What is Social and Solidarity Economy and why does it matter?

UNRISD Deputy Director Peter Utting introduces the theme of his organization’s big conference in May

Having had my professional and political interests shaped during the somewhat heady days of the 1980s in Sandinista Nicaragua, I’ve long been interested in the potential and limits of collective action—of people organizing and mobilizing through associations, unions, cooperatives, community organizations, fairtrade networks and so on. The Sandinista “revolution” soon gave way to the “neoliberal” 1990s. As in much of the world, collective action went on the backburner or assumed new forms via NGO networks and identity politics. Fast forward two decades and we are witnessing a significant rebound in collective action associated with workers, producers and consumers. Whether in response to global crises (finance and food), the structural conditions of precarious employment or new opportunities for cultural expression and social interaction afforded by the internet age, old and new forms are on the rise.

The term social and solidarity economy (SSE) is increasingly being used to refer to a broad range of organizations that are distinguished from conventional for-profit enterprise, entrepreneurship and informal economy by two core features. First, they have explicit economic AND social (and often environmental) objectives. Second, they involve varying forms of co-operative, associative and solidarity relations.  They include, for example, cooperatives, mutual associations, NGOs engaged in income generating activities, women’s self-help groups, community forestry and other organizations, associations of informal sector workers, social enterprise and fair trade organizations and networks.

In addition to diversification, we see signs of upscaling. SSE appears to be moving beyond its niche, peripheral, project or community-level status, and becoming more significant in terms of macro-economic, commercial and social-economic indicators, as charted in a 2011 ILO report:

• In the UK some 62,000 social enterprises contribute £24 billion ($37.1billion) to the economy and employ 800,000 people.
• In Europe; 2 million SSE organizations represent about 10% of all companies.
• In India, over 30 million people (mainly women) are organized in over 2.2 million self-help groups; and the country’s largest food marketing corporation, the cooperative organization Amul, has 3.1 million producer members and an annual revenue of $2.5 billion.
• In Nepal, 5 million forest users are organized in the country’s largest civil society organization.
• The global fairtrade market has grown to €4.9 billion ($6.4 billion) and involves some 1.2 million workers and farmers producing certified products.
• Mutual benefit societies provide health and social protection services to 170 million people worldwide.

Beyond the statistics, why the growing interest in SSE? Theory and anecdotal evidence tell us that such an approach can be a key mechanism through which poor or disempowered people in society gain greater control over resources and decision-making processes that affect their lives. Economists and political scientists have long espoused the benefits that can derive from co-operation or group behaviour in terms of addressing market failures and making demands on more powerful entities. Sociologists have emphasized other virtues related to social cohesion, identity and job satisfaction.

But the contemporary interest in SSE also relates to the fact that we are living in an era that seems to be crying out for new models of development. Not only have we to deal with multiple and recurring crises (finance, food and energy), but there is growing recognition that today’s normative agenda has to be much more encompassing. Some may hark back to the glorious days of post WWII “embedded liberalism”, of welfare states protecting citizens and corporations upholding some principles and practices of “decent work”. But for all its benefits and ongoing pertinence, this model ignored some key issues related to gender equality and environmental pollution, and is struggling to reproduce itself in contexts of economic liberalization and informalization of labour markets.

The discussions and debates taking place in the build-up to 2015—the date that has been set for a new or revised set of Millennium Development Goals (MDGs) and Sustainable Development Goals (SDGs)—signal that the old development formula of economic growth plus social protection is no longer sufficient. Other aspects, associated with the realization of rights, empowerment, equality, women’s care burden, and transformations in production and consumption patterns, need to be factored in. The theoretical attraction of social and solidarity economy lies precisely in the ways it lends itself to addressing these multiple dimensions of development. It simultaneously fosters economic dynamism, social and environmental protection and socio-political empowerment.

But achieving in practice what is promised on paper is another ballgame. SSE’s recent revival has been, organic, a largely grassroots phenomenon.  And therein lies the rub—in two respects. First, collective action needs to connect at multiple scales via networks, movements and alliances. If the SSE is to be sustained, enabled and scaled-up on terms compatible with its values and objectives, action cannot remain local; it must cohere at other levels (municipal, provincial, national, regional and global) where governance, advocacy and politics play out. Second, in order to expand and really move beyond the fringe, the SSE must interact far more with states, for-profit enterprise and global value chains. Such interactions inevitably generate tensions and dilemmas given differences in development priorities and approaches, as well as differentials in bargaining power.

For a graphic illustration of these tensions, look no further than fair-trade. In 2011 there was a major split in the international fair trade movement asthe US labeling organization (then known as Transfair USA) left the international federation, FLO (since renamed Fairtrade International).

Closer integration with powerful market actors underpinned the split. Fair-trade had expanded significantly over the years but quite different approaches were being promoted. The US organization leaned towards engagement with corporations like Starbucks and was keen to source from large commercial tea and other plantations, something not possible under FLO rules. Such relationships with big business had implications for the price that buyers were prepared to pay to small farmers and the quality of sustainability standards. Meanwhile, various labeling organizations and producer groups that were key stakeholders in FLO wanted to stick to the original principles and practices of fair trade, based on smallholder empowerment and agro-ecology.

What immediate policy implications stem from this reflection? Governments and international organizations clearly need to be paying far more attention to the SSE, and question how its developmental and emancipatory potential can be realized. And they should also be asking themselves whether current priorities or biases in policy approach in the field of development are not missing, or indeed undermining, what could be a major new game in town. These include the tendency to focus on

i) individuals or entrepreneurship, rather than groups,

ii) economic, rather than political, empowerment;

iii) idealize the integration of small producers and communities in global value chains; and

iv) social (and environmental) protection, rather than equality and emancipation.

