ProPoor Policies and ProPoor Growth Training elements for Joint Donor Staff Training on Poverty Redu

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Pro-Poor Policies and Pro-Poor GrowthTraining
elements for Joint Donor Staff Training on
Poverty Reduction in PRSP-Contexts, Dar es
Salaam, 17-19 June, 2002Timo VoipioMinistry
for Foreign Affairs of Finland (MFAF)Email
timo.voipio_at_formin.fi
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Difficult and contested topics ? Presentation
based on

• DAC PovRed Guidelines, p. 37-49
  http//www.oecd.org/pdf/M00022000/M00022693.pdf
• Stephan Klasen (SPA-2001) In Search for the Holy
  Grail How to Achieve Pro-Poor Growth
• http//www.spa-psa.org/confidential/docs/
  tgm1101/In_search_of_the_Holy_Grail.pdf
• Cornia and Court (2001) Inequality, Growth and
  Poverty http//www.wider.unu.edu/publications/pb4.
  pdf
• WB World Development Report (WDR) 2000/1
  http//www.worldbank.org/poverty/wdrpoverty

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and on

• Klugman (2001) Overview to PRSP Sourcebook
• http//worldbank.org/poverty/strategies/chapters/
  overview/over0427.pdf
• DFID (2001) Poverty Bridging the Gap
• http//www.dfid.gov.uk/Pubs/files/poverty_bridgega
  p_guidance.pdf
• Ashley and Maxwell (2001) Rethinking Rural
  Development
• http//www.odi.org.uk/briefing/rural_develp.pdf
• Dollar-Kraay Growth Is Good for the Poor
  http//www.worldbank.org/research/growth/pdfiles/G
  IGFTP3.pdf
• WB Country Policy and Institutional Assessment
  (CPIA) Questionnaire
• http//www.worldbank.org/ida/cpiaq2001.pdf and
• http//www.worldbank.org/ida/IDAPerfalJan02.pdf
• WB The Quality of Growth (2000)
  http//econ.worldbank.org/view.php?type20id1556
  

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WHAT DO DONOR STAFF NEED TO KNOW ?
(a) Multi-dimensional Poverty (Consensus?) ---gt
requires multi-dimensional Policy Action (b)
Pro-poor growth - Weakest area in our PovRed
Agenda (Debate?) - What is it ? How to promote
it ? (Debate?) (c) How to Analyse the Quality
(pro-poorness) of Policies? - The Democratic
Principle role of those elected. - Tools for
donors, e.g. IDAs CPIA (Debate)
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? Diverse expectations macro/sectoral
policies? Not everything can be discussed in
detail today

• Heavy dose of info to be expected in the first
  half of the training element, more time for
  discussion during Case Tanzania? Questions
  and comments during blue slides
• but if one slide is the maximum you can absorb
  today, remember this, at least
• THE ULTIMATE ONE-PAGE SUMMARY FOLLOWS

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POVERTY IS MULTI-DIMENSIONAL
Source DAC PovRed Guidelines (2001, p. 39)
PROTECTIVESecurityVulnerability
POLITICALRights Influence Freedom Voice
ECONOMICConsumptionIncomeAssets
GENDER ENVIRONMENT
HUMAN Health Education Nutrition, Water
SOCIO-CULTURAL Status Dignity
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WB MULTI-DIMENSIONAL POVERTY Source WB World
Development Report 2000/1

• EMPOWERMENT
• Responsive Public Administration
• Rule of Law
• Decentralization
• Eliminating Gender Discrimination
• Social Fragmentation and Conflict
• Building Social Capital

• SECURITY
• Social Risk Management
• - Household Responses
• - Policy Responses
• Reducing Vulnerability to
• - Economic Crises
• - Natural Disasters

• INTERNATIONAL ACTIONS
• Market Access in Rich Countries
• Reducing Global Volatility
• Pro-Poor International Public Goods
• Voice for the Poor in Global Forums
• Making Aid Effective in Reducing Poverty
• Relieving the Debt Burden

• OPPORTUNITY
• Pro-Poor Growth
• Inequality and Redistribution
• Markets
• Assets
• Governance and Accountability

