Budgets and diversity in development

Picking over the scraps

There was an article in the Financial Times yesterday (Development Aid to Poor Nations Falls) talking about newly published OECD figures on western spending on development. Not surprisingly in these times of austerity, many countries have cut back on their development budgets as a part of overall reductions in public spending plans.

Meanwhile against this trend, the UK is currently moving towards legislation that will oblige governments to maintain a development budget at 0.7% of gross national income (an increase from 0.56% in 2011). However while all of the main parties support this objective, there is not universal agreement that this is the best approach. For example, the House of Lords Economic Affairs Committee (referred to in an earlier post) recently concluded "Whatever its merits when it was adopted in 1970, we do not accept that meeting by 2013 the UN target of spending 0.7% (£12bn) of Gross National Income on aid should now be a plank, let alone the central plank, of British aid policy".

If we accept that making international commitments on development spending is a good idea and that the somewhat arbitrary target of 0.7% of GNI is as good as any other target (quite a lot to accept all in one go, but we have to start from somewhere!), my view is that the central development (rather than political) issue is not so much with the target budget but with the target date.

The political issue is straightforward, can the government convince the UK taxpayer that now is the time to increase spending on overseas development when public expenditure at home is being squeezed; but this is something for politicians to worry about. What I think is a legitimate subject for debate in the development world is whether DFID as the main spender of the budget, can successfully manage such a rapid increase in the budget.

This is where I want to come to the issue of diversity in development. From what I have seen over the years, one of the great strengths of DFID as a donor agency is its willingness to employ different approaches in different places and times. It brings a refreshing intelligence and lack of dogma to its development work, and as a result DFID is widely regarded as a global leader in development thinking. My view is that this is both the product and cause of DFID being institutionally designed to be good at diversity in development. The capacity arises from a combination of DFID being a specialist development ministry and the degree of devolution of authority the centre allows to country offices; these key organisational strengths can be balanced to ensure overall political autonomy as well as local variation, experimentation and learning.

The importance of diversity in development lies in the adaptability it brings to the design of interventions. It allows an evolutionary development of development based on experimentation and critical analysis rather than the adoption of models driven by dogma.

One size fits all?

Anyone who says "DFID thinks..." or "DFID says..." assuming that an individual's pronouncement is the same as the World Bank's "Positions" on various topics has missed an important distinction; DFID has placed itself very much at the diversity end, rather than the dogmatic end, of the spectrum. The beauty of this is that DFID has created an environment in which its a relatively small budget (in absolute terms) can be used intelligently and (hopefully) more effectively. Of course it doesn't always work like that, sometimes large chunks of budget are "captured" for political reasons or by dogmatic or bullying agendas, but the potential for intelligent application of budget by virtue of organisational design is there.

Successfully managing the rapid increase in budget is therefore a question as to whether the new budget can be used as well as (if not better than) the existing budget. Is there spare capacity within DFID (time and space for thinking and designing experiments) to use this new money to enhance the way it delivers development as well as increase the quantity of the development delivered? Can diversity be maintained in the face of pressure to spend more money?

While welcoming anything that means that there are more resources available to apply to poverty reduction work, from the point of view of diversity, I have several concerns about what this rapid increase in budget will or might do to DFID:

1. To head off public criticism (anticipated, real or perceived), DFID will rely more and more on quantified (so-called) "results" when justifying the allocation of an increased budget, meaning that money will go to those that make up the most convincing numbers, rather than those interventions that may be having the most effect;
2. To cope with lack of people to manage interventions (and it is clear that country offices are struggling to manage existing budgets effectively), the plan is that more and more money will be channeled through the  multilateral agencies, meaning the specific characteristics of DFID's approach will be diluted or even lost; and
3. To placate the development community, a disproportionate amount of the increased budget will go to the noisy ones (the campaigning types) rather than those who focus less on attention seeking.

Each of these potential effects of a rapidly increased budget will limit or undermine the diversity of development approaches that DFID has nurtured over the years, which would be a very sad result for DFID and for development in general.