Introduction to From Poverty to Power

Book imageIntroduction to From Poverty to Power: How Active Citizens and Effective States Can Change the Worldby Duncan Green, Head of Research at Oxfam GBJune 2008

Introduction titleIntroduction: The Unequal World

What is it?A book (300+ pages)Spin off print and web materialsA ‘reflection’, i.e. not a strategy, campaign briefing or agreed Oxfam International policy positionComprehensive – a ‘state of the world’ publication

Who’s the target audience?Next generation leaders and opinion formers, North and SouthCurrent development practitioners, policy makers, influencers

What’s the vision?“Women and men in communities everywhere who are equipped with education, enjoying good health, with rights, dignity and voice - in charge of their own destinies”

So what’s the problem? Inequality

These children’s life chances are already shaped by their:SexRaceNationalityParental incomeParental education

Inequality is falling in some countries…0-1-2-3Annual % Gini Change

…but rising in many more43210Annual % Gini Change

Global inequality is obsceneEnding poverty would cost $300bn – a third of global military spendingTop 500 billionaires earn as much as the 416 million poorest peopleAverage global income is $9,500 – 25 times more than that of the bottom billion

What’s happening with inequality?

The answer? RedistributionOf Power

The answer? RedistributionOf Opportunities

The answer? RedistributionOf Assets

What's needed:Effective States

The urgency of nowClimate change makes development more urgent than everIt means dirty growth is no longer an optionWe need to move poor countries onto a clean growth path as soon as possibleIf we fail, and carbon becomes either forbidden or too expensive, poor countries and communities may be stuck outside the ‘carbon curtain’ in a new Dark Age

The urgency of now“Human progress is neither automatic nor inevitable... Over the bleached bones of numerous civilizations are written the pathetic words: Too late.Martin Luther King, 1968”

Main messages Rights and dignity are a crucial part of development and well-beingAchieving these requires involvement in power and politicsAbility to exercise rights requires access to essential services, information and knowledgeActive citizenship, including civil society organization, is essential to developmentDemocracy is beneficial on both intrinsic and instrumental basisEffective states play a central role in development

And rights are about power - Picture Development is about rights

Development is about rightsRights are long-term guarantees that allow right- holders to put demands on duty bearersCapabilities = rights + ability to exercise themInvolves crucial shift from treating poor people as ‘beneficiaries’ to seeing them as active agentsRights = lawyers and scholars; development = economists and engineers

And rights are about powerPower over: the power of the strong over the weak Power to: the capability to decide actions and carry them out Power with: collective power, through organisation, solidarity, and joint actionPower within: personal self-confidence

How change happens: the Chiquitanos

How change happens: the Chiquitanos3 July 2007: Chiquitanos win title to 1m hectares of traditional lands in Eastern BoliviaLived in near-feudal conditions up to 1980sActivism began on margins of football leagueMarches to La Paz forged links with highland Indians and built ethnic identityChiquitanos elected as mayors and senatorsEvo Morales’ 2006 election, the turning point

First build the people…Education, healthcare, water, sanitation and housing are basic building blocks of a decent lifeEducation: need improvements in both quality and quantity (esp. for girls)Health: maternal mortality as example of gender and wealth-based inequalitiesControl over fertility is both a rights and health issueThe state must be central to provision

Then ensure access to knowledge and informationSteady improvements in access to knowledge, e.g. radio, mobiles, internetTechnology holds enormous potentialBut current incentives bias R&D against the needs of the poorAnd intellectual property rules act as a barrier to technology transfer (pharmaceuticals, biopiracy)

And the right to organiseIncreasing range and complexity of civil society organizationsRole of CSOs as catalysts and watchdogsIntrinsic and instrumental benefits of CSO involvementCivil society activism waxes and wanesCivil society is very involved in decentralization processes

How change happens: winning women’s rights in Morocco

How change happens: winning women’s rights in Morocco 2004: Moroccan parliament approves new Islamic family code that strengthens women’s rightsChanges driven by Union de l’Action Feminine, working within Islam, e.g. quoting KoranCounterattack from conservative activists and clericsWomen’s movement used insider-outsider tactics - petitions and marches to fend off conservativesKing formed commission which led to law change

