Sweden was commended in its May 2005 Peer Review for making poverty reduction in developing countries a focus across the full range of government departments.
‘Joined up’ policies, or policy coherence is more likely to produce good results in poverty reduction. This is the conclusion of much of the OECD DAC’s analytical work, and that’s why the OECD continues to press for strong synergies between aid, trade and investment policies in particular.
While aid furnishes resources and expertise, members increasingly recognise that other policies can potentially have far more powerful impacts. Jobs and self-employment for example are ultimately the main pathway out of poverty. That means encouraging growth, which means more and better infrastructure, better systems of governance, and help in creating the right environment for investment and trade.
The aid-trade-investment-migration nexus is something Sweden has chosen to formally recognise in the first whole of government approach to global development, called the Policy for Global Development (PGD), which was formally endorsed by parliament. A major innovation, the Swedish government is required to report annually to the parliament and is now in its second year of doing so.
“The job of a Peer Review is to point out issues, to illustrate what’s going on in a country’s development practice. We’re not trying to convince people necessarily, but just to draw their attention to important areas and to help them keep track of how effective their approaches might be,” says the DAC Peer Review team’s James Hradsky.
“In the past, no-one wanted to think about policy coherence. But over the last five years people have become aware that we need to do more than just give aid money with one hand, and take it back with the other, for example in the form of agricultural subsidies in wealthy countries that are effective barriers to developing world exports. ”
“If donors really want to help - be coherent. Develop a system that examines different national policies for their impact on poor countries. Look at it through the prism of the whole of government. Make sure the perspectives of poor countries are understood and analysed in all relevant policies. Then you can make informed decisions.”