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Africa: Thinking Beyond Acronyms
AfricaFocus Bulletin
Sep 16, 2010 (100916)
(Reposted from sources cited below)
Editor's Note
"Even if globally the poverty rate is reduced by half by 2015, as
the latest United Nations progress report on the MDGs [Millennium
Development Goals] suggests, about one billion people will still be
mired in extreme poverty by 2015. ... The report argues that
current approaches to poverty often ignore its root causes, and
consequently do not follow through the causal sequence. Rather,
they focus on measuring things that people lack to the detriment of
understanding why they lack them." - UNRISD Report on Combating
Poverty and Inequality, September 2010
As world leaders gather for the Summit on Millennium Development
Goals on September 20, the reports and the speeches will be largely
predictable: some real progress made, but the effort will fall
short unless, unexpectedly, more rich countries meet previous
commitments and all governments step up their efforts.
Among the few reports to probe systematically beyond acronyms such
as "MDGs" is the latest report from the UN Research Institute for
Social Development (UNRISD), which was initiated by its previous
director Thandika Mkandawire and included key researcher Yusuf
Bangura. The authors do not deny some of the macroeconomic policy
needs embodied in the World Bank's PRSPs, or the goal-setting of
the UN's MDGs and of programs in specific sectors. But they argue
that these approaches are doomed to fail by addressing poverty as
a "residual category" rather than pursuing structural
transformations, including job creation, universal rights to social
services, and countering inequality as well as poverty.
This AfricaFocus Bulletin contains excerpts from the preface and
the executive summary of the report. The full report is available
on the UNRISD website at http://www.unrisd.org / direct URL:
http://tinyurl.com/3994c27
For previous AfricaFocus Bulletins on economic issues, visit
http://www.africafocus.org/econexp.php
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Correction
Apologies to Joseph Hanlon and to AfricaFocus readers for an error
in the e-mail version of the last AfricaFocus about Mozambique
(http://www.africafocus.org/docs10/moz1009a.php). Because of a
mistake in punctuation in the version on the web the article was
pasted from, "Milton Keynes" was inadvertently transformed from the
location of the Open University to a co-author! Although the error
did not originate with AfricaFocus, I definitely should have caught
it. Sorry!
Royal African Society
This month the Royal African Society (RAS) and AfricaFocus begin a
collaboration, with RAS featuring AfricaFocus in the Highlights
section of the RAS website (http://www.royalafricansociety.org) and
in their regular news updates to members. Thanks much to Richard
Dowden and Magnus Taylor for this initiative.
Facebook
I set up a page for AfricaFocus on Facebook sometime ago, but
hadn't until recently decided what was best to put there, in
addition to links to each AfricaFocus Bulletin as published. But I
often find material of interest that doesn't work as a Bulletin,
for one reason or another, and in any case I limit the number of
Bulletins so as not to overload your in-boxes. Now I've decided to
post some of these on the Facebook page - I will still be selective
in picking items that I think of interest to readers.
So, if you use Facebook, and want to keep up on additional
recommendations for web reading from AfricaFocus, visit
http://www.facebook.com/pages/AfricaFocus/101867576407 and click to
"like" the page. If you see something particularly interesting, you
can help promote AfricaFocus by passing it on further to your
friends.
++++++++++++++++++++++end editor's note++++++++++++++++++++
Combating Poverty and Inequality: Structural Change, Social Policy
and Politics
United Nations Research Institute for Social Development (UNRISD)
2010
http://www.unrisd.org / direct URL: http://tinyurl.com/3994c27
Preface
Combating Poverty and Inequality is published just as global
leaders meet to review and recommit themselves to a set of goals
for reducing poverty agreed, under vastly different circumstances,
a decade ago. The optimism of the new millennium is now
overshadowed by the effects of multiple, interrelated crises.
Progress in many areas appears threatened and resources are more
constrained.
This volume provides a timely reminder of the strengths and
limitations of various approaches to addressing poverty in the
current context. It is the culmination of an ambitious project,
Poverty Reduction and Policy Regimes, initiated with characteristic
foresight by my predecessor as Director of UNRISD, Thandika
Mkandawire. Responding to a concern that dominant approaches to
poverty reduction, as reflected for example in the PRSPs and MDGs,
had serious shortcomings, the research aimed to reposition the
analysis of poverty and poverty reduction processes within the
broader political economy of development.
