Nelson Mandela — A Most Profound Loss

December 5, 2013

Having worked at the margins of the constitutional transition in South Africa from 1991-1994, I believe that in one way or another every person on Earth has benefitted directly or indirectly from the life and leadership of President Nelson Mandela today. His personal example, moral political leadership, and persistence  has not been paralleled by anyone during the last 40 years. He will be missed even by those who are not aware of their debt to him.

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My Review of New Biography — William Egan Colby and the CIA

April 9, 2013

William Egan Colby was the highly visible Director of Central Intelligence during 1973–1975 following a career in the CIA beginning in its predecessor OSS during WWII; the Agency’s head of clandestine efforts in Sweden and Italy during the 1950s; Deputy Chief  and then Chief of Station in South Viet Nam (1959–1962); Chief of its Far East Division (1962–1967), and again in Saigon as deputy, and then civilian head of the American counter-insurgency program within Military Assistance Command, Vietnam (MACV) from 1968 to 1971.

My review of the new biography — Shadow Warrior: William Egan Colby and the CIA — written by Randall Woods was published by the New York Journal of Books on June 6, 2013. Although not without a few minor flaws, this book should be read by anyone interested in either political biographies and/or the recent history of America’s foreign policy.


THE UN SYSTEM & WORLD BANK GROUP #1: SIMILARITIES & DIFFERENCES

March 17, 2011

Increasingly in recent times we have come first to identify the remedy that is most agreeable, most convenient, most in accord with major pecuniary or political interest, the one that reflects our available faculty for action; then we move from the remedy so available or desired back to a cause to which that remedy is relevant. John Kenneth Galbraith (1908-2006)

On Again, Off Again (Personal Reminiscences)1

It was 1982. I was in Sierra Leone as a World Bank short-term consultant. This was the Bank’s first joint agriculture sector review mission with the International Fund for Agricultural Development (IFAD). This assignment also represented several firsts for me as well. It was my first direct encounter with a UN System agency, my first participation in a World Bank mission, my first visit to West Africa, and my first involvement in long-term sector policy assessment and formulation.

I soon discovered that our IFAD colleagues were worried that Bank staff would ignore their desire to consult directly with smallholder farmers at the village level. But that turned out not to be the case and, as an outsider to both IFAD and the Bank, I found little difference in either style or focus between the staff of those two agencies.

Although I was not aware of it at the time, this collaboration with IFAD was evidence of a shift in World Bank attitudes toward United Nations (UN) agencies.  It also signified a growing interest in more participatory approaches, even if by only a small number of Bank staff. And unbeknownst to me, that had been the reason I had been employed by the Bank for this mission.

About eighteen months later (1984), I was hired as the World Bank’s first Institutional Development Specialist and assigned to a new Institutional Development, Technical Assistance, and Training projects division within what was then the Eastern and Southern Africa regional vice-presidency. There again I found an interesting sign of collaboration between the World Bank and the UN. That collaboration took the form of a United Nations Development Programme (UNDP) staff-unit embedded within our projects division. Indeed, the “training” designation in our Division’s title referred to that unit. I confess that I never really understood then nor do I know now what my UNDP colleagues actually did. All I knew was that, although their offices were integrated with ours, they attended our staff meetings, and were evaluated by our projects division chief, they actually had their own portfolio of activities, retained their status as UNDP staff, and were paid by UNDP. And about three years later the unit was dissolved, staff were reassigned either to UNDP headquarters in New York or to that agency’s field offices.

I did not have occasion to interact with any UN agency again until sometime during 1989 when I approached UNDP with a request for financing. Requests to UNDP or other UN entities for grant financing by World Bank staff were rare, but not completely unknown. In this case, I had proposed and received permission to launch a relatively low-cost effort to “develop local consulting capacity in Africa.” But that approval had come with a catch. Although I would have about twenty percent of my time released at the Bank’s expense, I would need to find grant financing for the actual activities elsewhere. So I prepared a draft scope of work and drafted a cover letter for my regional Vice-President to sign and send to several possible sources of grant financing. The only positive responses were from UNDP and the Netherlands Ministry of Foreign Affairs, together pledging about $650 thousand. I naively thought that once the two memoranda of  understanding had been signed, the money would be released and I could proceed. But of course, that was not the case. The formal agreements still needed to be negotiated separately and appropriate paperwork prepared and  signed before any money would actually be transferred to the World Bank trust fund account established for this specific activity. And as busy as I was with my normal tasks within the Bank, it appeared that my colleagues in The Hague and New York were even busier. A brief visit to the Ministry in The Hague did the trick there. But it soon became clear to me that a truly understaffed office in New York was attaching a relatively low-priority to the processing of the necessary paperwork and, therefore, the UNDP money might never be actually available. As they explained, it was not that they didn’t want to do it, but they didn’t have the staff-time to do it.

So I invited myself to New York, asked them for an office, and examples of paperwork previously completed for other trust fund arrangements and, with their permission, typed the letters required on UNDP letterhead and personally collected the four or five required signatures so that the letters could be sent to my Managers at the Bank; all of which was completed in one full day. Only a few days later, that signed paperwork arrived in Washington, DC, the trust fund was established, and the money was transferred. I tell this story not to embarrass anyone in UNDP those many years ago, but rather to illustrate the fact that degrees of collaboration between agencies like the World Bank and UNDP are not simply a function of policy, but of the relative priorities and incentives among managers and staff of collaborating organizations.

My next encounter with a UN agency was indirect, even if a bit disconcerting. Although I am a political scientist, my advocacy and modeling of participatory approaches led to my assignment in 1995 as Manager of the “UNDP-World Bank Water and Sanitation Program” (WSP) unit for the “East Asia and Pacific Region” (WSPEAP) headquartered in Jakarta. Established in 1979 as a partnership between UNDP and the World Bank, the WSP was an early example of international consortia managed by the World Bank with regular World Bank staff but financed by grants from multiple donors; the most well-known of which is probably the Consultative Group on International Agricultural Research (CGIAR) established eight years before. However, although largely financed by UNDP during its earlier years as a program to develop and test very low-cost hand pump and latrine designs suitable for local manufacture, it had shifted by the early 1990s to the design and implementation of small-scale pilot projects meant to demonstrate the efficiency of demand-driven approaches to the design and implementation of projects for provision of safe water and effective sanitation to poor people.

By the time I came aboard in 1995, UNDP headquarters was no longer providing core financing, although individual UNDP country-programs did continue to finance some WSP pilot projects. Financing for our Program in East Asia was provided primarily by the Australian, Swedish, and Swiss bi-lateral aid agencies and from within the World Bank itself as our approach was increasingly incorporated into the design of the Bank’s larger loan or credit financed projects. My satisfaction as a regular World Bank staff with the increasing integration into mainstream World Bank operations was off-set by our apparent inability to establish effective collaboration with other UN system organizations, especially UNICEF’s separate water and sanitation program in the Lao Peoples’ Democratic Republic.

Although UNDP had been heavily involved in the original establishment of the WSP, UNICEF’s own discrete water and sanitation projects were designed and implemented by its own separate staff that were also resident in many of the same countries as UNDP. And despite similar demand-driven approaches to expanding water and sanitation facilities and services to the rural and urban poor, both groups viewed each other as competitors rather than collaborators. Our own Country Program Officer in Vientiane was bedeviled by what he viewed as UNICEF’s successive rejections of overtures to establish closer operational collaboration. However, although maintaining friendly diplomatic relationships with the UNICEF resident office in Vientiane was valuable, it soon became apparent to me that actual collaborative planning and/or implementation was unlikely because our respective institutional incentives pulled us in separate directions. Both groups were scrambling for money from the same bi-lateral donors and staff were not likely to be promoted on the grounds that they deferred to another organization in the interests of greater overall efficiencies. Eventually, our nominally shared UN system identities disappeared as UNDP financing of the joint program ended and the official name of the Program was ultimately changed to “The Water and Sanitation Program” (WSP) in April 2000 to better reflect the multi-donor nature of its financing. Nonetheless, although UNDP no longer finances the Program, its representative continues to serve on its Program Council.2

Introduction3

The conventional expectation at the end of World War II was that the new International Bank for Reconstruction and Development (IBRD) would focus primarily on providing financial support to member-states while the United Nations (UN) concentrated on global collective security. Nonetheless, it was also expected that IBRD would operate within a broader policy context coordinated by the UN, as implied in Article V of its Articles of Agreement:

The Bankshall cooperate with any general international organization and with public international organizations having specialized responsibilities in related fields…. In making decisions on applications for loans or guarantees relating to matters directly within the competence of any international organizationparticipated in primarily by members of the Bank, the Bank shall give consideration to the views and recommendations of such organization.

True, that single Article is not as specific as the multiple provisions specifying the role of the Economic and Social Council (EcoSoc) within the UN Charter. But there is also other evidence that IBRD was expected to operate within the broader mandate of the UN.
One example is provided by the active lobbying by several Latin American delegations in San Francisco for expanding EcoSoc’s power and responsibilities as a direct channel for post-war financial aid to non-European states,4 a position directly opposed by the Soviet Union’s view that the UN should limit itself to ensuring “collective security” and not much else.5 However, the Latin Americans prevailed as EcoSoc was explicitly tasked with consideration, coordination, and recommendation of proposed economic and social activities (Articles 61-72). But that victory was ultimately incomplete — and therein lays a tale.

The telling of that tale will be presented in a series of five separate blog posts. This first post provides a summary comparison of the UN System and World Bank Group. Part #2 (“Building Walls”) presents the story of their relations during the period from 1946 through the 1950s. Part #3 (“Mending Fences”) extends the story to the evolution of the relationship during the 1960s and 1970s. Finally, Part #4 (“Tensions Re-Emerge”) summarizes relations during the 1980s and 1990s while Part #5 (“Older and Wiser?”) focuses on the period since the year 2000.

Similarities & Differences

The overall structure of the United Nations System and World Bank Group has been described in previous posts. Both of those groups have expanded exponentially since their creation. Given that both the UN and World Bank were born from the same parents almost simultaneously, the extent of differences among organizations both within and between those two broad institutional systems is surprising:

  1. Although membership in all entities within the UN System and World Bank Group is limited to sovereign- states, all members of the United Nations General Assembly are not necessarily members of IBRD (or other World Bank subsidiary bodies or specific UN specialized agencies);
  2. Although sovereign-state members are represented by their respective governments within UN System and World Bank Group entities, different agencies within those governments represent them in those different international bodies (for example, [i] ministries of foreign affairs generally represent their governments in the General Assembly and Security Council, [II] bi-lateral development agencies, ministries of external affairs, or sector-specific line ministries normally represent them in specialized agencies, and [iii] ministries of finance or central banks normally represent them in the World Bank and International Monetary Fund [IMF]);
  3. Although informal agreements existed that the Administrator of the United Nations Development Programme (UNDP) and the President of the World Bank should both be Americans,6 a wide range of other nationalities have always served in the highest leadership position of other UN specialized agencies;
  4. Although senior leaders within both systems stressed the importance of “country-knowledge” among staff, the UN system began posting Resident Representatives to client countries very early-on while the World Bank continues to rely primarily on staff and consultants dispatched from its Washington headquarters; and
  5. Although the UN system fairly rapidly expanded its interests in international development assistance and capacity to provide it, the attention of its overall leadership and Secretariat staff remains focused on, in the words of Craig Murphy, “matters of international high politics.”7

In addition to the differences summarized above, three others are even more fundamental: (1) their respective decision-making structures; (2) their sources of finance; and (3) the terms under which development assistance is provided.

