In a few years, Minister for Development Aid Gunilla Carlsson (M) has successfully challenged the dominant special interests in the development aid debate and pushed through the largest development aid policy reforms ever. What made this possible and what has it resulted in? Joakim Stymne, former Secretary of State for International Development Cooperation, believes that significant improvements have been made but that we cannot expect development aid to create growth.
Perhaps somewhat unexpectedly, development assistance has been one of the policy areas that has been characterized by a particularly sharp and ambitious reform policy since the Swedish Allans Government took office in October 2006. The conditions for such a policy did not, of course, look good. Unlike many other areas, no common alliance policy had been formulated for pre-election assistance. When Gunilla Carlsson, the Moderates' foreign policy spokesperson during the opposition period, was appointed Minister for Development Aid in connection with the formation of the government, politics was an unwritten card.
Barely five years later, however, it is no exaggeration to say that Swedish development assistance during this period has undergone its most far-reaching reforms ever. Aid has been concentrated in fewer countries, with clearer justification for what Sweden aims to achieve in each country. The focus on development assistance results has been placed at the center of the business. The possibility of demanding responsibility has become a leitmotif in development assistance: Swedish taxpayers have the right to demand that the funds be used well, the poor people in the partner countries have the right to demand that the funds benefit them. The division of roles between Sida and the Ministry for Foreign Affairs has been refined. The political governance and policy considerations are clearly placed with the Ministry of Foreign Affairs. Sida's role as responsible for ensuring the operationalization and leadership of the implementation of development assistance policy in its areas has been clarified. The so-called dialogue between Sweden and the partner countries has intensified, with significantly reduced Swedish patience than before with abuses of human rights or with environments that are permissive against corruption. Within the framework of development assistance policy, initiatives have also been taken to create a more active principle of openness by making information about development assistance much more accessible.
There is thus nothing wrong with the reform ambitions, the pace of reform is high, and the reform agenda has been and continues to be packed. The question remains, however: have the Swedish reforms contributed to a more strategic and cost-effective fight against poverty? Not least in the light of the sharp arguments against the idea of development aid put forward by development aid skeptics such as William Easterly, or on Swedish soil Fredrik Segerfeldt, one can not ignore this question. I will return to this.
The starting points
What made the staging of development aid reforms possible? The most important precondition was to formulate the need for reform - and to subsequently obtain a mandate for the reforms. In this context, we made a number of observations at the beginning of the term of office.
1. Aid was too unfocused. Of the Swedish development assistance of (then) just over SEK 30 billion, about half was bilateral, with a Swedish presence in 120 countries, of which co-operation agreements existed with 47. The other half was multilateral, channeled through around 50 multilateral organizations. There was no hint of a strategic overall picture of the development assistance portfolio. Rather, most indications are that its composition has developed almost organically, as the sum of ad hoc decisions over a large number of years, where new efforts are added but where few old ones are cleared out. This was also one of the main conclusions in the OECD's Development Aid Committee's so - called “peer review” which was conducted in 2005. There, Sweden was criticized for lack of focus in development assistance both geographically and sectorally.
2. Sida, the authority responsible for the implementation of the bilateral part of the assistance, was clearly difficult to manage. There was a chronic mistrust between the Ministry of Foreign Affairs and Sida, where Sida has long been given (and taken) the right to formulate central parts of development aid policy, a task that should lie with the government. The in practice unclear division of responsibilities between the Ministry of Foreign Affairs and Sida was also an area where Sweden had received criticism in the OECD's peer review.
3. The development assistance debate is driven by Swedish special interests. The aid is a prime example of the public choice problem which means that a small group of strongly interested people benefits from a certain policy while the cost is spread over the vast majority, whose interest in the expenditure is limited. It can be expressed as if there is a weak positive preference among Swedish citizens for development assistance - in opinion polls, just over 60 per cent usually say that development assistance is reasonably large or that it should increase. But it is a small group of strongly committed people who have shaped the Swedish development aid debate - active in voluntary organizations and those who are professionally employed in development aid. And unlike in other policy areas, the voices in the debate are not heard from those who are to help development aid. There is a much longer distance between a poor person in Zambia who is dissatisfied with Swedish development assistance and a Swedish politician than there is between a Swede who is dissatisfied with health insurance and the same politician. If nothing else, the Swede has the right to vote in the next Swedish election - unlike the Zambian. However, the demands for results in the form of effective poverty reduction have been sadly absent from the debate.
4. The development aid debate focuses almost exclusively on "inputs", not on outcomes and results. The target of a certain volume of development assistance - a percentage of gross national income (GNI) - has been overwhelming. This volume target is run by most parliamentary parties and voluntary organizations. The demands for results in the form of effective poverty reduction have, however, been sadly absent from the debate. It can be expressed as the good will being its own result.
