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Simon Maxwell

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Looking to the future of development and humanitarian aid: what can be seen in the crystal ball?

Two recent research reports deserve comment, both offering insight into the future of the ‘project’: development in one case, humanitarian in the other. An interesting question is whether both foresee the same future in their crystal ball (answer: not really). Another interesting question is how far the thinking of these two papers can be used to shape the post-2015 development and sustainable development goals (answer: quite a long way, especially if they can be brought to converge). A third question – no, hang on, let’s not get carried away. Two questions is enough for now.

Futurology is not new in our field. Indeed, I’ve been writing for a decade on ‘what’s next in international development’, as the website testifies. Older readers will have fond memories, as I do, of my paper on the 20% Club and the 0.2% Club, from 2006, which pulled together thinking on a new development agenda in countries that were not aid-dependent; and of ‘Spyglass, Spigot, Spoon and Spanner’, from 2005, my attempt to explore the implications of a new development agenda for the role and staffing of development agencies. More recently, I have written and given lectures on the need to vision development cooperation of the future.

Of course, many others have also contributed in a similar vein: think, for example, of Inger Kaul’s work on global public goods, published as early as 1999;  Sagasti and Bezanson on the future of development finance; Klein and Harford on the Market for Aid; or Jean-Michel Severino’s work on the death of oda and the rebirth of a global public policy. Add Andrew Rogerson to the list, writing in 2004 on the future of aid; Andy Sumner, on the fact that 75% of the poor live in middle income countries; and Jonathan Glennie, analysing the future of aid to MICs. On the humanitarian side, note the work of the Humanitarian Futures Programme; or the challenge work of the World Economic Forum’s Global Agenda Council on Humanitarian Assistance.

All this thinking has contributed to policy: for example the British Government White Paper of 2009, Building Our Common Future, emphasising partnerships beyond aid; or the new EUEuropean Union development policy, Agenda for Change, with its emphasis on ‘differentiation’ among developing countries and on strategic partnerships with emerging powers. The High Level Forum on Aid Effectiveness, held in Busan at the end of 2011 had similar concerns, and launched a new Global Partnership for Effective Development Cooperation. DFIDDepartment for International Development is busy implementing the recommendations of the Humanitarian Emergency Response Review.

There are consistent themes in all this work: the rise of new powers; the growing number of middle income countries, and the concentration of the poor in those countries; climate change and other global pubic goods; policy coherence (i.e. non-aid policies); the need to manage globalisation for the benefit of all; new forms and sources of finance; resilience; multilateralism, strategic partnerships. It is not hard to detect major shifts in the tectonic plates which underpin both development and humanitarian thinking; nor to see that development agencies will have to change if they are to keep up. At the High-Level Copenhagen Conference in March this year, to celebrate 50 years of DANIDA, which discussed papers commissioned from ODIOverseas Development Institute (London) on these issues, I described the challenge as ‘same mission statement, new job description’.

What then is new? I’m afraid I find I need to summarise the two reports, and comment on the findings, before pulling out some contrasts and lessons.

Horizon 2025: Creative Destruction in the aid industry

The first paper is a forward-looking and clever piece by Homi Kharas and Andrew Rogerson, ‘Horizon 2025: Creative Destruction in the Aid Industry’. There are some recognisable challenges in the discussion, but also some new analysis.

First, the authors examine likely trends in the number and location of poverty. They find inter alia that

  • High per capita income growth and falling population growth in large, dynamic MICs shrink the global poverty pool drastically – with $2 per day poverty falling from over 2bn in 1990 and over 1 bn in 2010, to only about 500m in 2025.
  • Income stagnation and high fertility rates in selected low-income and fragile countries re-establish them as the main locations of global poverty – with over three quarters of the total in this category by 2025, mainly in Africa (see Figure).

 

 

 

 

 

 

 

 

 

 

  • Availability of public and private resources for development, coupled with the fall in global poverty, imply that dramatically more funding is potentially available for each poor person – official aid could be up to $300 per poor person by 2025.

