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A World for the Many Not the Few: The Labour Party’s Vision for International Development

A World for the Many Not the Few: The Labour Party’s Vision for International Development

 

 

 

The new Labour Party Policy Paper on international development, published in March, warrants analysis, as the development policy of the Official Opposition, but also because it contains a number of Big New Ideas (BNIs). The Paper reads like a manifesto or a White Paper (the word ‘will’ is used 21 times in the Executive Summary), but is billed as a Green Paper, open for discussion and refinement over coming months. That is helpful, because, although there is much to like in the approach, some of the BNIs, though pointing in the right direction, need further work. In particular, Kate Osamor and her colleagues would find it useful to balance their ‘narrative of predation’ with a ‘narrative of accumulation’.

What the Paper says

The paper has a Foreword by Jeremy Corbyn, an Introduction which acts as a tour d’horizon and diagnostic, then: a Vision, with 5 priorities; an action plan covering 6 key areas; and a list of 34 specific actions to be rolled out over a five-year period. So: no danger of empty rhetoric.

The key focus is labelled on the tin: building ‘a world for the many, not the few’.  This is embedded in a recurrent refrain about justice, social justice, international social justice, and global social justice. The word ‘justice’ appears more than 40 times in the document. Importantly, global social justice is for everyone, in both developed and developing countries. The paper says that ‘what people need and want in the UK, people need and want everywhere: our needs, our rights and our struggles to achieve them are one and the same.’ There are two BNIs here: global social justice, and no distinction between developed and developing countries.

The Introduction provides a catalogue of challenges (poverty, ecological breakdown, conflict, inequality, and so on), plus a short history of Labour’s long-standing commitment to development, and an attack on the Conservative approach, characterised (it would be fair to say caricatured) as ‘charity’. The important BNI is the argument that development problems are not natural, but manufactured, by what Jeremy Corbyn, in the Foreword, describes as a ‘rigged system’. Thus, the paper says that

‘People are increasingly aware that poverty, income inequality and gender inequality are not natural – they are created. They are symptoms of an unfair system that funnels wealth and power into the hands of a few. Our globalised economy has been designed over several decades to benefit a few at the expense of the many.’

This leads to a focus in the diagnostic on tax avoidance, illicit financial flows, unfair trade, low wages, poor working conditions, environmental deregulation, and the privatisation of public services. It also sets up the Vision and the action plan.

‘The solution is clear: we must find ways to unite across borders in solidarity against elite control of our global economy, and in support of this living planet that is our home.’

The Vision begins with another BNI: setting the reduction of inequality alongside the reduction of poverty. The Paper promises to carry this through to new legislation and a series of global initiatives, including exploring the possibility of a global wealth tax. The main focus is on income inequality, to be measured by the Palma ratio, but there are also references to gender inequality, discrimination against marginalised groups, and inequalities in power. It might have been better for the headline to say ‘inequalities’.

There are then five priorities, connected to the SDGs and summarised in Figure 1:

  1. A fairer global economy
  2. A global movement for public services
  3. A feminist approach to development
  4. Building peace and preventing conflict
  5. Action for climate justice and ecology

Figure 1

Labour’s five priorities

Consistent with the Vision, the priorities for a fairer global economy lie in the area of tax and trade, as well as the end of ‘neoliberal structural adjustment conditions’. Note the word ‘growth’ does not appear in this section, and indeed barely in the document as a whole, except with negative connotations (though there are a couple of references to more equal societies being able to sustain growth).

The global movement for public services is about spreading the availability of ‘universal, free, high quality and gender responsive public services’, especially health and education. Note that social protection is not mentioned in the document.

The feminist approach to development is described as ‘implementing a gender transformative approach across all of DFID’s work’.

Building peace and preventing conflict is a priority embedded in an ethical foreign policy linking diplomacy, defence and trade, with increased spending on crisis prevention, better humanitarian aid, and more support to refugees. Peace-keeping is not mentioned, but there is a pledge to replace the Conflict, Security and Stability Fund (CSSF) with a new Peace Fund.