It is these and other issues we’ll be debating at UNRISD’s conference on Potential and Limits of Social and Solidarity Economy from 6-8 May at the ILO in Geneva.  Please join us!

Peter Utting is writing in his personal capacity.

Incantations, inclusive growth and the illusory ‘we’: whatever happened to politics in the post-2015 process?

French development guru Pierre Jacquet laments some of the gaps in current debates on the ‘post-2015’ successor to the MDGs

It is altogether amazing how wishful and incantatory discussions on global issues have become. We seem to be content with passionate statements about what “we should”, “we need”, “we must” consider and do. “Inclusive growth” may well have become the new global development objective to worship, and it is hard to disagree with all the statements that go with it and sometimes resemble a laundry list of great things to do. Have we reached a sort of “end-of-History” development approach in which we believe that everyone agrees on some final objectives and we collectively know how to get there? Or is it, rather, that we try to exorcize our impotence and helplessness, while buying ourselves a conscience?

To avoid any misunderstanding, let me stress my full support to all the objectives that “we” should achieve! However, I find this display of self-indulgent and well-intended thinking almost totally irrelevant. My objections are twofold.

First, who is this “we”, as in “we should” or “we need”? Presumably, there are several such “we”s, and “they” might not all agree. Or “they” might have other priorities. For example, I believe that gender equality is a crucial aspect of inclusive growth and an objective very much worth pursuing, for ethical, social, economic as well as cultural and other reasons. Yet, seminar participants saying for example “we should promote gender equality” are generally not the main or unique actors. It thus amounts to talking at length about what others should do, which may seem a pointless incantation (I’ll qualify this below, though).

Second, these objectives seem so obvious and (ethically at least) incontestable – and they are so repeatedly discussed and endorsed – that the real question is not whether “we” should pursue them, but why they have not yet been achieved!

Motherhood, apple pie, and post-2015?

Answering that question is much more difficult. It is tempting to explore the idea that we did not know enough to be able to do the right thing, and so we turn to diverse sophisticated studies to get knowledge and inspiration on how to do things better. This is the altogether well-established technocratic approach to life. I do not want to dismiss it too easily, nor to underestimate its merits in providing useful evidence-based guidance from serious evaluations. But it comes as a complement to something at least as fundamental, which belongs to the realm of the political economy: there are power issues and relations out there; there are scores of individuals with interests, and the collusion of these interests shapes individual and collective actions. If all these objectives we discuss at such length have not been met, it is likely to be because they were not seen as a priority by most of the relevant actors, notwithstanding any lip service to the contrary.

Hence, my own recommendation would be that global seminars (and the post-2015 process) focus more on the process of political and social change rather than on desired outcomes. Influencing the process is indeed possible, and brings me to qualify my earlier critique: mobilizing agreement around objectives helps attract attention, both global and local, and may change the political environment. However, instead of brooding over broad objectives and principles, one effective way to focus attention is to provide facts and data and report on experiences, in order to shape a better evidence-based diagnosis and precisely define the space for action.

What is measured and reported cannot be ignored, so that describing and measuring are powerful instruments of political influence. For example, facts and data on income distribution are bound to feed a discussion on whether the current situation is compatible with an acceptable vision of social justice; facts and data on the quality of public service delivery, a crucial element of social inclusion, will lead to questions about how to organize that delivery in more effective ways and how to reach out to people who may be excluded. Instead of trying to define social inclusion through a laundry list of objectives, a better way to push the agenda is to document various aspects of social exclusion and their costs.

But the final judgment about whether the situation is acceptable or not is bound to be specific to local politics. A major point, here, is that it would be naïve to believe that there is a spontaneous demand from policy makers and politicians for academic knowledge and evidence to formulate policies. Unfortunately, the connection between knowledge and policies is not a simple, linear process. It is rather chaotic and political as well. The interest of policy-makers in what good research can bring needs to be built through a sense of urgency that will re-shape local priorities and demand action. This is why good facts and data are so crucial in the process.

Finally, “we” need “them”, I mean the people described by our statements. Diagnoses and recommendations need to be owned locally, rather than formulated by outside, foreign observers, however well intentioned. For example, the debate on social protection in developing countries is often cast in terms of resources: do they have resources to develop an effective system, can development assistance help with additional resources, etc. But since no amount of resources will allow governments to do everything that might be useful, the central question is how the allocation of scarce resources is decided, which points to the establishment of local priorities.

The political process is bound to be run by local actors. Data collection and fact finding and their use in the local debates will also be more credible and convincing if local actors are fully involved: the role of NGOs is emphasized and known; empowering local academics and researchers is also crucial.

“We” as actors can help by building their capacity. My own organization, the Global Development Network (GDN) was created to promote research capacity building in economics and social sciences, both for the sake of increasing the stock of relevant knowledge, but also to enhance the quality and density of the local debate on development policies. Research gives access to debate and ownership. My central message, here, is that “we should” (I’m not immune…) focus on what we can do, and let (and help) “them” decide for their own good. Yet, beyond my own ranting, I believe that pressure from the international debate, including the worshiping of global objectives and the adoption of good principles and guidelines, can help. What is missing is a more conscious and deliberate attempt at promoting empowerment and ownership, through a better understanding that the governance of globalization “needs to” be better anchored in local and regional politics.

Pierre Jacquet is President of the Global Development Network, and a former Chief Economist and Director of Strategy at the French Development Agency (AFD)

Make Inequality History? What would change if we focussed on inequality rather than poverty?