A key premise of the report is that poverty cannot be reduced when
both analysis of the problem, and the people affected, are
relegated to the margins of development processes -- targeted with
safety nets or residual policy interventions while economic growth
fails to create jobs, deliver services, or provide other means
through which all individuals can realize their capabilities.
Building on lessons from prior research on social policy by UNRISD,
the report demonstrates that countries which have successfully
reduced poverty, from Europe to East Asia, did so through strategic
state interventions. These included transformative social policies
that aimed not only at protecting the vulnerable, but that also
enhanced productive capacities, provided critical social
investments and performed a redistributive function that
contributed, in turn, to social cohesion and nation building.
...
Sarah Cook, Director of UNRISD, Geneva, July 2010
Overview
The global economic and food crises have called into question the
possibility of achieving the Millennium Development Goals of
halving poverty and hunger by 2015. Before the crises, the number
of poor people, defined in the MDGs as those living on less than
$1.25 a day, had fallen: from 1.8 billion in 1990 to 1.4 billion in
2005. Progress across regions was, however, varied with East Asia
experiencing the sharpest fall - thanks to China's rapid growth -
and sub-Saharan Africa the least. Even if globally the poverty rate
is reduced by half by 2015, as the latest United Nations progress
report on the MDGs suggests, about one billion people will still be
mired in extreme poverty by 2015. Furthermore, according to
estimates of the Food and Agriculture Organization of the United
Nations (FAO), the number of malnourished individuals rose above
the one billion mark in 2009 for the first time.
Income and wealth inequality have also increased in most countries,
as have inequalities based on gender, ethnicity and region. In
developing countries, children in the poorest households and those
in rural areas have a greater chance of being underweight than
children in the richest households or those in cities and towns. In
some of the least developed countries, children in the poorest
households are three times less likely to attend primary school
than those in the richest households. And globally, girls account
for a much higher percentage of those who drop out of school than
boys.
Persistent poverty in some regions, and growing inequalities
worldwide, are stark reminders that economic globalization and
liberalization have not created an environment conducive to
sustainable and equitable social development. Even now, when
poverty reduction is relatively high on the international policy
agenda and governments are launching direct assaults on poverty
through various programmes, poverty and inequality are proving
intractable foes.
This report explores the causes, dynamics and persistence of
poverty; it examines what works and what has gone wrong in
international policy thinking and practice, and lays out a range of
policies and institutional measures that countries can adopt to
alleviate poverty. The report argues that current approaches to
poverty often ignore its root causes, and consequently do not
follow through the causal sequence. Rather, they focus on measuring
things that people lack to the detriment of understanding why they
lack them.
The report analyses poverty reduction as part of long-term
processes of social, economic and political transformation, but
also draws important lessons from the experiences of those
countries that have successfully combined economic development and
active social policy to reduce poverty over relatively short time
periods. It is critical of current approaches to poverty reduction
that treat the poor as a residual category requiring discrete
policies. When a substantial proportion of a country's population
is poor, it makes little sense to detach poverty from the dynamics
of development. For countries that have been successful in
increasing the well-being of the majority of their populations,
long-term processes of structural transformation, not poverty
reduction per se, were central to public policy objectives.
The report also examines the complex ways that poverty alleviation
outcomes are shaped by the interconnection of ideas, institutions,
policies and practices in a triad of economic development, social
policy and politics. It advocates a pattern of growth and
structural change that can generate and sustain jobs that are
adequately remunerated and accessible to all - regardless of income
or class status, gender, ethnicity or location. It calls for
comprehensive social policies that are grounded in universal rights
and that support structural change, social cohesion and democratic
politics. And it makes the case for civic rights, activism and
political arrangements that ensure that states are responsive to
the needs of citizens and that the poor have influence in how
policies are shaped.
