Speaker:

Punam Chuhan-Pole - Lead Economist,  Africa Region, World Bank
Dr Liesbet Steer - Project Leader Development Progress Stories, ODI
Patrick Gihana-Mulenga - Commercial attaché, Rwanda High Commission/ Rwanda Development Board
Mark Lowcock - Director General, Country Programmes, DFID
Will Day - Chairman of the Sustainable Development Commission

Laurie Lee - Deputy Director of External Affairs, Bill and Melinda Gates Foundation

Chair:

Alison Evans - ODI Director

Punam Chuhan-Pole

Recent success in Africa

After decades of stagnation, Africa has, on the whole, exhibited strong economic performance between 2003 and the onset of the 2008 financial crisis. Sub-Saharan Africa’s annual GDP growth averaged nearly 6% in 2003-08 and 4.5% in 1996-2008; this contrasts with average annual growth of under 2% for 1978-1995. Recent growth has notably been:

1)      Widespread over different regions.

2)      Broad based - Growth has not been solely concentrated in oil exporting economies. FDI  is beginning to diversify into manufacturing and other sectors.

3)      Stable - Inflation has remained under control for the most part.

At the same, growth has been accompanied by improvement s in human development. Poverty is falling and there have been impressive progress on health and education indicators such as school enrolment and maternal mortality. For example primary enrollment rose 14 percentage points to 73% in the period 1999-2008.

Moreover, this progress has continued during the midst of the global financial crisis and is forecasted to continue thereafter. Although growth slowed sharply to 1.3% in the wake of the global financial crisis, but rebounded strongly in 2010 to an estimated 4.7%; it is expected to be over 5% in 2011 and 2012. However, African countries do share a common set of long term challenges:

1)      An infrastructure deficit – Further private sector development requires an expansion in the quality and quantity of infrastructure.

2)      Lagging agricultural productivity.

3)      Expanding and improving service delivery.

4)      Corruption and lack of government/ bureaucratic capacity.

Lessons from the ‘Africa Can’ studies

There is no ‘one size fits all approach’ to development success. Nevertheless, it is possible to draw out lessons from the case studies for those countries looking to scale up.

Success across the case studies is very much driven by more effective policies which address market and government failures.

Market failure can be conceived as a sub-optimal outcome driven by market forces which can be corrected by government action. Examples of government action in addressing market failures largely concern the supply of public goods. Prominent examples include:

1)      Provision of transport infrastructure in Mali. Improved infrastructure has connected Mali to international markets, enabling the impressive development and expansion of mango production.

2)      Lesotho - Provision of apparel industry infrastructure in Lesotho.

3)      Protection of gorilla reserves to boost tourism in Rwanda

Government failure refers to suboptimal outcomes which can be corrected by the introduction of market forces. Prominent examples where market reforms have led to development progress include:

1)      Liberalisation of the coffee sector in Rwanda. Reforms have incentivised farmers to move into the production of higher quality, higher value coffee.

2)      Liberalisation of the fertiliser market in Kenya where reforms have led to expanded supply and utilisation of fertiliser.

3)      Liberalization of the exchange rate and macroeconomic stabilization in Ghana, enabling the revival of the cocoa sector.

4)      Deep structural reforms with macroeconomic stabilization in Tanzania

5)      Market competition in ICT provision across Africa

While some of these policies are not particularly new or innovative, they have succeeded where past efforts have failure partly due more inclusive policy process where relevant stakeholders are included in policy formulation and implementation.  For example, the New Rice for Africa (NERICA) - continuously consulting farmers about their possible adoption of new seed varieties, and  KickStart Irrigation pumps (rolling out technology in a participatory fashion, with farmers advising on marketing and design itself.)

Liesbet Steer

Development Progress Stories is a major research project providing robust and accessible information on progress at the national level across twenty four case studies, outlining lessons for policymakers on what works in development and why.

General points to consider when evaluating progress:

1)      A focus on relative progress draws attention away from absolute progress. To illustrate, in 1990, U5MR in Thailand was 31 (per 1000 live births) and 209 in Malawi (per 1000 live births). By 2007, the mortality rate in Thailand had dropped to 7 in Thailand and 111 in Malawi. For Thailand this means an absolute reduction of 24 but a relative reduction of 77%. In contrast, the relative reduction for Malawi is only 47%, but the absolute reduction was 98 (more than 4 times as much as Thailand). This leads to a bias in some measures of development such as the MDGs, where a tendency to evaluate progress in relative terms undermines some of the most notable progress stories.

2)      Progress is not uniform within countries. Many countries may exhibit progress in sectors such as education, for example, while may be falling behind on health. In evaluating overall progress at the national level may therefore miss important progress stories within specific sectors.