Decision-Structures

It is generally well understood that the United Nations General Assembly operates on the principle of “one country, one vote” without regard to the different amount of dues paid by each individual member-state. That is also true of all other UN “principal organs” except for the Security Council where China, France, Russia, the United Kingdom, and the United States each have an absolute veto. Less well understood is that decision-making structures vary among UN specialized agencies, including the World Bank Group and IMF.

It is impossible to describe that entire range of variation among UN System agencies within this blog post. But in broad terms, there are three broad decision-making arenas within the UN and World Bank Group systems. The first two are the “principle organs” of the United Nations where decisions made by individual member-states are directly represented and the various “secretariats” where the professional leadership and staff of UN subsidiary bodies and specialized agencies make operational decisions themselves.8 The third arena is found primarily within the walls of the World Bank’s headquarters in Washington, DC where, although officially part of the United Nations system, decisions are independently made by its middle and senior managers.9 With that three-fold classification in mind, the remainder of this blog post focuses primarily on the relationship between UNDP and its predecessor agencies on the one hand with IBRD and the International Development Association (IDA) on the other hand.

Financing Development Assistance

Most welfare and development-oriented UN entities provide assistance as grants. Although grants do not require repayment, some cost-sharing is almost always required of recipient governments. Nonetheless, because most UN activities are financed by grants it is most often limited to provision of technical assistance or training.

Although a few, relatively small, grants are sometimes provided by the World Bank, the overwhelming majority of its finance is provided by IBRD in the form of “loans” at or near market interest rates and zero-interest concessional “credits” provided by IDA. Differences between IDA and IBRD are limited to: (1) sources of finance; (2) eligibility for finance; and (3) fees charged borrowers and terms of repayment. The principal amount of IDA credits must eventually be paid back, but only a small fee of half of one percent is charged, there is normally a ten-year grace period before repayment begins, and full repayment is extended for twenty to thirty years beyond that. Since 1970 (the date from which adequate time-series data is available), World Bank financing has been substantially larger than that provided by the UN’s largest agencies.

According to the World Bank’s current classification scheme, member-countries are eligible to borrow from IDA only if their per capita income was less than $1,165 during 200910 and they are not sufficiently credit-worthy to borrow from IBRD. That means that only countries classified as “lower-income” plus a few at the very lowest end of the “lower middle income” range might be eligible. Member-states with per capita incomes above $1,165 but less than $12,196 are eligible for IBRD loans. “High income” member-states with incomes of above $12,195 are not eligible for any borrowing from the World Bank. A few lower middle-income “blend” countries like India and China have been allowed to maintain a mixed-status allowing access to borrowing some combination of IBRD loans and IDA credits that effectively lower the aggregate amount of interest they are charged.

Sources of Finance

Financing formulas and arrangements vary substantially among different United Nations organizations and commissions.  A very brief comparison of the way the UN General Assembly, UNDP, UN Specialized Agencies, IBRD, and IDA are financed is provided below.

UN General Assembly Authorized Core Budget & Peacekeeping. UN member-states are assessed dues for three-year periods. Dues range from a maximum “ceiling” of twenty-two percent of the total core budget to a minimum “floor” of only 1/1,000th of one percent based primarily on estimates of each member’s gross national income (GNI). Since the founding of the UN, the United States has been the only country whose dues are levied at the maximum rate; from at least fifty percent of the UN’s regular core budget in 1945 to one-third in 1955 and twenty-two percent of the UN’s 2010 core budget.11

UNDP. As a subsidiary body of the United Nations General Assembly, the UN’s regular core budget subsidizes a small percentage of its total expenditures. The remainder is raised directly through direct negotiations with UN member-states. At the time that UNDP’s predecessor Extended Programme of Technical Assistance (EPTA) was established in 1949, its leadership understood that its financial survival required two things: (1) continued voluntary support by the United States, including by both Congress and the President, and (2) increasing contributions by Scandinavian countries, especially Sweden, that had escaped relatively unscathed from World War II. Therefore, it is not surprising that the United States voluntarily contributed a full sixty percent of its budget in 1949 and declined only slowly to fifty percent by 1958 at the dawn of the de-colonization era. Nonetheless, by 2004, the United States contribution had declined to only about twelve percent of what had become the UNDP budget.

UN Specialized Agencies. By contrast with subsidiary organs like UNDP, specialized agencies are not normally subsidized even in part by the UN’s regular core budget. Instead, they negotiate the amount of dues with each of their own member-states directly. In addition, several agencies like UNICEF also raise funds from both public and private sources. Some agencies also contract their services directly to individual member-states; as UNESCO, UNICEF, and WHO did to the United States Government in Iraq during 2003 and 2004.12

IBRD. By contrast to all UN principal organs (other than the Security Council), subsidiary bodies, and almost all other specialized agencies, World Bank Group entities and the IMF employ a weighted voting system whereby the share of total votes held by each individual member-state is determined by their relative share of subscribed capital. Nonetheless, the actual voting power of individual member-states varies within each of the Bank Group’s five entities.

With specific respect to IBRD, the minimum number of shares assigned to each member is tied to the financial “quota” that state is required to deposit with the IMF.13 Because the voting power of original and early members of the Bank (Articles of Agreement, Article V) has declined as the number of member-states has increased, the United States’ share of total IBRD votes has been dramatically reduced from the thirty-seven percent of the total in 1944 to today’s sixteen percent (click below for Figure 1).

Figure 1 – WB Voting Shares (1947-2005)

The primary difference between the manner in which the United Nations, IMF, IDA, and IBRD are financed is that, unlike all those others, IBRD member-states are not required to pay-in the full amount of their capital subscriptions. Instead, the overwhelming bulk of IBRD’s resources come from borrowing in the private sector financial markets (Article IV), the collateral for which are the financial guarantees by its sovereign-state members that their unpaid capital subscriptions will be available if required to meet the Bank’s obligations (Article II). Although available, calls on unpaid capital subscriptions have never been necessary. Indeed, the Bank has always posted an annual profit. In 2007, that profit exceeded $1.65 billion.14 That, in turn, has enabled IBRD to provide substantial funding in its own right to IDA and various other multi-donor trust funds managed by the Bank. Because the bulk of IBRD financing is raised through the private sector bond market, the need to establish and maintain a superior credit rating among international private investors has been critical to the IBRD’s financial success. Indeed, IBRD’s “first bonds, issued  in July 1947, were substantially oversubscribed.” According to the private non-profit Bank Information Center (BIC), the IBRD had by 2008:

paid-in capital of US$11.5 billion and callable capital of US$178 billion…. [and] with capital backing of nearly US$200  billion from its member governments.., [had a] “AAA” credit rat[ing] and [is able to on-]lend those funds to  borrowers at rates slightly below those offered by commercial lenders.15

IDA. IDA was established in 1960 for reasons that will be discussed in Part #2 of this five-part series. Although it operates under the terms of  its own Articles of Agreement, it is actually a fund rather than a separate organization. Indeed, the managers and staff of IBRD and IDA are exactly the same. The procedures for identifying, appraising, supervising, and evaluating IDA credits are also the same. As a separate fund, IDA is financed primarily by contributions from its members pledged approximately every three years during “replenishment rounds;”16 the seventeenth of which begins during 2011. Those funds are also supplemented by repayment of previous IDA credits and direct contributions from IBRD profits. Although not very large to date, those repayments will increase as IDA’s very long-term repayment periods are increasingly reached over future years. As in the case of IBRD, voting within IDA is weighted according to the number of shares subscribed, but the amount of shares subscribed is entirely voluntary.17 Because all members of IBRD are not also members of IDA18 and the number of shares is voluntarily subscribed, the share of votes held by each member-state varies from those exercised within IBRD. Thus, while the United States currently holds only sixteen percent of votes within IBRD, it holds eleven percent of votes within IDA.19

Summary Conclusion

As will be illustrated in subsequent parts of this five-fold series, different sources of finance, membership, and voting formulas account for many of the different priorities and behaviors among UN and World Bank organizations rather than different moral principles. Differences in financial sources limited UN system entities largely to technical assistance and education assistance while enabling the World Bank to provide substantial capital for large-scale infrastructure development. As will be demonstrated in the following four parts of this series, those different capacities led their respective organizations in different directions. As only one example, while UNICEF was established in 1946 and WHO two years later, the World Bank did not begin to finance projects in the education and health sectors until 1962 and 1979 respectively (click below for data provided in Figure 3).

Figure 3 — UN/WB Comparisons: Macro-Organizational & Thematic (1947-2011)

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NOTES:

[1]All “Personal Reminiscence” posts are stories told about one or more of my own personal experiences as I remember it. They are true to the best of my ability to recollect them and reflect my view of how they illustrate “lessons learned” from that experience even if one or another aspect of the story as told might not be completely correct in each and every detail. Further, I have done my best to disguise the identity of other persons referred to in these stories, including not using their true names unless references to their presence at that time or circumstance has already been published by others in other media.

[2] WSP’s current donors include Australia; Austria; Canada; Denmark; Finland; France; Ireland; Luxembourg; Netherlands; Norway; Sweden; Switzerland; United Kingdom; United States; The World Bank; and the Bill & Melinda Gates Foundation.

[3] Louis Emmerij, Richard Jolly and Thomas G. Weiss point out that “there is no comprehensive history of the United Nations (UN), either institutional or intellectual…. [even though] several specialized agencies have written or are in the process of writing their institutional histories.” That contrasts with the publication of two large histories of the World Bank, both of which were sponsored by the Bank to commemorate its 25th and 50th anniversaries (Edward Mason and Robert Asher, The World Bank Since Bretton Woods [Washington, DC: The Brookings Institution, 1973] and Devesh Kapur, John Lewis, and Richard Webb, The World Bank: Its First Half Century, two volumes [Washington, DC: Brookings Institution Press, 1997]), and the employment of an in-house historian who ensures the capture of its place in history with regular publications (for example, James Boughton, Silent Revolution: The International Monetary Fund 1979–1989 (Washington, DC: International Monetary Fund, 2001). See Louis Emmerij, Richard Jolly and Thomas G. Weiss, Economic and Social Thinking at the UN in Historical Perspective, Development and Change 36 (2005), p. 211–235.