Such an approach contrasts with contemporary efforts to reduce
poverty through discrete social policies that are often weakly
related to a country's system of production or macroeconomic
policies. This has been the case with three of the dominant
approaches to poverty reduction in the past decade, including the
IMF- and World Bank-led Poverty Reduction Strategy Papers (PRSPs),
the introduction in many countries of targeted poverty reduction
and social protection programmes, and the UN-led Millennium
Development Goals (MDGs) (see box O.1).
In the five years that remain of the MDG process, it is important
that the world community continue to concentrate on meeting the
agreed-upon targets, drawing lessons from recent experience about
the most effective mechanisms for doing so. It is equally important
to begin an inquiry into how to sustain progress towards equitable
development and poverty reduction in a post-MDG world. This report
aims to contribute to this endeavour.
+++++++++++++++++++++++++++++++++++++++++++++
BOX O.1: Contemporary approaches to poverty reduction
Poverty Reduction Strategy Papers
Poverty Reduction Strategy Papers lay out the economic and social
policies that governments in low-income countries should pursue to
achieve growth and reduce poverty. The PRSPs share a strong lineage
with the structural adjustment policies of the 1980s, which sought
to correct the macroeconomic imbalances of crisis-affected
countries. The deflationary and social consequences of these
policies galvanized the international community, in 1996, to launch
the Heavily Indebted Poor Countries (HIPC) initiative, which
focuses on reducing countries' debts while helping to spur growth
and reduce poverty. Through this process, the PRSPs emerged as a
framework aimed at ensuring that resources freed up by debt relief
would be used for poverty reduction. The IMF's Poverty Reduction
and Growth Facility (PRGF), established in 1999, subsequently
became the key instrument for providing loans. The PRGF was
expected to support the PRSP goals of growth, poverty reduction and
country ownership. In practice, however, it has remained narrowly
focused on achieving fiscal stability. Rather than being designed
to support PRSPs, therefore, it often pre-determines the
macroeconomic frameworks and low inflation targets of the PRSPs.
The resulting fiscal frameworks tend to be pro-poor in the sense
that aid policy has been reoriented towards basic services.
However, they have failed to be pro-growth, especially in terms of
infrastructure investment and support for other growth-related
activities that will expand capacity in agriculture and industry.
Programmes that target the poor
In the 1980s, fiscal constraints, as well as criticism of the
capture of resources by elites, forced many governments in
developing countries to shift priorities, placing less emphasis on
the goal of universal social protection and more emphasis on
targeting the poor. Social programmes were often cut back to
residual interventions to cushion the worst effects of adjustment
measures, while narrowly targeted mechanisms gained popularity on
efficiency grounds. Since then social spending on health and
education has often increased but targeted approaches have
remained. While there are many positive examples of initiatives
that have reduced poverty, sustained consumption and encouraged
labour market participation, there are also shortcomings associated
with this approach. Identifying and reaching those most in need
requires a degree of state administrative capacity that is often
not present in low-income countries, or that has been undermined in
recent decades as a result of structural adjustment policies and
public sector retrenchment. Where poverty is widespread, targeting
is unlikely to make significant inroads. Moreover, targeted
programmes that are not linked to a broader strategy aimed at
ensuring that all citizens have access to basic services and income
or consumption guarantees may exacerbate exclusion, resulting in
lower quality services for the poor. Targeting also mitigates
against the building of links among classes, groups and generations
that enhance social solidarity.
Millennium Development Goals
The MDGs are a clear demonstration that world leaders can come
together to address the major challenges of our time - not only war
and financial crisis, but also poverty. The MDGs acknowledge the
multidimensional nature of poverty, going beyond simplistic
measures of income to identify other elements that define the
experience of being poor. Leaving aside the improbability that
people in some parts of the world could even survive on $1.25 a day
- the current definition of extreme poverty - such income metrics
fail to account for the vulnerabilities and indignities that plague
the lives of many people in poor countries. Such concerns are refl
ected in the inclusion in the MDGs of other targets, such as
alleviating hunger, promoting universal primary education, reducing
maternal and child mortality, advancing gender equality and easing
the burden of major diseases. Despite an ambitious agenda, the MDGs
nonetheless represent a cautious approach to social development. A
number of critical issues and obstacles to overcoming poverty have
not been addressed, including the mechanisms required to achieve
the goals individually, or the synergies among them; the role of
employment; growing levels of inequality; the often contradictory
impact of certain macroeconomic policies; and the political and
social relations that structure power and exclusion.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++
Seven Arguments towards the Reduction of Poverty and Inequality
Poverty reduction requires growth and structural change that
generate productive employment
A fundamental precondition for poverty reduction is a pattern of
growth and structural change that generates productive employment,
improves earnings and contributes to the general welfare of the
population. ...
