Rehabilitate the state

Courtesy The Guardian World News by Roy Hattersley on 8/21/09

Those who decry ‘big government’ soon realise how much we need it when things go wrong

Seventy-six years after the New Deal eased America out of depression, United States congressmen – Democrats as well as Republicans – are rejecting President Obama’s healthcare plans on a matter of principle. Many were opposed to him bailing out the banks for the same reason. They believe government initiatives that influence the conduct of the economy and the welfare of ordinary citizens are, by definition, wrong. The more literate of them quote Thoreau. “The government is best which governs least.” The more rabid support another of their countrymen, John O’Sullivan, who simply asserted: “All government is evil.” The theory those 19th-century luminaries propagated is supported by an increasing number of people on this side of the Atlantic. Indeed, patriots will claim it originated here with Magna Carta.

China’s State Enterprises – a success story with many lessons

Virodhi’s post on China is revealing and a direct challenge to the orthodoxies of growth, development and liberal agendas..

China is the center of the debate. With the brilliant show of Olympics at Beijing, the debate regarding the character of the Chinese state and society has also resurfaced. What is China? Socialist? People’s Democracy moving towards capitalism or socialism? Degenerated workers’ state? Capitalist? Imperialist? I argue that China was never a socialist state. Since its birth in 1949 in a very backward terrain, China continues to be a People’s Democracy moving towards socialism. With the advent of the period of Deng Xioping, revisionism took hold of Chinese ecnomics and society and the movement towards socialism was reversed. However, lately new information has been emerging from China which provides an interesting perspective, i.e., the reversal of the process of reversal. I am posting here an interesting article (I am not in agreement with the analysis, but the facts are interesting) that appeared in The Australian regarding the role played by the State Owned Enterprises in China:

China’s state enterprises aren’t dinosaurs

THE Olympic Games comprise China’s most prominent state-owned enterprise.

In some other countries, including Australia, the Olympics, and sport in general, are chiefly the realm of volunteers, of corporations, of a discrete professional world.

The developmental state

—Syed Mohammad Ali

Much is written about the evolving nature of state systems and the subsequent range of responsibilities assumed by them for the purported benefit of their citizenry. However, a major bulk of such thought is based on political frameworks of analysis. Thinking about a state from a primarily developmental perspective receives relatively less attention. Yet the growing prominence of multinational entities in the contemporary world order has at least managed to nudge the concept of developmental responsibilities of a state to the centre of international policy debates. Besides thinking of the state primarily in geo-strategic terms, or with reference to sovereignty, ideology or political legitimacy issues, this recognition has led to considering more closely measures adopted by states for achieving human development goals.

There are some underlying reasons why the concept of development is gradually being acknowledged as one of the pivotal responsibilities of a state. The glaring prevalence of socio-economic disparities that continue to tarnish the claims of incremental global progress provides ample moral justification for adjusting the conventional criteria for assessing states. Moreover, the growing realisation that environmental problems like climate change are hardly containable within national boundaries has also compelled international consensus that all states must be urged to pursue sustainable models of development. The security threat posed by fragile states to their own citizens, as well as to those of more affluent states, has further justified the need for focusing on the developmental role of states.

Ethiopia aid laws raise concerns

Addis Ababa – Heavily aid-reliant Ethiopia is drafting a bill to provide a legal framework for the activities of foreign aid groups, sparking concern among aid workers and threatening to antagonise creditors.

“We can understand that the Ethiopian government would want to bring in legislation on NGOs to create a proper legal framework and more financial transparency,” said one official representing a donor country.

“But the text in its current form would make it impossible for NGOs to function,” he told AFP on condition of anonymity.

The bill, a copy of which was obtained by AFP, comprises 12 sections and is to be submitted to parliament soon.

According to the draft bill, any NGO drawing on foreign sources for more than 10 percent of its funding will be considered a foreign organisation. The new law would bring several existing local NGOs into that category.

The myth of NGO superiority – debunked

Source

Recent research suggests that non-governmental organisations (NGOs) from donor countries do not provide better targeted or more efficient aid than state-run development agencies. They do not seem to even try to outperform the latter by focussing on the neediest or by working in particularly difficult environments.

[ By Peter Nunnenkamp ]
It is easy to lament the stinginess and selfishness of official donors, as Kishore Mahbubani did in D+C/E+Z 2/2008. Those donors provide critics with the data needed to expose the flaws of official development assistance (ODA). It is different with non-governmental organisations (NGOs). NGO aid is certainly relevant, but its allocation has hardly been mapped, let alone explained. The main reason is that sufficiently detailed data are hard to come by. After all, NGOs probably do not want critical analysis to tarnish their image of being superior donors.

NGOs are often believed to provide well-targeted aid. They are said to be particularly close to the poor, as many of them directly cooperate with local target groups, circumventing recipient governments with a reputation of corruption. Accordingly, the argument goes, they are better aligned to poor people’s needs, and suffer from less leakage. Moreover, it is said that NGO aid is less distorted by donor governments’ commercial and political interests, such as export promotion or political alliances.