Second, Kharas and Rogerson identify what they call ‘disruptors’ to the aid system: private finance from philanthropists and peer-to-peer networks; changes in the world economy, including new donors and South-South cooperation; and, finally, issues arising in ‘shared space’, including climate finance.

Third, Kharas and Rogerson conduct a stress test on development agencies, to see which are best adapted to face the new world they have described. Agencies do well if: (a) they spend a greater share of resources on fragile and high poverty gap countries; and (b) they spend a greater share on ‘future issues’, global rather than national, and growth rather than social welfare. Countries are assigned to risk categories, using a traffic light system (see Figure): Japan, Spain, Italy and Germany are at greatest risk; Canada, Sweden and the Global Funds (GAVI and GFATM) are at the least risk. The EUEuropean Union and the UK both fall into the second highest of four categories of risk.

 

It will not be surprising to learn that I agree with the general thrust of this analysis – and I love the idea of the stress test. There are a couple of areas, though, where I wish that Kharas and Rogerson had expanded their analysis.

The first relates to the classification of countries as between fragile and non-fragile, which is important because it underpins their whole analysis of future poverty. Kharas and Rogerson are not the first to experiment with extrapolations (see, for example, work by Andy Sumner and Lawrence Chandy); and, as Duncan Green has observed, their findings are likely to trigger a ‘nerd war’ on definitions of poverty and assumptions about future growth and income distribution). For the country classification, the key text is a footnote on Pg 7, which says that

‘Fragile states are defined here as states that are unable to meet their population’s expectations or manage changes in expectation and capacity through the political process. See OECDOrganisation for Economic Cooperation and Development glossary of International Network on Conflict and Fragility (INCAF) terms. The list of fragile countries is that used by the OECDOrganisation for Economic Cooperation and Development and is a compilation of two lists: the 2009 World Bank, African Development Bank and Asian Development Bank Harmonized List of Fragile Situations and the 2009 Fund for Peace Failed States Index.’

Tracking back through the DACDevelopment Assistance Committee (of the OECD) website, we find this list of 45 countries:

listcountries

 

 

An important assumption is that these countries will remain poor and fragile up to 2025, so the poverty numbers for fragile countries in 2025 are for countries which are fragile in 2009. Of course, any assumption can be queried, but this seems brave to me. First, several countries on this list already fall into the middle income category as defined by the World Bank: Cote d’Ivoire, Iraq, Pakistan, Nigeria, Sri Lanka, Uzbekistan . . . Second, there are several countries on the list which might well aspire to escape the category of fragile state by 2025: Bangladesh? Uganda? Sri Lanka? Even, at a pinch, Nigeria? If these countries were to be excised from the poor and fragile category, and if no others were to join (South Sudan is not on the list, for example, presumably because it did not exist in 2009), then the impact would be to change the relative importance of the categories – and the balance of the argument. I’m not convinced myself that the ‘poverty problem’ in 2025 will be concentrated in fragile states. It would be good to have some sensitivity analysis.

I am also not convinced on a second point, which is the calculations which underpin the stress test. I was very surprised to find GAVI and GFATM in the best possible category. It turns out that this is because a large part of their work is classified not as a health/social welfare benefit (which would count against them), but rather as a global public good (which counts in their favour). There is a relevant footnote on Pg 25, which explains that:

‘If most Global Fund spending on communicable diseases was instead associated uniquely with the MDGs, or much of the GAVI Alliance ’s work was related to the delivery of existing vaccines rather than the development of new ones, as these agencies have virtually no growth-oriented portfolio, their concentration would go from overwhelmingly global challenges to overwhelmingly social welfare, so they would shift quite rapidly up the risk scale. However, particularly in the case of the GAVI Alliance, their substantial focus on high poverty gap countries and fragiles would limit this effect.’