[4] Latin American delegations argued forcefully that EcoSoc’s authority to “recommend” development projects and policies should be understood to have the force of a directive or veto with respect to the decisions of any UN subsidiary or specialized agency. They formulated that position following the Inter-American Conference on the Problems of War and Peace at the Chapultepec “Castle” in Mexico City from February 21 to March 8, 1945 in response to the United States delegation’s statement that its priority for post-war financing – and by extension the IBRD’s priority as well — would be the reconstruction of Allied European economies rather than development of Latin American economies that had largely stagnated during the War. See the Declarations on Reciprocal Assistance and American Solidarity, known as the “Act of Chapultepec,” see United States Army Information School, “Pillars of Peace in Documents Pertaining to American Interest in Establishing A Lasting World Peace: January 1941 – February 1946 (Carlisle Barracks, Pa.: Army Information School Book Department, May 1946). Also see Jean Krasno, A Step Along an Evolutionary Path: The Founding of the United Nations, Global Dialogue 2 (Spring 2000); Colombia’s Resolution on Aggression Introduced at Inter-American Conference; New York Times (February 23, 1945); Harry S. Truman Library and Museum, Reminiscence of William Sanders, written responses to questions as part of Oral History Project (August, 1975); and Jerry Mark Silverman, An International Economic History of Latin America & The Caribbean in Jose de Arimateia da Cruz and Eduardo Gomez (ed.), Latin America in the New International System: Challenges and Opportunity (Boston: Pearson Custom Publishers, 2005), p. 57-96.

[5]See Harry S. Truman Library & Museum, Oral History Interview with August Maffry, interview conducted by Richard D. McKinzie as part of Oral History Project (January 19, 1973).

[6] The informal agreement with respect to the World Bank Group is still apparently in effect, although increasing noises are made to end it. The informal agreement with respect to UNDP ended with the appointment of Mark Malloch Brown, a citizen of the United Kingdom and at the time the World Bank’s Vice-President for both External Affairs and United Nations Affairs, as UNDP’s 6th Administrator on April 23, 1999. He was the first UNDP Administrator who was not a United States citizen to serve in his own right since the establishment of UNDP in 1966. He was succeeded by Kemal Dervis, a citizen of Turkey and also former World Bank Vice-President, in  August 2005 and by Helen Clark, former Prime Minister of New Zealand on April 17, 2009.

[7] Louis Emmerij, Richard Jolly, and Thomas Weiss assert that “…UN secretaries-general basically confirm that political and security crises tend to fill all the available time, and that economic and social issues assume a lower priority.” They quote Javier Perez de Cuellar, UN Secretary-General from January 1, 1982 to December 31, 1991, to bolster that statement: “Coming from the Third World, I was especially unhappy during my ten years as Secretary-General with the failure of the United Nations to work as a system more effectively for economic and social development . . . It can be persuasively argued that, over the years, there has been inadequate leadership on the part of the Secretary-General and the UN Secretariat in placing the United Nations in the forefront of economic thinking . . . Moreover, the political and administrative demands on the Secretary-General have always come first. See Louis Emmerij, Richard Jolly, and Thomas Weiss, Economic and Social Thinking at the UN in Historical Perspective, Development and Change 36 (2005), p. 211–235. Javier Perez de Cuellar’s quote is from his Pilgrimage for Peace (New York: St Martin’s Press, 1990) while Craig Murphy’s quote is from The United Nations Development Programme: A Better Way? (Cambridge, UK: Cambridge University Press, 2006). A history “commissioned by UNDP” that is nonetheless “an independent publication” in which the “views expressed do not necessarily reflect the views of the United Nations Development Programme.

[8] The identification and formulation of two of these four “arenas” is borrowed from Louis Emmerij, Richard Jolly and Thomas G. Weiss who differentiate within the UN system between the “arena where states make decisions” and “the leadership and staff of international secretariats.” See Louis Emmerij, Richard Jolly and Thomas G. Weiss, Economic and Social Thinking at the UN in Historical Perspective, Development
and Change
36 (2005), p. 211–235 and Thomas Weiss, David Forsythe, and Roger Coate, The United Nations and Changing World Politics 4th edition (Boulder, CO: Westview Press, 2004).

[9] For reasons discussed in a forthcoming blog post (“From United States to World Bank Dominance”), the World Bank’s executive directors do not significantly affect World Bank Group decisions.

[10] The IDA-eligible per capita income ceiling is recalculated by the World Bank on July 1st of each year using its Atlas method.

[11] For illustrative purposes, the top ten member-state assessments for the UN regular core budget for 2005-2007 (the most recent year for which I could find data) were: United States (22.0%); Japan (19.5%); Germany (8.7%); United Kingdom (6.1%); France (6.0%); Italy (4.9%); Canada (2.8%); Spain (2.5%); China (2.1%); and Mexico (1.9%); United Nations, Questions and Answers about the United Nations (June 30, 2006). See also the United Nations Association of the United States of America, U.S. Dues and Contributions.

[12] I have personal knowledge of UNESCO’s, UNICEF’s, and WHO’s participation in that part of the Coalition Provisional Authority’s program administered by USAID in Iraq for only the years 2003 and 2004. I do not know how long they individually or collectively continued that involved beyond April 2004.

[13] According to IBRD’s Articles of Agreement (Article IV), “each member shall have two hundred fifty votes plus one additional vote for each share of stock held.” See also World Bank, Voting Powers, Board of Directors.

[14]Bank Information Center (BIC), World Bank (IBRD & IDA).

[15]Ibid.

[16] Article III of IDA’s Articles of Agreement suggests that replenishments will occur “approximately five years” apart, but in fact several member-states have refused to make commitments beyond three years at a time.

[17] According to IDA’s Articles of Agreement (Article VI), “each original member shall, in respect of its initial subscription, have five hundred votes plus one additional vote for each $5,000 of its initial subscription.”

[18] As of June 25, 2010, IDA’s total membership consisted of 170 sovereign-states equivalent to 91% of IBRD’s total membership of 187. The 17 IBRD members that have not joined IDA to date are: Antigua and Barbuda; Bahrain; Belarus; Brunei; Bulgaria; Jamaica; Lithuania; Malta; Namibia; Qatar; Romania; San Marino; Seychelles; Suriname; Turkmenistan; Uruguay; and Venezuela.

[19] See International Bank for Reconstruction and Development, Management’s Discussion and Analysis, The World Bank Annual Report 2010 (June 30, 2010).

Keywords: agriculture, Argentina, Asia, August Maffry, Australia, Austria, Bank Information Center, BIC, Bill and Melinda Gates Foundation, Blend countries, Canada, capacity-building, CGIAR, Chapultepec Conference, China, Coalition Provisional Authority, collective security, Community-based social development projects, Consultative Group on International Agricultural Research, consulting capacity in Africa, Craig Murphy, credits, David Forsythe, Decade for Deserts and the Fight Against Desertification, Decade for Disabled Persons, Decade for Eradication of Poverty, Decade for Industrial Development in Africa, Decade for Sustainable Development, Decade for Women, Decade for World’s Indigenous People, Decade to roll back malaria in developing countries, particularly in Africa, Denmark, Department for International Development, development banks, development corporations, DFID, East Germany, Eastern Europe, Economic and Social Council, EcoSoc, education, Egypt, EPTA, FAO, Finland, First Development Decade, Food and Agriculture Organization, Fourth Development Decade, France, General Assembly, Germany, health, Harry S. Truman Library and Museum, Helen Clark, Human Development Reports, IARD, IBRD, IBRD Articles of Agreement, ICSID, IDA, IDA Articles of Agreement, IFAD, IFC, ILO, IMF, industry, Inter-American Conference on the Problems of War and Peace, integrated rural development projects, integrated urban development projects, International Bank for Reconstruction and Development, International Centre for Settlement of Investment Disputes, international civil servants, International Development Association, International Finance Corporation, International Fund for Agricultural Development, International Labour Organization, International Monetary Fund, International Water and Sanitation Decade, Iraq, Ireland, Italy, Japan, Javier Perez de Cuellar, Jean Krasno, Kermal Dervis, Lao PDR, Latin America, Literacy Decade: Education for All, loans, Louis Emmerij, Luxembourg, Mark Malloch Brown, MDGs, Middle East, Millennium Development Goals, MIGA, Monroe Doctrine, Multilateral Insurance Guarantee Association, National Institute of Planning, Netherlands Ministry of Foreign Affairs, North Africa, North America, Norway, peace-keeping, policy-based lending, ports, programs, projects, PSM, public administration, public sector management, public utilities, railways, Richard Jolly, roads, Roger Coate, Russia, Sadat Academy of Management, SAMS, San Francisco Conference, Scandinavia, Second Decade for Eradication of Poverty, Second Decade for Industrial Development in Africa, Second Decade for Transport and Communications in Africa, Second Decade for World’s Indigenous People, Second Development Decade, Second World War, Security Council, Sierra Leone, South Asia, Southern Europe, Soviet Union, Spain, Special United Nations Fund for Economic Development, structural adjustment, Sub-Saharan Africa, SUNFED, Sweden, Switzerland, Third Development Decade, Thomas Weiss, training, transport, UK, UN, UN Charter, UN System, UNDP, UNDP-World Bank Water and Sanitation Program, UNESCO, UNFPA, UNHCR, UNICEF, UNRWA, UNSF, United Kingdom, United Nations, United Nations Childrens’ Fund, United Nations Development Programme, United Nations Economic, Social, and Cultural Organization, United Nations Expanded Program for Technical Assistance, United Nations High Commissioner for Refugees, United Nations Population Fund, United Nations principal organs, United Nations Relief and Works Agency, United Nations Resident Representatives, United Nations Secretariats, United Nations Special Fund, United Nations specialized agencies, United Nations subsidiary bodies, United Nations System, United States, United States Agency for International Development, United States Congress, United States President, USAID, Vientiane, Water and Sanitation Program, Water for Life Decade, West Africa, Western Europe, WFP, WHO, William Sanders, World Bank, World Bank Group, World Bank Resident Representatives, World Food Programme, World Health Organization, World War II, WSP, Yalta Conference.


New Biography of President Obama’s Mother

March 14, 2011

A new biography of Ann Dunham Sutoro, President Obama’s Mother (A Singular Woman: The Untold Story of Barack Obama’s Mother) will be published by Penguin this coming May 3rd.

Although I have not had access to a pre-publication version of the manuscript and, therefore, have not yet read it, I have reason to believe that a significant part of the book places Ann’s work in Indonesia during the 1970s and 1980s in the context of competing approaches to international development and, therefore, might be of
special interest to readers of this blog. I can vouch for the fact that Ann was a proponent of demand-driven development, even though that label was not known to us yet.