Last week I spoke at a Brussels conference on inequality, organized by the Belgian NGO coalition 11.11.11. Inequality is flavour of the month right now, showing surprising staying power within the post-2015 process and elsewhere. Inequality gabfests usually involve violent agreement that inequality is indeed a Bad Thing, lots of evidence for why this is the case, and polite disagreements on what inequality we should target first – often along the lines of ‘because inequality is really important, we should all work on X’, where X just happens to be the thing that person works on anyway. A more retro variant involves ritual combat between supporters of equality of opportunity (aka American Dream) v equality of outcome (Socialist Paradise). Cynical, moi?

But in Brussels, I had a more difficult, but interesting job: what, if anything, should we do differently if our focus is on inequality rather than, say ‘getting to zero’ on poverty? So let’s imagine. It’s 2015, the UN has signed off on a shift in focus from poverty (MDGs) to inequality (post-2015). True, the commitment is a little vague (hey, this is the UN we’re talking about), but now NGOs and official donors are charged with the task of turning this into a viable campaign and lobbying exercise. What might a Make Inequality History campaign look like?

Firstly, as poverty reduction starts hitting the hard core of chronic poverty, both poverty and inequality campaigning will have to look more at targeting excluded groups (disabled, mental health, elderly, ethnic minorities.) For some people, the debate stops right there.

But compared to poverty, there could be a number of additional and pretty fundamental conceptual shifts

• Inequality is all about relationships (a single individual can’t be unequal!), meaning a greater emphasis on power and politics within/between countries
• Inequality is a universal challenge – within countries, it involves everyone; internationally it obliterates North-South distinctions
• That in turn means ‘whole of society’ interventions become more important: aid agencies would do more on norms (do children have rights?); prejudice and discrimination (eg against women, indigenous, disabled); disabling environments (eg violence; market failures that exclude poor people);
• Inequality is structural – what kind of economy do we have/want? What’s balance between disequalizing sectors (finance, extractives, capital intensive agriculture) and equalizing sectors (smallscale ag, labour intensive manufacturing, smallscale retail)

In terms of specific themes:

• Taxation is the standout issue. A focus on the distributive imapct of how governments raise reveneue would be a necessary complement to the traditional focus on how they spend it. At the moment, there’s real potential for reforming the global system of tax evasion. But at national level, many tax systems are going in a regressive rather than progressive direction.
• More focus on ratchet mechanisms that drive up inequality – eg hyperinflation or shocks when the rich typically have more access to smoothing mechanisms (credit, social protection)
• Would there be a focus on ceilings as well as floors, eg on land ownership (South Korea) or Oxfam’s recent cheeky proposal for an end to ‘extreme wealth’?

time to change the title (and maybe lose the mullet)?

The shift to a more overtly political and relational approach to development might be welcome by campaigners (if not by their fundraisers), but it won’t be easy. INGOs and (even more) official donors would have to learn to strike a fine balance between becoming more explicitly engaged on issues of power, politics and redistribution, and being thrown out for meddling in internal politics. There are ways to do this:

• Work with and through local partner organizations and curb any messianic tendencies in our own staff
• Focus on the ‘enabling environment for redistribution’ (promoting norms and values for social cohesion, rule of law, governance, access to information, freedom of expression), rather than specific redistributive campaigns that might prompt a greater backlash
• Build the state’s capacity to redistribute (eg domestic resource mobilization): this includes supply (training, technical assistance), demand (eg citizens watchdogs) or a mixture of both
• Develop skills in ‘convening and brokering’, ensuring the voices of poor people and their organizations are at the table by bringing together dissimilar players to build trust and find collective solutions

• Compared to specific campaigns, society-wide interventions are a lot harder to communicate and inspire people about: ‘what do we want? New norms!’
• A shift to a more universalist and political project could seriously damage levels of political and financial support for aid agencies, where it is currently based on a rather unthinking (and disingenuous) ‘aid is about helping people, not politics’ narrative
• Many of these things demand skills more than cash – aid, with its pressure on a small number of aid agency staff to disburse large chunks of funding, may even be counterproductive to the long-term, subtle political engagement required to tackle the structural roots of inequality. This was definitely the trickiest question for those in the room in Brussels – can aid agencies find a way to spend the money, and still free up brain time for the more politically sophisticated, long term, rooted work needed to confront inequality? If not, is the conclusion that more money is a mixed blessing? Or can we divide up our approaches into aid-dependent low income countries (business as usual) and non-aid dependent unequal countries (new inequality lens, needing less money and more knowledge)?
• If engaging in domestic redistributive processes proves just too politically risky and complex for aid agencies with large budgets and limited attention spans. What about a renewed focus on global inequalities – collective action problems such as climate change, tax havens, trade, intellectual property rights, migration? But here the obstacles to change often seem even greater (contrast dynamic national progress with multilateral paralysis on numerous issues).

Conclusions? This is still churning around in my head, but it feels to me like MIH would be right but difficult, banging up against all kinds of institutional constraints including communications, fund-raising and coalition-building. A three tier approach might well emerge:

1. Make Poverty History: ‘Business as usual’ poverty reduction in low income, aid dependent countries
2. Make Inequality History: A more politically engaged MIH in middle income and other fast-growing countries with falling aid dependence
3. Make Externalities History: A global campaign for collective action on climate change, tax havens, intellectual property, arms trade etc

So over to you. With limited resources, and taking into account both the opportunities and the obstacles to success in each, which of the three approaches should aid agencies adopt? And to avoid the ‘both, and’ syndrome, you’re only allowed to vote for one option.

And here is the undoubted highlight of the Brussels show, ‘India’s first youtube star’ Wilbur Sargunaraj with the catchiest song I’ve heard on poverty and redistribution. OK, the only song…..