There are other issues worth debating, like the allocation of sectors to the welfare/growth/GPG columns (listed in Annex 1 to the Report): why, for example, is humanitarian assistance classified as a global public good?. And, of course, if the original country classifications were more sensitive to changes in future fragility, then the stress test would also give different results.

However, these qualifications should not obscure the original and valuable contribution that Kharas and Rogerson have made, nor the key finding, that the job descrition is changing and that many agencies are currently ill-equipped to fill it.

The State of the Humanitarian System

The second paper is the report on the State of the Humanitarian System, launched by ALNAP in London on 4 July, at a public meeting I was pleased to be asked to chair. This is another excellent, analytical, meticulously-researched and forward-looking review. It assembles comprehensive information: on the efforts of some 274,00 humanitarian workers, employed by the UN, the Red Cross/Red Crescent, and some 4,400 NGOs; and on total spending of $US 16bn a year to save lives and livelihoods.

The ALNAPActive Learning Network for Accountability and Performance in Humanitarian Action report uses an OECD/DAC framework to assess progress and performance. There are six criteria: (a) coverage/sufficiency; (b) relevance/appropriateness; (c) effectiveness; (d) ‘connectedness’; (e) efficiency; and (f) coherence. Among the main conclusions:

  • Humanitarian funding continues to rise, but falls short of requirements: in 2009/10, only 68% of stated needs were met.
  • Some crises are much better served than others: average funding following the earthquake in Haiti amounted to $US 1,167 per person, compared to only $US 159 for the crisis in Cote d’Ivoire. (This is a much lower disparity, by the way, than was evident at the time of the Indian Ocean tsunami in 2004. The joint donor evaluation estimated that the response amounted to $US 5,500 for each person affected and drew an unfavourable comparison with aid to Eritrea at the same time of only $US 50 per person.)
  • Most response was effective, but often too slow.
  • Reform of the system is beginning to show results – especially the ‘cluster’ system for agency coordination, the Central Emergency Relief Fund (the CERF) and country-level pooled funding.
  • A modest improvement in ‘connectedness’, led by host governments, especially National Disaster Management Authorities - but also frustration on the part of NDMAs at the failure to recognise their leadership and at the ‘artificial’ division between relief and development.
  • Underinvestment in the capacity of local operational partners.
  • The transformative use of new technologies, including cash and mobile phones.
  • Erosion of respect for humanitarian principles, by political actors but also by some humanitarian organisations, especially those with multiple mandates.

Again, it will not be surprising to learn that these overall findings are consistent with work I have been involved in, through the WEF and the HERR. However, three points are worth pulling out.

First, it is notable that the numbers in the report (need, workers, NGOs, funding) refer to the international humanitarian system, not the national. There are other sources for particular kinds of need. For example, the World Disasters Report provides detail every year of the number and scale of disasters, including floods, earthquakes and droughts, but not war. The IPCC has also been active on part of this agenda, with its recent special report on extreme weather events. The Global Humanitarian Assistance Report provides additional information. However, there is, so far as I know, no global database of humanitarian need – where ‘humanitarian need’ is defined as being in need of life-saving relief, in whatever context and from whatever source.

Second, this matters, because a good part of the total global caseload may well be picked up by countries themselves, and their domestic NGOs, with no requirement for external assistance. This was largely true for India after the tsunami, for example, for China after the Sichuan earthquake in 2008, and for Chile in 2010. Indeed, we talked in our WEF work, in a series of Perspective pieces, about the need to help countries move from the ‘Haiti column’ of extreme vulnerability and dependence, to the ‘Chile column’ of resilience and self-reliance. An important question arises, which links to the Kharas and Rogerson analysis: how many countries will have made the move by 2025? And what then will be the role of the international humanitarian system?

Third, the new emphasis on resilience, preparedness, and bridging relief and development imposes a new agenda on humanitarian and development actors. It is not difficult to imagine conflict situations in which neutrality and impartiality are essential features of the humanitarian profile. However, it is also easy to imagine many other situations where long-term commitment and engagement with Government actors are top priorities. In these cases, multiple-mandate organisations are probably required. The difficulty, however, is to know when an Oxfam or an SCFSave the Children Fund is in ‘pure’ humanitarian mode, and when it is not.