Three issues undermine efforts to adopt growth strategies that are
employment centred. First, increased globalization has weakened the
organic links between agriculture and industry. In many countries
today, the urban population is largely fed by importing food rather
than by supporting domestic agriculture; many countries also import
most of their manufactured goods rather than expanding domestic
production. In least developed countries with high levels of
poverty, both agriculture and industry have stagnated because of
this trend. Second, technological change and sources of
productivity growth are increasingly determined by foreign firms,
reducing the demand for labour. The third issue relates to the
continued hold of neoliberal ideas on macroeconomic policies, which
emphasize fiscal restraint, privatization and liberalization.
Within this framework, employment is seen as a by-product of growth
that does not require direct policies. Even the macroeconomic
frameworks of the PRSPs, which are supposed to help low-income
countries generate growth and reduce poverty, are constrained by
standard structural adjustment programmes that have been strongly
criticized as deflationary.
Governments can achieve employment-centred structural change by
pursuing deliberate policies in a number of areas. These include:
- instituting selective and well-managed industrial and
agricultural policies that connect the agricultural sector more
productively to industry and other sectors of the economy;
- stimulating and maintaining an adequate level of labour demand by
expanding domestic production and raising the demand for domestic
goods and services;
- investing in infrastructure as well as education, training and
research to improve skills, productivity and the mobility of the
population; and
- adopting a macroeconomic framework that avoids procyclical
policies or restrictive monetary and fiscal policies during periods
of slow growth. In addition, the international community can
- provide support to the least developed countries by reducing
vulnerability to commodity price and interest rate shocks, phasing
out agricultural subsidies in rich countries and granting more
access to rich country markets. Comprehensive social policies are
essential for successful poverty reduction
Even when employment levels are high, social policies play an
essential role in enabling people to extricate themselves from
poverty. A number of welfare policies are feasible and affordable
for countries at fairly low levels of income. In fact, evidence
from across the world, including high-income countries, suggests
that poverty levels are drastically reduced after social transfers
have been implemented, with the most significant reductions
occurring in countries with comprehensive social policies that aim
at universal coverage.
Although the MDGs are fundamentally about the promotion of social
development, they do not provide a social policy framework for
achieving the targets and exploiting the synergies among them. In
efforts to meet the MDG targets, many countries, sometimes with the
support of donors, have introduced targeted social assistance
programmes. In countries where such programmes are well funded and
stable, and reach large numbers of people, the results have been
positive. However, where poverty and deprivation are widespread,
targeting is unlikely to make significant and sustained inroads
into poverty, may fail to build support among middle-income groups
that are needed for funding and providing good quality services,
and may condemn the poor to inadequate services.
An effective social policy framework for rapid and sustained
poverty reduction must be grounded in universal rights. It should
aim to:
- reinforce the redistributive effects of economic policy;
- protect people from income loss and costs associated with
unemployment, pregnancy, sickness, chronic illness or disability,
and old age;
- enhance the productive capacities of individuals, groups and
communities; and
- reduce the burden of the growth and reproduction of society,
including care-related work, which is unfairly borne by women.
...
The PRSPs and MDGs are concerned primarily with absolute levels of
poverty; neither directly addresses the issue of inequality. In
contexts of high inequality, growth is often concentrated among
sectors that benefit the elite; the poor, on the other hand, are
likely to be excluded from market opportunities or to lack the
resources to benefit from growth. High levels of inequality make it
harder to reduce poverty even when economies are growing, while the
evidence also reveals that poor countries are generally more
unequal than rich ones. Poverty and inequality must thus be
considered as interconnected parts of the same problem. ... These
inequalities are often interlocking and dysfunctional for
development for a number of reasons.