Action for climate justice and ecology is about taking action at home and abroad to live within planetary boundaries, including divesting DFIDDepartment for International Development from fossil fuels, and ‘developing an alternative measure of wellbeing and economic success instead of GDPGross Domestic Product growth, and reducing the importance of GDPGross Domestic Product growth as an objective for UK-funded development programmes.’ Is this another BNI?

Chapter 4 deals with ‘How Labour will achieve this vision’. It talks about development effectiveness, as might be expected, but also about redistributing power to people, improving delivery (including via more support to NGOs), increasing voice (including by better transparency and accountability), supporting development education, and improving communication. The Chapter also contains sections on managing the transition out of aid for middle income countries (Figure 2), renewing DFID, working better across Government, and strengthening the legislative framework. There is a commitment to policy coherence, which may be the main BNI in this section, with

‘an annual whole-of-government plan . . . in place across government departments, setting out development objectives for the year with measurable indicators, and signed off by the Secretary of State for International Development. Each government department will be accountable for delivering on their objectives.’

Figure 2

Planning for transition

Finally, there is the 34 point action plan, with some items to be completed within 100 days, some by the end of the first year, and some within five years. A White Paper is promised in the first year.

An assessment of the Paper

Overall, the document provides a coherent, systematic perspective on international development, grounded in institutional realities, and rich in propositional detail. It has had significant input from a specialist task force and a public consultation, but is presented as a signed product by the Shadow Secretary of State, Kate Osamor. It builds usefully on the keynote speech she delivered at ODIOverseas Development Institute (London) in November 2017.

But is it right? That is a question best addressed by examining the BNIs. I have identified 6 of these:

  1. The framing of global social justice;
  2. Universalism across developed and developing countries;
  3. The rigged system;
  4. Prioritising a reduction in inequalities;
  5. Reducing the importance of GDPGross Domestic Product growth; and
  6. Taking policy coherence (more) seriously.

Some comments follow on each of these, based partly on my own work. But note, these are big topics, which need full and nuanced treatment.

The framing of global social justice

This seems like a very good idea. It was a term used in relation to climate change by Douglas Alexander, Labour Secretary of State for International Development, in a lecture for the Foreign Policy Centre back in February 2008, and is one I picked up myself the same year as possible framing for development policy as a whole. I found inspiration in the work on Amartya Sen, and in the work of Prof David Miller of Nuffield College, Oxford, who identified the four defining characteristics of social justice as: equal citizenship; entitlement to a social minimum; equality of opportunity; and fair distribution. If I had been writing now, I would probably have tried to incorporate and unpick the arguments between Rawls and Sandel.

I thought in 2008 that we had work to do on voice, rights, social protection, distribution, and mutual accountability. Some of those are covered in the Labour paper, but there is nothing on social protection, and rather little on genuine international accountability. There is also more to say about distribution, but just note at this point that ‘global’ social justice requires a discussion of ‘global’ distribution. In 2008, I observed that

‘This is a fraught topic at national level, as we see in the UK, and also in the international debate on income and assets in the development process. Global distribution is very little discussed, yet we know that the global gini-coefficient (for income) is around 0.65, higher than for any national gini, a level which, if seen in a single country, would pretty well guarantee social unrest. What would those who campaign for global social justice see as a reasonable global gini? And what measures would they recommend, and over what time scale, to achieve it?’

It is worth noting that world per capita income, in Purchasing Power Parity  $, is equivalent to $US 16,515, 39% of the UK level.

As a footnote, Dirk Messner, Laurence Tubiana, Francoise Moreau and I tried to sell the idea of global social inclusion to the EUEuropean Union as a big idea, even a BNI, when we were asked to scope the idea of a European Report on Development. This was in 2006. We had the idea that this could be a transformative idea for EUEuropean Union development cooperation, with metrics to back it up. We said that a socially inclusive world would be one in which

  • Democracy and the rule of law are the norm;
  • Human rights are respected;
  • Individuals are able to maximise their capabilities and potential (based on the MDG agenda);
  • Excessive inequalities are addressed (nationally and globally);
  • Global change is tackled effectively and the environment is protected;
  • Global Governance is based on principles like effectiveness, transparency, accountability and fairness (fair multilateralism);
  • Regional cooperation is a cornerstone of global governance.