Property rights matterProperty rights matter to poor peopleWomen often excluded from full rights to propertyMany systems of property rights, e.g. customary lawRole of property rights in development: important but not a panacea (de Soto) and can have negative impacts

The importance of land reform to equality and growth

Democracy worksSpread of democracy was a feature of the 20th centuryDemocraciesProduce more predictable long run growth ratesProduce greater short term stabilityHandle shocks much betterDeliver more equalityDemocracy in many countries is ‘exclusionary’, with flawed party systems and patronage politics But for most people remains the ‘least worst’ alternative

Corruption is often linked to natural resourcesCorruption is both a cause and effect of povertyImpact on development varies (10% v 100%)Active citizens can curb corruption, while rich countries and corporations must also put their houses in orderNatural resources can undermine the social contract between state and citizenBut some countries have managed natural resource wealth well (e.g. Botswana, Malaysia)

States are at the heart of development (and growing in importance)Nation states play a core role in providing essential services, rule of law, economic stability and upgradingWeak or absent states are often worse than bad ones, but can be turned around, often after a ‘shock’Looking at East Asian tigers, successful states:Govern for the futurePromote growth Start with equity Integrate with the global economy, but discriminate Guarantee health and education for all Taxation is central to the citizen-state relationship Globalization and orthodoxy make building effective states harder

Dilemma: are Effective States compatible with Active Citizens?

Dilemma: are Effective States compatible with Active Citizens?Aka would you rather be poor in China or Bolivia?Nation builders are often undemocraticBut selection bias excludes states that are now developedAutocrats often fail and civil society is less tolerant of ‘benevolent dictators’Democracies:Produce more predictable long run growth ratesProduce greater short term stabilityHandle shocks much betterDeliver more equality

Main messagesOrthodox economics must be expanded to incorporate environment and unpaid workMarkets, and poor peoples’ involvement in them, are evolving rapidly, raising new threats and opportunitiesRedistributing power in markets is essential to reducing inequality and overcoming povertyRedistribution is not the only issue: effective states are needed to generate growth where it benefits poor people most, provide infrastructure, and build national technological capabilities

Economics for the 21st CenturyOrthodox economics and its indicators (income GDP etc.) lead to biased policies and blind spots in crucial areas of poverty and inequalityA new economics of human sustainability must address:Environmental constraints and sustainability Non-monetary economics, e.g. unpaid women’s workWeighting policies and outcomes for equityFocus on well-being, not just income

Economics for the 21st Century

Introduction to From Poverty to Power

Making agriculture pro-poorSmall farmer based agricultural growth has led to take-off in Viet Nam, India, etc.Requires both Effective States and Active Citizens acquiring power in markets Active Citizens: producer organization, consumersEffective States: access to credit, investment, pro-poor technologiesGood news: commodity prices, biofuels (perhaps) and shift to low carbon productionChallenges: supermarketization; outmigrationDilemma: food v feed v fuel – can we have all 3?

How change happens: winning ‘pond rights’ in India

How change happens: winning ‘pond rights’ in IndiaFishing ponds crucial to 45,000 families in BundelkhandTechnology change (new fish varieties and stocking) prompted a new wave of seizures by landlordsProtests got support from state government for fishing cooperatives – basis for mobilisationDirty tricks and some violence were a turning pointNGOs brokered relations with police and politicians100 ponds now under fishers’ control

Decent workSeveral trends are driving up inequalityFlexibilization and rise of the informal economyDownward pressure on labour rightsIncorporation of women brings mix of costs and benefitsWhat needs to change:Rebuild and change trade unionsReform supply chain managementRecognize role of unpaid work

Private sector, public interestPrivate firms create jobs, buy and sell to the poor, pay taxes and generate externalitiesThe human impact of any firm is firstly determined by sector, but within that different firms can choose to be more or less pro-poor TNCs differ from large national firms on linkages, technology, capital flows and employmentActive Citizens ensure the private sector benefits the poor (trade unions, consumer organizations)Effective States need to regulate and refocus attention on SMEs and national capital