First, they make it harder to incorporate the poor and
disadvantaged in the growth process; inequalities constrain their
productive capacity and their potential contribution to
development. Second, in highly unequal societies, the poor are more
likely to be locked into a subsistence economy. This may limit the
size of the domestic market and thus retard the potential for
sustained growth. Third, high levels of interlocking inequalities
may undermine the realization of civil, political and social
rights; they may raise the level of crime and plunge societies into
conflict. Fourth, high levels of inequality may create institutions
that maintain the political, economic and social privileges of the
elite and lock the poor into poverty traps from which it is
difficult to escape.
Countries can adopt a number of redistributive policies to tackle
the multiple dimensions of inequality. These include:
- providing the poor (differentiated by gender, ethnicity and other
relevant characteristics) with greater access to productive assets,
such as land;
- investing in social infrastructure to reduce the drudgery of
domestic work;
- pursuing affirmative action policies for disadvantaged groups
within a framework that incorporates all citizens in national
development and welfare provision;
- stimulating investment in rural infrastructure, creating public
works programmes and increasing access to credit;
- pursuing fiscal reforms that improve tax administration, prevent
tax evasion, and limit opposition to progressive taxation and
redistribution; and
- creating a stable global economic environment that responds to
the needs of low-income countries. Poverty reduction requires
effective state action
Poverty reduction requires effective state action
Sustained progress in combating poverty requires effective states
that are both developmental and redistributive. Countries that have
successfully reduced poverty in relatively short periods of time
had purposeful, growth-oriented and welfare-enhancing political
systems; they also built and maintained competent bureaucracies.
...
Building state capacity requires a focus on three crucial
dimensions:
- the crafting of political coalitions needed to set and carry out
policy;
- mobilizing resources with which to implement development
objectives; and
- allocating resources to productive and welfare-enhancing sectors
and enforcing rules governing their use.
...
Current approaches to state-building have focused largely on
market-enhancing reforms of good governance, managerialism and
decentralization. Aspects of these reforms are desirable goals for
all countries, but they do not necessarily generate and sustain
growth or produce socially equitable outcomes.
Politics matters for poverty reduction
The protection of civic rights, active and organized citizens, and
political parties that effectively engage the poor and other
disadvantaged groups are all important for sustained progress
towards poverty reduction. Most low-income countries have relied on
the participatory frameworks of PRSPs to involve citizens in
designing and implementing anti-poverty strategies. However, the
consultative process adopted has generally failed to give citizen
groups the power to effect real change or to get policy makers to
deliver on agreed-upon goals. Many such groups typically feel that
real decisions on important policies lie elsewhere. ...
Lessons from successful democracies suggest that effective
strategies to combat poverty require that:
- rights be institutionalized to allow citizens to organize and
contest public policies as autonomous actors;
- political parties are embedded within broad social coalitions
that include the active participation of the poor, women and other
disadvantaged groups;
- bargaining regimes or social pacts are constructed that give
groups voice and influence in holding corporations and states to
account and in shaping development policies and outcomes; and
- the democratic regime is sufficiently competitive to create
uncertainties in electoral outcomes, allow for periodic changes in
power and prevent ruling parties from becoming complacent.
Different countries have pursued divergent paths to achieve
development. Most countries that have been successful in exploiting
the benefits of globalization have adopted heterodox policies that
reflected their national conditions, rather than fully embracing
market-conforming prescriptions. ...
The global economic crisis has given added impetus to the calls
from developing countries for greater policy space. This is a
potentially important development, but it should not be reduced to
issues such as less donor conditionality or the possibility of
developing country governments adopting countercyclical policies.
Policy space also means that countries and peoples should have the
option to adopt different models of development in which issues of
employment-centred growth and structural change, transformative
social policy, and democratic politics that elevate the interests
of the poor in policy making, figure prominently.
...
AfricaFocus Bulletin is an independent electronic publication
providing reposted commentary and analysis on African issues, with
a particular focus on U.S. and international policies. AfricaFocus
Bulletin is edited by William Minter.
AfricaFocus Bulletin can be reached at africafocus@igc.org. Please
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