Teaching the poor to Fish? Cash grants in Sierra Leone

Are cash transfers an effective poverty reduction tool in post conflict societies? Intuitively one would think that they would be, given the comparatively low demands that they make on state service delivery agencies and the dire poverty of people in these countries.

Cash transfers have recently been the topic of hot debate in richer countries such as South Africa and India. But what can they do in post conflict situations? Below we list and discuss some of the findings of Rebecca Holmes and Adam Jackson of the ODI’s briefing “Cash Transfers in Sierra Leone: Are they appropriate, affordable or feasible?“.

Are Cash Grants Affordable?

As a result of its recent history of conflict, Sierra Leone will not be able to finance its own expenditure anytime in the foreseeable future. So the debate about whether cash transfers are affordable in Sierra Leone is largely a debate about whether donors will funds such grants. Given the diversification and deepening of donor funding, existing donors in country such as Sierra Leone may soon be replaced by the entry of new players such as China and the growing body of private donors.

Does Sierra Leone have the state capacity to deliver them?

Surprisingly Holmes and Jackson find that Sierra Leone may already have sufficient private and public infrastructure to deliver cash grants. This underlines the more general point that cash grants are relatively undemanding of state capacity to deliver.

Do they create Dependency?

Holmes and Jackson indicate that donors’ main reservation about cash grants is that they could create dependency. There is however no evidence to support this fear.

Do they raise expectations unnecessarily?

One of the strongest arguments against cash grants is that they may create the expectation of long term cash support. In kind transfers such as agricultural equipment do not run the same risk.

The need to target

Cash grants should be carefully targeted. Policy instruments targeting the economically active population should have strong linkages to sustainable economic activity, for example public works programs that construct local economic infrastructure such as markets. The economically inactive such as children and the elderly are best reached through cash grants that do not set such preconditions.

Economies of scale and the multiplier effect

Donors argue that in kind transfers benefit from economies of scale because donors can negotiate better prices when purchasing in bulk. The downside of this argument is that such bulk purchases are often made outside the targeted communities and even outside the targeted countries. Such ‘external’ purchases negate the multiplier effect that communities would otherwise benefit from, were good purchased locally, albeit at a potentially higher price.

Your thoughts?

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2008

 

When the Sweat of your Brow isn’t enough: How to get good pay and good work in Kenya

A recent paper by the International Poverty Center paints a familiar picture of unemployment in Kenya. Like many countries in Africa  under and undemployment is higher in rural than in urban areas; more women are affected by these phenomena than men; and the young and old working-age workers are more affected than the rest of the work force.

Eduardo Zebeda’s paper Addressing the Employment-Poverty Nexus in Kenya compares the effectiveness of a job-creation and a cash-transfer programme in alleviating the failures of the Kenyan labour market. He finds that cash-transfers are very effective in rural areas because of the high dependency ratio. He also finds that well designed job-creation programs are more effective in reaching extremely poor people in urban areas. They have the added advantage of creating local infrastructure.

However in the end Zebeda finds that a tertiary qualification and employment in the formal sector are the most important determinants of household income. In the long run, therefore, only the creation of formal sector employment and more and better tertiary education will provide a check on poverty in Kenya.

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More African doctors to rich countries?

Dean Baker at Beat the Press argues that the U.S.A. could fix its health care system by outsourcing its health care to countries that have more efficient health care systems.

The CGD recently reported that by the year 2000, approximately 65,000 African-born physicians and 70,000 African-born professional nurses were already working in developed countries. That figure is much higher now.

The WHO estimates that in Canada, New Zealand, the United Kingdom and the United States, a quarter or more of all physicians have been imported from other countries. 

 

And this in a context where the Americas have 10% of the global burden of disease and 42% of the health workers. Sub Saharan Africa has 3% of the health workers and 25% of the burden of disease (WHO data).

If ’outsourcing the healthcare system’ means that the U.S. and Europe will suck even more trained health professionals from poor countries, perhaps they should rather consider fixing its own health systems.

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No Aid Effectiveness in Afghanistan

The current debate on aid effectiveness makes one think that donors are prioritizing the quality of spending. However, a recent report by ACBAR (Agency Coordinating Body for Afghan Relief) lists many examples of where billions of dollars promised for the reconstruction of Afghanistan has been wasted, ineffective or not transferred at all. Aid constitutes around 90% of all public expenditure in Afghanistan, making aid effectiveness a crucial issue for the development of the country.

Of the aproximately $25.41 billion of aid that has been committed up to 2008; only 40% been disbursed to date. The ACBAR report also gives many examples of the inefficiencies of donor spending: one example being the reconstruction of a maternity hospital in Kabul. In this project the Italian government contracted the UN Population Fund who then sub-contracted to the UN Office for Project Services, who then sub-contracted to an Italian organization who in turn sub-contracted an Afghan construction company.

The Kabul Press reported that less than half of the total budget allocated for this project was spent on the actual reconstruction and that the end product was so poor it needed further reconstruction. In 2006 the then director of the World Bank in Kabul estimated that 40% of aid was ‘badly spent’.