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DAC PovRed Guidelines AND WDR-2000/1 Recognize
the SHIFT in the CONSENSUS (1-4)
1. From single-dimensional (money-metric) to
multi-dimensional concept of poverty - From
GNP/cap to .....???? - From USD 1/day to
.....???? 2. From one-size-fits-all to
context-specificity in poverty and policy
analysis - Uniqueness of each historical and
spatial (global,national, local, household,
individual) context. (DAC p. 43, WDR p. 45-46)
Challenge remains!
But...
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DAC PovRed Guidelines AND WDR-2000/1 Recognize
the SHIFT in the CONSENSUS (1-4)
3. From focus only on individual national
economies to interlinkages between the household,
local, national, regional and global levels. 4.
From conditionality to ownership and partnership
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Summary 2 MULTI-DIMENSIONAL POVERTY CALLS FOR
MULTI-DIMENSIONAL POLICY ACTION (DACWDR)
1. Pro-poor economic growth 2. Empowerment
rights and pro-poor governance 3. Basic social
services for human development 4. Social Risk
Management Reducing vulnerability and managing
shocks for human security 5. Mainstreaming gender
and enhancing gender equality 6. Environmental
sustainability and Sustainable Livelihood
Approaches 7. International Action Global
Policies and Global Public Goods Donor Policy
Coherence
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But in this presentation to be discussed in a
changed order
1. Empowerment 2. Basic social services 3. Social
Risk Management 4. Mainstreaming gender ? Module
5. (Crosscutting) 5. Environmental
sustainability ? Module 5. (Crosscutt.) 6.
International Action ? Module 6.
(Partnership/Coherence) 7. Pro-poor economic
growth ? To be discussed later in this module,
after (1-3)
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EMPOWERMENT

• Poverty often means powerlessness, injustice and
  exclusion from social participation as a result
  of discrimination and lack of human/civic/politica
  l rights
• (DAC)

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EMPOWERMENT, RIGHTS AND PRO-POOR GOVERNANCE (1)
(DAC Klugman)

• Empowering poor women and men requires
• democratic and good governance at all levels
• popular participation in policy making, programme
  design and implementation
• a civil society with representative community
  organisations
• human rights and the rule of law
• Accountability, incl. independent media
• --gt Consensus on all these?

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EMPOWERMENT, RIGHTS AND PRO-POOR GOVERNANCE (2)
(DAC Klugman)

• Rights-based approaches to poverty reduction are
  increasingly in focus (Debate?)
• linking empowerment and rights of poor women,men,
  children, workers to international agreements on
  human rights (Debate?)
• Formal rights and day-to-day experiences of
  fairness, e.g. access to services, justice,
  information.
• Civic education needed to learn and to be aware
  of how to claim rights, at intra-household,
  community, workplace, local govnt, national and
  global levels

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Good Governance for Poverty Reduction (DAC)

• Civil Service Reforms to improve governance and
  to reduce corruption by strengthening
  accountability and service orientation in the
  public sector are crucial. Pay reforms may be a
  necessary part of CSRs in many countries.
• Decentralization has potential to bring
  decision-making closer to poor people. But in
  highly inegalitarian societies, fiscal
  decentralization may serve to aggravate misrule
  by unchecked local elites. Civic education,
  publication of state allocations and Public
  Expenditure Tracking Surveys (PETS) may help.

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Questions or comments on EMPOWERMENT
?-----------------------------------------------
-------------? BASIC SOCIAL SERVICES

• Human development is the process of expanding
  human capabilities and choices what people do
  and can do with their lives.
• Human development includes the expansion of
  income, wealth, adequate nutrition, safe water,
  medical services, schools and transportation,
  decent shelter, employment and secure
  livelihoods.
• (DAC)

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BASIC SOCIAL SERVICES (DAC-1)

• To live long, healthy and gratifying lives
  requires access to public social services of good
  quality.
• Access to quality social services also increases
  peoples productive capabilities
• Individual rights of access based on citizenship
  or residence (e.g. for women not only via
  husband)
• NOTE Constraints may exist not only on the
  supply side of services, but also on the demand
  side
• ? Special efforts and incentives may be needed
  to encourage outreach, active demand and better
  access for the poorest, isolated and
  marginalized.
• ? Sectoral technocratic vs. participatory
  community planning?