Trade and developmentTrade is boomingTrade can be a crucial tool in overcoming povertyRigged rules and double standardsOfficial story in conflict with evidence on trade liberalization:Some liberalization-led take offs in agricultureIn manufacturing protection and state-led industrialization is the normLiberalization as an outcome not an initial conditionRise of China could change the script, by overcoming commodity trap and kicking away the ladder from other developing countries

Average annual growth 1990-2005

Making growth work for developmentGrowth has always been central to development – redistribution on its own seldom worksBut growth is becoming more disequalizing and less effective at reducing povertySo how to make growth work for poor people?

How change happens: BotswanaShould be a basket case: small, arid, land-locked and dependent on diamondsInstead is Africa’s most enduring success story – GDP per capita is up 100x since 1966Reasons include traditional inclusive governance system, leadership, hands-on role for the state, lucky timing on diamonds and good use of aid and technical assistance

Section 4Risk and Vulnerability

Main messagesRisk and vulnerability are central to the experience of being poor Shocks reinforce each other and have long-term impacts on health and well-beingReal (human) security lies through a combination of empowerment and protection by effective, accountable statesBut the concept of security has been devalued by the war on terror

Social protection is spreadingSocial assistance and social insuranceOne of most effective ways to reduce vulnerability, esp. for the chronic poor (elderly, disabled etc.)Response to failure of targeted safety nets and food aidSocial protection bridges gap between emergencies and development – challenge to OxfamSouth Africa, Brazil arguing for universal basic income guarantee – could it work at a global level?

How change happens: India’s employment guarantee scheme

How change happens: India’s employment guarantee schemeAll rural Indians are now guaranteed 100 days work a yearGrew from activist legal campaigns in Rajasthan and spread of ‘rights consciousness’Congress adopted scheme in 2004 election manifesto, not expecting to winSonia Gandhi and activism were crucial to ensure implementation after the election

Finance and vulnerabilityAccess to credit, insurance and savings are critical in coping with shocksMicrocredit is booming and going commercial, and is now being followed by other microfinance8 out of 10 borrowers are women, with very high repayment rates (98% according to Grameen)Has microfinance been oversold? Indebtedness, repayment burden and ‘forced borrowing’

Hunger and famineUntil current price crisis, hunger stuck at 850 million, but famine deaths have fallenHunger reflects power and inequality - 400m people in developing countries are now obese Undernourishment in foetus and infancy are particularly damagingDealing with hunger relies primarily on self reliance and effective accountable states Current crisis driven by switch to meat, biofuels, climate change, oil prices, and possibly speculation

Health and maternal mortality: one woman dies needlessly every minuteA woman’s risk of dying ranges from one in seven in Niger to one in 47,600 in IrelandChildren who have lost their mothers are up to ten times more likely to die prematurelyMore progress on other health issues, e.g. access to water and sanitation, immunization, life expectancy‘First world’ ailments such as heart disease, diabetes, and cancer are on the riseAnswer lies in investing in public health systems

Pandemics such as HIV will persist, but can be containedIllness and death drives individuals and families into poverty At societal level, pandemics can set development back decadesNew ‘zoonotic’ diseases may follow HIV in years to come (e.g. avian flu, SARS)Active Citizenship is particularly important for diseases that have no cure, like HIVPolitical leadership can make or break response (Brazil v South Africa)Global collaboration showed effectiveness in case of SARS outbreak of 2002/3

How change happens: the Treatment Action Campaign

How change happens: the Treatment Action CampaignTAC is an organization of HIV positive people in South AfricaLed a campaign against big pharmaceuticals in court cases of 2001, then moved on to South African government, demanding access to antiretroviralsUsed legal challenges, official participatory structures, outsider tactics and alliancesPartial progress in changing government policy

