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Introduction: Making Aid Work for the Poor
Growing Commitment to Poverty Reduction
The 1990s ushered in a period of heightened commitment to poverty reduction. It began with the World Bank's 1990 World Development Report, which signalled the recognition by the world's largest development institution of the importance of a specific focus on the poor, so that the poor are not excluded from the fruits of development. The commitment of all development agencies to poverty reduction, however, is most tangibly reflected by their across-the-board support for the International Development Targets. These targets have their origin in targets discussed and approved in the context of UN conferences and summits, and were set out in the OECD DAC's 1996 report Shaping the 21 st Century. They are both an important signal of common commitment to meeting the needs of the poor and a powerful vehicle for maintaining the momentum in favour of poverty reduction (see Chapter 1, Box 1.1). There is undoubtedly more determination than ever before to ensure that aid makes a difference to the lives of the poor.
Development Cooperation Can and Does Benefit the Poor
This decade has seen agencies increasingly embrace aims with the potential to deliver on this commitment to reduce poverty. Some of these are swift and practical measures geared towards tackling the worst manifestations of poverty. Others have a more strategic orientation, seeking to create an enabling environment for poor people.
There can be no doubt that these aims have been translated into actions which, in many cases, have substantially benefited poor people. Development agencies have worked with partner governments to:
- meet the immediate needs of the poor for food, water and other basic necessities;
- increase the opportunities available for the poor to help themselves; and
- create a pro-poor enabling environment from which the poor stand to benefit.
There have been attempts to ensure that interventions at a macro, meso and micro level have taken into account the needs of the poor. Donor country assistance strategies increasingly seek to focus specifically on addressing poverty, including through sector programmes. In addition, a recent survey of European donors provides strong evidence that development agencies are making increasing efforts to involve partner governments and the poor themselves in designing and implementing approaches to poverty reduction (Cox et al., 1999). This implies rejecting supply-led solutions and instead assessing the nature and causes of poverty and prioritising activities accordingly. The latest generation of projects gives greater attention to the fact that poverty tends to be experienced differently by women and men, and interventions increasingly include gender analysis.
It has been at the micro or project level, however, that interventions have been most explicitly linked by donors to poverty reduction. The various dimensions of poverty have been addressed through a huge range of interventions and activities, including ;
- providing basic education to poor communities, geographically or socially excluded from mainstream education;
- creating access to credit through schemes which do not expect the poor, including women, to be literate or have collateral assets;
- improving sanitation, housing and creating employment in urban slum areas;
- giving the poor access to basic health services, nutrition, and family planning methods, allowing poor people to take control of their own lives;
- enabling poor farmers to increase their productivity and security through agricultural extension services, improved seeds and greater access to markets.
- working with local community associations and national non-governmental organisations to reach the poorest more effectively.
Yet, although many aid interventions have benefited poor people, far too many have not. There is a real opportunity for donor agencies to work more effectively with developing country partners and increase their impact on poverty.
Reaching the Poor More Effectively
Despite the many positive examples of development assistance contributing to poverty reduction, there is a strong perception that donor rhetoric has got ahead of field-level realities. Ad hoc solutions need to be replaced by a far more systematic approach to reducing poverty. This implies a reappraisal of whether all possible avenues for promoting poverty reduction are being exploited, and whether each agency has the right kind of skills and management structures in place.
This report reveals, for instance, that DAC members could do more to ensure policy consistency by ensuring that the full range of their policies on agriculture, trade, and investment are also consistent with the poverty reduction focus espoused by their development ministries. Another underexploited channel concerns more systematic consideration of the needs of the poor when providing macro-level (e.g. budgetary) support, or working at the meso level to achieve health, education or agricultural sector reform. Donors talk about creating a pro-poor enabling environment, yet are rather unclear about what this means and entails. Agencies could work far more closely with national and regional governments and with civil society representatives to try to promote a domestic economic and social policy environment which improves the opportunities for poor and marginalised people to obtain better livelihoods and increased access to resources, knowledge and rights. It also involves trying to promote a domestic political and institutional environment that is more responsive to the needs of the poor and to issues of gender equality. This could involve increasing the accountability of the political system to the needs of the poor, changes in the law to reduce the exclusion of women and particular ethnic groups, and more efficient and accountable public administration at central, regional and local levels. It requires challenging the general bias of development activities towards majorities which currently has serious adverse effects on minorities. It implies that greater weight is given to 'bottom-up' approaches which enhance understanding of the priority needs and capacities of poor people.
The Role of the DAC Informal Network on Poverty Reduction
The creation of the DAC Informal Network on Poverty Reduction in June 1998 is a response to the recognition that development agencies can do more to contribute to poverty reduction. The goal of the Network is to develop, in collaboration with developing country partners, more effective approaches to poverty reduction. The Scoping Study, of which this is the Synthesis Report, represents the first step towards this goal.
The Scoping Study involved completing case studies of each DAC member, as well as the World Bank and UNDP, to assess their policies and, to some extent, their practice with respect to poverty reduction. An attempt was made to explore lessons from country-level implementation by interviewing field staff by email, fax and telephone, as well as those at headquarters with country-level responsibility or experience. The case studies were prepared by over twenty consultants who, despite time constraints, drew up detailed reports and discussed findings at a workshop in London in December 1998. A substantial effort was also made to examine a sample of developing country perspectives from across five countries: Bangladesh, Bolivia, Ethiopia, Mali and Vietnam. In-depth interviews with ten governmental and non-governmental actors were conducted by developing country researchers within each of these five countries.
This Report draws on the 25 case studies and the survey of developing country perceptions, as well as donor evaluation studies and academic literature. The Report does not seek to provide 'the answers', but to provide a sound basis for the development of a set of guidelines for donor agencies on how best to promote and foster effective, sustainable poverty reduction in developing countries. These Guidelines will be completed by June 2001. The DAC Informal Network on Poverty Reduction, Co-Chaired by Mr Jean-Claude Faure and Mr Peter Grant, is leading this process, which includes consultation at the developing country level.
Broad Structure of the Report: The Report is divided into three Chapters. Chapter 1 considers the 'big picture' of donor's goals, approaches and perceived roles in poverty reduction. Chapter 2 examines the record of agencies in trying to mainstream their poverty objectives in their actual work, while Chapter 3 grapples with actual donor experience at the country level. The Executive Summary contains the major points and findings from the first three Chapters.
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