This list points to many of the same issues as in the Labour paper. It also suggests that global governance is an issue to which the next stage of Labour’s policy development could pay more attention. The Paper talks about a renewed commitment to multilateralism, but without much detail. UN Reform? Cooperation with the EU? Reinvigorating the WTO?

Universalism across developed and developing countries

Here is another good idea. The dissolving boundary between North and South was an idea I worked on at the Institute of Development Studies in Sussex in the mid-1990s (see here for the IDSInstitute for Development Studies, Sussex Bulletin on Poverty and Social Exclusion in North and South, jointly edited with Arjan de Haan, and here for the recent IDSInstitute for Development Studies, Sussex Bulletin entitled Universal Development Comes of Age, edited by Richard Longhurst (and containing reprints of several articles from the earlier publication)). It was also a topic we devoted some time to at ODI, with a meetings series in 1999 on Lessons Without Borders, and another in 2004 on Targets, Voice and Choice, with speakers from both developed and developing countries. There were several publications linked to these events, including this one, written with Peter Kenway, on the need for North-South dialogue on poverty reduction policy.

The intellectual scaffolding for this work was provided by the idea of examining ‘Comparisons, Convergence and Connections’ between developed and developing countries. John Gaventa, himself a pioneer in the field, has endorsed this approach, writing in 2017 that

‘through addressing the contrasts and parallels, the interconnections of groups and communities, and the convergences of power and resistance around the world, we have enormous opportunities to develop a research agenda that goes beyond geographical boundaries and artificial binaries.’

So, fertile ground for Labour policy, especially understanding the connections between development in developed and developing countries, through trade, finance, technology, and migration. Technology is not mentioned in the Labour Paper, and migration barely addressed (only two mentions, both in the context of alleged Conservative failures).

The rigged system

Here the paper enters more difficult territory: not because there are not aspects of the international system that work to the detriment of developing countries, and that may indeed even be ‘rigged’, but because there is surely more to say about the benefits that may also accrue.

The Paper is certainly right to highlight issues like tax avoidance, illicit financial flows and labour conditions. Those are well-established themes of those who work on ‘policy coherence’ in development, including organisations like the Tax Justice Network and the Ethical Trading Initiative. There was a parliamentary enquiry on Beyond Aid in  2015, which coverd those topics, and also others like drugs, technology, migration, and the arms trade.

The paper is also right to recognise failures in political and economic management of globalisation, in the working of capitalism, highlighted by authorities like Joseph Stiglitz, Ha-Joon Chang or Adair Turner. In this sense, the controversy generated by the Washington Consensus has not dissipated, and has taken on new life since the Global Financial Crisis.

That said, I have more difficulty with the repeated assertion that poverty is ‘created’, and reinforced, by a world system that has been ‘designed’ for the purpose. We can allow that colonialism and centre-periphery inequities have played a role at global level, and that institutions have conspired against shared progress at local level, but surely this is too simple a view of human progress: read David Landes, or Jared Diamond or Yuval Noah Harari for the long view. Consider also that world per capita income has increased by over 10 times since 1820 (Figure 3). Think about the importance of trade to that trajectory. And don’t forget that poverty has fallen and that human development indicators have mostly improved in the past half-century. Charles Kenny at CGD has marshalled the evidence, including in The Upside of Down. Or try the new book co-authored by the late Hans Rosling, ‘Factfulness: Ten Reasons why we’re wrong about the world and things are better than you think’. There are now only 31 countries below the World Bank low income threshold, with per capita income less than $US1005.

Figure 3

Per capita GDPGross Domestic Product over the long run

Source: https://ourworldindata.org/grapher/gdp-per-capita-over-the-long-run-MaddisonAndWorldBank

This evidence is a big challenge to the narrative of the Labour paper. Where is the positive narrative about the pathways to prosperity and human development? Where is the joy?