5. Sweden is an international power in the field of development aid. As one of the world's largest and most influential donors, Sweden has the ability to be a role model and a setter of requirements in terms of the design and focus of international development assistance. Our assessment was that Sweden has not made sufficient use of the opportunities this provides. On the one hand, the lack of strategic focus of development assistance meant that Sweden's priorities and objectives were unclear. On the one hand, there was a historically conditioned reluctance to appear arrogant and demanding in these contexts.
6. Expectations of the moderate Minister for Development Aid were low. Among those involved in development aid, there was a pronounced suspicion of the intentions of the moderate development aid policy. This in itself created an opportunity to exceed expectations and show that clear and reformed development cooperation could contribute to creating credibility for the government's work for peace, security and global development, but also to show a concrete moderate commitment to issues such as world poverty, HIV / AIDS, environment and climate and the position of women in poor countries.
From these observations followed quite naturally a reform agenda with a number of central building blocks. It was important to take a strategic approach to the parts of the development assistance portfolio. This in turn required a screening and purge of the development assistance portfolio. This required stronger control by the government of Swedish development assistance. And it required sharp political communication that would focus not least on the legitimate interests of the broad masses of taxpayers and not just the most aid-minded. The development aid debate needed to have a different content.
The first major area of reform came to be known as land focus. This meant that we went through all the development cooperation programs that Sweden had with poor countries with the aim of limiting and sorting the country portfolio based on established criteria. The analysis was based on four groups of criteria: the needs of the partner country (poverty in different dimensions); the conditions for the efficient use of aid funds (macroeconomic situation, etc.); the conditions for a reasonable development in terms of democracy and respect for human rights; and Swedish added value (can Sweden contribute something that other donors do not have?). Based on this analysis, the country portfolio could be limited to around 30 countries.
Perhaps even more important was that the intention of the Swedish commitment could be clarified through a categorization of countries. In a first category of countries, Sweden engages in "traditional" long-term development cooperation. In a second category, we have a commitment to post-conflict countries with very weak institutions. A third category is countries in Eastern Europe where EU rapprochement can be seen as the most important prerequisite for reducing poverty in the long term. A fourth category is authoritarian states where cooperation does not take place with the country's government but with organizations and actors for change. A fifth category is richer countries where development assistance is to be phased out and transferred to other types of relations. This categorization has given good help to formulate different approaches to development assistance depending on country category, as well as to explain to Swedish citizens what the intention is in each case - Sweden wants and should have completely different approaches in geographically close countries such as Zambia, Zimbabwe and South Africa. .
When the Alliance took office, we could thus state that both Sida and the Ministry of Foreign Affairs both formulated policy and handled administrative matters - contrary to Swedish administrative tradition and with negative consequences for the overall strategic management of development assistance.
Another area where important reforms have been implemented concerns the management of Sida. Swedish authorities are traditionally independent of the government. There must be a difference between political decisions, which are made by the government, and administrative decisions, which are made by the authority. However, ever since it was founded, Sida has taken the right to make what can be described as political decisions - as important policy considerations or decisions with foreign policy consequences where political guidance has not been sought from the government. There has been a culture where Sida has perceived that it has a great deal of autonomy with regard to the formulation of development aid policy. On the other hand, over the years, more and more development aid funds have been retained and processed at the Ministry of Foreign Affairs - perhaps as a result of various ministers' frustration at having so little to say about the direct use of funds. When the Alliance took office, we could thus state that both Sida and the Ministry of Foreign Affairs both formulated policy and handled administrative matters - contrary to Swedish administrative tradition and with negative consequences for the overall strategic management of development assistance.
Changing these conditions has required many small steps: improved control instruments for Sida (instructions, regulatory letters, etc.); transfer of funds management from the Ministry of Foreign Affairs to Sida; changes in Sida's management; a strengthened informal dialogue between the Foreign Ministry's political leadership and Sida's leadership. My belief is that this process is on the right track. But before it can be said for sure that they have given a lasting positive result, the cultural change that needs to be the result must be consolidated.
The result of the assistance
A third area where important reforms have begun concerns the focus on development assistance. It is a shame for development aid policy that results for so many years have come second in the debate. Take a randomly selected debate article on development assistance, written by an development assistance enthusiast: I can almost guarantee that (1) a main requirement will be increased development assistance volumes in kronor and that (2) the requirements for measurable results of this development assistance shine with their absence. And politicians, for the most part, are not much better. When the G7, G20 or any other group wants to show action in connection with a summit, they promise a certain number of billions for food security, climate initiatives, African agriculture or what happens to be relevant for the day. But one never talks about what results it intends to give. Goodwill is its own result.
In order to talk about results in development assistance, it is required that goals have been set for efforts, quantitative or qualitative. It is required that the efforts are followed up, in the short and long term. Lessons need to be learned about how to prioritize between initiatives. It is required that mechanisms for demanding responsibility are in place, both in the partner country and at home. It requires evaluations and audits. It requires public access to information about what efforts are being made, by whom, by what means. This requires that the organizations responsible for development assistance have a culture where the focus is on results, not on quick and easy use of funds.