Humanitarians are well aware of these dilemmas. The Report itself has an extended discussion of disaster preparedness, and of the challenge of working differently with national governments and national NGOs. The issues all came up at the launch event of State of the Humanitarian System. David Peppiatt, for example, International Director of the British Red Cross, talked about how the number of humanitarian workers would rise if national Red Cross and Red Crescent workers were included in the total. Jane Cocking, Humanitarian Director at Oxfam, talked about the dilemmas facing multiple-mandate agencies. Solutions, however, are not necessarily easy to find. What will Good Humanitarian Donorship mean a decade from now?

Putting the two reports together

Reading the two reports side by side stimulates a number of thoughts.

First, these two communities could usefully spend more time talking to each other – about trends, principles of engagement, and organisational futures. There is very little discussion in Kharas and Rogerson about likely future shocks, climatic or otherwise, and the implications for welfare. There is very little discussion in the ALNAPActive Learning Network for Accountability and Performance in Humanitarian Action report about long-term growth, and the implications for capacity.

Second, and related, a key issue for both development and humanitarian communities has to be about whether middle income countries can be expected – or should be expected - to stand on their own, with regard to basic social protection and disaster preparedness. My own view, often expressed, is that there is little foundation in traditional aid theory for large-scale financial transfers to middle income countries, who should be able to fund their own growth and welfare programmes; but that there might be an argument for technical assistance, blended finance, and partnerships of various kinds, including via NGOs, and through twinning of towns and universities, in order to promote rights and access to services. The case for disaster assistance is easier to make, if institutions remain weak. I would love to know, though, how many countries international humanitarian actors think they are likely to be involved in by 2025.

Third, building resilience is an obvious priority for both development and humanitarian actors, through NDMAs and other such bodies, but also directly in all forms of development programming. Nothing new there. We used to call it Linking Relief and Development. Margie Buchanan-Smith and I co-edited an IDS Bulletin on the subject in 1994, and it was not a new subject then. DFIDDepartment for International Development and other agencies have now picked it up, with new emphasis and approaches. It will be interesting to see whether the new sensitivity will lead DFIDDepartment for International Development to reassess the low score given to the United Nations Office for Disaster Risk Reduction (UNISDR) in the 2011 Multilateral Aid Review. Watch out, by the way, for the forthcoming NAO review of the MAR. More generally, how big a priority do Kharas and Rogerson think this should be for international funding? And how do humanitarian actors think they can resolve the dilemmas facing multiple mandate agencies in conflict and non-conflict areas?

Fourth, the idea of the stress test is definitely worth development, from the development and humanitarian sides separately and together, and for the international organisations and NGOs. It would be fascinating to stress test the WFPWorld Food Programme and the ICRC, for example, as well as Oxfam and MSF. As Kharas and Rogerson point out, the stress test only indicates long-term vulnerability if agencies do not change. A parallel change readiness test would be interesting, similar to the one KPMG and ODIOverseas Development Institute (London) have developed for countries.

Fifth, the traffic is definitely not one way. The humanitarian report raises important issues about system reform that could also help take forward the development aid debate. The approach taken to cluster leadership and to pooled funding both offer models for development aid in a post-Busan context. The emphasis on beneficiary perception is also valuable.

Finally, all this has implications for the growing debate on the post-2015 Millennium Development Goals and for the Sustainable Development Goals proposed at the Rio +20 conference. For example, should they be universal, or restricted to a particular group of countries? If Kharas and Rogerson are right, that poverty will be concentrated in a relatively small number of what today are considered fragile states, then it might be sensible to restrict coverage. If on the other hand, the numbers are more balanced or the categories are porous, then universal goals, applicable to all countries, might be preferred. Similarly, if ALNAPActive Learning Network for Accountability and Performance in Humanitarian Action and other humanitarian analysts are right, shocks will be important ‘disruptors’ in the future, affecting short term welfare, but also long term development prospects: country classifications will need to be sensitive to deviations from trend, and goals will have to include resilience. Both the MDGsMillennium Development Goals and the SDGs will need to take account of the increasing importance of supra-national drivers of well-being and sustainability, and give the necessary priority to global public goods and global public institutions – for both ‘development’ and ‘humanitarian’ purposes.