I have no pecuniary interest in the book, but it is offered at a pre-publication price of $16.00 by both Barnes and Noble (http://productsearch.barnesandnoble.com/search/results.aspx?store=BOOK&WRD=janny+scott&page=index&prod=univ&choice=book&query=janny+scott&flag=False&ugrp=2)
or Amazon (http://www.amazon.com/Singular-Woman-Untold-Barack-Obamas/dp/1594487979/ref=sr_1_1?ie=UTF8&s=books&qid=1300113234&sr=1-1).

Best, Jerry


FROM COLONIAL ADMINISTRATION TO DEVELOPMENT FINANCE

February 15, 2011

Insanity is doing the same thing over and over and expecting different results.                               Albert Einstein (1879-1955)

Papua New Guinea: Where are the Americans? (A Personal Reminiscence)1

It was sometime in 1980 and I was making my first trip to Papua New Guinea (“Papuaniugini” or PNG), a country that only five years before had achieved independent sovereign-state status from Australia. My purpose was to scout marketing opportunities for my employer, an American consulting firm providing technical assistance services primarily to the United States Agency for International Development (USAID). It was my hope that a former Ph.D. student of mine teaching political science at the University of Papua New Guinea would introduce me to key PNG Government decision-makers responsible for designing and implementing decentralized rural development efforts.

Up to this time, my career had been largely limited to service in or on behalf of USAID and I was struck by the absence of a USAID mission in PNG. Instead, the Australians completely dominated international development assistance there. As I subsequently learned, Australia’s overwhelming dominance in post-independence PNG followed a pattern set by European colonial powers following the transition of their colonies to sovereign-state independence beginning in the 1960s.

PNG’s entire territory had been administered as a single “integrated” colonial entity for only thirty years before independence as different regions were colonized at different times by different colonial powers. In 1883, the Australian territory of Queensland annexed southeastern New Guinea and that territory plus various offshore islands became a British Protectorate the following year. That same year Germany annexed northeastern New Guinea and various other off-shore islands. In 1906, the United Kingdom transferred colonial responsibility to Australia for the southeastern section. In 1914, Australia invaded and occupied the northeastern section administered by its World War I enemy Germany. Australian administrative responsibility for those segments of today’s PNG was affirmed by the League of Nations in 1920. Japan invaded and occupied most of New Guinea and several of the outer islands in 1942, but Allied forces reoccupied those territories during the waning years of World War II, Australia’s jurisdiction was re-established, and the United Nations reaffirmed its authority in 1947. Two years later the two Territories of Papua and New Guinea were merged administratively, followed by self-governing status as the single entity of Papua New Guinea in 1973. And full independent sovereign-state status was achieved only two years later.2 Indeed, Australia established the Australian Development Assistance Agency (ADAA) in 1974, the first of three predecessors to today’s Australian Agency for International Development (AusAID),3 in anticipation of PNG’s scheduled independence the following year.

Australia’s initial focus on PNG was emblematic of the priority given to former colonies by the British, French, and Belgians before them. Thus, despite a more than five-fold increase of total Australian foreign aid worldwide between 1975 and 2003 and its role as the largest bi-lateral donor in Southeast Asia, PNG remained the primary beneficiary of Australian aid until the early 1990s. Indeed, PNG accounted for a third of all AusAID assistance worldwide between 1995 and 1999 and a significant sixteen percent as recently as 2003. And although PNG’s share of Australia’s expanding bi-lateral aid budget has decreased significantly, the real value has remained fairly constant and still accounted for eighty-five percent of total bi-lateral aid received by that country as recently as 2003.4  Even today, USAID’s assistance to PNG is limited to assisting that Government to —

improve…the capacity, quality, and effectiveness of programs…[to] prevent.., care, support, and treat…at-risk populations and people living with HIV/AIDS

plus access of that country to a regional Responsible Asia Forestry and Trade (RAFT) program.5   

Overview: Distribution of Bi-Lateral Aid

With sixteen bi-lateral development assistance agencies each providing $1 billion or more during 2004,6 it is easy to forget that only a very small number of development assistance agencies existed before January 1, 1960. At the beginning of that decolonization decade, only four multi-purpose multi-lateral agencies had been established7 while the United States was the only country with an established bi-lateral aid agency.8 That changed dramatically after the 1960s as former colonial powers, Japan, and the Scandinavian countries also established significant aid programs. But among those various bi-lateral aid programs, those of the most significant former colonial powers were marked by the connections between them and their respective dependent territories. Perhaps more significantly, as late as 2004 a full twenty-three countries received more than a third of their bi-lateral official development assistance (ODA) from the country that had previously exercised sovereign authority in their territories and, of that number, thirteen had received more than half from such sources.9 Although the United Kingdom and France accounted for fifty-nine percent of all dependent territories between 1949-60, the transition from colonial administration to bi-lateral aid by Belgium, The Netherlands, and Portugal is also instructive.

United Kingdom

The United Kingdom was clearly the “big elephant” among colonial powers. Indeed, more than a quarter (28%) of today’s United Nations’ member-states were at one time or another British colonies or protectorates, accounting for a third of all colonies world-wide.10 Included among those former dependencies were some of the largest: India, Bangladesh, Nigeria, and Pakistan. The transition from that vast colonial empire to today’s Commonwealth of Nations began in 1867 when Canada was the first colony to achieve self-governing “Dominion” status. But it was another thirty-four years before Australia too achieved that status in 1901; followed by New Zealand (1907), South Africa (1910) and the Irish Free State (1922). The British Commonwealth of Nations was established as an association of autonomous Dominions “united by common allegiance to the Crown” by the Statute of Westminster in 1931.11 But as discussed in “The More Things Change: Development’s Colonial Heritage” (posted January 10, 2011), the British were not committed to granting independence during the years immediately following the end of that war. Instead, they established the Colonial Development Corporation in 1948 to finance projects for “developing resources of colonial territories.”12

But by the 1960s half of all British colonies existing at the end of World War II (34) gained their independence; requiring a transition from former colonial to post-colonial development policies and organizations.

Responding to the Government’s assertion in a 1960 White Paper that:

the best way to lift poorer nations out of poverty is through economic development…,

a Department of Technical Cooperation was established in 1961 –

to deal with the technical side of the aid programme…. [by] bring[ing] together the expertise on colonial development previously spread across several government departments [emphasis added].13

Two years later, the Colonial Development Corporation was transformed into the Commonwealth Development Corporation (thus retaining the same initials)14 and the functions of the Colonial Office were split between the Ministry of External Affairs and an entirely new Ministry of Overseas Development (ODM) in 1964.15

But whatever the sequential reorganizations of the United Kingdom’s international development program and the claim One year later, the Government issued its first post-colonial White Paper on “development” asserting that it had a — 

moral duty for development and development is in the nation’s long-term interest,16

But as argued by a senior staff of the United Kingdom’s Department for International Development (DFID), the policy set forth in that White Paper: 

did not make an entirely clean break with the past…. Not only were many of the ODM staff former colonial civil servants, the Overseas Development and Service Act was perceived and drafted as the latest in a long line of Colonial Development and Welfare Acts…. Right up to the present time, a prevailing self-image of ODA has been a Whitehall Department with special skills and responsibilities connected with working overseas to promote the development of former colonies or the welfare of their people [emphasis added].17

The transfer of many Colonial Office staff from both headquarters and the colonies to the new Ministry of Overseas Development in 1964 reinforced that evolutionary approach to relations with former colonies. Indeed, a former Governor of Colonial Kenya served as Chairman of the Colonial Development Corporation as it was transformed into the Commonwealth Development Corporation. And although it is not possible to precisely determine the exact numbers or percentages, anecdotal evidence suggests that the bi-lateral aid agencies subsequently established by Australia, France, Belgium, and The Netherlands were also largely staffed by former colonial administration officials. The United Kingdom’s direct bi-lateral aid was also heavily skewed toward former British dependencies, accounting for more than eighty percent of the United Kingdom’s total world-wide bi-lateral aid between 1965 and 1984. Former British colonies still received more than sixty percent of British aid throughout the 1990s. Similar patterns hold for France and Belgium and, to a lesser extent, The Netherlands and Portugal.

France 

France first transitioned from its policy of imposing self-financing on its colonies to a new policy of providing “development” investment by establishing an Investment Fund for Economic and Social Development (FIDES) in 1946. The establishment of FIDES was a dramatic shift from France’s pre-World War II colonial policies.18 Nonetheless, FIDES’ objective was still premised on the continuation of the French Empire. However, with French colonies beginning to achieve independence in 1960, FIDES was replaced in 1963 by a Ministry of Cooperation with responsibility for providing grant assistance to Africa and a Department of Cooperation to provide concessional credits to selected developing countries worldwide. But even more important was the establishment of the African Financial Community (the “Franc Zone” or “CFA”) on December 26, 1945 only months after the end of World War II.

The CFA manifests itself in both currency19 and organizational forms. Organizationally, it consists of seven former colonies in the West African Economic and Monetary Union (WAEMU) and another six former French colonies plus the former Spanish colony of Equatorial Guinea in the Central Africa Economic and Monetary Community (CEMAC); each of which share a Central Bank. France was represented directly in both Central Banks and guaranteed a fixed exchange rate between the CFA and the French Franc until the mid-1990s. That meant that decisions to devalue the CFA required the agreement of France; an issue that became a source of tension between France and both the World Bank and IMF during the 1980s and early 1990s. Nevertheless, following the major devaluation of the CFA on January 12, 1994, France’s role shifted to ensuring unlimited convertibility of the CFA pegged, since January 1, 1999, to the Euro. In exchange, the CFA central banks are required to maintain at least sixty-five percent of their foreign exchange reserves in operating accounts within the French Treasury.20

The distribution of post-independence French bi-lateral aid reflects its attempt to preserve its pre-eminent role as the primary source of international development assistance to its former colonies; especially in Africa.21 French Government ministers did not hesitant to remind World Bank managers and staff that the countries of the CFA Franc Zone were “an important dossier” of France.22 The importance of that commitment was clearly demonstrated when France effectively assumed responsibility for financing the re-payment of the CFA’s member-countries’ debt to the World Bank, IMF, and other multilateral organizations as their economies declined during the 1980s23 and the fact that more than sixty percent of France’s world-wide bi-lateral assistance was provided to former French dependencies between 1965 and 1999. The share received by the thirteen former French colonies of the CFA Zone, representing fifty-four percent of France’s former colonies, received sixty-three percent. But more importantly, thirteen of the fourteen CFA Zone countries received more than thirty percent of their bi-lateral financial assistance from France; and eight of them received more than fifty percent. Only six of France’s former dependencies (25%) received less than thirty percent of their total bi-lateral financing from France between 1960 and 1999 and, of those, Cambodia, Laos, and Viet Nam (50%) had been “inherited” by the United States – at least until 1975 followed by the early 1990s by the World Bank.