This is also something that the Swedish government has pursued during the coalition government's years in power. Sida has been instructed to conduct a "cost-effective poverty reduction". An authority, Sadev, has been created with the task of independently evaluating development assistance. Sweden connects in a more explicit way than before its support via multilateral organizations to ensure that they look at the results of development assistance.
The Minister for Development Aid has had a major challenge in turning this debate: from a focus on development aid volumes and good intentions to a focus on results and accountability.
The aid debate
A fourth area for political action concerns the development aid debate. As I have already indicated, it has been overly dominated by individuals and organizations with a strong personal interest in large-scale development assistance. The Minister for Development Aid has had a major challenge in turning this debate around: from a focus on development aid volumes and good intentions to a focus on results and accountability.
In this context, I would like to say a few words about the role of voluntary organizations (or civil society organizations, CSO, as they are currently referred to in Sweden, ie what is usually called NGO internationally). In Sweden, there are a number of such organizations that have put themselves in a position that is difficult for me to understand, where they are very dependent on the state for their funding. A number of CSOs receive framework grants via Sida, a total of approximately SEK 1,5 billion, with the condition that this finances initiatives that the organizations themselves have identified and where the organizations themselves pay 10 percent of the total cost (and the state budget thus accounts for 90 percent). In addition, these organizations carry out assistance on Sida's assignment with 100 percent funding from Sida. This is a total of several billion annually. This means that many organizations are to a very large extent financially financed - to take one example, the Swedish organization Diakonia's operations are over 90 percent financed with state funds. It is difficult to see such an organization as "independent" of the state. They can rather be compared to a consulting business.
Nevertheless, Diakonia has a self-image of being an independent popular movement organization. At the same time, significant resources are being invested in lobbying for a higher development assistance allocation in general, for a higher allocation to CSOs in particular, and for very generous allocations for the CSOs' information in Sweden. They effectively process politicians in most parties as well as the media and relatively often succeed in gaining support for their positions. I do not comment in this context on the quality of Diakonia's efforts. But I think it is hypocrisy when such a clear self-interest ("higher contribution to us") is dressed in terms of solidarity with poor people. Diakonia would have been more credible if at some point in the debate the issue of the outcome of development aid had been pushed.
In any case, the Minister for Development Aid has dared to challenge the debaters from Diakonia and other organizations. It has proven to be successful. Questions about results and risks of corruption have come to light in a completely different way than before, and have helped to make the reforms that have been made possible.
What do the reforms lead to?
This is just a selection of the areas in which aid reforms have taken place. For reasons of space, I have left out such things as humanitarian aid, democracy initiatives, increased cooperation with business and other actors, etc. The overarching question must in any case be: what does it look like in the field? Is aid better? Does it lead to a reduction in poverty to a greater extent than before? Is it worth the money?
The criticism that aid does not create growth is irrelevant - we should not expect development aid to do so. It is to set the demands too high - whether you are a critic or an advocate.
There is a critique of development aid as an idea which deserves to be taken seriously. The arguments are well known: aid keeps unpleasant regimes under control. It breeds corruption. Aid reduces the incentives to strengthen public finances in the partner countries. It distorts labor markets and resource use. Aid benefits above all an international aid elite in the donor countries, in collusion with the elite in the partner countries. There is very weak academic evidence that development aid promotes growth.
I would like to focus on the last of these objections to aid. I believe that the strongest opponents of aid and the strongest advocates of aid have a common starting point: they want to discuss the "transformative" ability of aid. Proponents (like Jeffrey Sachs) say that with enough effort, aid will make the difference between underdevelopment and development. Critics (like Fredrik Segerfeldt) say that we have empirically already been able to state that this does not work.
My own view is that it is giving too much importance to the role of development aid. Aid will never be more than a marginal share of a country's resource mobilization. The criticism that aid does not create growth is irrelevant - we should not expect development aid to do so. It is to set the demands too high - whether you are a critic or an advocate.
William Easterly did in his article "Can the West Save Africa" (Journal of Economic Literature, 2009, 47 (2): 373–447) the important distinction between a “transformative” and a “marginal” approach to development assistance. In his opinion, the transformative approach has proven not to work. On the other hand, he believes that more speaks for a marginal approach, where small steps are taken to help push things in the right direction. An example he cites is health instacts that have helped to sharply reduce mortality in some parts of Africa.
I sympathize with Easterly's marginal view. I believe that the conditions for success in development are owned by each country, their government and population.
The development assistance's ambition should be to contribute to strengthening positive processes where they occur, as well as to counteract a negative development where possible. This also includes a strong awareness of the risks of negative effects posed by aid critics.
The Swedish development aid reforms have moved us closer to a more objective and objective attitude to development aid. It can on the margin can lubricate the wheels in processes that are already in progress. Poverty is declining in many poor countries, aid or not. Goodwill is not its own result. It is also important to know what we do, and why.
The article has previously been published in the Norwegian newspaper Minerva.