More Wilbur videos on the Why Poverty? Site – well worth it

Government Spending Watch – a new initiative you really need to know about

I’m consistently astonished by how little we know about the important stuff in development. Take the Millennium Development Goals – the basis forinnumerable aid debates, campaigns, and negotiations. A large chunk of the MDG agenda concerns the size and quality of public spending – on health, education, water, sanitation etc. So obviously, the first thing we need is to know how much governments are spending on these things, right?

Well no actually, because we don’t have those numbers. Until now. Oxfam has teamed up with an influential and well-connected NGO, Development Finance International, which advises developing country governments around the world. Working with a network of government officials, DFI has pulled together and analysed the budgets of 52 low and middle income countries (With another 34 to follow). The result is a new database, called Government Spending Watch, (summary of overall project here) and a report ‘Progress at Risk’, previewed in Washington last Friday in a joint DFI/Oxfam America event to coincide with the IMF and World Bank Spring meetings. The full report won’t be ready ‘til May, but an initial draft exec sum is available, and here’s what it says.

The data cover seven sectors (agriculture/food, education, environment and climate change, gender, health, social protection and water/sanitation), from 2008 to 2015 (including medium-term forecasts). They examine planned and actual spending, disaggregated by types (recurrent and capital), and sources of funds (government revenue or donor funding). There are some major gaps (see map), so the first call is for donors (who are often the worst culprits) and governments to collect and publish more and better data.

The report looks separately at countries with and without IMF programmes (although attributing the differences to the IMF is tricky, and the report avoids doing so). Headline findings are:

• Most countries have been increasing revenue and spending as a % of GDP, but this is now going into reverse
• The sources of government finances have shifted from grants to loans, including more expensive domestic borrowing, raising fears about growing debt burdens (although no new debt crisis is imminent)
• Countries with IMF programmes have raised less revenue, are cutting deficits faster and have seen less positive trends in MDG spending. Agriculture and health spending are now much higher as a percentage of GDP, and education and social protection spending are rising faster in non-IMF countries. Other MDG sector spending is stagnating compared with GDP or total spending.
• For all MDGs, the vast majority of developing countries are spending much less than they have promised or than international organisations have estimated is needed. Only one third of countries are meeting any education or health goals, and less than 30 per cent are meeting agriculture and WASH goals. Trends have been even less positive for gender and sustainable development.
• Some of the spending has been funded by rapidly growing aid – especially in education, health, WASH and agriculture. Progress in these areas is threatened as OECD aid flows are now declining in real terms, and are increasingly moving away from MDG sectors to infrastructure and growth.
• In most countries, actual spending is substantially less than the amounts announced in budgets (see table). This is particularly true in the health, agriculture and WASH sectors, reflecting delays in donor funding, and absorptive capacity problems in sector ministries and decentralised government agencies.
• Types of spending show two worrying patterns. Some sectors (WASH and agriculture) are dominated by investment, raising the need to increase recurrent spending dramatically to maintain buildings and equipment. Others (education, health and social protection) are dominated by recurrent spending on wages and supplies. Especially if donors reduce budget support, which funds much recurrent spending in many countries, governments will need to make even greater revenue efforts to maintain recurrent spending and keep delivering progress.

If the excitement around last week’s prelaunch is anything to go by, this is going to be a really important initiative. According to report author and DFI boss Matthew Martin:

“We had conversations with officials from about 20 IDA countries about their relative performance in terms of spending and transparency and all of them were anxious to see the full data and report, and to improve their performance. Senior donor government officials were also energised about being able to use these data to see country spending inputs for the MDGs and for the post-2015 framework.

Major global campaigns on education and health were anxious to see and use the data. The DC development research community (Brookings, CGD, IMF, World Bank) as well as USAID, MCC and the African Development Bank  were very excited by the data and want to organise further seminars after the full report is published and consider using the data for their own research and policymaking.

We also had great conversations about potential partnerships with the International Budget Partnership (who run analysis and campaigns on budget transparency and accountability), and the BOOST team in the World Bank (who help countries produce much more detailed geocoded data and would like to code it for the MDGs).

All in all, an amazing week: it has felt like standing on a snowball which is rolling faster and getting bigger every day – we start again with the New York academic and UN community next (i.e. this) week.”

Looking ahead, citizens and social movements in poor countries will now be able both to see what their governments are promising and delivering, and to compare that with other countries in the neighbourhood. International bodies will be able to track the extent to which warm words translate into cash on the ministerial table. Internationally, Oxfam will certainly be using the database as a vital new tool to help local citizens and civil society actors ensure their governments actually deliver the goods.

In addition to scaled up advocacy and campaigns, the plan now is for GSW to expand the database to cover more countries and years, and to publish regular updates. But to do that we will need to find funders and advocacy partners. Please form an orderly queue……

Learning the Lessons: Why is change NOT happening in the response to hunger crises?

I know I go on all the time about ‘how change happens’, but often in development the important question is ‘why doesn’t change happen?’, and we need to get better at answering it. On Tuesday Oxfam published Learning the Lessons, an analysis of the response to the 2012 Sahel food crisis, which affected some 18m people across 9 countries. It’s a serious piece of work, drawing on interviews with 30 external bodies – donors, governments etc, other published research, focus group discussions with affected communities and perspectives from civil society.

Compared to the ‘too little, too late’ response to previous crises in the region in 2010 and 2005, the report finds some improvements: early warning systems had improved and raised the alarm earlier, and governments in the region reacted in good time – Niger, for example, appealed for support six months earlier than it did during the 2010 crisis.