Belgium

All three of Belgium’s former colonies are located in Africa and achieved independence between 1960 and 1962. Belgian aid has also conformed to the pattern established by the United Kingdom and France. During the period from 1960 to 1994, Belgian aid to its three former colonies averaged forty percent of Belgium’s worldwide total. More important, between 1960 and 1974, Belgium accounted for sixty-three percent of all bi-lateral financing received by Rwanda and for sixty-six and fifty-nine percent received by the former Zaire and Burundi respectively through 1979. However, it is also important to note that from 1995 to 1999, the total amount of Belgium’s worldwide bi-lateral assistance directed to its three former colonies dropped to only ten percent.

The Netherlands

Only two Dutch colonies have achieved independent sovereign-states status; Indonesia in 1949 and Suriname in 1975. Indonesia incorporated Western New Guinea in 1969. Most of the remaining Dutch overseas dependencies are small islands in the Caribbean and have the legal status of internal Departments of the Netherlands itself. The pattern of Dutch bi-lateral assistance to Suriname and Indonesia both conforms to and contradicts the British, French, and Belgian pattern summarized above. The Netherlands never accounted for more than fifteen percent of total bilateral assistance to Indonesia and dropped to five percent or less from 1965 to 1969 and again from 1990 to 1999. However, the pattern of Dutch assistance to Suriname conforms to the more usual pattern; as that country has relied almost exclusively on The Netherlands for bi-lateral aid since independence in 1975. The Dutch share of assistance to Suriname ranged between eighty-six and ninety-eight percent through 1999. But with the exception of the period prior to 1965 and again from 1970 to 1974, less than twenty percent of total Dutch bi-lateral aid has been allocated to its two former colonies. That low share of total Dutch aid is due primarily to that country’s substantially increased global aid budget between the early 1960s through the 1990s; from the equivalent of $250 million to $24 billion in constant 2010 dollars.

Portugal

Portugal emerged as a powerful colonial power during the fifteenth century; maintaining that position for almost 300 years until defeated in a series of wars with the Dutch, British, and French. By the middle of the twentieth century, Portugal retained colonial authority in only seven overseas territories. Among those territories, Goa and Macau were peacefully transferred to India and China respectively. Indonesia invaded Timor-Leste and asserted its sovereignty over that Portuguese territory in 1975. Portugal never officially recognized that act, and Timor Leste was able to wrest its own sovereignty from the Indonesians in October 1999 during a period of political instability in Jakarta. The other five former Portuguese territories — Angola, Cape Verde, Guinea-Bissau, Mozambique, and Sao Tome and Principe — all achieved independence during 1974 and 1975 when Portugal abruptly withdrew in response to its own domestic revolution at home. That revolution led to Portugal’s withdrawal from the OECD/DAC in 1974, requesting that it be included in the list of DAC eligible recipient countries. Portugal rejoined the OECD/DAC in 1991 and, therefore, data on the allocation of its bi-lateral aid is only available from that date forward. The pattern of its assistance conforms to that of The United Kingdom, France, and Belgium. Portuguese assistance to its five former independent territories during the last decade accounted for a full sixty-one percent of its total worldwide bi-lateral assistance. More important, Portugal alone accounted for more than half of the bi-lateral aid received by Timor Leste and Sao Tome and Principe during the 1990s, while Guinea-Bissau and Cape Verde depended on Portugal for thirty and twenty-five percent of such financing respectively. Nonetheless, it now appears likely that Brazil will exceed Portugal’s level of aid to Angola, Cape Verde, Mozambique, and Sao Tome and Principe, suggesting that some aid flows are determined by shared language.

The United States of America

The United States is not easily classified with respect to the discussion here.24 Technically, it has exercised colonial authority over only eight territories not located in North America: Cuba, Guam, Hawaii, the Marshall Islands, Palau, The Philippines, Puerto Rico, and American Samoa.25 However, fifty percent of those territories were administered for fifty years or less while Hawaii was incorporated as the 50th State in 1959. Today, only Guam (1898), Puerto Rico (1898), American Samoa (1899) and the United States Virgin Islands (1917) remain as American dependencies. However, the United States also intermittently exercised administrative responsibilities in Mexico and several Central American and Caribbean states during the nineteenth and twentieth centuries and more recently in Iraq from mid-2003 through much of 2004. Notwithstanding such engagements, neither formal nor de facto “dependencies” have received significant amounts of United State’s bi-lateral assistance; although nine of them received more than thirty percent of their total bi-lateral assistance from the United States in 2004.26 Finally, given American foreign policy objectives during the post-WWII Cold War period, it has exercised an important role in support of its political and economic objectives in such countries as Korea, Viet Nam, the Middle East, The Persian Gulf, and The Balkans.  That expansive involvement in the global political and economic arena, combined with an increasingly reduced foreign aid budget, has resulted in the absence of any priority extended to its own former colonies.

Summary Conclusion

The notion that aid flows are determined by the need of potential recipients, the quality of project or program proposals, and adherence to sound economic policies without political considerations is belied by the patterns of bi-lateral development assistance summarized above. The pattern of United States’ bi-lateral aid is not influenced by its colonial legacy to the extent of the United Kingdom, France, and Belgium. However, its status as a superpower and current focus on aggressively defending against international terrorist threats strongly influences the allocation of its development assistance. This will be discussed further in the forthcoming blog post “From ‘Reconstruction’ to ‘Development’” available at www.internationaldevelopmentshould.com no later than March 8, 2011.

­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­_________________________________

NOTE:

  [1]    All “Personal Reminiscence” posts are stories told about one or more of my own personal experiences as I remember it. They are true to the best of my ability to recollect them and reflect my view of how they illustrate “lessons learned” from that experience even if one or another aspect of the story as told might not be completely correct in each and every detail. Further, I have done my best to disguise the identity of other persons referred to in these stories, including not using their true names unless references to their presence at that time or circumstance has already been published by others in other media.

  [2]   See Diane Conyers and R. Westcott, Regionalism in Papua New Guinea, Administration for Development 13 (1979) and Roger Berry and Richard Jackson, Interprovincial Inequalities and Decentralization in Papua New Guinea, Third World Planning Review 3 (1981).

  [3]    The Australian Government officially traces its bi-lateral aid program back to resources transferred to the various regions of PNG beginning in 1946, although those transfers were managed by several different Australian Government departments. In any event, the Australian Development Assistance Agency (ADAA) was followed by the Australian Development Assistance Bureau (ADAB) within the Ministry of Foreign Affairs two years later, the Australian International Development Assistance Bureau (AIDAB) in 1987, and finally AusAID in 1995. See Australian Agency for International Development, Brief History of AusAid available at http://www.ausaid.gov.au/about/history.cfm.

  [4]    The remaining 3.5% of development assistance to PNG during 1980 was provided by Germany, Japan, and The Netherlands. Statistics reported throughout this story for Australia’s direct bi-lateral development assistance to PNG and world-wide, as well as the data about aid received by PNG from Australia and all OECD sources were calculated by Jerry Mark Silverman from data provided by the Organisation for Economic Co-operation and Development (OECD), Development Assistance Committee (DAC), International Development Statistics (IDS) online: Databases on aid and other resource flows available at www.oecd.org/dac/stats/idsonline.

  [5]   United States Agency for International Development (USAID), Papua New Guinea, USAID Asia available at http://www.usaid.gov/rdma/countries/png.html .

  [6]       The sixteen bi-lateral ESA’s providing $1 billion or more during 2004 were, in rank order: USA ($19.0); Japan ($8.7); France ($8.5); UK ($7.8); Germany ($7.5); The Netherlands ($4.2); Sweden ($2.7); Spain ($2.6); Canada ($2.5); Italy ($2.5); Norway ($2.2); Denmark ($2.1); Australia ($1.5); Belgium ($1.5); Switzerland ($1.4); and Portugal ($1.0). See Larry Nowels, Foreign Aid: Understanding Data Used to Compare Donors, CRS Report for Congress (Washington, DC: Congressional Research Service, UNT Digital Library, May 23, 2005) available at http://digital.library.unt.edu/ark:/67531/metacrs7336/m1/. Excluding the more than fifty percent of USA economic assistance provided for Iraqi Reconstruction ($8.1 billion), Egypt ($663 million), and Israel ($555 million) alone, the United States still ranked first in total amount of economic assistance ($9.6 billion). The UK’s economic support of “reconstruction” in Iraq during 2004 accounted for about four percent of that country’s worldwide economic assistance. See Organisation for Economic Co-operation and Development, Development Assistance Committee, International Development Statistics (IDS) online: Databases on aid and other resource flows; available at www.oecd.org/dac/ stats/idsonline.

  [7]    The four multi-lateral agencies with a world-wide and multi-sectoral mandate established prior to January 1, 1960 were: (i) the International Bank for Reconstruction and Development (IBRD, 1946); (ii) the United Nations’ Expanded Program of Technical Assistance (EFTA; 1949) and (iii) the United Nations Special Fund (1958) to complement and expand on the work of EFTA (both replaced by the United Nations Development Programme in 1965); and (iv) the European Economic Community’s European Development Fund for Overseas Countries & Territories (1957). The Inter-American Development Bank was the only one of the nine regional development banks already established as of January 1, 1960. Further, only nine of more than 50 other multi-lateral agencies had yet been established.

  [8]    With the end of the Marshall Plan in 1952, the European Cooperation Administration (ECA) was succeeded by two different American agencies. The Department of State’s Technical Cooperation Administration (TCA) was responsible for assisting non-European “poor” countries while responsibility for all other non-military foreign aid was assigned to a new self-standing Mutual Security Agency (MSA). “Food for Peace” was inaugurated in 1954 and integrated, along with all other American non-military foreign aid programs, into the new International Cooperation Agency (ICA) that, in turn, became the United States Agency for International Development in 1961. See United States, Agency for International Development, About USAID (January 7, 2005) available at http://www.usaid.gov/about_usaid/usaidhist.html.

  [9]    All of the statistical data presented below with respect to British, French, Belgian, Dutch, and Portuguese bi-lateral aid flows was calculated by Jerry Mark Silverman from data provided by the Organisation for Economic Co-operation and Development, Development Assistance Committee International Development Statistics (IDS) online: Databases on aid and other resource flows; available at www.oecd.org/dac/ stats/idsonline.

[10]   We count 68 sovereign-states as former dependencies of the United Kingdom here. Technically, however, a complete number would be 69.5 current states because the territories of three of today’s sovereign-states (Cameroon, Somalia, and Yemen) were divided between the United Kingdom and one or another colonial power.

[11]      The Commonwealth of Nations has provided a framework for relationships between the United Kingdom and its former colonies since 1931, but membership accelerated in the early 1960s. Membership in the Commonwealth is strictly voluntary and decisions are not binding on members. Today’s 54 members are all former British colonies except for Mozambique and Rwanda; former Portuguese and Belgian colonies respectively; see Commonwealth Secretariat, History available at http://www.thecommonwealth.org/Internal/191086/34493/history/ and Member States available at http://www.thecommonwealth.org/Internal/191086/142227/members/.

