skills, to identify markets for locally
produced goods, and to best utilise and purchase land. Efforts to improve access to finance for the poor
must also consider gender differences in needs and access. This requires overcoming the collateral issue
when legal or cultural barriers prevent women from holding land title or other assets, and providing
information on how to use and access credit to women who may be excluded from beneficiary groups or
lack the time to apply for credit.
184.
Micro-credit schemes will have limited impact if not backed by macro policies that support
financial markets and facilitate the spread of viable informal financial institutions. In rural areas most
public credit systems are not organised to serve the poor and private sector banking institutions, which
increasingly replace them, do not consider the poor to be good credit risks or a profitable market niche. As
a consequence, special credit service strategies are needed to reach the poor.
3.4.4
Conclusion
185.
In addressing poverty reduction through targeted or focused development co-operation (projects
and similar), it is considered good practice to:
•
Conceive activities within a broader development framework, for example as supplements
to a SWAP or national level support.
•
Use the first-hand knowledge that poor people possess of their own situation, as well as the
actions and coping strategies that they have devised.
•
Experiment with pro-poor approaches and issues recognising the relational and changing
nature of poverty.
186.
The participation of poor men and women in the process of development co-operation is a means
of ensuring that their interests remain central. Without such participation, development co-operation is
likely to neglect dimensions of poverty, undermine existing livelihood strategies and fail to achieve local
ownership and sustainability.
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CHAPTER IV. DEVELOPMENT AGENCY INSTITUTIONAL CAPACITY AND CHANGE
4.1
Introduction
187.
Partnership and ownership are in many respects at odds with traditional ways of conducting
development assistance. The 21
st
Century Strategy itself recognised this, noting with prescient clarity “We
will need to change how we think and how we operate, in a far more co-ordinated effort than we have
known until now”.
188.
Reducing poverty through the approaches and modalities set out in previous chapters is more
complex and sophisticated than the project approaches of the past. Agencies face many challenges,
particularly in view of the emphasis on country-owned development processes. Many DAC Members now
recognise that successfully addressing these challenges calls for changes at the very core of their
institutions: their organisational structures, practices, incentive systems and cultures.
189.
This chapter examines how agencies can best adapt themselves to the demands of partnership, of
mainstreaming poverty reduction throughout their operations, and of equipping their staff to carry out their
work more effectively. It describes fundamental institutional features and capacities where change is
needed in development agencies and suggests priority areas for action. It also looks at ways of creating an
enabling environment within agencies for promoting change and innovation.
4.2
An empirical basis for change: the findings of the DAC Scoping Study
190.
The DAC Scoping Study, a comprehensive assessment of bilateral agencies’ poverty reduction
policies and practices that provided the impetus for development of these Guidelines, found that actual
agency performance, in terms of poverty reduction commitment, focus and follow-through, fell short of
stated policy aims.
191.
The study outlined the following problems experienced in varying degrees by development
agencies:
•
A lack of leadership commitment to poverty reduction leading to multiple, competing
agency objectives, unfocused management systems and controls, and permissive country
programming;
•
Management and staff incentive systems that consolidated agency control functions,
reinforced sector-driven and supply-led approaches to programming, perpetuated
disbursement pressures and inhibited interaction with other development partners;
•
Monitoring and evaluation systems focused on inputs and measurable outputs, with few
linkages to agency or staff accountability towards achieving agency or development goals;
•
Missed opportunities for institutional development (e.g. developing staff capacities and
competencies through training, integration of lessons learned, etc.).
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192.
These problems suggest areas of focus for institutional change in the partnership era:
•
Clearer leadership commitment and signals to prioritise poverty reduction, which will
refocus institutional goals, realign management and information systems, and reshape staff
attitudes and behaviour;
•
Creating a supportive organisational and management structure to deliver the knowledge
and capacity required for poverty mainstreaming;
•
Revising incentives for staff performance, such as rewarding poverty reduction efforts, not
disbursement performance and alleviating time pressures that tend to “crowd out”
participation processes and co-operation with other development partners;
•
Increase and strengthen accountability against poverty objectives and stimulate lesson-
learning and feedback to partners and the development community at large.
193.
This change agenda is more fully developed in the remainder of this chapter.
4.3
Tracking changes in institutional practices
194.
Throughout the history of development co-operation, development agencies took responsibility
for delivering aid to reduce poverty and achieve development. Now partner governments are responsible
for the national poverty reduction strategy and for co-ordinating and taking into account the poverty
reduction efforts of a range of stakeholders. This redefines the scope for agency action to engaging in
dialogue on policy, facilitating action, monitoring results, and sharing lessons learned with partners. Table
4.1 summarises the ongoing evolution in development practices that, in turn, exert a formative influence on
the way development agencies formulate their approaches and country strategies for reducing poverty.