Prioritising a reduction in inequalities

This is, of course, another good and long-standing topic. We had an effusion of work on inequality at ODIOverseas Development Institute (London) in the early 2000s, including when the World Development and Human Development Reports on poverty were published in 2000.  See the series of Inequality Briefing Papers, work on inequality in middle income countries, many other references, and much later work at ODI, including by the Chronic Poverty Research Centre. I even wrote a paper in 2001 recommending an international development target on inequality. The abstract read:

‘The current narrative on poverty reduction, summarized in WDRWorld Development Report 2000/1, rehabilitates distribution as a central topic on the development agenda. WDRWorld Development Report argues (i) that redistribution matters for instrumental reasons, as a route to faster growth and faster poverty reduction; (ii) that changes to income distribution result from complex changes in sectoral, geographical and individual performance; and (iii) that better distribution can be achieved in a win‐win fashion, without undermining incentives or forcing a choice between equity and efficiency. The argument can be extended: (i) the case for redistribution is not simply instrumental, but can be rooted in a discourse about social inclusion and rights; (ii) observed changes are strongly associated with liberalization policies, and with changes to social norms; and (iii) governments can do more than the Bank suggests to achieve greater equality. A commitment to redistribution should be enshrined in a new international development target: a ceiling on Gini coefficients of 0.45.’

The ceiling of 0.45, by the way, was the inflexion point calculated by Andrea Cornea at which inequality began to impede growth.

So far, so good. There are, however, two points to make.

The first is that Labour needs to be rigorous about the recent data. It is a commonplace to say that inequality is increasing, but new evidence for both the UK and the world shows that this may not be the case. The latest UK data show that income inequality rose sharply in the 1980s, but then stabilised. In 2016/17, the Gini coefficient was at the same level as in 1994. Of course, a Gini-coefficient in the 30s is still relatively high, say compared to some other EUEuropean Union countries. Wealth inequality has also not increased. As Chris Giles concludes:

‘Calling for action to help the poorest or to address inequalities is entirely legitimate, but any call to arms should not be motivated by a desire to correct a deepening gulf — because that has not happened.’

Globally also, the alleged increase in inequality has been contested. The data underlying the well-known Milanovich ‘elephant chart’, showing that globalisation has driven increased inequality, have recently been revisited in careful work by Homi Kharas and Brina Seidel at Brookings. They conclude that

‘the primary narrative is one of convergence: Poorer countries, and the lower income groups within those countries, have grown most rapidly in the past 20 years. The data do not support the idea that the poorest people are being left behind, nor that the richest are taking all the income gains.’

This is a good example of where nuanced analysis is required, for example distinguishing between regions, countries, and social groups.

The second point is that the debate badly needs an understanding of what causes inequality – within and between countries. The overwhelming impression given in the paper is that the author(s) think inequality is entirely driven by venality: tax avoidance, illicit financial flows, profiteering, driving down working conditions, self-serving remuneration committees etc . . . No doubt. But were other factors considered and excluded?

For example, it is not uncommon to find that inequality rises during the early stages of development (the famous Kuznets curve), when both skills and capital are scarce and earn higher returns. Similarly, it is hard to resist the conclusion that growing inequality and/or stagnant living standards have penalised those not able to benefit from globalisation. Read Janesville, for example, or Hillbilly Elegy, or look at the experience of forgotten towns in the UK. If jobs move to China and are not replaced, that is not a positive sum game for those who find themselves unemployed and perhaps unemployable. And another example, new technology often offers increasing returns to scale, as Ryan Avent has argued in The Wealth of Humans, or as Andrew Norton has explored for developing countries. Norton concludes that there are multiple ways in which technical change can lead to greater inequality: a loss of manufacturing jobs; greater returns to capital; rising incomes of top-end workers; loss of opportunities for the rural poor in modern supply chains; and greater insecurity for workers in the digital economy.

How to manage structural transformation is one of the great issues of the age (see ODI’s work on the topic or my own work on the transformative power of the food industry). It is interesting that neither of the words ‘industry’ or ‘manufacturing’ appear in the Labour Paper (except in relation to the ‘development industry’). The word ‘jobs’ only appears a few times, in relation to jobs for women. Yet Africa needs to create 18 m jobs a year up to 2035, just to absorb new labour market entrants.

