How are the official donors facing up to the challenge? A view from the Development Assistance Committee (DAC)

17 June 1999
Public event

Speakers:

Dag Ehrenpreis, Senior Adviser on Poverty Reduction, OECD/DAC

Peter Grant, Head of Economic Policy and Research, DFID

Description

At this event, Dag Ehrenpreis discussed a DAC Scoping Study, coordinated by ODI, which provides a 'stock take' on the policy and practice of all major donors. The Scoping Study had highlighted areas where agencies could strengthen their approaches and bridge the gap between the growing rhetoric on poverty policies, and practices which still lagged somewhere behind.

1. Aidan Cox, ODI Research Fellow, introduced the two speakers. Dag Ehrenpreis has been seconded from Sida, where he was Chief Economist, to serve as Senior Adviser on Poverty Reduction strengthening the DAC work in this area. Peter Grant is the Head of Economic Policy and Research Department at DFID, but is also the co-chair of the DAC Informal Network on Poverty Reduction. Aidan Cox noted that although many people knew the DAC through its annual reviews of DAC members it also provided guidelines for agencies on evaluation and humanitarian assistance, and from 2000 on poverty reduction.

2. Dag Ehrenpreis began by explaining that the DAC had commissioned a Scoping Study, coordinated by ODI, which provides a 'stock take' on the policy and practice of all major donors. The Scoping Study had highlighted areas where agencies could strengthen their approaches and bridge the gap between the growing rhetoric on poverty policies, and practices which still lagged somewhere behind. The Study provided a set of 17 recommendations for the DAC members, which had been accepted and now formed the basis of the work programme of the DAC Informal Network on Poverty Reduction.

3. Dag summarised some of the main findings from the study, including:

  • greater determination on the part of donors to benefit the poor;
  • increasing efforts to contribute to poverty reduction through a partnership approach; and
  • increasing emphasis on participation.

However, much greater effort was needed in a range of areas, such as:

  • a shift from ad hoc attempts to a more systematic focus on poverty; and
  • more attention to coherence across the whole range of policies (trade, investment, agriculture, etc).

4. Given the time constraints, Dag focused on the issue of mainstreaming poverty reduction. If development agencies are to maximise their impact on poverty reduction, then their poverty reduction objectives must be taken into account in all agency activities and at all organisational levels, including:

  • policy, procedures and organisational culture of the agency;
  • country programming and interventions supported by agencies; and
  • the dialogue of agencies with developing country partners.

5. Achieving mainstreaming implies ensuring the right incentive structure within the agency. Key in this is senior management commitment to creating a 'poverty-friendly' culture. Commitment was perceived as being strong in about half of all agencies, and weak in a fifth. One of the obstacles to mainstreaming lay in negative incentives. These include: i) the pressure to disburse resources rapidly, which militate against participatory approaches and genuine partnership; and ii) multiple objectives, which may well blur efforts to give priority to any single objective, such as poverty reduction.

6. Peter Grant's presentation set out the various roles played by the OECD/DAC in the area of poverty reduction, including:

  • developing targets and indicators;
  • acting as a forum for exchanging best practice;
  • providing an informal poverty network; and
  • developing and disseminating poverty reduction guidelines by the end of 2000.

7. The primary purposes of the guidelines were to act as a standard of reference and accountability, to provide a source of lesson learning, and to provide a benchmark for the DAC's peer review process.

8. Peter set out how an Implementation Sub-Group of the Poverty Network has been charged with developing the DAC Guidelines on Poverty Reduction, which will cover the areas of:

  • poverty concepts;
  • poverty strategy process and institutional learning;
  • what works in poverty reduction and why? and
  • policy coherence (as an annex).

Although the DAC is primarily a 'donors' club', it was seeking to ensure that there would be consultation with partners at the developing country level. There would also be linkages with the World Development Report 2000/1 and with United Nations' work on poverty.

9. Key issues for the Guidelines include how to ensure that the efforts of donors and partners contribute towards the International Development Targets; and how to make sense of and operationalise new thinking on pro-poor growth, rights, participation and sector-wide approaches.

10. Peter concluded by providing a view from DFID, noting that DFID's strong emphasis on poverty reduction had provided the incentive for it to be actively involved in the DAC network. It was also reflected in its commitment to the International Development Targets, and the fact that DFID was currently drawing up Target Strategy Papers for its partner countries focusing on individual IDTs, leading to an agenda for action by DFID and wider partners. In addition, DFID is preparing a paper on 'Economic Well-Being', which focuses on the poverty reduction target, builds on work led by Lucia Hanmer on reaching the IDTs, and examines the relative importance of growth, inequality and vulnerability in relation to poverty reduction.

11. The discussion focused on four areas:

  1. Donors have stated their commitment to poverty reduction in the past. Why should their record at translating policy into practice be any better in the next 10 years than in the past decade? What would be different in concrete terms as a result of the new DAC Guidelines?
  2. It takes a long time for organisations to change - the changes required within donor agencies by the DAC Guidelines were akin to the institution-building efforts within developing countries - long, slow, difficult, but extremely important. Sustained senior management commitment, and consistent messages prioritising poverty reduction, were the key to achieving pro-poor institutional change. There was arguably a new recognition that past shortcomings were the result of perverse incentives within development agencies and not simply failures of policy and practice within developing countries.
  3. The nature of the consultation process with developing countries was not yet clear, but would combine a regional and a country-level approach. There was some concern that the reluctance of some developing country governments to engage seriously in the poverty reduction agenda was not being addressed within the DAC context.
  4. The new Guidelines and the existing Scoping Study (shortly to be published) did not have statutory weight, but they would provide valuable ammunition for advocates for effective poverty-focused development cooperation.