What’s Hot and What’s Not What’s Hot and What’s Not? Changes in development thinking in the last 5 years Duncan Green 2013

Book image FP2P’s core argument was that the driving force behind development (understood in the Sen formulation as ‘freedoms to do and to be’) is a combination of active citizens and effective states. Why active citizens? Because people living in poverty must have a voice in deciding their own destiny, fighting for rights and justice in their own society, and holding the state and private sector to account. Why effective states? Because history shows that no country has prospered without a state than can actively manage the development process in terms of infrastructure, rule of law, human capital and industrial upgrading. In addition, the first edition stressed the importance of inequality and redistribution, both in terms of human and economic waste, and social justice. What’s new in the second edition? An update chapter covers the main events of the intervening years, which it identifies as three shocks – the global financial crisis, the food price spike(s) and the Arab Spring - and a slow-motion train wreck in the form of climate change.

Global Financial Crisis The global financial crisis was a watershed event, triggering historic geopolitical change, including the shift from G8 to G20 and the rise of the emerging powers. It drew attention to the risks of an excessively ‘financialised’ global economy, but failed to lead to a reining in of the excessive size and volatility of ‘hot money’, condemning us to future financial crises, possibly starting with Europe in the coming months. More broadly, the advent of the G20 has failed to reenergise the multilateral system, with global talks on climate change, trade and arms control all paralysed. Some commentators are even talking of a ‘G zero’, with no-one in charge.

Global Food Price Spikes The food price spike, which in many countries traumatised the lives of poor people to a much greater extent than the financial crisis, reversed decades of low and falling prices, threatening long-term progress on hunger and nutrition. That has led to renewed attention to food security worldwide, but with some unfortunate side effects such as ‘land grabs’ across the developing world by investors from rich countries.

The Arab Spring The Arab Spring confirmed the importance of active citizenship in processes of change, and made us think much harder about the role of women (who were very active) in Islamic contexts, along with the granular and complex nature of social movements.

Climate Chaos

4 Trends in how we think about Development Changing understanding of Poverty Rising importance of Inequality Working in Complex Systems Power and Theories of Change

What is Poverty? Voices of the Poor Chronic Poverty Wellbeing

Poverty and volatility Taken together, the three shocks, along with the growing frequency of extreme ‘weather events’, have made us much more aware of the impact of volatility, risk and vulnerability on the lives of poor people. That leads both to a focus on building resilience, and on trying to dampen or prevent them in the first place. Shock absorbers, from social protection to food reserves to ‘circuit breakers’ in financial markets, have become a much more central part of the development debate.

Implications for Aid & Development Agencies Change your metrics Tackling hard core chronic poverty – disabled, elderly, remote – needs different policies Smoothing/avoiding/coping with Volatility is more important than we thought Resilience = the new fuzzword Care economy (food price spike, financial crisis)

Inequality

Globally, it’s the 2%

G20 doing badly

LICs doing better (on average)

‘The Palma’ v Gini: Birth of an Index? Ratio of income of top 10% to bottom 40% Falling v Rising Palma index X3 in reducing hunger and extreme poverty X2 in progress on access to improved water +30% in progress on U5MR Worth pursuing?

Implications for Aid & Development Agencies Gini or Palma? Relationships, power and politics Taxation/Domestic Resource Mobilization Identify and target ratchet mechanisms (hyperinflation, volatility, financial exclusion) V tricky politics, esp for official agencies

Complex Systems v causal chains But it goes deeper than that. The unpredictability and systemic nature of the shocks has driven home the inadequacy of development thinking predicated on linear processes of change. That raises real challenges for traditional systems of planning and measuring results. Oxfam recently sent a complexity physicist to visit its programme in Northern Kenya, and the insights from this kind of interdisciplinary work are likely to play an important role in transforming our thinking in coming years.

Implications for Aid & Development Agencies ‘Whole of society’ interventions Fast feedback and realtime data Multiple experiments and rapid evolution Measurement and Results for grown ups Rules of thumb, not best practice & toolkits Who to employ? Searchers not planners

The power and change cycle Power Analysis Change Hypothesis Monitor, Learn, Adapt Select Change Strategies

“In telling us what can be achieved by ordinary people through organised action, this book generates hope even as it enhances understanding of what is involved in the removal of poverty.” Amartya Sen

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