[12]    It is also interesting to note that on January 1, 1950 the British “discontinued” negotiations with the World Bank for loan of approximately $5 million (equivalent to 2010’s $45.75 million) to the United Kingdoms’s Colonial Development Corporation because the CDC “was unable to accept certain of the Bank’s requirements, especially the non-financial covenants,” that would impinge on its colonial prerogatives. See World Bank, World Bank Group Historical Chronology: 1950-1951 (Washington, DC: World Bank, 1949) available at http://go.worldbank.org/0K2T0GA1I0.

[13]   United Kingdom, Department for International Development, History, About DFID available at www.dfid.gov.uk/About-DFID/History1/

[14]    United Kingdom, Competition Commission, Commonwealth Development Corporation: A Report on the Efficiency and Costs of, and the Service Provided by, The Commonwealth Development Corporation (1992) available at http://www.competition-commission.org.uk/rep_pub/reports/1992/320commonwealth.htm#full .

[15]    The Ministry of Overseas Development (ODM) was the United Kingdom’s first bi-lateral aid agency. But that function was downgraded from ministerial to agency status when the Overseas Development Agency (ODA) succeeded ODM in 1979 until that status was upgraded again with the establishment of the Cabinet level Department for International Development (DFID) in 1997; see United Kingdom, Department for International Development, History, About DFID available at www.dfid.gov.uk/About-DFID/History1/.

[16]    Rosalind Eyben, Globalisation: Implications for How We Work, presentation within the United Kingdom’s Department for International Development in London on May 30, 1997.       

[17]      Ibid.

[18]   See Richard Fanthorpe, Fonds d’Investissement pour le Développement Economique et Social (FIDES) in Kevin Shillington (ed.), Encyclopedia of African History, Volume 1 (London: Routledge Taylor & Francis Group, 2004), p. 905-909 available at http://books.google.com/books?id=Ftz_gtO-pngC&pg=PA905&lpg=PA905&dq=french+Investment+Fund+for+Economic+and+Social+Development+fides&source=bl&ots=IuDIvkkzlU&sig=bu_yS2n6AejZ0J7LW97_YITE-5s&hl=en&ei=zp1ZTabBDIeWtweCs_23DQ&sa=X&oi=book_result&ct=result&resnum=1&ved=0CBMQ6AEwAA#v=snippet&q=fides&f=false.

[19]   As currency, the CFA was first established as the “Franc of the French ‘Colonies’ of Africa” on the same day that France ratified the charters of the World Bank and IMF. Anticipating de-colonization in 1958, the CFA became the “Franc of the French ‘Community’ of Africa,” even as it also retained its earlier initials. One year later, separate monetary unions were established for West and Central Africa and the common initials since then denote two different currencies: the “Franc of the African Financial Community” in West Africa and the “Franc of Financial Cooperation” in Central Africa; see Banque de France, What is Franc Area? (November 26, 2004) and La Banque Centrale des États de l’Afrique de l’Ouest,  History of the CFA Franc (no date).

[20]   Ibid.

[21]   Devesh Kapur, John Lewis, and Richard Webb, The World Bank: Its First Half Century, Volume 1 (Washington, DC: Brookings Institution Press, 1997), p. 769 recommend Guy Martin, “Continuity and Change in Franco-African Relations,” Journal of Modern African Studies, 33 (March 1995), p 1-20 as a good summary of the extensive literature devoted to analyses of French political and economic power in Africa. 

[22]    As only one example of the French Government’s assertion of primary influence within the CFA zone, see Memorandum, Jean-Louis Sarbib to Edward Jaycox, through Edward Lim, “Meeting between Mr. Qureshi and the French Minister of Cooperation,” August 23, 1991; cited in Devesh Kapur, John Lewis, and Richard Webb, The World Bank: Its First Half Century, Volume 1 (Washington, DC: Brookings Institution Press, 1997), p. 776.

[23]    Devesh Kapur, John Lewis, and Richard Webb, The World Bank: Its First Half Century, Volume 1 (Washington, DC: Brookings Institution Press, 1997), p. 76, 776, 1072.

[24]   Total United States’ development assistance to non-European areas between 1946-61 amounted to $26.9 billion – almost equal to the $28.3 billion provided to Europe during that period; United States, Agency for International Development, About USAID (January 7, 2005) available at http://www.usaid.gov/about_usaid/usaidhist.html.

[25]    Of the eight United States’ colonial territories, Cuba was administered directly for only four years (1898-1902) and The Philippines for 49 years (1898-1946) following several centuries of Spanish rule. The Marshall Islands was under American authority for 43 years (1943-1985) following colonization by Germany in 1885 and administration by Japan between 1914 and 1943. Palau was administered by the United States for fifty years (1944-1994) following 300 years under Spanish (c. 1600-1899), German (1899-1914), and Japanese (1914-1944) colonial rule. The Hawaiian Islands were incorporated as the 50th State of the United States by the popular vote of its residents in 1959 following 61 years of colonial administration (since 1898). American Samoa (1899), Guam (1898) and Puerto Rico (1898) remain dependencies of the United States today.

[26]      As classified and calculated by Jerry Mark Silverman, the ten “de facto dependencies’ that received more than thirty percent of their total bi-lateral assistance from the USA during 2004 were: the Dominican Republic (35%), Guatemala (40%); El Salvador (46%); Panama (57%); Haiti (59%); Liberia (60%); Palau (67%); Marshall Islands (90%); and The Federated States of Micronesia (92%). As calculated by the Author from data provided by the Organisation for Economic Co-operation and Development (OECD), Development Assistance Committee (DAC), International Development Statistics (IDS) online: Databases on aid and other resource flows available at www.oecd.org/dac/stats/idsonline and United States, Agency for International Development (USAID), U.S. Overseas Loans and Grants: Obligations and Loan Authorizations July 1, 1945 – September 30, 2003 available at http://pdf.usaid.gov/pdf_docs/PNADH500.pdf.

Keywords:  ADAA, ADAB, Africa, African Financial Community, AIDAB, American Samoa, Angola, AusAID, Australia, Australian Agency for International Development, Australian Development Assistance Agency, Australian Development Assistance Bureau, Australian International Development Assistance Bureau, Balkans, Bangladesh, Belgium, bi-lateral aid, bi-lateral donor, Brazil,British Commonwealth of Nations, British Empire, British Protectorate, Burundi, Cambodia, Cameroon, Canada, Cape Verde, Caribbean, CEMAC, Central Africa Economic and Monetary Community, Central America, CFA, China, Colonial Development and Welfare Acts, Colonial Development Corporation, Colonial Office, colonies, Commonwealth Development Corporation, Commonwealth of Nations, Commonwealth Secretariat, Cuba, DAC, Denmark, Department of Cooperation, Department of Technical Cooperation, Development Assistance Committee, development assistance, DFID, Dominican Republic, Dominion, ECA, EFTA, Egypt, El Salvador, Equatorial Guinea, Euro, European Cooperation Administration, European Economic Community’s European Development Fund for Overseas Countries and Territories, Federated States of Micronesia, FIDES, First World War, Fonds d’Investissement pour le Développement Economique et Social, Food for Peace, Franc Zone, France, French Empire, French Franc, Germany, Goa, Guam, Guatemala, Guinea-Bissau, Haiti, Hawaii, IADB, IBRD, ICA, IMF, India, Indonesia, Inter-American Development Bank, International Bank for Reconstruction and Development, International Cooperation Agency, International Monetary Fund, Investment Fund for Economic and Social Development, Iraq, Irish Free State, Israel, Italy, Japan, Kenya, Korea, Laos, League of Nations, Liberia, Macau, Marshall Islands, Marshall Plan, Mexico, Middle East, Ministry of Cooperation, Ministry of External Affairs, Ministry of Overseas Development, Mozambique, MSA, Mutual Security Agency, Netherlands, New Guinea, New Zealand, Nigeria, Norway, ODA, ODM, OECD, official development assistance, Organisation for Economic Co-operation and Development, Overseas Development and Service Act, Pakistan, Palau, Panama, Papua New Guinea, Papua, Papuaniugini, Persian Gulf, Philippines, PNG, Portugal, protectorates, Puerto Rico, Queensland, Responsible Asia Forestry and Trade (RAFT) program, Rwanda, Sao Tome and Principe, Scandinavian countries, Second World War, Somalia, South Africa, Southeast Asia, sovereign-states, Spain, Statute of Westminster, Suriname, Sweden, Switzerland, TCA, Technical Cooperation Administration, Timor-Leste, UNDP, United Kingdom Department for International Development, United Kingdom, United Kingdom, Competition Commission, United Nations Development Programme, United Nations Special Fund, United Nations, United Nations’ Expanded Program of Technical Assistance, United States Agency for International Development, United States, USAID, Viet Nam, Virgin Islands, WAEMU, West African Economic and Monetary Union, Western New Guinea, World Bank, World War I, World War II, Yemen, Zaire.


Old Wine in New Bottles – or The Triumph of Form over Function

January 17, 2011

A Personal Reminiscence1

But what experience and history teach is this – that peoples and governments have never learned anything from history, or acted on principles deduced from it.                                                               Georg Hegel (1770-1831)

There is nothing new in the world except the history you do not know.                                                 Harry S. Truman (1884-1972)

Every time history repeats itself the price goes up. (anonymous)

Déjà vu All Over Again

Not for the first or last time, I was experiencing a feeling all too similar to former New York Yankee Yogi Berra’s “déjà vu all over again.” The occasion was a meeting attended by staff of the World Bank, the Ford Foundation, the United States Agency for International Development (USAID), and Deutsche Gesellschaft fuer Technische Zusammenarbeit (GTZ; the German Technical Assistance Agency). It was 19952 and I had just returned to Jakarta following an absence of more than ten years to take on my new responsibilities as the Manager of the World Bank’s Water and Sanitation Group for East Asia. The main theme of the conversation at this meeting was the lack of capacity within Indonesian local government planning departments (bappeda); a theme all too familiar to me from my stint as “Chief of Party” and “Provincial Planning Advisor” of the first USAID-financed Provincial Development Project (PDP) fifteen years before (see “How do you know…….?”, posted here January 10, 2011).   

Harking back to those earlier days, I had thought that PDP was the “jewel in the crown” of my professional career to that date. That project was the first in Indonesia of any kind dedicated to developing the capacity of planning offices at local provincial levels to identify, recommend, prepare, and finance community-based projects rather than solely by the Central Government in Jakarta. Indeed, PDP was designed to be:

  • One of the earliest projects anywhere to specify the “poorest of the poor” as target beneficiaries;
  • One of the first to foster a village level participatory process through which beneficiaries themselves could select the kind of benefits they would receive (although from a limited list of pre-determined choices);
  • The first project in Indonesia designed specifically to support decentralization of planning and financing of development projects to provincial governments; and, therefore
  • The first foreign aid project channeled through the Government of Indonesia’s equivalent of a Ministry of Local Government and semi-autonomous provincial planning offices.