Natural disastersDeaths have halved over last 30 years (to 200 a day) due to risk reduction such as early warning systemsNatural disasters highlight inequality– hit poor countries and communities hardestDisaster preparedness and risk reduction require Active Citizens and Effective StatesImproving ‘downward accountability’ is a priority

Climate change is already hitting poor countries and peopleRich countries created the problem; poor countries/communities will be worst hit through drought, floods, disease and falling agricultural yieldsImpacts already occurring (e.g. for pastoralists)Helping victims adapt will be essential whatever happens on reducing GHG emissions (mitigation)Will also mean ‘climate proofing’ existing development programmesThis requires technology transfer, self organization, diversifying livelihoods and effective state support i.e. climate change means that good development becomes more urgent than ever

Conflict is both symptom and cause of poverty and inequalityViolence, poverty and inequality are interwoven – against women, crime, abuse by authorities, civil warProgress on gender-based violence through legislation and women’s organizationAfter bloody 20th C, post Cold War has left rump of 30 ‘poverty conflicts’ mainly in AfricaConflict = failure of politics, but some have acquired economic logic of their ownActive Citizens: self organization to reduce conflictEffective States: including providing livelihoods for ex-combatants

Dilemma: shocks and changeHistory shows that shocks and their aftermath are crucial ‘moments of opportunity’ for change But when shocks hit, outside ‘change agents’ like Oxfam either leave or go quiet!How could we change our response to shocks in order to promote positive change as well as humanitarian relief?

Section 5 The International System

Main messagesInternational system must do more of some things, less of others. This includes:More attention to governance of global public goods and bads, including climate change, migration, taxation, and knowledge‘Stop doing harm’ on issues such as trade, arms trade, corruption, climate changeSupport national development processes, by backing Active Citizens and Effective StatesDemocracy and accountability in global institutions

Global governance growing but no overall plan. Ideally, role includes:Regulating the global economy Co-ordinating big countries (e.g. via G8)Redistributing wealth, technology, and knowledge Averting environmental or health threats Avoiding/managing warPreventing powerful countries or corporations from harming weaker and poorer ones Protecting the most vulnerableChanging attitudes and beliefs

World Bank and IMF25 years of adjustment-based lending are coming to an end (thankfully). IFIs are at crossroadsFailure and eclipse of Washington Consensus, butBank has changed more than the FundWashington changed more than ‘the field’New direction should involve:Focus on global public goodsSeparate policy advice from lendingReturn focus to rich country policy failureReform institutions (starting with the bosses)

Finance$3 trillion crosses borders every day (100 x trade)Finance most volatile form of cross border flow and least suitable for rapid liberalizationFinancial crises becoming deeper and more frequent, usually followed by massive bailouts, ratcheting up inequalityCapital controls can be useful tools, but are being pegged back by BITs, RTAsInternational action is needed to reduce tax evasion/avoidance (est. $385bn per year)International taxation (e.g. carbon, arms, Tobin) and global tax institutions could raise $, or agree global floor on corporation tax

Trade: rigged rules and double standards Prevalent in 5 areas: barriers, subsidies, forced liberalization, intellectual property, and migrationGlobal focus on WTO has hidden growing importance of RTAs and BITs with ‘WTO plus’ clausesParalysis of Doha is a symptom of shift to multi-polar world v mercantilist negotiatingTrade realities remain more important than trade rulesTNCs have imbalance of rights v responsibilities

Intellectual property: knowledge protectionismIP = patents, copyrights, and trademarks A developed, innovating “North” and a developing, imitating “South” makes knowledge flows crucialBalance between encouraging innovation and spreading knowledge destroyed by TRIPsIn 2005, developing countries paid out $17bn in royalty and licence feesTRIPS keeps medicines expensiveBiopiracy is widespreadReplace TRIPs with an access to knowledge convention?

MigrationA common and effective response to povertyThe last great protectionism (along with knowledge)Those who do migrate face barriers and mistreatmentCurrent remittance flows to developing countries = $240bn – poverty reduction and protection against shocksObjections are often misplaced, but a political minefieldBest option: enhanced temporary migrationDo we need a World Migration Organization?

