…continued from last Sunday…

But if conditionalities are limited to policy actions that the government is showing some inclination to undertake anyway, something else is needed to get other and more difficult issues onto the development agenda.

Three areas seem worth exploring: getting a better understanding of country contexts into the operational work of donor agencies; opening up those understandings to public debate at country and international levels; taking steps to create an international climate of policy opinion that is more welcoming to political projects that build developmental states.

For donor staffs, getting to know and understand well the country context is an important first step. This seems obvious, but has not always been done.

Short postings and management of country programmes from headquarters have contributed to a situation where aid approaches often get decided on the basis of generic principles and even passing fashions, not detailed knowledge of the concerned country.

Thinking has tended to be technocratic and less well informed than one would expect about the country’s history and the political economy of previous reform efforts.

Several bilateral initiatives and the World Bank have moved towards recognizing these criticisms and have departments working on addressing them.

Understanding is only a first step. It can allow donors individually and collectively to respond more intelligently to the type of problems the PRSP experience has thrown up. Good ideas about how to do things better may and may not follow.

Many of the problems identified in a country political analysis will not be capable of being solved by donor action, however wise and well motivated.

That is why there has to be a second step, that of opening up the debate about the politics and political economy of reform, as well as about specific policy areas where there is no consensus.

Donors should be prepared to put behind them the old principle that national sovereignty forbids active involvement in policy controversies within countries, because this would be political.

As opposition politicians often point out, donors are part of the political system of the country whether they care to acknowledge it or not.

That being the case, they should act responsibly by positively engaging in and contributing to the debates that ultimately shape the commitments of country stakeholders. This engagement needs to be politically and socially realistic.

It must take into account the level of socio-economic development of the country. But it should also bear in mind that we live in an increasingly integrated world, with, among other features, large Diasporas from poor countries working in professional capacities in the developed world and benefiting from increasingly cheap and rapid international communications.

The above are both things that might be done at the country level. But there is no reason for this discussion to be limited to the country level, and indeed there are many reasons for seeing it much more as a global or at least a regional (continental) challenge.

The wave of formal democratization that broke over Africa and the former Soviet bloc in the 1990s, and over Latin America a bit earlier, shows that the international climate of opinion does have effects within countries.

It is surely time for a further change in the international environment, one that provides more positive incentives and fewer negative ones to national leaders faced with policy choices between building predatory states and building developmental ones.

Several ideas currently under discussion are relevant to this suggestion. Some of them are based on development cooperation agencies exercising greater selectivity in aid allocation between countries and doing so on a basis that openly rewards improved or improving governance, and punishes demonstrably bad behaviour by political leaders.

This can be done using governance indicators and thresholds of performance, as in the USA’s Millennium Challenge Account.

Alternatively, it might be done using only results’ measures (on the basis that we don’t know well enough what kinds of governance qualities are crucial for producing development result.

Other proposals include constructing long-term compacts between the international community and national leaders who have political projects centered on state building, and concentrating on delivering powerful negative signals.

These proposals have different strengths and weaknesses. They share two difficulties, as their proponents recognize. One is that many of the countries where state-building projects are most in need of encouragement are already heavily aided and/or have natural-resource revenues that give them now, or will give them soon, a large measure of immunity to aid-related international pressures.

The other is that the effect on country incentives would only be significant if the selectivity was coordinated, and that seems an unlikely prospect on account of well-known features of donor motivation.

For these reasons, it may be more useful to change the international climate in ways that do not involve aid. The options considered should certainly include all of the actions Northern governments could take to make the international banking system and the arms trade less hospitable to developing world leaders who steal natural resource rents and use them to create private armies.

Various current initiatives on these lines are usefully explained and promoted in the report of the 2005 Blair Commission for Africa.

Another kind of mechanism that has proven effective in changing incentives for national elites in several parts of the world is the aspiration to join a multi-country club, such as the European Union, with its exacting entry standards or peer-review processes.

A study of international efforts to avert instability and respond to crises by the UK Cabinet Office has investigated this line of approach, including its applicability to developing regions. However, it reaches cautious conclusions.

The African Peer Review Mechanism established under NEPAD by the African Union is one of the most relevant examples, with some potential to alter the nature of the neighbourhood in which African political leadership evolves.

Unfortunately, it is also one of the less promising regional clubs, given the lack of anything equivalent to the benefits from EU accession in the set-up of the scheme.

The international climate can only take countries so far, as is well illustrated by the experience with democratisation.

But what it can do is to set up a framework of standards and expectations to which domestic actors can appeal and to which they may respond in their own way, participating in movements for change that otherwise would not have existed.

It may be that, for this reason, the general climate of opinion in the world is more important than creating special mechanisms that act upon elite incentives directly.

In any case, several of these things could be tried together. A few small steps to create a more welcoming environment for state-building political projects could make a large difference to the prospects of realising a positive outturn from the PRSP experiment.

To sum up, there are sound reasons for wanting more country ownership of poverty-reduction policies. The PRSP experiment has been the only show in town in trying to address this need for the last ten years.

It cannot yet be said that the experiment has failed, if only because no better idea has yet been articulated by anyone.

On the other hand, it is clear that PRSPs have not delivered what was hoped for, and the reasons include the rather simple theory of political change that was one of the conceptual underpinnings of the experiment.

The theory that participation alone can generate accountability and an orientation to results is inconsistent with many findings from social science research. It also seems not to be confirmed by the PRSP experiment.

Despite what has been learned from PRSP processes, quite a lot of the current donor agenda remains valid and sensible.

But it is not sufficient. Both PRSPs and the efforts that have been made to align aid with them have underlined the pivotal importance of domestic politics and its trajectory.

This paper has drawn attention to three types of possible international action that are the missing links in the politics of development after many years of PRSPs.

They are: more serious understanding of country contexts by donor staffs; a willingness to go public about issues that donors currently discuss behind closed doors; and a more serious effort to construct regional neighbourhoods and a global climate of opinion that would do what PRSPs have been unable to do …. to really increase the dynamic generation of the construction of developmental states in poor countries.

END