But there were still problems with governments, donors and the aid system. Governments in the region still lack the financial and technical capacity to really be able to lead. As for donors:

‘There was still disagreement about the likely severity of the crisis. Some donors, such as the European Community’s Humanitarian Office (ECHO), acted earlier than in previous years, but overall, donor funding was no more timely than before. By the beginning of July 2012 and the peak of the crisis, the UN appeal remained just under 50 per cent funded.’

This really matters: 5.6 million people didn’t get the seeds and tools they needed in time to prepare for the 2012 harvest cycle.

Interestingly, the report sees the roadblock as conceptual, and argues that this can be overcome by changing the way we think about such crises to emphasise the concept of ‘resilience’ – very much the current buzzword in a lot of development circles. ‘Learning the Lessons’ reckons a ‘resilience lens’ would allow donors to:

-          Develop a shared understanding of vulnerability to food insecurity so that support is targeted to the poorest and responses can be launched rapidly;

-          Break down barriers between humanitarian and development actors so that long-term and emergency programmes effectively support each other;

-          Invest in strengthening the capacity of national and local actors so that governments can deliver large-scale, sustained support to their citizens.

I must admit I was initially sceptical that the answer to such a profound failure is a new buzzword. But actually, I think the authors may be on to something.

The most useful framework I’ve found for understanding the roots of inertia (aka ‘why change doesn’t happen’) is the ‘3i’ model of ideas, institutions and interests. A combination of these three underlies the kind of paralysis we’ve seen in the Sahel response.

Institutions: there is still a deep division between the ‘humanitarian/emergency’ and ‘long term development’ wings of the aid business. This is reflected in funding structures, which are completely different for the two silos. The polarization makes it hard to take a long-term approach to reducing the vulnerability to the inevitable future crises.

Interests: if you work in an aid agency, there are clear risks to responding early to a crisis – what if the rains come, you are accused of crying wolf etc? In any case, your political pay masters often only start banging the table when the grim TV images start to roll (by which time it is often too late, and certainly much more expensive, to respond). There is also still something of a macho ‘I’m here to save lives, get out of my way’ approach to humanitarian work which can all too easily brush aside national governments and local knowledge that are crucial to understanding the long-term roots of crises, and building institutions to deal with future ones. National governments need to be at the heart of efforts to address food insecurity, but that is likely to threaten the power relations of the status quo,

Ideas: The institutional silos reflect a crippling conceptual dichotomy. Cyclical crises such as those affecting the Sahel really can’t be described as ‘emergencies’, in that they are predictable and regular. But the underlying thinking in the aid business is still ‘is that an emergency, or is it long term development? Do we send in the engineers or the economists?’

One of the things I’ve noticed about climate change is that it is a ‘disruptive idea’. Disruptive ideas can’t be fitted into existing entrenched mental and organizational frameworks, and so often prompt violent rejection, but also the possibility of paradigm shifts. Because climate change doesn’t ‘belong’ to any existing camp, it makes it easier to bring people together (development and environment, for example) to think differently about how we respond to it without prompting accusations of turf wars and interference. Is ‘resilience’ also a disruptive idea, with the potential to bypass the humanitarian/development divide?

I’m sure there is a big literature our there about the characteristics and impact of disruptive ideas. Any links appreciated.

Why has economic crisis produced a new left in Latin America, but not elsewhere?

For a wonk parent it’s hard to beat the heart-warming experience of seeing your book referenced in your son’s university essay. In this case, junior had the task of trying to understand the link between neoliberalism and the rise of a new left in Latin America, so he cited Silent Revolution, a book I first published in 1995, when he was 3 years old.

But his essay also got me thinking. Citing Polanyi, he put the rise of Chavez, Morales, Lula et al down to the ‘commodification’ of land, labour and money. Through privatization, deregulation etc, the Washington consensus over-reached itself, trying to commodify things like jobs that have much deeper human significance than just being tradable items. That provoked the backlash that became Latin America’s centre left, while simultaneously undermining the unions that were the backbone of the previous ‘old left’.

Nice thesis, but surely if that was true, the centre left would be much more of a global phenomenon, given that commodification is hardly confined to Latin America? So what, specifically, about Latin America has led to the rise of such an interesting range of political movements and governments over the last 15 years? Candidates include:

- The depth of prior trauma from hyperinflation meant that people were less willing to go for slightly friendlier variants of neoliberalism and ready to pursue more radical solutions

- Disillusion with more orthodox forms of ‘bourgeois democracy’ because in Latin America, the return to democracy from military rule coincided with the debt crisis and economic stagnation of the 1980s

- The particular depth of progressive social capital: the radical Catholic Church, the fight back against military rule, the rise of identity movements (indigenous, black, women) created new political expressions outside the previous structures

- The concept of ’social debt’ – the new left successfully argued that the legacy of military rule was a degree of inequality that was unacceptable, and they won that argument even with the middle classes. As a result, Latin America is the one region in the world where inequality has been falling.

Hold on, what's HE doing there?

And of course, (sorry, son) it’s very dangerous to generalize about the whole region (even in an undergraduate essay). For a start, there are at least two ‘new lefts’: a more social democrat ’sensibilist’ left, epitomised by the PT under Lula, and the more fire-breathing ‘Bolivarian’ left of Morales, Chavez and friends (see left). One reason why Venezuela and Bolivia were able to depart further from the Washington Consensus was at least partly because they were enjoying massive oil and gas royalties, so felt much freer of fiscal constraints. Brazil, traumatized by memories of hyperinflation, pursued a different combination of radical social policy and cautious economic policy. Argentina, as always, is a special case, buying itself fiscal space by defaulting on its debts after the 2000 meltdown, but is now having trouble maintaining it (and the Peronists are virtually indestructible, and have so far headed off any new political challenges).