These practices are organised according to key aspects of the emerging poverty reduction agenda (left-
hand column). There is widespread agreement on the principles underlying the practices set out in the
right-hand column, especially on the need for widespread country ownership of the national poverty
reduction strategy, strengthening partnerships and participation, and on the priority attached to poverty
reduction as set out in the International Development Goals.
4.4
Gearing up for mainstreaming poverty reduction: institutional factors
195.
Institutional change
10
is driven by a clear perception of the need to change course, a clear and
collective perception of the goal, and a collective ‘enthusiasm’ in combining efforts to reach the goal.
Strong leadership, supportive management behaviour and organisational structures and appropriate
incentive systems are key elements of a strategy for changing the institutional behaviour.
196.
A review of the literature on organisational behaviour and development agency institutional
arrangements suggests that efforts should focus on factors that are fundamental for fostering greater
commitment and response to poverty reduction and on areas where agencies need to strengthen their
capacities. Tables 4.2 and 4.3 below indicate six possible areas for fundamental change and six possible
10
The term institution generally refers to a set of rules or patterns of behaviour underpinned by norms and
values. Institutional analysis focuses on trying to understand the existing rules and norms, Institutional
development is the term frequently used to describe the process of institutional change by which
organisations increase their capabilities and performance in relation to their goals, resources, and
environment, and sets out the content of the prescribed interventions.
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areas for strengthening capacity, each of which are appended with explicit examples of changes that could
be implemented.
197.
Is it realistic to expect agencies to undertake all of the changes outlined in these tables? Each
agency will need to judge how, to what extent, and how quickly they can and will address the institutional
requirements of partnership and policy goals such as poverty reduction. There is no single “right way”
forward. Nevertheless, priorities should be driven by the challenges set out in Table 4.1 above which can
be regrouped under the following headings:
•
Mainstreaming the poverty reduction agenda throughout the agency
•
Issues that affect country level operations
•
Organisational structures and mechanisms to strengthen policy coherence
Table 4.1 Shifting emphases in the poverty reduction agenda
KEY
CHALLENGES
FROM
TOWARDS
Partnership
Identification and preparation of projects,
methods of project appraisal, use of
logframe analysis
Administrative and managerial
approaches
Capacity for project management
Decisions and control from agency
headquarters
Working through partnerships and policy dialogue e.g.
identifying partnership terms and defining issues, concerns and
priorities for the policy dialogue
Methods of stakeholder analysis, participatory approaches
Capacity to access knowledge for poverty analysis and policy
dialogue
Decentralised decision-making and control
Ownership and
Participation
Development agency ownership of
projects for direct poverty reduction,
often based on agency-managed project
implementation units
Multiple agency missions, duplicative
research and analysis, diverse and
complex administrative requirements
Sector- and supply-led interventions
Collaboration with government and
NGOs
Government ownership of national poverty reduction strategies
through which all agencies integrate their activities; agencies
focus on strengthening partner capacity to manage and account
for development assistance resources.
Efforts to work jointly with others, to co-ordinate better, to
reduce administrative burdens on partner country governments
Support partner priorities based on agency-specific
comparative advantage
Legitimacy through broad participation of different
stakeholders
Multi-dimensional
Concepts and
Approaches
Poverty reduction promoted through
economic growth, more social services
and safety nets
Focus on technical specialists,
administrative skills and quantitative data
A multidimensional and dynamic concept of poverty, greater
recognition of equity, inclusion and governance and the need to
facilitate an enabling environment for poverty reduction
Focus on cross-cutting expertise, new political/social skills,
multidisciplinary teams and qualitative and quantitative data.
Accountability
Accountability mainly by financial
control and focus on delivering inputs
Accountability through reference to the International
Development Goals and assessment of client commitment and
performance in achieving results -- and the agency’s supportive
role in this regard
Policy Coherence
Inward-looking
Greater concerns with coherence across agency governments
regarding the impact of diverse policies (e.g. trade, agriculture,
debt) on poverty reduction
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Table 4.2 Key areas for fundamental institutional change
AREAS
ISSUES FOR DEVELOPMENT AGENCIES TO ADDRESS
Vision, policy
and strategy
•
Develop a clear agency vision, policy framework and strategy for reducing poverty, including through country strategies, sector approaches
and project interventions. The goal of poverty reduction should inform all relevant planning processes within the agency.
•
Greater reliance on agency comparative advantages in allocating resources and choosing instruments and modalities in response to country-
owned strategies.
Leadership’s
role in turning
vision into
reality
•
Determined leadership at both political and policy-making levels must capture and channel the interest and commitment of all staff and
external government and civil society to focus more resolutely and forcefully on supporting poverty reduction in partner countries.
•
Convince and steer authorising and legislative bodies to mobilise and allocate sufficient resources and ensure the agency can account for its
performance against the poverty reduction goal.
•
Where a complex governance structure limits the autonomy of the agency, changes in governance arrangements should be considered.
Co-ordination
and management
of the external
environment
•
Defuse public concerns with conflict and corruption as symptomatic of the (in)utility of development co-operation by strengthening policy
coherence and enhancing agency co-ordination with other institutions concerned with these issues.