This first project was designed to be a “pilot” and was, therefore, limited to assisting only two provincial planning offices; one each in Central Java and Aceh. Nonetheless, long-before any actual impact evaluations of PDP could be conducted, USAID and other donors began to expand the program; first to Bengkulu, East Java, East Nusa Tenggara and South  Kalimantan (PDP IIA) followed by West Nusa Tenggara and West Java (PDP IIB) plus the World Bank’s assistance for a similar project in Yogyakarta followed by the Federal Republic of Germany’s financing of a PDP project in West Sumatra and East Kalimantan not long after.3 By the time I returned to Indonesia during 1995, the establishment and capacity-building of local government planning offices had expanded to almost all of Indonesia’s provinces. Nonetheless, the complaints of weak institutional capacity I was hearing at this meeting were essentially the same as those that had consumed my attention those many years earlier. To be honest, the discussion was making me feel really depressed and disappointed. The last time I had glanced at PDP a bit more than a decade before, it looked to me to be emerging as a major success story. Had the opposite been true; had we failed completely in that earlier attempt to foster local governmental capacity? 

There was a moment of relief as I finally realized that, although the conversation was focused on the same capacity-building themes with which we had struggled in an earlier time, the focus this time was on the inadequate performance of planning offices at the lower district (kabupaten), rather than provincial (propinsi) level. While in 1980, planning offices had not yet been established in most Indonesian provinces, they had subsequently expanded not only to all provinces but to almost all districts as well. That was clearly a major achievement of a kind. But – and there is always a “but” – it turned out that another major complaint of those present was that the now very powerful provincial planning offices were exercising too much control over district planning offices. 

I had a different concern than most of the other persons present at that 1995 meeting. Leaving aside the question of who was exercising power over whom within provincial and district governments, it was apparent that planning offices at both levels were no longer focused on their primary responsibility under PDP to identify, plan, and implement innovative small-scale community-based projects. Instead they had shifted their attention almost exclusively to larger scale, more conventional, mainstream infrastructure and social investment projects. Further, consistent with that shift in emphasis, the provincial planning offices had increased their staff, administrative and operational budgets, and logistical resources beyond anything that any of us would have thought possible in 1980. Thus, our initial efforts during PDP had succeeded only too well with respect to establishing provincial, and subsequently district, planning offices as mini-versions of the Central Government’s own Planning Agency (Bappenas). However, that “success” had apparently been achieved at the expense of effective participation of poor people in the planning, decision-making, implementation, and evaluations of projects involving those planning offices.

That did not mean that projects directed toward the original PDP objective of identifying and supporting small-scale demand-driven community-based project had been abandoned. But responsibilities for those types of projects had begun to shift to other quasi-independent entities; a shift formalized with the launch of the new Kecamatan [sub-district] Development Program (KDP) during 1998. What accounted for such changes? Although the shift of community-based demand-driven projects away from provincial planning departments began after I had left Indonesia in 1981, my subsequent analysis suggested two different contributing factors: (1) the shift of PDP focus in some locations from the core objective of fostering community-based demand-driven project identification to improving the capacity of provincial governments to plan and supervise infrastructure investment projects (see “Bigger Must be Better” below) and (2) the eventual shift of responsibility for community-driven projects from the largely USAID-financed PDP program to the World Bank initiated KDP program (see “By-Passing Local Governments” below).

Bigger Must be Better

I had already been directly involved in my international development career for about thirteen years when I met a World Bank staff person for the first time. That meeting occurred following his phone call to me at my office within Central Java’s provincial planning department in Semarang and request that I come to Jakarta to discuss our experience implementing the USAID-financed PDP. It turned out that he wanted to talk with me because the World Bank was beginning the preparation of a new PDP project for the Special District of Yogyakarta  located immediately south of Central Java Province. So I flew to Jakarta a few days later and we met, if I remember correctly, at the Borobudur Inter-Continental hotel there. As he began to describe that forthcoming World Bank version of PDP in Yogyakarta, I became increasingly dumbfounded; and quite frankly concerned.

I might not remember the exact amount of the financing actually available during the time I was directly involved in the USAID-financed PDP or planned by the World Bank preparation team for their PDP Yogyakarta Project; but I do remember my jaw dropped when the person with whom I was meeting stated the World Bank’s cost expectations for their project. Indeed, the World Bank was planning to provide about four times the amount USAID had initially provided to finance small-scale demand-driven projects within three districts in Central Java and two districts in Aceh; but in Yogyakarta the World Bank was programming that larger amount for only two districts.

I had at that point in my career never been exposed to the sums being considered by the World Bank PDP project preparation team. So I asked him how they could possibly spend so much money on a PDP project so much smaller than ours. I just couldn’t see how Yogyakarta’s planning department could at that time absorb the responsibility for such levels of funding. His response was that a substantial amount of that funding would be used to construct a new office building for the planning office and to purchase a fleet of 4×4 vehicles. It was true that a new provincial planning office was also under construction in Central Java, but it was clearly more modest than what the World Bank envisaged for Yogyakarta. And it was also clear to me that the projects to be financed through their involvement in PDP were more likely to be of the larger physical infrastructure kind than the type of small-scale community-based activities financed through our original version of PDP.

After my return to Indonesia in 1995, the various provincial planning office buildings I had occasion to visit were of the large variety financed by the World Bank. Perhaps more significantly, the small office building that was built in Semarang during my tenure in Central Java had already been replaced by a dramatically larger three-story office building occupied solely by the substantially larger provincial planning department.

It occurred to me that this transformation was probably due to the capture of the PDP program and the provincial planning departments responsible for it by managers and staff primarily focused on conventional infrastructure-heavy projects rather than more innovative small-scale demand-driven investments. It is important to remember that the World Bank’s involvement in PDP occurred well before it expanded its operations to include “Community-Driven Development” during the 1990s. Thus, by the end of that 1995 meeting, my feeling that we might never be able to overcome the well established development view that “bigger is better” was reinforced. That suspicion was reinforced by the focus of the development professionals attending the 1995 meeting on the inefficiencies of lower level planning and management of large investment projects rather than on the need for facilitation of community participation in project identification and implementation.

By-Passing Local Governments

By contrast with PDP, the subsequent KDP program was managed through stand-alone project management units that essentially by-passed established provincial and local government planning units throughout its decade-long implementation.4 By the late 1980s and early 1990s, the broader international development community had come to believe that central and local government agencies were obstacles to reducing poverty and, in its place, the private sector was to be relied on as the “engine for growth5 while reliance on quasi-public non-governmental organizations (NGOs) for small-scale community-based projects was increased. A concomitant of that approach was to shift the donor community’s focus from building the capacity of governments to implement infrastructure projects to reliance on quasi-public/private entities to improve the efficient delivery of project benefits to target populations while reducing the scope of governments’ in that process; an approach included in the broader policy framework eventually known as the “Washington Consensus.” That new emphasis clearly contributed to a shift of responsibility for community-driven projects away from local government planning agencies back to the quasi-independent project or program management units favored by donors during the 1960s. Thus, although the World Bank itself traces KDP directly back to PDP,6 it was by virtue of the establishment of parallel management structures entirely separate from provincial and district planning offices clearly separate from, and not simply a continuation of, PDP.7 The by-pass organizational arrangements established for KDP have been perpetuated and reinforced by the more ­­­­­­­­­recent successor National Program for Community Empowerment for both poor urban neighborhoods and rural areas established in 2006.8

Why do donors continue to by-pass established governmental agencies for community-based projects by establishing decentralized parallel structures substantially similar to what – at least theoretically – could be integrated into already established governmental structures? That question would seem to be particularly relevant to countries like Indonesia with democratically-elected governments and mature bureaucracies.

Learning from Experience?

That 1995 meeting reinforced yet another of my growing suspicions; that development assistance agencies have responded to weak local government capacity with short-term tactical “fixes” rather than taking a longer-term strategic overview of the appropriate relationship between community demands and priorities on the one hand and technical and financial responses by governments on the other hand (a subject to be addressed further in a future post to this Blog). Instead, international financial institutions have consistently resorted to “project” (and more recently “program”) management units (PMUs) while bemoaning the “need” to do so because of “inadequate capacity” of governments’ conventional line agencies.

Innovative small-scale participatory initiatives are increasingly included within an expanding international development portfolio. However, such components remain at the margins of other entrenched core practices; we continue to do things in much the same way as we have since the 1950s. The result is that we are increasingly confronted by several fundamental inconsistencies; include the following:

1.    Although formal governments of many sovereign states have demonstrated that they are either inappropriate agents of development or incapable of serving as such agents —

Formal governments continue to serve as the main channel for the use and distribution of official international development assistance;

2.    Although there is increasing recognition that the reconstruction model of the Marshall Plan years, which was dramatically successful in the context of that time, does not adequately address the realities of development since the 1960s —

International development assistance still relies primarily on creation or rehabilitation of physical infrastructure and enhancement of human resources instead of promoting effective changes in the structure of institutional incentives;

3.    Although it is becoming increasingly apparent that there is no agreed definition of what is or is not developed and, therefore, no single path to that objective —

Official development assistance agencies continue to define development almost exclusively in economic terms and to rely (at least implicitly) on theories that posit that the development process must pass through the same stages of economic growth as have Western Industrialized countries;

4.    Although master planning and central planning have been discredited by many development professionals —

The procedures and organizational arrangements through which development investments are proposed and approved continue to be rooted in a combination of scientific central planning and economic theories underlying such approaches; and

5.    Although an increasing number of development professionals understand the importance of securing the voluntary support and commitment of civil society for development decisions —      

No substantial channels have been institutionalized for the efficient, effective, and sustainable participation of the people in official investment decision-making.

Unfortunately, the view that by-passing the established public sector by creating quasi-independent special purpose management units effectively responds to the perverse inconsistencies identified above is much too simplistic and is clearly not a sustainable approach to substantially reducing global poverty. Therefore, a future blog post will summarize what I believe would be necessary to square that circle.

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NOTES:

[1]     All “Personal Reminiscence” posts are stories told about one or more of my own personal experiences as I remember it. They are true to the best of my ability to recollect them and reflect my view of the “lessons learned” from those experiences. Nonetheless, the ability to remember being limited, the specific details presented in these stories might not be completely correct in each and every detail. I have also done my best to disguise the identity of other persons referred to in these stories, including not using their true names unless references to their presence at that time or circumstance has already been published in other media.

[2]     For anyone who believes that a story about an event or events that occurred 30 or more years ago is too old and irrelevant, I beg to differ. Indeed, an underlying theme of this Blog is that the truth of the aphorism “the more things change, the more they remain the same” is particularly relevant to the history of international development efforts for the entire period since the end of World War II.

