Work? Tony Addison Overview Does development aid work? How do we - PowerPoint PPT Presentation

Does Development Aid Work? Tony Addison

Overview • Does development aid work? • How do we answer that question? • Multiple goals for aid + country variety • Delivery of aid is complex – many actors • Aid is just one element of development • Community action, private sector investment, state- building & delivery • Nobody can speak with authority on every facet of aid • Do bridges work?

Does Development Aid Work? • Bridges work – if well-designed & built • Aid works – if well-designed & implemented • ReCom – Research & Communication in Foreign Aid • Large network: 300+ people from 60 countries (since no single person knows everything about aid) • & you won’t find out by just sitting in Helsinki or DC (so we used UNU- WIDER’s base in Africa, Vietnam etc.). • Four key questions: – What works? – What could work? – What is scalable? – What is transferrable?

ReCom web-site: http://recom.wider.unu.edu/

Aid & Social Development Health Care, Education, Water & Sanitation, Social Protection

Net Official Development Assistance (disbursements in constant prices 2010) 160 140 120 In 1960, 36.4 billion 100 USD of aid allocated. Billion USD By 2011 aid flows 80 had multiplied by four , to amount 146 60 billion USD 40 20 0 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Total ODA Bilateral Multilateral

Social Sectors, at the heart of development cooperation 45% Social Sectors 40% 35% Economic 30% Infrastructure 25% Production Sectors 20% 15% Environment, 10% Gender, Rural-Urban Development 5% 0% 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011

Aid to Social Sectors Aid to Social Sectors Aid to Social Sectors as % of (billion USD constant 2010) total aid flows 30 20 25 15 Education Education 20 Health 15 Health 10 10 Water and Water and Sanitation 5 Sanitation 5 0 0 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007 2011 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007 2011

Aid is effective in social development • Many innovative & successful outcomes • UNU-WIDER ReCom research shows that: an annual inflow of aid equivalent to 5% of GDP: • - augments schooling by 1.4 years per child • - boosts life expectancy at birth by 4 years • - reduces infant mortality by 20 per 1000 births • - reduces poverty when growth is inclusive (e.g. smallholder agriculture) & by helping build social protection

Falling under-five mortality rates Deaths of children age <5 per 1,000 live births 200 180 Sub-Saharan Africa 160 140 Southern Asia 120 100 80 South-Eastern Asia 60 40 LAC 20 0 1990 2010

2.6-3.0 million fewer under 5 child deaths annually Reduction in global U5MR by disease, 2000 to 2010 Deaths per 1,000 births 73 3 >30% decline from 2000 to 2010 20-30% decline from 2000 to 2010 ~50% of the reduction 3 <20% decline from 2000 to 2010 comes from pneumonia, diarrhea, and measles 3 2 1 1 1 1 1 1 1 0 0 0 0 0 57 Measles 2000 Pneumonia Diarrhoea Preterm birth complications Intrapartum related events Other conditions AIDS Meningitis Neonatal Tetanus Malaria Neonatal Pneumonia Other conditions neonatal Neonatal sepsis/ meningitis Neonatal diarrhea Congenital abnormalities injury 2010 SOURCE: CHERG 2012, Lancet 2012 13

Significant increase in primary school enrolments (%) 1990 2010 Boys Girls Boys Girls Developing world 84 75 91 89 Sub-Saharan Africa 57 50 78 74 Latin America 88 84 96 95 Southern Asia 83 66 94 91 Western Asia 87 79 94 89

Social Development is Far from Done • Persistent poverty – By 2015, about 1 billion people will still live in extreme poverty – Many are chronically poor – they live in poverty through their lives, & their children live in poverty too • Not only access, but access to good quality social services remains a challenge – Functionally illiterate and innumerate children completing primary education – Under-nutrition is still the single biggest cause of the global burden of disease – 2.5 billion people still lack access to sanitation – Progress in child maternal health care is too slow • Persistent social inequality within countries – and often rising – & socially destabilizing – ‘fragility’

Aid & Economic Development

Sustainable Economic Growth • Rising GDP per capita – increases the government revenue – providing more public spending for social development • Aid helps by building better budgetary & taxation systems (state institution-building) • Economic growth delivers more employment – BUT need ‘good’ well -paid jobs • Growth reduces poverty – especially agricultural growth focused on small-holders & women • Aid helps attract private capital & investment

UN High-Level Panel report on the post- 2015 development agenda • Calls for: • “..A quantum leap forward in economic opportunities and a profound economic transformation to end extreme poverty and improve livelihoods…” • How could aid best feed into this endeavour?

Aid Helps Achieve Growth • Like bridges, aid for growth has to be well-designed • Impact is cumulative – sending a child to school today, but the economic benefit comes later • Over the long run, aid tends to add an additional 1 percentage point to the annual per capita growth rate • Reconstruction from conflict – Mozambique • Need INCLUSIVE growth + build the environmental sustainability of growth • INFRASTRUCTURE is critical to livelihoods (also for climate change adaption)

Challenges & Dilemmas for Aid

Through growth countries graduate from aid Regions 1960s 1970s 1980s 1990s 2000s East Asia 0.52 0.31 0.19 0.14 0.08 0.72 0.37 0.42 0.36 0.25 Latin America MENA 2.91 2.31 1.34 1.30 0.80 South Asia 2.71 1.90 1.65 1.29 0.82 sub-Saharan Africa 2.57 2.37 4.11 5.60 4.91 Low Income na 4.44 7.32 9.11 9.11 Lower Middle 2.55 2.37 1.88 2.09 1.47 Income Middle Income 1.05 0.77 0.70 0.73 0.46 Upper Middle 0.46 0.24 0.27 0.29 0.15 Income Aid as % of GNI

Poverty is falling, but a billion remain in poverty • Since 1990: people living on % of people living on less than $1.25 USD (2005 PPP) less than $1.25 has fallen in every region, including sub- Caucasus and Central Asia Saharan Africa: Oceania In 1990  46% (or  2 billion – people) were extremely Western Asia poor South-Eastern Asia – Estimates predict that that 2008 the MDG target of cutting Southern Asia excluding India extreme poverty by half will 1990 Southern Asia be achieved by 2015 – Number of countries Eastern Asia (China only) categorized as low income Latin America and the Caribbean has fallen from 63 in 2000 to 36 today Sub-Saharan Africa Still:  1 billion people – Northern Africa (  14%) remain in extreme poverty Developing Regions 0 10 20 30 40 50 60 70

More countries are moving from low- income to middle- income status BUT …. • Climate change could overwhelm development, reducing the effectiveness of development aid, & raising the need for humanitarian aid • Aid in ‘fragile countries’ can only do so much – reinforce with peacekeeping & action on global public ‘bads’ • Aid is still ‘transactions heavy’ – too many small projects, need impact at SCALE • Gender equality: plenty of rhetoric, not enough action at SCALE – especially women’s livelihoods • Huge challenges remain: exploitation & injustice, incomplete democratization, global governance

So, we need to build better bridges..

www.wider.unu.edu Helsinki, Finland