Reducing the importance of GDPGross Domestic Product growth

Is the absence of discussion about jobs the result of downplaying the role of growth? No-one will disagree with the proposition that GDPGross Domestic Product should not be the only measure of development and that well-being should be considered in the round: the Stiglitz-Sen-Fitoussi Commission carried out an exhaustive review in 2015. Nor will anyone disagree with the need to take account of natural and human capital, as in the latest edition of the World Bank’s Changing Wealth of Nations. But it is quite a step from that to saying, as the Report does, that Labour will commit to ‘reducing the importance of GDPGross Domestic Product growth as an objective for UK-funded development programmes’. Is that true of Liberia (2016 per capita income $US812 in purchasing power parity on World Bank data) or only in the UK ($US42,609)?

This is an important discussion, driven partly by environmental concerns, for example the work of Tim Jackson on Prosperity Without Growth, and Kate Raworth’s more recent work on balancing environmental and social concerns through what she calls doughnut economics. The Paper’s concern for planetary boundaries is praise-worthy. When I last looked at this in 2011, developing ten propositions on climate change and growth, I noted that Jackson specifically excluded developing countries from his admonition not to grow. The Global Footprint Network shows which countries do need to slow down – those marked in red on the map in Figure 3. There are not many sub-Saharan African countries in that group.

Figure 4

Source: https://www.footprintnetwork.org/our-work/countries/

Where, I wonder, does Labour stand on this issue? The paper says that ‘we will work at home and internationally to decarbonise the economy, reduce fossil fuel reliance and promote alternatives that enable us all to live within planetary boundaries’. It would be good to spell out what this means for growth (and jobs) in the poorest countries.

 

Taking policy coherence (more) seriously

Finally, and briefly, just to note that there is a strong statement about the importance of policy coherence across Government. The paper says that

‘We will ensure that an annual whole-of-government plan is in place across government departments, setting out development objectives for the year with measurable indicators, and signed off by the Secretary of State for International Development. Each government department will be accountable for delivering on their objectives.’

There will also be international development special advisers posted in key Government Departments, as well as staff seconded from DFID.

Policy Coherence, or PCD, is a popular topic in the EUEuropean Union and also the OECD. As already noted, it was the subject of an enquiry entitled Beyond Aid by the International Development Select Committee of the House of Commons in 2015. Writing about the various initiatives at the end of that year, I said

‘Some people think that PCD – Policy Coherence for Development – is for anoraks. They’re wrong. In a world with fewer low-income countries, and in which official aid is declining in importance relative to other sources of finance, policy engagement is the future and PCD its standard bearer.

  • First, the various reports demonstrate that PCD is a valuable concept, which opens new conversations.
  • Second, the new paradigm is what development will increasingly be about in the future. This, of course, has huge implications for the orientation and staffing of development agencies.
  • Third, in a world in which global public goods and global deals become central to the development project, ‘Policy Coherence for Development’ is a misnomer, implying a one way relationship, when what we need is a two-way, shared commitment to collective action. ‘Policy Consensus for Development’ might be a better term.
  • Fourth, procedures and processes matter, but substance matters more. We should celebrate past work on conceptual frameworks and checklists, declare victory on process, and ask for a moratorium on method.
  • Fifth, when it comes to substance, we should choose a few priorities and really push.

My view is that the priority is to move away from high level statements (‘PCD is important’) and methodologies (‘we need a framework’) to action on specifics (‘what are we going to do about refugees?). . . . My own list includes refugees, of course, but also additional action on climate change, environmentally sustainable and fair trade, joint technology and innovation work, macro-economic coordination, and other things.’

The Labour paper is more or less consistent with this approach. More would be useful on macro economic coordination: for example, the G20 is not mentioned in the paper. The idea of Policy Consensus rather than Policy Coherence is worth exploring. And I do think the paper underestimates the political and institutional difficulty of implementing a new approach.

Conclusion

It is one thing to work through the paper and identify gaps: more on social protection, or multilateralism, or mutual accountability. The bigger point, however, is one which links many of the themes into a grand narrative about the alleged global ‘crisis’. This is a narrative about a rigged system, rising inequality and environmental degradation. Call it a ‘narrative of predation’. What it seems to me is missing is a companion ‘narrative of accumulation’: discussion of trade, technical change, migration and mobilisation of finance. I have written elsewhere about how to build a progressive industrial policy. Useful references for the next stage of dialogue include Jacobs and Mazzucato on Re-thinking Capitalism, McMillan, Rodrik and Sepuldeva on structural change, and Lin and Monga on Beating the Odds.

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