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BASIC SOCIAL SERVICES (DAC-2)

• Pro-poor methods of financing public services
  with taxes, and in some cases with user fees must
  be studied and monitored to ensure access,
  affordability and quality.
• It is important to monitor and improve the
  pro-poor allocation of social sector spending and
  pro-poor incidence of the benefits in the
  context of broad sector policies.
• Address trade-offs e.g. between
• basic vs. higher education
• primary health care vs. hospitals
• preventive vs. curative health
• ? WB Benefit incidence analysis of public
  spending!!

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Questions and comments on basic social services,
in general ?---? PRO-POOR SECTOR POLICIES ?

• E.g.
• Education
• Health
• Infra
• Water and sanitation
• Transport and communication

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Pro-Poor Education Policies (1)

• ACCESS ( Education for All)
• Free (or affordable ?) basic education is a
  human right. (Primary? Secondary?)
• School mapping? Rehabilitation? Mainstreaming the
  disabled minorities?
• EQUITY
• Gender equality (MDG) --gt Fathers attitudes?
  Female teachers? Schools near home? Girls
  toilets? School meals? School calendars suited to
  local agricultural calendars? etc.?
• Other disadvantaged groups (rural, isolated,
  minority languages, disabled) Incentives?
• Inter-regional equalization mechanisms?

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Pro-Poor Education Policies (2)

• QUALITY School infra? Learning materials?
  Teacher education? Teacher-pupil ratios?
  Curriculum reform (Vocational locality-specific
  life-skills? Nutrition education? Health
  education?)
• EFFICIENCY Decentralized mngt? Mngt training?
  Participatory planning? Integrated
  village-planning, PTAs? Inter-sectoral linkages
  at local govnt level?
• ENVIRONMENTAL AWARENESS Hygiene?
  Erosion-control? Sustainable consumption and
  production models?
• SWAPS Trend from individual projects to
  Sector-wide programmes co-ordinated by the
  Government and supported by many donors (via
  basket-funding or budgetary assistance?)

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Pro-Poor Health Policies (1)

• ACCESS to care is a basic social right (C. or
  D.?)
• --gt Health for All
• --gt Especially remote, poor areas.
• --gt Decentralization, participatory planning,
  referral system, infra upgrading, materials,
  focus and incentives to needy groups
• Emphasis on preventive/primary health care
• most budgets spent on curative/tertiary?
• Inter-sectoral approach (with safe water,
  hygiene, nutrition, roads)
• Public health orientation, incl. immunization
• Reproductive health and rights essential
  (Debate?)

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Pro-Poor Health Policies (2)

• QUALITY OF CARE Infra? Staff training?
  Information? Essential drugs?
• EQUITY AND EFFICIENCY
• Secure and equalizing financing methods
• Collective risk-pooling (health insurance?)
• Care to be provided according to need and paid
  according to ability? Vs. user fees?(Debate?)
• Vulnerable groups children, mothers, disabled,
  hungry, remote, AIDS victims Special support?
• Inter-regional equalization grants (Debate?)
• Accountability of service providers to
  communities? to local councils? to ministries?

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Pro-Poor Health Policies (3)

• ENVIRONMENTAL HEALTH through awareness raising
  and participatory planning is cost-efficient,
  effective and pro-poor. E.g.
• Prevention and control of malaria and TB
• Pollution control and waste management
• OCCUPATIONAL HEALTH, JOB SAFETY
• can provide opportunities for pro-poor
  cooperation with the private sector (employers)?
• government role in awareness raising, incentives,
  training and regulation.

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Pro-Poor Infra Policies - Water and Sanitation
(1)

• Access to safe water is a basic social right.
  Water is a social as well as an economic good.
• Priority to safe domestic water and sanitation?
• Irrigation - neglegted opportunity in Africa (D?)
• Access integrated watershed mngt,
  demand-orientation, consumer-initiatives?
• Quality realistic standards, guidelines,
  training?