•
Develop tactical strategies to deal with possible criticisms of the agency’s poverty reduction focus coming from varying external forces
(including legislative bodies and lobbying groups).
Organisational
and structural
change
•
Develop structures and mechanisms for mainstreaming poverty reduction. Good practice combines two approaches: i) making all staff
responsible for promoting poverty reduction and ii) appointing poverty reduction “focal points” or “champions” to propel action and
institutional change. Poverty champions can be used to raise the profile of poverty, provide advice, strengthen communication between and
across organisational levels, promote good practice and ensure that programmes/projects are systematically assessed for poverty reduction
potential in agency screening and approval procedures. Resources and authority must be vested in agency poverty advocates.
•
Decentralise agency operations and field staff e.g. strengthen professional staff presence in the field (either local hires or agency staff); give
field-based staff the authority and capacity to negotiate with local partners; grant a degree of budgetary flexibility to decentralised levels; etc.
•
Consider how to ensure compliance, at every level, with corporate policies on poverty reduction, gender, governance, and sustainability.
•
Encourage team-working across professional boundaries to address more effectively the multidimensional nature of poverty and to overcome
sector-driven or supply-led approaches.
Transforming
the institutional
culture
•
There is a need for leaders at all levels of the agency to clearly flag their commitment to poverty reduction.
•
Give attention to promoting an institutional culture that supports poverty reduction. A “disbursement culture” or a “permissive” culture that
leaves discretion to programme managers can undermine effective approaches to poverty reduction. Develop approaches, instruments or
strategies that accommodate/reduce disbursement pressures at the end of the agency fiscal year.
•
Transforming the institutional culture requires detailed analysis, action at various levels, and time.
Staff motivation
and incentives
•
Staff recruitment and incentive structures (for permanent, temporary and diplomatic staff) must focus on poverty reduction skills and
performance, team-working capacities, and co-ordination efforts. Incentives might be regulatory or facilitory rather than financial.
•
Terms of reference for research, studies or programme preparation should make linkages to poverty reduction goals. Build targets and
standards for poverty reduction into contractual arrangements and partnership agreements with external agencies, NGOs, consultants, and
resource centres. Partnership agreements should incorporate incentives and sanctions, and have clear systems for monitoring results.
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Table 4.3 Key areas for strengthening agency capacities
AREAS
ISSUES FOR DEVELOPMENT AGENCIES TO ADDRESS
Human resource
development and
skills
•
It is crucial to deal with the multidimensional nature of poverty, including an understanding of the macro-economy at the community level
and of stakeholders at the national level. Consider building and deploying multidisciplinary teams at country level with competence in policy
analysis, economic and financial issues, gender issues, participatory approaches, governance, policy dialogue, partnership, and negotiation.
Bring skills together at macro, meso, and micro levels.
•
Training programmes should promote awareness-raising of all staff and enhanced operational skills to specialist staff. Institutional
development approaches should focus on poverty reduction and facilitate change processes and innovation within the agency.
•
Agencies should consider joint collaboration as regards training efforts and poverty analysis.
Programme
planning and
management
•
A stronger focus needed on achieving poverty reduction impact, tracking intermediate policy targets and establishing quality control
mechanisms.
•
Greater emphasis on institutional analysis, including analysis of policy, stakeholders, and gender.
•
Greater reliance on the partner government for providing management information, including i) greater attention to supporting capacity in
partner countries to provide accounts to an agreed format and/or ii) more flexible financial control mechanisms e.g. for accepting partner
countries’ accounts and/or reporting standards.
Deployment of
resources and
knowledge
•
Resource allocation decisions should be increasingly based on poverty reduction needs and commitment.
•
In the context of country-owned poverty reduction strategies, consider increased aid untying to promote local ownership and capacity-
building and to reduce partners’ economic costs.
•
Develop coding systems permitting agencies to track poverty reduction efforts in all budgets.
•
Allocate staff time to learn about and share good practice in development, and facilitate their access to knowledge, research and evaluation
results.
Instruments
•
Assess which instruments provide the most scope for mainstreaming poverty reduction strategies and have potential for the greatest impact on
reducing poverty.
Management style
and staff relations
•
Consider revisions/additions to staff regulations that reinforce the centrality of poverty reduction to agency objectives, operations and
performance.
•
Enhance the poverty orientation of staff reporting systems (e.g. “upwards reporting”, which encourages the client focus of staff). Sustainable
change in management systems to reflect this aim will require substantial lead-time and incremental change.
•
Management needs to stress the development of skills that foster partnership (e.g. facilitation, diplomacy, consensus-building, active
interaction) and create opportunities for learning and team-working.
