NN41, December 2008
The New Politics of Partnership: Peril or Promise?
Improving the Terms of Development Partnership
By Charles Gore, UNCTAD, Geneva
Email: Charles.Gore@unctad.orgKeywords
Partnership, Development
Summary
Improving the terms of development partnership in favour of poor countries depends on enhanced country ownership of national development strategies. A necessary condition for this to occur is changes in the process of production of development knowledge.
The recent resurgence of the idea of development partnership is closely associated with the new approach to development cooperation which donors have adopted since 2000. The roots of the approach can be traced to the OECD?s report, Shaping the 21st Century: The Contribution of Development Co-operation, which was published in 1996. That report not only argued that aid should be focused on achieving a limited set of international poverty reduction and human development targets, a list which later formed the basis for the Millennium Development Goals (MDGs). It also stated that the key to aid effectiveness was the establishment of development partnerships between donor and recipient Governments. On the one hand, recipient Governments should make a commitment to development and accountable governance. On the other hand, donor Governments should commit (i) to provide adequate resources, (ii) to improve coordination of assistance in support of nationally-owned development strategies, and (iii) achieve policy coherence between aid policies and other policies, such as trade policies, which affect development prospects and processes.
In poor countries, a major impetus to these proposals was provided when it was decided that qualification for debt relief under the Enhanced HIPC Initiative would be conditional upon a recipient country preparing a Poverty Reduction Strategy Paper (PRSP). This was initially introduced as a mechanism to ensure that the additional financial resources released through reduction in debt repayments would be directed to poverty reduction. But this quickly morphed and the PRSP approach became the main operational instrument for implementing the key principles of the development partnership approach. As the OECD insightfully and succinctly put it in its Development Cooperation Report 1999: ?The decision to place the implementation of the enhanced HIPC into the larger context of the new development partnership paradigm has in effect leveraged political support for debt relief into a reform of the whole concessional financing system? (p.21). The development partnership approach was further endorsed in the Monterrey Consensus in 2002, and the basic principles of approach - namely, country ownership of national development strategies, harmonization and alignment of aid with those strategies, results-orientation and mutual accountability - were further codified and rendered monitorable through the Paris Declaration on Aid Effectiveness in 2005 and the Accra Agenda for Action in 2008.
The idea of development partnership is very important as it recognizes that development aid - and development cooperation more broadly - is a relationship whose effectiveness depends on the practices of both parties. However, it would be simplistic to assume that all parties are equal. Amartya Sen, for example, has conceptualized the family as an active partnership of cooperative conflicts. Within this arena, there are many cooperative outcomes which are beneficial to all the parties compared with non-cooperation. But the different parties have conflicting interest in the choice among the set of mutually beneficial cooperative arrangements. In these circumstances, outcomes from the partnership depend on the relative bargaining power of the different parties. The bargaining power of women within the household partnership, according to Sen, is strongly affected by their ability to find remunerative employment outside the household, and thus to escape the confines of the family relationship, as well as the broader institutional arrangements within which the family is enmeshed, such as legal rights to property.
Implicit within the current approach to development partnership is the idea that aid and development work best when based on a genuine and balanced partnership of equals. But it is reasonable to ask: what are the terms of development partnership between donor and recipient countries when there are major inequalities between them in terms of resources, capabilities and power? How does partnership work when one party is highly indebted and dependent on debt relief from the other party or when it depends on aid from the other party for over fifty percent of the government budget? Moreover, given that everyone recognizes the importance of balanced partnerships, what practical policy measures can be introduced to promote greater balance and equality in development partnership?
UNCTAD addresses these issues in The Least Developed Countries Report 2008: Growth, Poverty and the Terms of Development Partnership. The study argues that enhancing country ownership of national development strategies is the key to improving the terms of the development partnership in the poorest countries. At present this is being undermined not simply by misalignment of aid with national strategies, but also through: (i) weak technical capacities together with strong incentives to anticipate and internalize donor priorities in policy formulation; and (ii) the prioritization of donor agendas in policy implementation through the working of policy conditionality, administrative guidance via monitoring indicators and selectivity in donor financing choices. In effect, most second-generation PRSPs in the LDCs are so broadly defined and so weakly embedded in a strategic choice that there is an ownership frontier within the PRSP. Part of the policy agenda is strongly owned by national Governments, part by donors, and in between there is a shifting zone of consensus policies.
Enhancing country ownership of national development strategies is a complex task. But the production of development knowledge is an essential element. Independent thought rooted in local realities as well as local experimentation can provide the basis for policy pluralism and home-grown development solutions. Yet local knowledge and practices are marginalized by the current way in which development knowledge is produced. How donors and research financing bodies can support the evolution of stronger domestic knowledge systems and promote networking to share experiences is a vital question. In itself, this will not be enough to create a situation where national Governments can take the lead and freely choose the strategies and policies which they design and implement. But without a stronger domestic knowledge base, improvements in the terms of development partnership will remain an elusive goal.
Further Reading
UNCTAD (2008) The Least Developed Countries Report, 2008. Growth, Poverty and the Terms of Development Partnership.
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