WHO IS RESPONSIBLE FOR POVERTY?

This Blog focuses on Knowledge for Development. It focuses especially on knowledge backed by evidence and analysis, supported by theory. It seems obvious, but some of the most critical knowledge for development comes from economics and other social sciences. This entry will be one of the few on my Blog dealing with such knowledge.

Conflict:

There is a new report from a team lead by Paul Collier at the World Bank, “Breaking the Conflict Trap: Civil War and Development Policy”.
Abstract: “The repercussions of civil war are often felt in countries far removed from their countries of origin, civil wars cannot be allowed to continue towards their ill-fated conclusions. Rather, cohesive international intervention is needed to avert externalities such as drug trafficking, spread of disease and global terrorism. Indeed the report finds that contrary to popular opinion, ethnic tensions and ancient political feuds are rarely the primary cause of civil wars. Instead economic forces such as entrenched poverty and heavy dependence on natural resource exports are usually to blame. This study therefore urges three specific sets of actions to prevent civil wars: more and better-targeted aid for countries at risk, increased transparency of the revenue derived from natural resources, and better timed post-conflict peacekeeping and aid.”

The report is the subject of articles in the Economist (“The global menace of local strife”) and the International Herald Tribune (“How to stem civil wars: It's the economy, stupid?”).

Apparently, most wars are civil wars today. (Which was the more important war, that in Iraq during the last few months which killed a few thousand people, or that in the Congo during the last five years which is estimated to have resulted in between 3.1 million and 4.7 million deaths? Why is there no obvious relationship between the amount of media coverage of a war and the number of deaths it causes?) Most of the wars are in very poor countries. (Answering my own question.) They are very bad for development, and often poison the development process for a long time after the fighting ends.

It is important to have studies such as this one, that say what should be obvious, with data. It is even more important when the studies point out things that are counter-intuitive. Thus Collier et al point out that poverty is a more implicated in civil war than ethnicity. Perhaps on the basis of such evidence we will give more emphasis to stopping civil war; or at least stop sending aid to countries that will waste it in violence.

It surely seems to me that there ought to be international mechanisms that work better to halt civil wars and to build the peace. The UN seems unable to accomplish this task well, and the former colonial powers (that seem to do it often) seem no better than the US. In this respect, I was disturbed in a chat with a senior European journalist last week, who indicated that Europe was going to have enough problems in its back yard in the next decade, and should not be expected to try to solve problems in other parts of the world. This may be bad news for Africa.

Agricultural Subsidies, Trade Barriers, and Development Aid

I was surprised that the ICT Development Forum focused very heavily on these topics. The most memorable statistic was this:
Half the people on earth live on less per day than the average daily subsidy per cow in European Agriculture, which is US$2.50. The average subsidy per day per Japanese cow is US$7.
Trade barriers were estimated to cost developing countries exports that are seven times greater than the flow of development assistance. (Some of the data for such assertions can be found in Chapter 7 (“Competition”) of the 2002 World Development Report.

Probably a better source on the real contribution to development of poor nations is the Commitment to Development Index of the Center for Global Development (that I mentioned in a posting a week or three ago). Read the supporting documents too.

The joint issue of subsidies, trade barriers and aid levels was raised by James Wolfensohn, President of the World Bank, and Mamphela Ramphele, a Managing Director of the Bank. They were very clear about the negative impact on developing nations of the current situation.

The Forum had agreed with some tranquility to the proposal from the head of Transparency International for better tracking of corruption and transparency, and to the modest proposal that the Development Gateway portal join with Transparency International to collect and distribute information on these topics. It ground into controversy when the idea of doing the same for subsidies, trade barriers and aid came up. And indeed, a part of the controversy is related to the allocation of blame – is corruption keeping poor countries poor, or is it the policies of rich countries. And, if it is both, is it not appropriate to track both?

I suppose the developing country people in the meeting were right to insist on the relevance of these sources of foreign currency to a meeting on ICT for Development, and especially given the focus on the Development Gateway. Money counts! Hard currency obtained through trade and aid allow countries to purchase capital goods from abroad, goods fundamental for development. These goods of course include ICT, but the demand for ICT will grow with economic growth.

The Development Gateway Portal has agreed to take on the job of providing a platform for information on the Millennium Development Goals. The recommendation that it utilize its ICT expertise in this manner was quickly and easily accepted. Interestingly, the eighth Goal has specific sub-goals on official development assistance and on market access for developing nations (mentioning both trade barriers and agricultural subsidies.)

In short, I think we need knowledge about civil war, corruption, and financial flows to developing countries (including agricultural subsidies, trade barriers and aid flows of developed nations that influence those flows).