Monitoring,
evaluation and
accountability
•
The International Development Goals focus attention on poverty reduction results at the country level and on indicators measuring
intermediate progress. In this regard agencies need to:
−
support the capacity of the partner country to undertake programme evaluations (including in partnership with external agencies);
−
encourage the participation of the poor in studies and evaluations, and
−
improve impact assessment methodologies to relate agency efforts to development outcomes and results, especially where there is a
collective effort.
•
There is a need to improve the DAC poverty marker to get beyond just measuring direct assistance to poor people.
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4.5
Mainstreaming the poverty reduction agenda throughout the agency
198.
Efforts to promote poverty reduction in agencies will call for much more that just adding on a
specialised poverty-focused unit to deal with poverty reduction. It will require the mainstreaming of a
poverty reduction approach throughout the agency, meaning that poverty reduction objectives are taken
into account in all activities and at all organisational levels. In undertaking an approach to mainstreaming
poverty reduction, there are lessons that can be learned from the experience of several agencies with
mainstreaming gender equality (see Box 4.1).
199.
Institutional development factors cited as key to effective mainstreaming efforts include:
•
Strategic management and oversight
•
Appropriate knowledge and skills
•
Effective networks and linkages
•
An enabling policy and institutional framework
•
A supportive economic, social, and political environment in both partner countries and
development agencies
Box 4.1 Canada’s organisational approach to mainstreaming gender
In Canada gender is mainstreamed throughout the agency’s operations and departments. To facilitate
this mainstreaming effort, a separate unit has been created which provides resources, guidance and
advocacy for promoting gender equality issues and concerns. Combining a specific focal point with
an organisation-wide mandate to integrate gender analysis and awareness into all departments and
operations has proved to be a successful way of mainstreaming in some agencies.
Gender experts are associated with each branch as technical advisers and further expertise may be
located or hired at field level. The mainstreaming process is supported by a gender mandate within
programming priorities and by associated budgetary allocations.
These mechanisms have led to gender being relatively well-integrated into development and poverty
reduction aims in Canada. However, the gender mainstreaming process is still not complete as 25% of
staff reportedly are still uncomfortable with gender mostly because they are still unsure about how to
operationalise gender analysis into country programmes and strategies.
200.
Efforts to mainstream poverty reduction will need to pay attention to particular problems posed
by the multidimensional conception of poverty and to ensuring there is adequate accountability.
4.5.1
Mainstreaming poverty as a multidimensional issue
201.
In the multidimensional approach to understanding poverty there is a need for an improved
analytical framework setting out macro-meso-micro linkages based on a more sophisticated understanding
of the potential effects of policy interventions on poverty reduction in different areas and among different
social groups. This is very different from proceeding through a relatively simple suite of project
interventions, as would have been the case previously. Agencies will need to acquire greater knowledge of
their partner countries and to be aware of recent poverty data, including participatory data that uses criteria
identified by the poor.
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202.
As regards staff capacities, agencies will require access to a broader range of skills (including
cross-cutting concerns with gender, governance, environment and participatory approaches) and they will
need to provide a number of these specialists (including those with macroeconomic and technical skills) to
field offices. Poverty reduction strategies will put greater emphasis on the use of multidisciplinary teams
and on staff capacity for interpreting quantitative and qualitative information on poverty. This will have
further implications for the way in which agency staff are deployed, including through the management of
multidisciplinary teams. Agencies will need to organise themselves in order to facilitate such teamworking.
Finally, training programmes dealing with poverty reduction issues and techniques will be essential for
developing staff capacity to respond with wisdom and perspective (see Box 4.2).
Box 4. 2 The role of training in strengthening expertise, awareness and institutional learning
Adequate, relevant training provides essential operational skills and heightens staff awareness of poverty
concerns. Training also plays an important role in improving aid effectiveness through transmission of
good practice and lessons learned. Two examples of DAC Members’ approaches to poverty reduction
training include the following:
•
The European Community has developed a well-received training programme providing a
basic understanding of poverty and how poverty reduction objectives might inform policy
and programme formulation. Topics covered include an overview of global poverty, EC
policy on poverty reduction, an evaluation of DAC members’ aid allocations, and poverty
concepts and measurements. Gender and governance issues are integrated into the
discussion. The course concludes with a review of case studies dealing with macro-economic
reforms, sectoral policy, and project approaches. Low attendance levels due to heavy staff
workloads initially hampered the training programme’s impact. Attendance increased when
the course duration was reduced to two days.
•
DFID is currently elaborating a comprehensive training programme that will cover poverty
concepts and approaches; mainstreaming issues and techniques (governance, gender,
environment); country assessment methodologies; priority macro, sectoral and project level
interventions; participatory techniques; monitoring and evaluation practices; facilitation and
negotiation, and facilitating partnerships with the private sector and civil society.
4.5.2
Accounting for performance
203.
Accountability for poverty reduction requires sensitivity to the increased complexity of the
multidimensional nature of poverty, partnership and stakeholder processes. To facilitate accountability, the
agency should clarify responsibilities for different poverty reduction activities at different levels within the
agency. Indicators of performance are not obvious at every level, especially given the enabling and
facilitating role -- rather than direct responsibility -- now to be assumed by agencies. Performance will
ultimately need to be measured against outcomes, notably the International Development Goals,
recognising that poverty reduction is a collective effort.