Not that Silent Revolution is much help in understanding all this. One painful aspect of being an author is that your thinking is captured at a fixed point, even as time moves on. The first edition in 1995 lamented the Latin American left’s inability to move from ‘protesta a propuesta’ (protest to proposal). The second edition in 2003 saw much more evidence of a crisis in the prevailing paradigm, but failed to find any clear signs of what was emerging. Oops.

Any other thoughts on the origins of Latin American exceptionalism? (Don’t worry, junior’s already handed in his essay, so he can’t be accused of crowdsourcing.)

What is the point of the European Report on Development 2013?

The 2013 European Report on Development was published yesterday, with the title Post 2015: Global Action for an Inclusive and Sustainable Future.I’ve been rude about previous ERDs, and I’m afraid I’m going to be rude about this one, but a conversation at last week’s OECD gabfest (more on that tomorrow) at least made me think differently about the ERD’s purpose and value.

If you read the ERD as a thinktank document, it is pretty underwhelming. The 20 page exec sum (which is all they sent me in advance) contains no killer facts, no big new ideas and not much new reseach. When I asked one of the report’s authors for his 30 second elevator pitch on what was new, he couldn’t answer. So far, so bad (and they really need to get some media people involved on that elevator pitch).

Instead what you get is a decent overview of progressive thinking on inequality, migration, trade, domestic resource mobilization and the role of aid. And a lot of developmental platitudes: the ‘key conclusions’ include ‘a transformative agenda is vital’, ‘national ownership is key’, ‘the children are our future!’ (OK, I made that last one up).

But weirdly, no mention of the Eurozone crisis, and its likely impact on aid, trade and every other aspect of Europe’s relationship with the rest of the world.

There is one exception to the ‘nothing new’ critique – Chapter Two contains four case studies on Nepal, Peru, Cote d’Ivoire and Rwanda, exploring their experience with the MDGs. At first sight, these might go some of the way to filling the evidential vacuum on how international instruments do/don’t gain traction on national policy, so I may well come back to that chapter.

But when I raised these criticisms with the OECD’s Dirk Dijkerman, he told me I was looking at it all wrong. Although the report insists that it ‘does not reflect the official opinion of the European Union or of its Member States’, in fact it has the hands (and logos and funding) of the European Commission all over it. EC staff were involved in negotiating the final text (pretty intensively on some issues). So the ERD is somewhere between an EU White Paper and an arm’s length World Development Report. The positive content on migration, policy coherence etc has a status with the European Union that an independent report (however well-written) will never have . And sure enough, the discussion at the OECD meeting was all about what the ERD means for European policy.

But if that is the case, I’m not sure the report really makes the most of its unique position. A while ago, I raised some issues where an ERD might have particular relevance, but this report largely ignores them in favour of a global development narrative. Might be better if the authors based the report more overtly on the EU’s sphere of influence, both geographically and thematically (and you’d think the Eurozone crisis would be pretty high on any Eurocrat’s agenda).

Anyway, the ERD authors should feel free to reply, and here’s an edited down version of the report’s main message:

Main message 1: A new global development framework is needed.

The MDGs have been instrumental in mobilising global support for development, while the vision behind the Millennium Declaration remains highly relevant. A new development framework should build on these efforts.

Main message 2: The framework should promote inclusive and sustainable development.

Poverty eradication remains a central objective, but its achievement and protection will require development strategies that are both inclusive and sustainable, as long-term poverty cannot be eradicated simply through social provisions. Economic growth is key but it needs to be socially inclusive and environmentally sustainable.

Main message 3: The framework must build on an updated understanding of poverty.

A post-2015 framework will have to tackle absolute poverty and deprivation both from an income and a non-income perspective, which incorporate aspects of social inclusion and inequality.

Main message 4: A transformational development agenda is essential for this vision.

A stronger emphasis on promoting structural transformation and particularly job creation will be crucial.

Main message 5: The global framework should support country policy choices and development paths

The policy space of governments should be respected both in determining national development priorities and in other areas such as development finance, trade and investment and migration.

Main message 6: The deployment of a broad range of policies ‘beyond aid’ is essential.

Policies in areas such as trade and investment, international finance and migration have significant effects on development outcomes and need to be designed accordingly and in a coherent manner. ODA will continue to be important, but more as leverage for other finance.

Main message 7: A range of development finance sources will be required.

Domestic resources are the main source of finance for development, not least because they provide the best policy space. Levels of ODA should be maintained and increased, and ODA should be allocated in ways that maximise its impact.

Main message 8: More extensive global collective action is urgently needed.

Achieving the vision of the Millennium Declaration will require considerably greater international collective action to tackle global issues that directly affect the ability of individual countries to achieve development outcomes (eg. development finance, trade, investment and migration).

Main message 9: Processes to address global challenges need to be mutually reinforcing.

Several international processes are probably required to respond to multiple global challenges and support inclusive and sustainable development. A post-2015 agreement may best be conceived as a framework that brings together a series of interlocking and mutually reinforcing agendas.

Main message 10: Over and above its ODA effort, the EU’s contribution post 2015 should also be assessed on its ability to promote PCD and promote conducive international regimes.

The EU’s most valuable contribution to a new global framework for development will be in a range of policies beyond development cooperation (e.g. in trade, migration, PCD, knowledge sharing, climate change, promoting global collective action, and contributing to the establishment of development friendly international regimes) while still maintaining and improving its development cooperation. In particular the EU will need to adopt internal policies that support inclusive and sustainable development at the global level.