3)      Equity considerations should be factored in to any evaluation since there are often large variations on development indicators between different income, social and gender groups. Case studies such Eritrea illustrate that progress on health has been highly equitable despite comparatively low levels of achievement, while progression health indicators in Vietnam has quite inequitable despite relatively higher absolute levels of health.

4)      Progress is a dynamic continuous process which can take place across different sectors, at different time periods and at different rates. A focus on progress rather than success allows more selectivity in examining examples of development since it does not imply that an optimal level of development has been reached.

Key drivers of progress

Examining progress across twenty four case studies revealed four common factors driving progress:

Smart leaders

Leadership can be instrumental in driving through reforms, enhancing national cohesion and generating support for reform processes, as well as enabling innovation and local initiative. Notable examples from the case studies include Paul Kagame in Rwanda, or technocratic leadership with line ministries in Uganda and Burkina Faso. There are a number of key elements that play an important role in enabling leaders to lead effectively. Leaders have been most effective when (1) they have been held accountable; (2) they have consulted the population and its representatives, and (3) they have been pragmatic and willing to revise policies.

Smart policies

Well designed policies and policy processes make a great difference. The understanding of which policies are most effective for progress has evolved over time. There is now broad agreement on the long term principles that should support successful policymaking. While policies are specific to context, some general points can be observed:

1)      In the economic realm there has been a gradual change in the role of governments from controlling (prices and markets) to facilitating and enabling of investment and production. In many countries heterodox and orthodox policies have complemented each other, and progress has been achieved by liberalizing some sectors or parts of the economy and maintaining control in others.

2)      Progress requires policies that address both supply and demand side constraints. Across the social sectors, many case studies made rapid progress through increasing the demand for service provision , for example through eliminating user fees, as well as increasing supply.

3)      Policy consultation, experimentation and piloting. Successful policies sustained over the long term have often arisen from consultative policy processes from which public/party opinions and interests are incorporated. The progress stories also point at the importance of evidence, learning and community involvement in policy making. Policies were found to be particularly effective when they are generated from pilots and when communities and citizens are engaged in their formulation.

4)      The uptake and sustainability of policies can be extended through their formal institutionalisation. For example, through incorporation into the institution.

Smart delivery

Smart policies may often not have the intended effects without suitable delivery mechanisms.

1)      In many of the case studies, the decentralisation of governance has resulted in improved and more accountable governance and public service delivery. Newly empowered institutions at decentralised levels have an important role in creating new spaces for public participation and ownership around policies, in turn increasing the likelihood of their effective implementation.

2)      Institutions created to offer a participatory role for citizens to deliver, monitor and improve the delivery of services have achieved an important impact in increasing accountability and improving service delivery. Notable examples include the use of Community Health workers in Rwanda and mother associations in Benin.

3)      Institutional change is often an uneven process in which state structures evolve over decades or even centuries, shaped by complex social and political processes. Locating institutional change and reforms to systems of governance in locally legitimate norms is critical to their acceptance and sustainability.

Smart Partners

The relationship between donors and developing countries has changed dramatically in recent years. In the process genuine partnerships have emerged, in which national governments are increasingly taking ownership of their development agendas, and interacting with donors in a more mutually accountable way. Across the case studies it was observed that:

1)      In the majority of progress cases, some level of international assistance has been provided. However in some countries this was found to be a key driver of progress and instrumental to change, particularly in sector such as education, health and water and sanitation.

2)      The sharing of ideas – in a wide range of economic, technical, educational and political areas – can offer a ‘soft’ form of international assistance.

3)      An important aspect of international assistance lies in the sharing of experiences and lessons across countries. Some of the case studies illustrate examples of ‘south south’ learning. A case in point is Namibia which adapted its conservation policy from a Zimbabwe, and is now sharing it’s experiences with other African nations.

4)      International assistance has been most effective where national governments exercise effective leadership over their development policies, and strategies and co-ordinate development actions. Moreover, effective coordination between donors and external actors has promoted the effectiveness of international assistance, and in turn its impact on progress in recipient countries.

Mark Lowcock

·         Getting the policies right is crucial. This has been increasingly recognised in development circles and policies are getting smarter.

·         However, there less coverage on policy areas such as the terms of trade, conflict, governance and security.

·         Regarding DFID restructuring:

1)      Development finance will play a smaller part of ODA

2)      DFID will focus on funding programs directly relevant to MDG outcomes; wealth creation; conflict resolution; gender equality.

·         There is a greater need to gain a greater understanding of the ‘known unknowns’ of development. For example in Lagos 70% of children are enrolled in low cost private schools. How effective are these and how can we learn from them?