 

To conclude, these two valuable reports both suggest that aid is in a state of flux. We had better hang tight onto the crystal ball and think hard about what it shows.

 

Image: http://blog.campaignasia.com/mike-fromowitz/some-random-thoughts-on-where-things-may-be-going/reiki-crystal-ball-2/

Comments  

# RE: Looking to the future of development and humanitarian aid: what can be seen in the crystal ballGuest 2012-07-18 20:30
Simon, thanks for this blog and the serious questions it raises about the divide between the development and humanitarian communities. Your idea that we need more of a conversation between these two is absolutely right.

In our paper, we struggled with how to treat humanitarian assistance provided by aid agencies. We ended up including it as a Global Public Good on the grounds that all of us are in a world where there is an outpouring of solidarity towards those affected by nature…like a GPG, humanitarian assistance embodies collective action and unfortunately it is likely to be needed over the long-term if one believes that natural disasters are, if anything, likely to become ever more severe.

Another reason for encouraging a conversation is that a large fraction of humanitarian aid is long-term, so the overlap with development aid has become large. Perhaps INGOs will be the drivers of this, sitting as many do at the union of the two categories.

You wonder about whether middle income countries will need humanitarian aid. My sense is that the costs of disaster actually follow an inverse U-curve, rising initially as income levels rise(because there is more property that gets damaged), but then falling as prevention measures and resilience (better construction of houses etc)take hold in more advanced countries. So I suspect that the case for humanitarian assistance in middle income countries will survive for quite a while longer.

You also wondered about the sensitivity of our results to the classification of fragile states. Buried at the end of the report, in Annex 3, is the list of countries with the largest numbers of poor in the future. DRC and Nigeria top the list, but there are several others that are substantial. (Not including Bangladesh, incidentally, which is growing quite fast so may have resolved many of its poverty problems in the next 15 years…insha’All ah). My point is simply that this Annex gives you a bit of a sense of how sensitive the results are to individual countries. But you should note that there will always be a bias towards more poverty in fragile states. If a country not on this list becomes fragile/conflic t affected, presumably its growth will be lower and it will therefore have more poverty than we estimate. Conversely, if a country that is fragile on this list works its way out of that category (say, Ethiopia), I would expect its growth to pick up and for there to be fewer poor people in that country.

The real issue is not about the listing of fragile states or whether that list stays constant over time, but is about the treatment of large countries (mostly middle income) with big gaps between National Accounts estimates of household expenditure and survey estimates. Those that choose to say that the “missing” expenditure is concentrated at the top end of the distribution come up with much higher estimates of poverty in middle income countries than we do. But they also have to keep arguing that growth does not change the incomes of the poor… a bit tough when, as now, there is clear evidence that poor states in India are growing faster than the richer states. My point: if you choose to use unadjusted survey results, you will find more poor in non-fragile middle income countries, both now and in 2025, and that is a far larger effect than the classification of fragility.

Related, and for the record, when we talk about fragile states, we include several middle-income country fragile states. So there is some overlap in the categories. What we are suggesting is that fragile middle-income countries still need assistance, but that dynamic, middle-income countries will need much less (except for infrastructure where needs will still be huge).

You are right we have to finesse the issue of whether GAVI/GFATM provide public goods of better global health or private goods of better individual health. This was a tough call but maybe there is a case for saying that these funds do a bit more on the public goods side of things than bilateral health aid.