204.
Intermediate measures of performance will also be necessary and should be agreed with other
partners. Ideally the partner government with its strategy should be the implementing, and therefore the
accountable, partner. At the same time, agencies must be accountable to the government for the advice they
give. In most cases, agencies should avoid undermining the government’s authority by assuming any sort
of indirect responsibility in relation to the citizens of the country. Agencies will need to support the
development of accountability and transparency mechanisms through governance programmes, to facilitate
learning and feedback into the country.
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4. 6
Issues that affect country level operations
4.6.1
Aligning agency procedures with partner procedures
205.
Consultations with partner country stakeholders and development practitioners in the course of
preparing these Guidelines revealed widespread dissatisfaction with the heavy burdens created by multiple
agency administrative and financial reporting, tracking and auditing requirements and poor agency co-
ordination regarding policies and activities. The emerging consensus on country ownership of poverty
reduction strategies puts even greater stress on the need to streamline, simplify and harmonise practices,
procedures and reporting requirements.
4.6.2
Decentralising to the field
206.
There is substantial support for the idea that continuous negotiations with both partners and other
agencies will require a significant number of field staff who are qualified and competent to negotiate for
the agency. In turn, this implies greater deconcentration of staff and decentralisation of policy formulation
and management. Decentralisation will require redoubled efforts to co-ordinate local meetings and
negotiations to ensure it does not give rise to a proliferation of meetings with government officials whose
time would be better spent managing the country. It will also heighten the need to improve mechanisms for
continuous learning at different levels of the agency, for knowledge dissemination, and for ensuring
lessons learned are implemented throughout a decentralised management structure. Even if agencies are
not ready for full-scale decentralisation, they should give consideration, in collaboration with other
Members, to reforming their administration requirements and increasing their financial flexibility. Such
changes are essential to respond to the challenges of country ownership of poverty reduction strategies and
partnership arrangements.
4.6.3
Support for partner country strategy development
207.
Enhanced country ownership and broader stakeholder participation requires agencies to
develop their capacity to support the government in developing its own poverty reduction strategy, with
support from other stakeholders. In doing so, care will have to be taken not to undermine the partner
government’s primary role in developing the poverty reduction strategy, but rather to enhance government
capacity to interact with its own partners. This may require a change in agency attitudes towards the role of
civil society in policy formulation processes, and a corresponding change in agency behaviour. Support
should aim to enhance the involvement of civil society (including the poor), private sector actors, and local
government institutions. Agencies should also help identify all factors -- including their own practices --
that inhibit country ownership. Agency support may be needed to help governments undertake a gender
analysis of stakeholders to ensure that poverty reduction strategies take account of gender dimensions in
poverty reduction approaches. In addition, Members should be realistic about the timeframe required to
generate broad-based support for poverty reduction strategies and the resources this involves for partner
governments, especially where capacity has been weakened through reforms and adjustment efforts.
4.6.4
Working in partnership
208.
The focus on partnerships and policy dialogue in poverty reduction strategies recognises the need
for agencies to have a solid understanding of the country’s poverty situation and its strategy for reducing it.
At the same time agencies will need to be politically aware, assessing the points of leverage for poverty
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reduction (even for those agencies with an expressly non-political mandate) and providing support to pro-
poor constituencies. Since the country will identify which agency is best equipped to give support in
specific areas, agencies should concentrate their efforts where they can make a difference. As discussed
above, partnership implies that agencies should adjust their systems to line up with those of country
governments and support the government to strengthen its capacity to lead co-ordination. There will also
be increased collaboration with other agencies in management reporting, monitoring and evaluation.
4.7
Organisational structures and mechanisms to strengthen policy coherence
209.
Agencies need to focus on their own governance arrangements, particularly if these limit their
ability to focus consistently and effectively on poverty reduction. Many agencies have extremely complex
governance arrangements, with several ministries and additional agencies involved in development policy
formulation and implementation. More complex governance structures take longer to focus on poverty
reduction, even when political will exists. Political will depends crucially on the willingness of other
ministries and agencies to consider development perspectives in arriving at a balanced view in formulating
policy.
Box 4.3 Government structures to improve policy coherence in the Netherlands
To ensure that Dutch policies relating to developing countries are coherent, the Bilateral Department in
the Ministry of Foreign Affairs now takes responsibility for all aspects of relations between the
Netherlands and developing countries. The aim of this “de-compartmentalisation” is to create synergies
within and across all parts of the Dutch government, thus improving overall policy coherence and
effectiveness. The Bilateral Department integrates development co-operation with other aspects of
foreign policy and trade relations to produce medium-term policy documents for each country or region.