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Water and Sanitation (2)

• EQUITY AND EFFICIENCY
• Decentralized mngt at lowest appropriate levels?
• Empowerment of consumer associations?
• Private sector involvement (PPP/OBA?)?
• Focus on rural and peri-urban communities?
• Full participation of men and women
• all groups, castes, ethnic groups, etc.?
• Safe access to water a basic security for the
  disadvantaged and vulnerable groups?
• SIA necessary in all large water schemes?

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Pro-Poor Infra Policies - Transport and
communication (1)

• Priority to providing rural poor people access to
  social services, markets and to information?
• Roads, cars and internet are not always key
  Conduct first participatory assessments of the
  genuine transport, mobility and communication
  needs of the rural poor? (Debate?)
• Establish realistic affordability estimates for
  the options, including maintenance costs.
• Study the interlinkages between infra
  construction and rural livelihoods

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Transport and communication (2)

• Use local contractors to support the local
  economy?
• Use labour-intensive approaches and phase
  activities so that they provide extra incomes
  (social protection) for rural poor during
  difficult times, e.g. food-for-work, etc.?
• Disaggregate findings by gender and age-group
• Consider subsidies for public transport (to
  customers or to providers) as an alternative to
  high-cost roads and unsustainable/unaffordable
  private vehicle transport? (Debate? Note major
  differences among donors domestic transport
  cultures and policies!)

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Transport and communication (3)

• Tax private transport to raise funds for public
  transport, road maintenance, railways? (D?)
• Intermediate technology (bicycles, pathways,
  small bridges, billboards, radiocall, bushmail)
  (D?)
• Radio most likely media to reach the poor?
  Support local interactive radio? Newsletters?
  Posters? Local council minutes and CG allocations
  to be published on village billboards? Video as a
  monitoring and lobbying tool to give a voice
  for the remote poor?
• Cellular phones more likely to work than line
  phones.
• Reliable post office (paper mail) system would be
  a great improvement (and could gradually grow
  into a network of rural communications centres)
  (D?)

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Questions and comments on pro-poor sector
policies ?---? SOCIAL RISK MANAGEMENTReducing
vulnerability and managing shocks(New Consensus
WDR, DAC, DFID, etc.)

• Poor women and men see insecurity as a major
  dimension and cause of poverty. I.e. many lead
  decent lives normally, but are highly vulnerable
  to falling into poverty.

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SOCIAL RISK MANAGEMENT (1)

• The livelihood risks facing the poor include
• Individual/family risks illness, injury,
  disability, old age, crime, domestic violence
• Group/community risks local natural calamities,
  food shortages, epidemics, terrorism, riots,
  pollution, soil degradation, deforestation,
  unemployment, occupational hazards, ethnic
  conflict
• Regional/national risks Nation-wide natural
  calamities, civil strife, war, economic shocks
  (e.g. growth collapse, hyperinflation, balance or
  payments/currency crisis, terms of trade shock,
  transition costs of economic reforms.)

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SOCIAL RISK MANAGEMENT (2)- KEY CONCEPTS OF
SOCIAL POLICY

• Formal and informal mechanisms can be used
• Social inclusion
• Fighting discrimination and social exclusion
• E.g. women, the old, ethnic minorities, disabled
• Social protection
• Social insurance e.g. health insurance, crop i.,
  unemployment i., accident disability i., old
  age i.
• Social assistance e.g. food subsidies,
  exemptions from user charges for social services,
  micro-finance, public works, land/tenancy reform
  (D?)
• Social capital
• The benefits of trust, cooperation and networks

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Understanding the poor as portfolio managers
Balancing their portfolio of capabilities and
assets to secure a Sustainable Livelihood
(Chambers 1992, 1995)

• (People)
• Livelihood Capabilities
• A LIVELIHOOD
• Stores and Claims and
• Resources Access
• (Tangible Assets) (Intangible
• Assets)

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SOCIAL RISK MANAGEMENT (3)

• Anti-poverty strategies should help the poor
  protect themselves from social risks/shocks.
• Social risks call for Social Risk Management by
• (a) risk reduction,
• (b) risk mitigation
• by diversification
• by insurance
• (c) coping with shocks.
• Pooling of risk helps the poor manage the
  risks. Pooling requires large populations -
  therefore public systems (or large market-based
  systems) have advantages.