[3]     For an official USAID evaluation of PDP, see Devres Inc., Final Evaluation of The Provincial Area Development Project (November 1989) available at http://pdf.usaid.gov/pdf_docs/PDABC993.pdf. For a contemporaneous academic description and analysis of PDP throughout the 1980s, see Moeljarto Tjokrowinoto, Integrated Rural Development in Indonesia: Problems and Prospects in H. Ramachandran and J.P. de Campos Guimaraes (eds.), Integrated Rural Development in Asia: Learning from Recent Experience (New Delhi: Concept Publishing Company, 1991), p. 119 – 134 available at http://books.google.com/books?id=V64u3n1O8LIC&pg=PA127&lpg=PA127&dq=pdp+yogyakarta+world+bank&source=bl&ots=1qkxQt2cGB&sig=slSkoBUfdRGEtqE-v0nGAREdNGI&hl=en&ei=dkIyTcPXHcjOgAfKpa2HCw&sa=X&oi=book_result&ct=result&resnum=5&ved=0CDAQ6AEwBA#v=onepage&q=pdp%20yogyakarta%20world%20bank&f=false.

[4]     For a general critique of the management by-pass approach, see George Honadle, David Gow, and Jerry Silverman, Technical Assistance Alternatives for Rural Development: Beyond the By-Pass Model, Canadian Journal of Development Studies 4 (1983), p. 222-240.

[5]      For an early argument that the performance of the public and private sectors was affected more by whether they operated as monopolies or were subject to competition rather than to their public or private character, see Jerry M. Silverman, Paul Crawford, George Honadle, and Gary Hansen, A.I.D. Assistance to Local Government: Experience and Issues (Washington, D.C.: Agency for International Development, November 1983) available at pdf.usaid.gov/pdf_docs/PNAAL026.pdf.

[6]      KDP itself is an immediate descendant of the Provincial Development Project (PDP)….[and] many of the current KDP staff, in fact, came to Indonesia through PDP;” see World Bank, Indonesia Kecamatan Development Program, available at http://go.worldbank.org/9RCD9UBX40.

[7]      See “Activity” and “Management” charts in World Bank, Workflow, Management, Financing, Results, Monitoring: Indonesia Kecamatan Development Program, available at http://go.worldbank.org/TT8S5KJUW0.

[8]     See World Bank, Empowering Indonesian Communities Through Direct Participation in Developing Infrastructure and Services (April 2010), available at http://siteresources.worldbank.org/NEWS/Resources/Indonesia_Direct_Participation_4-11-10.pdf  and Results Profile: Indonesia’s Community-Driven Development available at http://go.worldbank.org/CE4BSHHAA0.

Keywords: Aceh, Bappeda, Bappenas, Bengkulu, bigger must be better, bureaucracies, by-pass strategies, capacity-building, central government, Central Java, central planning, community-driven development, decentralization, demand-driven, Deutsche Gesellschaft fuer Technische Zusammenarbeit, development, East Asia, East Java, East Kalimantan, East Nusa Tenggara, engine for growth, Federal Republic of Germany, Ford Foundation, German Technical Assistance Agency, GTZ, Indonesia, international development, international relations, Jakarta, kabupaten, KDP, Kecamatan Development Program, local government, Ministry of Local Government, National Program for Community Empowerment, NGOs, non-governmental organizations, ODA, official development assistance, participatory process, PDP, PMU, poorest of the poor, poverty reduction, poverty, program management unit, project management unit, propinsi, Provincial Development Project, provincial government, provincial planning, rural, Semarang, South Kalimantan, Special District of Yogyakarta, supply-driven, supply-responsive, United States Agency for International Development, urban, USAID, village participation, Washington Consensus, water and sanitation, West Java, West Nusa Tenggara, West Sumatra, World Bank.


HOW DO YOU KNOW……?

January 5, 2011

What a delightful thing is the conversation of specialists! One understands absolutely nothing and it’s charming.                 Edgar Degas (1834-1917)

If certain things are described to you as being real they’re real for you whether they’re real or not.                                               James Baldwin (1924-1987)

It was 19791 and I had been serving as “Chief of Party” and “Provincial Planning Advisor” of the technical assistance team in support of the first USAID-financed Provincial Development Project (PDP1) since August 1978. PDP1 was the first project in Indonesia of any kind dedicated primarily to building the capacity of planning offices (Bappeda) within provincial governments.  

It was in that context that I began to address my responsibility as the project’s “Planning Advisor” to design a new planning system from scratch for Central Java’s Planning Office. So relatively soon after my arrival, I began to do just that and, after several months, I felt confident in the design I had produced; including the elements that I thought needed to be performed within a provincial planning system and specific procedures to give practical effect to that system. And so, as this was back in the days before Email, I sent a telex to my corporate headquarters in Washington, DC asking them to send two trainers whose job would be to train the Indonesian staff according to the system I had designed.

About a month later, two American trainers arrived in Semarang, Central Java to (I thought) begin preparing a curriculum for training the Indonesian planning staff. I was busy on their day of arrival, so we had our first substantive meeting at my house that evening to review the draft Terms of Reference I had prepared. Frankly, I expected that I would simply answer any supplementary questions they might have and they would go off and begin designing the training program while I went about other business. So I asked them if they had any questions. 

Their very first question was, “how do you know they want to do it that way(?).” I confess, I was completely thrown by that question and not just a little ticked-off. Looking back, I realize that I became quite defensive. Basically, I said; “what do you mean how do I know they want to do it that way – what difference does that make?” From the perspective of 2006, that might seem narrow-minded. But I can assure you my response was typical of many – if not most – task-oriented foreign Project Managers during the late 1970s (and for many today for that matter). The firm that had employed me had been contracted directly by USAID to – at least in part – design and implement a new planning system. That was a significant part of my job.  I had spent several months completing the first step of that task. After all, if the Indonesian staff already knew what they wanted and how to design and implement it, what was I doing there in the first place? 

It was only later that I was informed by a trusting “host-country” counterpart that my own implicit answer to that question was woefully off-base. Indeed, many of my counterparts viewed the presence of foreign “advisors” as a tax imposed by external development assistance agencies required if the other, more desired, project benefits were to be received. Nor did I yet understand that the external financing agency also viewed us, at least in part, as a way of maintaining financial and operational management control over the aid project itself. But at the time I was ignorant of that reality and I reminded these two Americans that their job was not to raise new issues; rather, it was to train the Indonesian staff – period. And that’s when the fun began.  

The only credit I can claim for what happened after that is that I did not send those two trainers packing. Instead, during the week that followed, I worked on my regular tasks during the day and argued with these two guys at night. The essence of what they were saying was that (i) any system I designed on my own would not be sustainable; (ii) the Indonesian staff needed to feel a sense of ownership of the system if it was to work effectively; (iii) ownership required the Indonesians’ participation in the design; (iv) the staff knew how things worked in their country much better than I could possibly know; (v) certainly I had something to contribute, but if the Indonesians and our entire advisory group worked together as an integrated Team, we would benefit from the synergies that would result from the interaction of our different experiences and knowledge; and (vi) effective ways of working together – especially across cultures – was not common-sense.  

I could sort of get my mind around what they were saying at an abstract level. But if I followed their argument to its logical conclusion, we would need to throw-out all the work I had done and start again from scratch. Further, I could not visualize how they would translate what they were proposing into actual actions. I kept asking them – “OK, say I agree with you that we need to start over and more actively involve our Indonesian counterparts, what do we actually do and [importantly] how long will it take?” And the response seemed wholly unrealistic to me —  (1) they would need to interview all the members of our advisory team and the key Indonesian staff of the Planning Office; (2) they would then design an “Action-Planning Workshop” emphasizing a participatory process of objective setting, prioritization, problem identification, and – based on that – initiate a planning system design process; and, following completion of the custom-tailored Workshop design, (3) our entire advisory team and all key Indonesian staff would need to drop our on-going work and devote a full two weeks to participation in that Workshop. Finally, we would need to do this at a location sufficiently far away from Semarang to ensure that we would not be disturbed by other tasks.

Well, come on!! I wasn’t fully convinced that the proposed approach would achieve its objectives – or even understood what “achieving its objective” really meant. But even if it did, drop everything for two full weeks? That had to put them somewhere on the wrong side of the “cost-benefit” relationship no matter what was accomplished. So given all of that, I really can’t recall why I finally agreed – on condition that my Indonesian counterpart, the Head of the Planning Office, also agreed. And surprisingly he did – maybe it was that Masters of Public Administration (MPA) degree he had received from Indiana University.

I had no doubt by the time we returned to Semarang that the alternative system resulting from the Workshop was better and more appropriate than what I had designed on my own. There was no question that the team spirit developed during the Workshop carried-over into our day-to-day working relationships from that point on. 

Punch Line

Participating in that Workshop along with our Indonesian counterparts was a life-transforming experience for me; keeping in mind that this was more than 30 years ago. There were no prepared papers or recommendations distributed in advance. The theory was that all the experience required to begin the formulation of an effective and appropriate location-specific planning system already existed – in combination — among the participants in the room.  The “trainers” did not do any training at all – rather they facilitated a process of discussion and negotiation among us. Their method was to begin each session with a specific question for us to address in small discussion groups – and these questions and responses led logically to the next question and the next session. So the effect was cumulative, while at the same time modeling an effective participatory planning process. The process was highly interactive and forced us to negotiate among ourselves whenever anyone disagreed with anyone else about what our conclusions ought to be. In that way, the process also mediated between the different cultural assumptions and values represented by the people in the room. It was clearly a room full of equals — rather than “advisors” and “counterparts.” And as they say, “the rest is history.

As a result of this experience, I became a strong proponent of more inductive “process approaches” and, over time, designed and ensured the proper implementation of workshops2 and other participatory processes – including extension of such approaches to consultations with intended beneficiaries as well. Nonetheless, I remain disappointed by the fact that, although the number of individual proponents of such methods have increased exponentially during the last thirty years or so, incorporation into the actual operations of larger development assistance agencies remains more rhetorical than operational.

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NOTES:

All “Personal Reminiscence” posts are stories told about one or more of my own personal experiences as I remember it. They are true to the best of my ability to recollect them and reflect my view of how they illustrate “lessons learned” from that experience even if one or another aspect of the story as told might not be completely correct in each and every detail. Further, I have done my best to disguise the identity of other persons referred to in these stories, including not using their true names unless references to their presence at that time or circumstance has already been published in other media.

[1]     For anyone who believes that a story about an event or events that occurred 30 or more years ago is too old and irrelevant, I beg to differ. Indeed, an underlying theme of this Blog is that the truth of Jean-Baptiste Alphonse Karr’s aphorism plus ça change, plus c’est la même chose (“the more things change, the more they remain the same”) is particularly relevant to the history of international development efforts for the entire period since the end of World War II.

[2]     See Jerry Silverman, Merlyn Kettering, and Terry Schmidt, Action-Planning Workshops for Development Management: Guidelines (Washington, D.C.: World Bank, 1986).


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