Harnessing the transnationalsPrivileges and powers but few responsibilitiesGrowth driven by changes in business, technology, and politicsConcerns include value chains, labour rights, extractive industries, and corruptionGood progress at UN and sectoral level, e.g. anti-corruption conventionsDisputed progress on ‘corporate social responsibility’Rise in southern TNCs e.g. in telecoms, mining, forestry, infrastructure

AidSuccesses: Marshall Plan, take-off countries, EU structural fundsAltruism, hubris, and self interestTurnaround since 2000, but donors backtracking on promises and serious quality problems How can aid support development?Do: fund watchdogs, fund long-term, support state capacity, put government in the driving seat, ensure downwards accountabilityDon’t: impose conditions, support parallel systems, and poach staff

How change happens: the Gleneagles agreement

How change happens: the Gleneagles agreement2005 G8 a high point for aid campaigners: leaders agreed to raise aid levels by $50bn by 2010 and deepen debt write-offDespite subsequent backsliding, still an important statement of intentCombination of government (e.g. Commission for Africa) and civil society activism (Make Poverty History and celebrities)Repetition important at G8 (cf. climate change)Tsunami and London bombings were factors

Dilemma: is aid like oil? Impact on Policy (conditionality) Institutions (transaction costs, paying the piper) Politics (severing the social contract)How big is the political deficit, and how can good aid overcome it?

International NGOsGrowth and shift from project to advocacy, and from national to global3 main functions: implementers, catalysts, partnersMajor challenges: AccountabilityRelationship to local activists and NGOsFunding/profile drivenRelationship to the stateMake the UN look streamlined…Being sucked into service deliveryToo cautious

Climate change: a global problem needs global solutionsMitigation involves combination of standards, subsidies and taxesKyoto II = key global governance event in coming yearsAdaptation funding also vital, Oxfam estimates $50bn a year neededConcerns on carbon trading as main response

Adaptation funding responsibilities

Dilemma: are there environmental limits to growth?Increasing environmental constraints on growth have profound implications for economic policy and the battle against inequality Carbon intensity of growth and its efficiency in reducing poverty and inequality will become more critical Can the system achieve a low carbon growth model and if not, what has to change?

Carbon intensity: falling too slowly, and has now gone into reverse

15 Wedge Strategies in 4 CategoriesBillions of Tons Carbon Emitted per Year16Current path = “ramp”16 GtC/yFuel Switching (1)CO2 Capture & Storage (3)Renewable Fuels& Electricity (4)Forest and Soil Storage (2)Energy Efficiency & Conservation (4)Nuclear Fission (1)Eight “wedges”Goal: In 50 years, sameglobal emissions as todayHistorical emissions8Flat path1.601950200020502100What level of technology transfer is required?

The humanitarian systemOnly 6% of total aidImproving but still a mess. Main failings:Too little too late, but CERF is hopefulDistributed according to CNN or geopolitics, rather than needToo many organizations. UN particularly byzantineHumanitarian aid warped by food aid – expensive, demeaning and can undermine local agriculture

Peace and peace-keeping‘Responsibility to Protect’ – an important UN achievementForce should only be last resortUN blue helmets up 6 x since 1998Rich countries give $, poor ones give soldiersDoes UN need a standing military force?Arms Trade Treaty neededWar on terror undermines peace-keeping/R2P

How change happens: the landmines ban

How change happens: the landmines ban1997 ban treaty has led to a sharp fall in deaths. In 2005 only Myanmar, Russia and Nepal acknowledged using them and producer countries were down from 50 to 13Ban rode post Cold War wave of optimismInternational Campaign to Ban Landmines worked closely with a handful of governments, e.g. Canada, Norway, Austria, and South AfricaGained momentum by moving outside UN system and insisting on total ban – no watering down

ConclusionA New Deal For A New Century

Elements of a new dealActive CitizensEffective StatesA new economicsWhat role for rich countries/institutions?Do no harm

Solve global problems that need global solutions

Introduction to From Poverty to Power

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Introduction to From Poverty to Power