And here’s a rather leaden 4m summary video

What questions help us understand how change happens?

How do we analyse the stories of change that we all use in development? Such stories shape narratives, illustrate approaches and enrich our understanding of how change happens. Regular readers of this blog will know that this is a running theme, but I’m now about to step it up, working with colleagues across Oxfam and beyond to collect and use case studies of change to sharpen our thinking and practice.

What emerges when you do this is the problem of ‘retrospective coherence’. Asked to remember what happened, people rearrange and reinterpret a change story. Typically they downplay the importance of failure and unexpected events, and the role of individuals (eg champions within state institutions). They also tend to minimize the role of actors outside the civil society-state interaction – faith leaders, academics, media, private sector, traditional leaders. What remains is a smooth, well-planned and executed project that bears little resemblance to the messy reality faced by people working in real time. So part of the effort in collecting such stories is to recapture what actually happened.

I’ve got case studies coming out of my ears at the moment – working with Oxfam Novib, in East Asia, and with the campaigns and advocacy team – and will be blogging about them as they develop. But in the meantime, here’s the latest version of the guidance questions I send round to kick off the process – I would really appreciate any suggestions for sharpening them up, references etc. They’re also available as a Word document here.

Starting Point

What change did Oxfam seek? Where/how did the idea originate? Was it specific (eg improving livelihoods for X women) or systemic (changing government policy, prevailing norms)? Was it primarily economic, political, social or a combination?

The remaining questions help you work your way round the power and change cycle, which helps in analysing a wide range of change processes (see graphic)

Power Analysis

What was the nature of the redistribution of power involved in the change? Was it primarily about ‘power within’ eg empowering women to become more active social agents, ‘power with’ (collective organization) or ‘power to’ (e.g. supporting CSO advocacy)?

What was the power analysis of the key forces driving/blocking such a change? What economic or political interests were threatened/promoted by the change? Which groups were drivers/blockers/undecided? Was their power formal (eg elected politicians) or informal (traditional leaders, influential individuals)? Was it visible (rules and force) or invisible (in people heads – norms and values) or hidden (behind the scenes influence)

Which individuals played key roles, either as allies or opponents?

Change Hypothesis

What aspects of (or changes in) political, economic, social context made the desired change more or less likely (eg functioning institutions, political leadership, new technologies, new threats or opportunities)

What was the hypothesis for how the change was likely to come about? What alliances (eg with sympathetic officials or politicians, private sector, media, faith leaders or within civil society) could drive/block the change? What tactics were likely to work best (cooperation v conflict, research v street protest)?

What were the pivotal moments/windows of opportunity (eg new governments; changes of leadership; crises and scandals; election timetables)?

Change Strategy

What was Oxfam’s role in promoting change? As an active player or supporting partners? One programme approach, or advocacy/programme only?

Who were our partners – were they ‘usual suspects’ (local civil society organizations and NGOs), ‘unusual suspects’ (private sector bodies, local/national government, faith leaders) or a mixture of both? What was Oxfam’s contribution eg helping them develop a clearer theory of change; bringing partners together with other actors to build alliances; building particular aspects of their organizational capacity; funding?

Implement and Evaluate

What did we/partners actually do (as specific as possible, please!)

What was unexpected? Few change processes go according to plan (although we often rewrite them to make them look that way!) What unforeseen events or realizations (e.g. that something wasn’t working) led to a change of approach? How did the original plan change as the work developed? Were there unintended outcomes and impacts?

Were there early wins that helped build confidence and momentum in the work?

Looking back, what would you have done differently?

How did you monitor and evaluate impact? What evidence can you provide to persuade someone who questions whether your actions actually led to the change described?

What are the top lessons you would draw from this experience for development workers in other contexts?

Whither (wither?) the ANC? Final thoughts on South Africa as a developmental state and the crisis of leadership

Like most of my overseas trips, my recent visit to South Africa resembled an intensive rolling seminar, as debates with brilliant Oxfam staff, partners and academics spilled over from conferences and meetings into cars and bars. Before it all recedes into the mists, I wanted to capture one of the recurring themes. The role of the South African state and the ANC.

Discussions on the developmental state are vibrant in South Africa. They are also very confusing. Often, the term is bandied about to describe anything a state should do to pursue development. But the term’s original meaning is much more specific, rooted in Chalmers Johnson’s attempt to explain the Japanese economic miracle of the 1960s and 70s. That includes a starring (and steering) role for a semi-autonomous technocracy, able to pursue a long term industrial upgrading project without succumbing to the short term demands of interest groups. Would anyone seriously compare that to what is currently happening in South Africa, where every day newspapers splash on the latest stories of chaos, intrigue and incompetence within the state machinery?

Actually, there is one part of the South African state machinery that is renowned for its efficiency and transparency – the South African Revenue Service (SARS, unfortunate acronym). One staffer at an Oxfam partner even said ‘if SARS was a party, I would vote for it’. Not often you hear that level of affection for the taxman.

But there are other points of comparison – Japan was certainly not free of corruption. More importantly, South Africa does have an activist state and that began long before the ANC. A questioner from the floor caused a stir at one seminar when he said ‘the closest South Africa has come to a developmental state was under apartheid’. The state provided for whites, and the non-white labour  it required. I was struck by the amount of state housing for all ethnic groups – rows of identical brick two bed houses are dotted around the chaotic sprawl of self-built ‘informal settlements’.

That tradition of state provision continues under the ANC. Housing, education and health have improved, though there is an awfully long way to go. But this prompts heated debates on whether the South African style of provision encourages passivity and dependence. Anti-state types love the dependence narrative as it provides a perfect excuse for cuts, but not everyone who worries about it can be written off as a bloodthirsty fiscal hawk.

what happens after he's gone?