These documents are prepared on the basis of inputs from other departments within the Ministry, as well
as from other ministries in the Dutch government. Dutch policy coherence is monitored by a committee
established by cabinet entitled the Council for European and International Affairs.
210.
Policy coherence implies an understanding of the relationships and impacts of different policies
on poverty reduction. It also implies the existence of mechanisms to resolve contradictions or to mitigate
the effects of conflicting policies. The concern with policy coherence requires agencies to improve their
mechanisms for co-ordinating with other institutions that have responsibilities for issues that have a
bearing on poverty reduction (e.g. trade, agriculture, debt, finance, etc.). These institutions may be other
Ministries in the Member country, other agencies in partner countries, or global governance institutions.
The issue of coherence also implies policy consistency, that is, where agencies do what they say they will
do. Efforts to manage policy coherence issues require a commitment of staff time and resources. Agencies
will need capacity to identify and analyse coherence issues make judgements about what can be
realistically changed. They will need to negotiate with other partners at different levels and make active
use of a range of mechanisms for resolving contradictions and inconsistencies (see Box 4.3 above). This
requires capacity to participate in international fora in order to exchange ideas about poverty reduction and
influence the policy development process.
4.8
Cultivating institutional change and learning
211.
All these proposals regarding agency institutional development discussed above are well and
good. But they will be of little use if they are not implemented. Change is not easily activated in
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institutional settings. Agency staff are busy with tasks and careers. Institutions themselves typically
prioritise operations (which are in constant flux), rarely focusing on institutional development and change.
This inertia tends to be reinforced by widespread perceptions that change is dislocating, unsettling,
threatening. Little change will occur unless agencies create an institutional culture that is favourable to
change, and this will only happen if explicit space and effort is dedicated to fostering change.
212.
As a general rule, organisations that have succeeded in carrying through real behavioural change
have had a broad approach where staff members have had frequent opportunities to influence the process.
The degree of participation has been high and the staff has had a strong feeling of ownership and
motivation for the change process. Box 4.4 below sets out some basic approaches for embedding change
and learning as values and goals in an organisation’s culture.
Box 4.4 Good practice for fostering institutional change
SIDA has developed a successful agency approach for enabling change processes to take root and
flourish. Good practice here involves a series of agency-wide steps affecting various aspects of the work
environment calling for modifications to policy frameworks that govern staff relations and management
practices.
•
Agency staff at all levels must be actively involved in formulating visions and goals. Each
department and group must have visions and goals that are strongly linked to those of the
organisation.
•
Personnel policies should also be developed in collaboration with staff (e.g. bottom-up
methods) and should clearly state the important role played by managers and staff to
promote learning and change in the agency in order to achieve common goals and visions.
•
Policies regarding change and learning must be suffused throughout operational processes,
behavioural patterns and agency activities. Managers have a key role here: they must know
how people learn, how people react to change and how they, as managers, can create an
environment that stimulates people to learn.
•
A clear definition of poverty competencies and skills is required for purposes of staff
training and recruitment.
•
Training that is conveniently provided and varied in terms of content and course length must
be provided for staff at all levels of expertise and authority. Managers should develop
innovative approaches or mechanisms that stimulate other learning opportunities and
experiences.
•
Staff must be rewarded for efforts to change, to learn and to apply lessons learned.
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CHAPTER V. POLICY COHERENCE
5.1
Introduction
213.
The previous chapters of the Guidelines consider development co-operation policies and the need
for coherence
i.
Between DAC governments/agencies and developing countries through partnerships at
country level.
ii.
Among development agencies, both within and between Member countries, i.e. aid co-
ordination to avoid wasteful duplication or inconsistency.
iii.
Between different parts of a development co-operation agency in mainstreaming poverty
reduction.
214.
Such coherence within development co-operation policies and programmes is necessary but not
sufficient to eliminate poverty. Their impact depends not only on the extent to which recommendations in
the previous chapters are implemented or on the policy environment of partner countries, but also on the
degree of overall policy coherence across OECD Member government policies. This chapter is focused on
overall policy coherence between development co-operation and other policy areas.
215.
The potential impact of improved OECD policy coherence is overwhelming in comparison with
that of development co-operation activities. For example, the welfare losses in developing countries
associated with industrial country agricultural protectionism alone were close to $20 billion in 1998, which
is 40 percent of total Official Development Assistance (ODA). It is more than ODA to either Africa, where
poverty is most prevalent and severe, or South and Central Asia, where most of the world’s poor live.
216.
ODA declined in the 1990’s and was less than 28% of total net financial flows from Member
countries to developing countries on average 1996-98, while private flows were 65% (largely concentrated
on middle-income countries). Furthermore, the highly indebted poor countries (HIPC) experienced an
overall decline in net resource transfers from $10 billion per year in the mid-1990s to about $6 billion per
year in 1998 as a result of a decrease in lending that exceeded actual debt relief.
217.