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MATRIX OF SOCIAL RISK MNGT
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Questions and comments on Social Risk
Management?---? Mainstreaming Gender and ?
Environmental Sustainability

• --gt Well skip them here because they will be
  discussed in Training Module 5 on Cross-cutting
  issues
• ? International Pro-Poor Policy Action
• --gt Well skip it here because it will be
  discussed in Training Module 6 on Partnership
  skills (Donor Policy Coherence)

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Back to the basic dilemmaPRO-POOR GROWTH ? -
More easily said than done...Main sources DAC
PovRed Guideline, Klasen (SPA 2001), Cornia
Court (WIDER 2001), WDR-2000/1, Dollar Kraay
(2000).

• Is it...growth of mean incomes ?
• Reduction of inequality ?
• Enhancement of the income share accruing to the
  poor?
• High elasticity of the poverty rate to economic
  growth ?

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PRO-POOR GROWTH

• Growth that benefits the poor
  disproportionately (Klasen, 2001)
• e.g. the proportional income growth of the poor
  (e.g. lowest quintile, or those below the
  national poverty line) must exceed the average
  income growth rate.
• Multi-dimensional poverty --gt Is it OK to look at
  money-metric growth alone?

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Seraggeldin, WBGrowth capital accumulation.
- What forms of capital can/should we try to
accumulate in sustainable pro-poor growth ?

• Man-made C. Human C Human C.
• Man-made C.
• Natural C.
• Natural C. Social C. Social C.
• We know that there are limits to Man-made and
  Natural capital.
• But Do we know the limits of Human and Social
  Capital ? DEBATE?

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Consensus UN, DAC, WDR, DFID, Finland, etc.
Growth would be good for the poor

• ? but what are the precise policy measures under
  control of government?
• - A government cannot decide We want / dont
  want growth.
• - Everyone wants growth, but a government can
  decide only on laws, policies, budgets and taxes.
  
• Growth could be a consequence of pro-growth
  policies
• PovRed could be a consequence of pro-poor
  policies, including pro-poor growth policies.

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WDR-2000/1, p. 45

• Countries do not choose to have slow growth or
  to undergo painful crises.
• Nor do they simply choose how equitable growth
  will be.
• Instead, the patterns of growth, the changes in
  the distribution of income and opportunities, and
  the rates of poverty reduction reflect a complex
  set of interactions among the policies,
  institutions, history, and geography of
  countries.
• Understanding the forces underlying countries
  disparate growth experiences, and the mechanisms
  through which this growth has reached poor
  people, is essential for formulating poverty
  reduction strategies.

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Pro-growth policies ?(whether pro-poor,
anti-poor, or neutral)
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What drives economic growth? (1)(WDR-2000/1, p.
49)

• Growth depends on education and life expectancy,
  particularly at lower incomes
• Female literacy and girls education are good for
  overall economic growth
• Absence of Rapid population growth, wars, civil
  unrest and natural disasters, macro-economic
  volatility, terms of trade shocks, slow growth
  among trading partners, poorly sequenced and
  badly implemented reforms, ethnic fragmentation
  and conflict, initial inequality, environmental
  degradation

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What drives economic growth? (2)(WDR-2000/1, p.
49, 57)

• Pro-growth economic policies (Wide consensus,
  but debate on the optimal degree of)
• Openness to international trade
• Moderate budget deficits
• Absence of high inflation (gt30-40 ?)
• Well-developed financial system
• Moderately sized government
• Land reform
• Infrastructure to poor areas
• Universal policies (e.g. pricing of educ.)

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What drives economic growth? (3)(WDR-2000/1, p.
49, Klugman, p. 10)

• Pro-growth institutions
• Prudent macro-economic management
• Strong rule of law
• Absence of corruption
• Predictable environment for private sector
• Institutions to protect minority rights
• Conflict resolution institutions
• Environmental protection institutions

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Pro-poor growth policies ?
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What we know about pro-poor growth policies?