Donor governments seem to share that favourable view. To a large extent, they channel ODA through NGOs. In some donor countries, the share of such ODA is as high as 20 %. The total of aid granted by NGOs from OECD nations amounted to almost $ 15 billion per annum in 2005 and 2006. That sum exceeded bilateral ODA from every individual donor country except for the USA.

Some critics, however, suspect that the case for NGO aid largely rests on ideological grounds. The view that NGOs have a clear focus on the poor first came under attack in the 1990s. Critics believe that NGOs probably prefer the quiet life of implementing their national governments’ agendas to risking failure in attempts to outperform state agencies. This seems all the more likely as some NGOs financially depend on official “backdonors”.

The cases of Sweden and Switzerland

Such criticism is hardly supported by empirical research so far; and that is something it has in common with the wide-spread faith in high NGO performance. NGOs only rarely support scholars who collect data. Doing research on German NGOs, for instance, therefore tends to be frustrating. By contrast, two relatively small donors – Sweden and Switzerland – offer reasonable data to compare NGOs and state agencies by analysing the following three questions:
– Do NGOs focus more strongly than ODA on those countries where need is most pressing?
– Do NGOs engage in particular where the policy environment is difficult, so government-to-government transfers are unlikely to work?
– Do NGOs behave more altruistically than state aid agencies, which may be pursuing hidden agendas?

Research done at the Kiel Institute for the World Economy in cooperation with the KOF Swiss Economic Institute in Zurich and the Radboud University in Nijmegen has led to only preliminary results so far, but they do reinforce the sceptics’ view on NGO aid. The answer to the first question is clearly “no” if one judges recipients’ need for aid by average per-capita incomes. The increase in Swiss NGO aid for countries with lower average income, for instance, was slightly less pronounced than the increase in Swiss ODA. In striking contrast to Swedish ODA, Swedish NGOs completely ignored the income position of recipients, spreading their aid almost equally over low and middle-income countries. The poorest 25 % only received 27 % of Swedish NGO funds, whereas the wealthiest 25 % received 22 %. The picture is more favourable for Swiss NGOs if need is measured in terms of absolute poverty (share of the population living on less than one or two dollars per day). Swedish NGOs hardly differ from state agencies in this respect.

development: On the margins

 —Syed Mohammad Ali

Limiting public participation of religious minorities, or other marginalised groups like peasants or women, in effect reduces their socio-economic status to that of underprivileged citizens. Subsequently, being a member of a minority or marginal group automatically reinforces a sense of disempowerment and deprivationDevolution and fiscal decentralisation have aimed to address multiple problems common to many developing countries, ranging from improved revenue mobilisation, more effective economic decision-making, better accountability of elected officials, and enhanced grassroots participation in governance.

Given that efforts to strengthen sub-national governance are still ongoing in many countries, it is necessary to pay closer attention to their on-ground effects, to see if they are really capable of moving government ‘closer to the people’, particularly those who had been previously marginalised by their state systems.

The developmental state

—Syed Mohammad Ali

Much is written about the evolving nature of state systems and the subsequent range of responsibilities assumed by them for the purported benefit of their citizenry. However, a major bulk of such thought is based on political frameworks of analysis. Thinking about a state from a primarily developmental perspective receives relatively less attention. Yet the growing prominence of multinational entities in the contemporary world order has at least managed to nudge the concept of developmental responsibilities of a state to the centre of international policy debates. Besides thinking of the state primarily in geo-strategic terms, or with reference to sovereignty, ideology or political legitimacy issues, this recognition has led to considering more closely measures adopted by states for achieving human development goals.

There are some underlying reasons why the concept of development is gradually being acknowledged as one of the pivotal responsibilities of a state. The glaring prevalence of socio-economic disparities that continue to tarnish the claims of incremental global progress provides ample moral justification for adjusting the conventional criteria for assessing states. Moreover, the growing realisation that environmental problems like climate change are hardly containable within national boundaries has also compelled international consensus that all states must be urged to pursue sustainable models of development. The security threat posed by fragile states to their own citizens, as well as to those of more affluent states, has further justified the need for focusing on the developmental role of states.

Towards meaningful devolution

By Jamil Nasir

THE Social Policy and Development Centre (SPDC) recently launched its report with the title Devolution and Human Development in Pakistan. The report, inter alia, has analysed the impact of the devolution plan on the poor and marginalised sections of society.

The finding of the report is that the system of local government introduced in 2001 in the country is plagued with the phenomenon of ‘elite capture’ and has not delivered well on enhancing the participation of ‘the voiceless and the marginalised’ sections of society in decision-making. The report further says that the influence of family, caste, tribe and other political affiliations permeates the fabric of local government institutions with the result that the political landscape of Pakistan is still dominated by the elite.

The idea of devolution per se is globally recognised as an effective arrangement for empowering people at the local level. Many countries in the world have either undertaken or are in the process of devolution by transferring political, fiscal and administrative responsibilities to the lower levels of the government. In some countries, devolution is considered a natural corollary to democratisation while in others it is spurred by the failure of the central government to deliver basic public services.