Much of the aid that has been spent has also been driven by donor priorities instead of being responsive to the needs of Afghanistan. For example, most aid is centralized in Kabul or other urban areas of strategic interest to donors. As a result many of the rural areas have experienced minimal social and economic benefit.

Download the  ACBAR report here.

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You can’t govern without the people

Many people see government as a process of service delivery that should be technically sound and as cheap as possible. But that is not enough.

While technical skills and efficiency are important, effective and democratic government is not possible without transparency and accountability.

Without accountability, those in positions of power can safely ignore the will of the people. In such cases government may be efficiently doing things that are not useful to citizens.

 To direct and oversee government, citizens need to know what government is doing, who in government is doing it and when they are doing it. Without transparency, citizen participation is less well informed and less effective.

Recent research by the International Budget Project shows that some civil society organizations have developed new forms of citizen oversight over government finances. In the process they are making governments more accountable. They are also empowering citizens to engage in more effective forms of advocacy and thereby make governments more responsive.

Some examples of their impact include:

• The Uganda Debt Network has implemented new forms of citizen oversight that combat local government corruption;
• DISHA in India has shown how disadvantaged members of society can lobby government to spend more on them, and 
• IBASE in Brazil has demonstrated how citizens can be made more aware of the technical issues around  government budgets

Click here to see the full IBP report. And click here to see the six case studies of citizens organizations on which this research was based.

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Getting Collier’s Bottom Billion to the Top

The latest issue of the Institute of Development Studies’ publication, In Focus, explores the strengths and weaknesses of the policies advocated in Paul Collier’s book ‘The Bottom Billion’.

 The 13 four-page policy briefs discuss the key issues raised by Collier, including aid, trade, military intervention and international conventions. Read them here.The briefs were written by a group of development experts, with financial support from DFID.

They welcome how Collier has advanced the debate, but also highlight his reliance on cross-country regressions, and significant omissions, including climate change and poverty in China and India.

Mick Moore (IDS) argues, for example, that Collier doesn’t explain why governance in poor
countries is likely to be corroded and corrupted through interactions with the international system. Or why these countries need protection through international laws and charters  when rich countries developed successfully in a much less regulated international  environment.

 James Fairhead (University of Sussex) argues that Collier neglects the negative interaction between natural resources and national debt in poor countries, and the role of local politics.

If you haven’t read the book, have a look at the IBP’s summary & review here. Or have a look at Collier’s homepage.

If you aren’t up to more reading, watch two Collier clips on Youtube by clicking here and here.

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African Parliaments becoming a force?

The UK’s Africa All Party Parliamentary Group (AAPPG), has just released its report on Strengthening Parliaments in Africa: Improving Support.

The report explores the factors that hold African parliaments back and how international donors can better support them. The report will be on their website later this week. We list some of the findings below.

WHAT SHOULD DONORS DO?

• Until recently donors have focussed on working with the Executive and often ignored parliaments. Sometimes they even undermined them. There are signs, however, that this neglect of parliaments has been recognised and is changing.  See, for example, the UNDP’s recent work in this regard: http://sdnhq.undp.org/governance/parls/

• Donors must approach parliaments in their political context and base work on a thorough understanding of the pressures, interests and actors that shape parliamentary power.

• Parliamentary strengthening will only succeed if it is pulled by a range of local actors, not just pushed by donors. Initiatives must build on local efforts to strengthen parliaments.

• Development partners must ensure that their work does not marginalise or undermine parliaments and that the parliaments of recipient countries are encouraged to play a full part in development relationships.

What has your experience been of donors’ work with legislares?

Other  findings of the report are:

• African parliaments are exerting growing influence on how their countries are governed.

• Despite this growth, insufficient constitutional and other provisions continue to constrain the role of parliaments. Even if they enjoy robust powers on paper, the political realities inside and outside parliament mean that parliaments often fail to exercise effective scrutiny over executives. Problems of institutional capacity also continue to loom large.

• African citizens and their political leaders are the most important groups for strengthening their parliaments. Development partners can, however, also play a role.

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Getting serious about Budget Support

Budget support is meant to build democratic accountability for public funds and reduce the amount of red tape involved with donor transactions.

The challenge of budget support is to change the relationship between donors and recipient government as well as between governments and their citizens.

If this is not done, budget support is doomed to be no more than project support by a new name.

Recent research by the International Budget Partnership and Eurodad shows that there is a lot more that donors can do to make Budget Support succeed. They argue that:

• Donors frustrate the objective of budget support by imposing policy conditions and performance targets.
• Democratic accountability be an automatic result of budget support - it has to be built.
• Donor don’t do enough to build democratic accountability.
• Donors still have better and earlier access to budget information than citizens.
• Donors participate in the budget process earlier than citizens and their representatives.
• By the time citizens and legislatures enter the budget process, donor agreements have large been finalized.

Read the full document here in English, Espagnol ou Francais.

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