• 1) Pro-growth policies help the poor in the
  long-run, but may hurt them in the short-run (D?)
• 2) Specific pro-poor growth policies help the
  poor more than neutral pro-growth policies.
• 3) Two ways in which growth can be pro-poor
• Direct way Pattern of growth that immediately
  raises the incomes of the poor
• Indirect way Public redistributive policies,
  e.g. progressive taxation and targeted public
  expenditures.

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Direct way of pro-poor growth (1)

• Requires policies that enable poor people to use
  their assets and capabilities to generate
  enhanced and sustainable livelihoods.

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For a poor person, GROWTH means a strengthening
of his/her portfolio for sustainable
livelihoods, along any of its dimensions
(Chambers 1992, 1995)

• (People)
• Livelihood Capabilities
• A LIVING
• Stores and Claims and
• Resources Access
• (Tangible Assets) (Intangible
• Assets)

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Which kinds of policies could enable poor people
to use their capabilities and assets ?

• LIVELIHOOD CAPABILITIES ?
• E.g. Health? Education? Extension? ...
• STORES AND RESOURCES ?
• E.g. Micro-finance programs? Soil conservation?
  Land/tenancy reform? (But note poor common
  property)
• CLAIMS AND ACCESS ?
• E.g. Good governance? Civic rights education?
  Accountability? Rule of law? Co-operatives?
  Networks? etc. Social capital...

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Direct way of pro-poor growth (2)

• The poor are not spread evenly throughout the
  economy Pro-poor growth policies must
• favour the regions/sectors where the poor are
• e.g. Rural / Agriculture / Non-farm / Informal
• stimulate the supply side in the disadvantaged
  areas/sectors (poverty traps) or encourage
  outmigration.
• Reliance on private sector often unlikely to
  succeed - govnt involvement required (Debate?)
• use the factors of production the poor possess,
  or are able to acquire
• e.g. Labour (predominantly unskilled) sometimes
  land and human capital (skilled labour)

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Direct way of pro-poor growth (3)(DAC, p.45)

• Global economy offers potential for PovRed
• But also great risks of economic disruption
• Hence integration requires prudent management to
  ensure that the poor benefit from
  trade-led/FDI-led growth
• This involves building capacity and exploring
  opportunities...
• ...while taking policy action to mitigate
  increased risks, e.g. capital outflows,
  environmental degradation, unemployment or the
  undermining of core labour standards.

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Indirect way of pro-poor growth (1)

• Via taxes, transfers, pro-poor infra, basic
  services and other government spending
• High growth of any sorts could, in principle, be
  made pro-poor via progressive taxation (etc.
  revenue policies) and government spending
  targeted on the poor, in order to...
• provide transfer payments (safety nets)
• to include the poor in the growing economy
  (springboards)

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Indirect way of pro-poor growth (2)

• Static redistributions (safety nets) unlikely to
  reduce poverty unless they provide pro-growth
  opportunities and incentives for the poor
  (springboards).
• Growth is highly contingent on the quality of
  human capital --gtInvestment in education and
  extension will increase growth and make it more
  pro-poor.
• Especially education and extension for women and
  girls

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Reduction of inequalities ?
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Consensus UN, DAC, WDR, DFID, Finland, etc.
Reduction of inequalities would be good for the
poor. It would also be good for growth.

• Sectoral / regional / gender / ethnic inequality
  ?
• Disability, unregistered citizens, HIV/AIDS
  victim or other form of disadvantage ?

57
PRO-POOR GROWTH (DAC, p.45)

• Governments need to tackle the inequalities of
  assets and income
• (Consensus DAC, WDR, DFID)
• Inequalities give a double negative impetus to
  poverty by...
• lowering the pace of growth
• lowering the poverty reducing impact of growth

58
INITIAL INEQUALITY MATTERS (Consensus DAC, p.
45-46, WDR, DFID)

• To reduce income poverty by half, high-inequality
  countries will, on average, need to grow twice as
  fast as low-inequality countries.
• This is not feasible. Thus more equitable growth
  is a necessary condition for achieving the
  international development goal for Poverty
  Reduction. (DAC, p. 45-46.)