On housing for example, I was struck by the different approaches in some places in Latin America, where the state supports (rather than replaces) self-build, eg by providing an engineer to advise, or by building only one room and leaving spaces for shanty-town dwellers to add their own (as they inevitably do). Does that approach increase agency as well as produce more housing per dollar?

In the end, all conversations came back to the state and fate of the ANC. The party suffers from Beatles syndrome – applauded outside the country, but much less popular at home. The headlines are all about corruption, which seems widespread, but in many ways patronage is more of a problem than plain theft. Not only does that benefit ‘tenderpreneurs’ who use their connections to win state contracts, however incompetent the execution; it also leads to the wrong people in key jobs – ‘someone who has never been to school becoming a mayor’.

If the ANC is to rekindle its waning legitimacy, it has to tackle some big headaches. How to redistribute land without destroying agroexports? Could it nationalise parts of the mining sector, and if it doesn’t, does it risk a Zimbabwe style split between party and trade unions, as Cosatu loses patience?

Overall the level of political paralysis and growing inequality and unrest means the ‘ANC is tiptoeing on a land mine’. How might it all end? Random speculation over a beer Deep and thoughtful analysis suggested a few possibilities:

• Rising expectations both among the poor (growing protests over poor quality services) and the middle class (‘I’ve got my degree, now where’s my job?’) leads to a broad protest movement and some kind of Arab Spring type meltdown.
• Possibly linked to this, the party splits and South African politics becomes genuinely competitive and multi-party. All parties have to sharpen up, both in terms of corruption and competence, if they are to get elected.
• Alternatively, the lack of opposition removes any incentive for party discipline. Politics becomes a vehicle for grabbing the spoils of power, and leads to increasing infighting within the ANC and a slow slide into chaos and incompetence (call it Nigeria on a bad day).
• The ANC pulls back from the brink, finds new, dynamic leaders, and regains its appeal by attacking South Africa’s malaises of inequality, unemployment and poor administration.

Any other plausible scenarios?

The other posts from South Africa were on Women on Farms and the recent farmworkers’ strike; Brazil v South Africa on inequality; How to build local government accountability and How can South Africa promote citizenship?

The Rise of the South: Human Progress in a Diverse World. Synthesis > novelty in a big new UN report.

Of the big reports that spew forth from the multilateral system, some break new ground in terms of research or narratives, while others usefully recap the latest thinking on a given issue. Last week’s 2013 Human Development Report, The Rise of the South: Human Progress in a Diverse World, falls into the latter category, pulling together the evidence for a tectonic North-South shift in global economic and political affairs, summarizing new thinking on inequality, South in the North etc and asking what happens next. If you’re currently sunk in the depths of Europessimism or US political stalemate, you may find such an upbeat story refreshing (or even disturbing). You can read the exec sum online, but it doesn’t seem to allow you to cut and paste (v annoying for lazy bloggers like me).

Some useful numbers to demonstrate the extent of the shift: From 1980 to now, developing countries’ share of global GDP rose from 33% to 45%, their share of world goods trade from 25% to 45%, and South-South trade as a % of the world total rose from 8% to 26%.

How has this happened and so what? The HDR’s approach is to learn from the success of 18 of the more than 40 countries in the developing world that have done better than expected in human development terms in recent decades, with their progress accelerating markedly over the past ten years. Not just China and India, but countries like Turkey, Ghana and Mauritius. Again, nothing new there – the Growth Commission had a go at that five years back – but still infinitely preferable to maths-led regression-tastic nonsense that ignores history and politics.

Compared to the Growth Commission, the HDR’s conclusions are more interventionist, and more political. The Report identifies 3 main drivers shared across the success stories:

1. A proactive developmental state

2. Tapping into global markets

3. Determined social policy innovation

On the role of the state, successful countries ‘share some key characteristics. Most were proactive “developmental states” that sought to take strategic advantage of opportunities offered by world trade. They also invested heavily in human capital through health and education programs and other essential social services. More important than getting prices right, a developmental state must get policy priorities right. They should be people-centred, promoting opportunities while protecting against downside risks.’

In case you missed it, that’s a not-very-subtle two fingers to the Washington Consensus and its preference for ‘getting the prices right’.

Oops, wrong South

The report points to some downside risks that threaten this progress: ‘short-sighted austerity measures, failures to address persistent inequalities, and a lack of opportunities for meaningful civic participation.’ But overall, as the South rises, the focus will shift to ‘long-term challenges shared by industrialized countries of the North’ – both commonly shared issues like ageing and jobs, and collective action problems like climate change.

Its recommendations for continuing this amazing progress include

1. Developing countries need to move their focus from ‘growth first’ to human development

2. Enhanced South-South learning and integration

3. Greater representation for civil society and the South in the international system. Global institutions have not yet caught up with this historic change (the international system’s loss rather than the BRICS’). China, with the world’s second largest economy and biggest foreign exchange reserves, has but a 3.3 percent share in the World Bank, less than France’s 4.3 percent. India, which will soon surpass China as the world’s most populous country, does not have a permanent seat on the UN Security Council. And Africa, with a billion people in 54 sovereign nations, is under-represented in almost all international institutions.

And in a nice table-turning touch, the report ‘urges the convening of a new “South Commission” where developing countries can take the lead in suggesting constructive new approaches to effective global governance.’

Nothing earth-shattering, but a useful exercise in synthesizing the evolving understanding of development and repositioning the multilaterals within it. So what have I missed?

And here’s the rather frenetic animated version