It is crucial for the achievement of the International Development Goals that Members make
further progress to ensure consistency towards that end between development policies and those of other
government departments. The DAC Shaping the 21
st
Century strategy document called for “nothing less
than to assure that the entire range of relevant industrialised country policies are consistent with and do not
undermine development objectives.”
218.
The OECD Ministerial Council and the DAC High Level Meeting decided in the year 2000 to
develop a checklist on policy coherence that can be a reference point throughout public policy systems in
the OECD. Thus, OECD Members governments are strongly encouraged to systematically integrate
development issues throughout all their work. On the basis of these Guidelines and extensive consultations
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between OECD Committees and Directorates, an OECD checklist on Policy Coherence for Poverty
Reduction will be developed in 2001.
5.2
Globalisation and policy coherence
219.
The coherence issues have to be considered in the overall context of the process of globalisation.
Rapid growth in the movement of people, goods, services, capital, technology and information across
national borders is creating an increasingly integrated global economy. This is the core meaning of
globalisation, and it has led to a world that is more interconnected and interdependent than ever before.
This increasing openness and integration of the world economy is creating conditions that could make
possible a massive reduction in poverty across the world. Globalisation is creating huge wealth and has the
potential to generate benefits for all. However, this will only happen with purposeful policy action by the
international community and governments.
220.
Fast changing information and communications technologies (ICT) are transforming markets,
including financial markets, and require new methods of organising work, business and trade to harness the
benefits of globalisation. At the same time, many people feel serious concerns over the rapid economic and
technological changes underway. The importance of addressing these concerns locally, nationally and
internationally has been recognised by OECD Ministers.
221.
Globalisation presents new opportunities as well as new challenges to all countries, regions,
societies and people. While world exports of goods and services have grown at unprecedented sustained
rates since the early 1980’s, the share of developing countries (with 78% of world population) is only 18%.
The share of the Least Developed Countries (LDC, with 11% of world population) has fallen to 0,5%
1999, despite preferential market access.
222.
The poorest countries are not able to benefit much from increased trade opportunities without
special measures to support economic and social development and institutional capacity building.
Similarly, poorer regions and groups in all countries are at a disadvantage in the increasingly competitive
world of economic and technological globalisation. Making globalisation work for the poor is a major
challenge for the 21
st
century.
223.
In the context of poverty reduction, the key challenge is to ensure that especially poor people in
developing countries benefit from globalisation and are able to adapt successfully to this new environment.
The lead responsibility for addressing this challenge rests with the governments of developing countries.
However, more policy coherence among OECD government is essential for enabling developing countries
to take advantage of the globalisation process and to reduce poverty.
224.
The process of globalisation requires OECD governments, more than ever before, to take account
of the broader development objectives in all policies and external relationships. In a world where there is
no longer a clear distinction between domestic and international affairs, effective aid programmes alone
will not deliver adequate poverty reduction. Development objectives need to be integrated within the full
range of government departments not only in developing countries but also in OECD countries. The main
areas for enhanced policy coherence are presented in the next section.
5.3
Policy areas
225.
Policy coherence incorporates the full variety of OECD country policies and their impact on
different dimensions of North-South relations. The potential range of areas in which policy coherence
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influences poverty reduction is vast. For practical purposes, this range needs to be limited by selecting the
most important areas for these Guidelines, considering the importance of the impact of policy coherence on
poverty, and the likelihood of achieving policy change. The proposed priority areas are presented under six
thematic headings in Box 5.1.
Box 5.1 Areas of Policy Coherence
• International Trade
−
International trade regime for goods and services
−
Trade in food and its links with domestic agricultural policy
−
Multilateral versus regional preferential trade
• Natural Resources and the Environment
−
Sustainable use of renewable resources
−
Export pollution
−
Global climate change
−
International fisheries
• Agriculture and Food Security
−
Food aid and food security
−
Application of biotechnology to agriculture in the LDCs
• Global Capital Movements
−
International financial architecture
−
Debt relief
−
Foreign direct investment
−
Export credits
• Social Issues
−
Labour and migration
−
Global public health
−
Illegal drugs
• Governance and Conflict
−
Human rights, participatory democracy, and good governance
−
Conflict prevention and resolution
5.3.1
International trade
226.
International trade is an area of major importance for poverty reduction. The magnitude of
potential gains for developing countries from eliminating or reducing remaining restrictions on trade
dwarfs the flows of official resources. Clearly, trade stands out as a potentially very powerful motor for
raising national incomes of developing countries and thus for poverty reduction. Trade reforms have been
undertaken, and further reform is possible. However, it becomes more difficult and politically sensitive the
more other government policy objectives are affected, such as employment and sustainable development.
227.
The major areas where there is lack of policy coherence associated with international trade
include i) the overall international trade regime, ii) trade in food and its links with domestic agricultural
policy, and iii) the issue of multilateral versus preferential trade regimes.
i.