Patrick Gihana-Mulenga

·         Concurs that the progress drivers of Smart leaders, Smart Policies, Smart Delivery and Smart Partners effectively account for the recent progress in Rwanda.

1)      The leadership of President Paul Kagame has been instrumental in promoting collective efforts to rebuild the country after genocide and in generating national solidarity and a spirit of self reliance among Rwandans. Development also requires responsible and consultative leadership. President Kagame makes sure to take policy suggestions as well as give direction.

2)      Smart policies requires policy cohesion, commitment and continuity. In Rwanda, Vision 2020 informs all policy initiatives and has been crucial in guiding all policy initiatives.

3)      Initiatives such as Performance Based Contracts (PBC) have been very successful in ensuring effective policy delivery. Civil servants are required to legally commit to delivering agreed outputs. These are enforced strictly and transparently

4)      Rwanda has formed constructive partnerships with donors. Negotiations with donors have been a process of give and take, resulting in consensus when going forward.

Laurie Lee

·         The Development Progress Stories initiative provides a good balance between macro and micro policies and offers a good coverage of what policies can be piloted and ‘scaled up’.

·         More generally, future initiatives need to effectively communicate progress stories to the public, who may not have grasped the extent of progress in the developing world in recent years.

·         There is also a need to build more effective monitoring and evaluation systems into development initiatives. This will enable governments and development partners to better document development failure. Through documenting and learning from failure, greater progress can be made. Currently, policymakers and development partners tend to shy away from this task, instead focussing solely on ‘what works’. Future initiatives should aim to mainstream the documentation of development progress and development failure together, rather than addressing each individually or sporadically.

·         Future efforts at identifying progress should also account for more unorthodox initiatives. For example, fertiliser subsidies in Malawi have had large positive impacts. Since these policies ran counter to conventional wisdom, donors initially dismissive, and have not yet sufficiently acknowledged the positive role of agricultural reforms in Malawi.

·         Lastly, many ‘surprise stories’ in developments are surprises in the regard that observers are unable to explain their progress. Many low income countries have made substantial progress form a low base though applying basic well known interventions. A notable example is here the use of simple, but effective health technologies. In the aim of furthering progress more effort should therefore be put into producing Global public goods such as R&D in health technologies.

Will Day

In aiming to promote greater private investment in Africa, particularly FDI, it is important to consider a number of points.

·         Business is hard-nosed and the profit motive ultimately guides behaviour. International private capital should by no means be expected or relied upon to engage with Africa in ethical terms with aim of promoting development for the wider good. Corporations are beholden to shareholders, not poor countries and poor individuals.

·         Investment uncertainty, as opposed to risk, is the main obstacle to greater capital flows. Reducing uncertainty is therefore key to increasing FDI.

·         However, factors such as climate change, increasing population growth are generating increased uncertainty for investors. Supply chains in tea, coffee and other agricultural products are currently being disrupted by changes in climate.

·         Africa needs long term investment. Without addressing such uncertainties, the development of more substantial long-term, stable, foreign capital flows to the continent will be impeded. This is a particularly difficult task due to the impatient nature of capital and the preference for short term speculative profit seeking which can cause substantial damage to an economy.

·         There needs to be greater recognition that some of the most celebrated ‘success stories’ of the private sector in development, such as MPESA, were not purely market driven. Donors such as DFID played an instrumental role in laying the groundwork.

·         Dumping responsibility onto the private sector for development in developing countries is therefore unable to work out.  Further progress requires the sustained commitment of international donors.

·         Finally, the fundamentals of many of the economies of progress stories are not sustainable. Greater efforts need to be taken to highlight more sustainable models. It does not make economic, as well as environmental, sense for developing countries to lock themselves into carbon intensive technologies which are going to get expensive soon.

Points raised during the discussion

1)      There is a blind spot in current development discourses regarding urbanisation. Increasing proportions of populations in developing countries are moving to urban areas - a trend that is going to continue in the future. More effort needs to be taken to document progress stories regarding the capable handling of rapid urbanisation. THE DPS case study on Burkina Faso provides one example in this regard.

2)      Many of the policy lessons highlighted seem to be a continuation of Washington consensus principals. There needs to be a greater recognition of the role un-orthodox policies can play in development.

3)      How can Africa gain a competitive advantage in low carbon development?

4)      Increasing access to education is a priority for donors. However, when students graduate, how are skilled labour to be integrated into the workforce given lack of industrial upgrading?

5)      There needs to be greater consideration of human rights issues when documenting development progress. Some of the case studies included in the report have very patchy human rights records.