IDA does poorly in the stress test partly because it does so much in India and also does so much on “welfare” type projects. If we changed the classifications on things like land development etc which are dual use between "growth" and "welfare", there might be some adjustments but the numbers are pretty small so I doubt much would change. Another downside for IDA is that it does little humanitarian assistance.

The baseline numbers for poverty by country is now available on the web as part of a broader effort by some of us at Brookings to expose ourselves mercilessly to the outside by posting all our data. www.brookings.edu/.../all
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# HPN CoordinatorGuest 2012-07-19 13:44
Simon, thank you for this very thought provoking piece. I wonder whether you’ve seen Simon Levine’s paper, System failure? Revisiting problems of timely response in the Horn of Africa odihpn.org/.../... published in November 2011 by the Humanitarian Practice Network at ODI. Simon argues that the entire system needs to change and that tinkering with one part of it, or individual actors focusing on their own roles within it, is not enough. Peter Gubbels’ 17 July paper (commissioned by Save the Children and World Vision) Ending the Everyday Emergency - Resilience and Children in the Sahel savethechildren.org.uk/.../..., which ‘…assesses progress, lessons learned, and challenges in promoting “resilience” in the Sahel, with a particular focus on the well-being of children…’ echoes this view:

‘Whilst there is strong consensus for action among all actors – governments, communities, donors, and aid agencies – to better integrate humanitarian and development efforts to “strengthen resilience” and break the hunger cycle, progress is still very limited. Actors differ in the dimension of resilience they focus on, the people and geographic areas they target, and their favoured solutions, creating a critical lack of comprehensive, coherent leadership and agreement around resilience. Currently, the approach to resilience in the Sahel is highly fragmented, dysfunctional and ineffective.

A systemic, collective approach by institutions of government, the UN, donors, international NGOs and civil society work is needed to bring about significant institutional changes within and between organisations. The challenge is reaching agreement about what the ‘system’ for achieving resilience is, who is in it, what each actor’s role is, and what the system is supposed to do and how to do it.

The current development approach is mostly based on a supply-driven approach to hunger reduction that concentrates on expanding agricultural production, assuming this will eventually lead to reduced food prices and improved nutrition. The current Sahel crisis highlights the major limitations of only adopting a supply-driven approach. The poorest 25% of small scale farm families in the Sahel are being left behind. To address this, an effective approach to resilience must be comprehensive and include a number of additional elements. One is adequate social protection - public actions taken to provide predictable support for targeted individuals, households or communities to reduce, prevent and manage risks and vulnerabilities which are deemed socially unacceptable within a given society.'

Linking relief and development is not enough – we need to have a major system-wide overhaul.
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# RE: Looking to the future of development and humanitarian aid: what can be seen in the crystal ballGuest 2012-07-20 11:23
In addition to Homi's point about the likely inverted U-curve of disaster related XP with rising income, the general notion of dealing with fragility precisely as the ultimate GPG strikes me as worth pursuing

In a perfect world investments to prevent or build preparedness/ resilience to natural and manmade disasters would be gauged for what they are, an actuarially sound stitch in time, an insurance premium to save much larger repair bills later

In practice, DRR and conflict prvention spends are a tiny fraction of such levels, why? Maybe myopia but more likely problems of externality- so for example if preparedness is funded from the same fixed humanitarian pot (and it mostly is) there is not much incentie to cut back on current spend in favour of future emergencies.
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# RE: Looking to the future of development and humanitarian aid: what can be seen in the crystal ballGuest 2012-07-20 13:09
Hi Simon, Homi, Andrew, there's a good piece in the Economist (url below).

I had a look at your data and you know you're estimates are based on India, Pakistan and Indonesia eradicating poverty at $2/day in 3-4 years from now which seems a bit optimistic? Also india halved poverty between 2007-2010 which again seems a bit optimistic?

Andy

economist.com/.../...
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# RE: Looking to the future of development and humanitarian aid: what can be seen in the crystal ballGuest 2012-07-20 13:48
ps that should be 'your estimates' not 'you're' - typing too fast...!
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