The international trade regime is characterised by a number of constraints that impede
access by the developing nations to the markets of the OECD member countries. One is the
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fact that, despite a substantial reduction in the average level of tariffs for OECD members,
there are still a number of high tariff rate peaks for sensitive products. Second, tariff
escalation discourages the exportation to OECD members of processed products in
comparison with those that are unprocessed. Finally, non-tariff barriers to developing
country exports are important, for instance product standards and regulations, non-
transparent government procurement including aid tying, application of rules-of-origin,
anti-dumping action, and subsidy discrimination.
ii.
The relationships between food, agricultural, and trade policies are major areas of concern
since these affect poor and food-insecure populations in a most human sense. Policies
related to the exchange of food products are particularly susceptible to incoherence with
poverty reduction because of the strong political interests that exist within the agricultural
communities of the OECD countries. A major issue relates to the effect a reduction in
domestic price supports and export subsidies would have on world food prices, and thus on
the import costs faced by the net-food-importing developing countries. Most of these
countries have become more dependent on food imports and thus increasingly vulnerable
to agricultural policies in OECD countries.
iii.
The coherence issue is complicated by the inherent incoherence of preferential régimes.
There is need to reconcile multilateral trade preferences and processes, such as under the
WTO, with arrangements such as the ACP-EU Cotonou Convention, the US-
Africa/Caribbean Trade and Development Act and the most basic preferential arrangement,
the Generalised System of Preferences (GSP). These preferential schemes have mainly
benefited the higher-income developing countries. Their benefits have been diminished by
the exclusion of sensitive products in such sectors as agriculture, textiles, and footwear,
where poor countries have their best opportunity to expand and diversify exports. The
schemes are very complex and the preferences can be withdrawn unilaterally if imports
from any country increase significantly. They need to become more comprehensive,
predictable, simple, and transparent so as to improve consistency with general WTO
principles.
5.3.2
Natural Resources and the Environment
228.
Many of the policy issues involving management of natural resources and the environment must
be dealt with primarily at the partner country level. However, some issues are regional or global in scope
and raise policy coherence concerns. Four of these issues are i) use of renewable resources, ii) relocation of
pollution-industries from OECD countries, iii) global climate change, and iv) international fisheries.
i.
Coherence between poverty reduction and natural resource management often is linked to
the rules of trade, market access, and product characteristics. In most cases, trade does not
in itself cause increased poverty or environmental degradation, but rather exacerbates or
brings into the open existing distortions or inequities in resource endowments. On the one
hand, openness to trade can raises the value of renewable natural resources, reinforcing
incentives to manage them efficiently and on a sustainable basis. On the other hand, when
regulatory mechanisms are weak, the increased demand for natural resources resulting
from openness to trade can further accelerate unsustainable extraction patterns.
ii.
OECD firms investing in developing countries often introduce improved technologies and
management processes which contribute to improving environmental management. At the
same time, the raising of environmental standards in OECD countries can sometimes lead
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to the transfer of polluting industrial processes to developing countries with negative
impacts on environment and health affecting especially poor people.
iii.
Most scientific evidence suggests that developing countries will experience greater
hardship and uncertainty resulting from global climate change than will the industrial
countries, which are contributing the most to it. Particularly worrisome is the rate at which
climate change will take place, since faster rates of change limit the ability of societies and
ecosystems to adapt to the change. Dealing with global climate change is an important
coherence issue for OECD governments, both in terms of unilateral actions taken to reduce
global warming and the positions they take at relevant international forums.
iv.
Bilateral fisheries agreements to assure a continued supply of raw materials for OECD
countries’ processing industries can harm developing countries by reducing domestic
catches. Providing for local capacity development and designating areas can reduce this
problem. Fishing without agreements or in contravention of agreed terms is a worse threat.
Fishing and fish processing industries are important for the livelihood of poor local
populations who may lack other alternatives. Women, particularly, are apt to be involved
in fish processing. Crowding out of local fishing results in higher fish prices for local
consumers, who do not benefit from the subsidy offered to foreign fishing fleets because
the fish caught by the foreign fleets are not sold locally. The result is a reduction in local
consumption of this important source of protein. In addition, these subsidies lead to serious
depletion of the fisheries resource base.
5.3.3
Agriculture and food security
229.
There are many issues of policy coherence related to agriculture and food security. Some of these
having to do with WTO and international trade have been discussed above. Two other sets of issues are of
concern: i) food aid and food security, and ii) application of biotechnology to agriculture in the least
developed countries.
i.
There has been substantial progress in achieving greater policy coherence with respect to
food security and food aid by increased monetisation, including food aid and a greater
grant element in the development assistance budget, greater purchases in local or regional
markets and more attention to avoiding disruption in them, a more appropriate product
mix, and better forecasting of needs. However, problems still persist linked to pressures to
use food aid to support domestic farm prices, lack of adequate supplies of both food and
cash for food security, and incoherent policies among the OECD members.
ii.
The goal of meeting the World Food Summit target of halving the number of
undernourished people in the world by the year 2015 appears increasingly elusive given