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PRO-POOR GROWTH (DAC, p. 46)

• Most poor people still live in rural areas
• Hence, pro-poor rural (on- and off-farm)
  development is a key priority for PovRed
• The proportion of urban poverty is increasing
• Policies need to support the rural-urban
  interlinkages
• RURAL Land rights, water, technology, markets,
  extension, irrigation, micro-finance, roads,
  information, public works
• URBAN Land-use planning, social protection,
  environmental and labour standards, social
  services

60
PRO-POOR GROWTH (DAC, p. 45)

• In addition inequalities increase risks of
  conflict and violence,and reduce the voice of the
  poor
• Public policies aimed at reducing inequalities
  require tactful building of political alliances
  to overcome vested interests. Development
  agencies can facilitate this.
• But note In no nation is inequality as grave as
  in the world between nations (E.g. UNDP/HDR and
  WDR-2000/1 p. 51.)
• ? Coherence of global policies

61
Policies the international community might
consider ?
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Policies the international community might
consider (1) (Cornia Court)

• Include distribution issues in policy advice and
  PRSPs
• Stabilization, structural adjustment and external
  openness are often helpful
• But the extreme nature and speed of the
  liberalization approach, often in the absence
  of...
• adequate macroeconomic balance, regulatory
  capacity and safety nets
• has often had a negative impact on distribution
  and poverty. (D?, widening C?)

63
Policies the international community might
consider (2) (Cornia Court, Klugman, p. 18)

• Active regional policy
• Evidence points to the value of active and direct
  policies for the benefit of marginalized,
  particularly rural, regions.
• Gender equality is good for growth and for
  poverty reduction
• Environmental sustainability is pro-poor

64
Policies the international community might
consider (3) (Cornia Court, Klugman, p. 18)

• Equitable labour market policies
• - Minimum wages, rules of hiring and firing,
  labour standards, occupational health and safety,
  (re-)training, regulations against gender and
  minority discrimination.
• Increase external budgetary support
• Speeding up debt relief...
• Reversing the decline of real aid flows...
• Targeting ODA more effectively...
• --gt would help protect vital pro-poor social
  expenditures.

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Policies the international community might
consider (4) (Ashley Maxwell, ODI)

• Rethinking Rural Development
• Multi-sectoral approaches are necessary
• But (unlike IRDPs of 1970s) plans need to be
  linked with capacity
• Rural development does not always sit happily
  with new aid modalities, e.g. SWAPs by line
  ministries or centrally-driven PRSPs
• ?CHALLENGE Strategic approaches are needed to
  raise the profile of rural issues in PRSPs and
  SWAPs !

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• THANK YOU !

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Practical tools for analyzing the pro-poor
quality of policies

• Could the CPIA used as a common approach by all
  donors ?

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Practical tools for analyzing the pro-poor
quality of policies (1)

• If donors want to work in partnership, and
  harmonize their approaches to policy analysis,
  what approaches could we use together ?
• We can use, e.g.
• PSIA
• Poverty and Social Impact Assessment
• A variety of tools for assessing the poverty
  and social impacts of each individual reform (--gt
  Training module3)

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Practical tools for analyzing the pro-poor
quality of policies (2)

• PER Public Expenditure Review
• to assess the allocation and benefit incidence
  of public budgetary resources (--gt Module 4)
• CFAA Country Financial and Accountability
  Assessment
• to assess how responsibly the public
  authorities manage public funds and what is the
  quality of their systems and capacity for
  internal and external auditing. (--gt Training
  module 4.)

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Practical tools for analyzing the pro-poor
quality of policies (3)

• CPIA Country Policy and Institutional
  Assessment
• This is the tool WB uses every year for
  deciding the allocation of IDA credits to LICs
  (with Portfolio Performance Assessment)
• Main purpose To assess the quality of a
  countrys present policy and institutional
  framework
• Quality means how conducive that framework is
  to fostering poverty reduction.

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The Democratic Principle (1)- Who should assess
whether a government is on track or not ?

• If the elected Parliaments and the elected Local
  Councils are not involved, the PRSPs lose in
  credibility as Economic Constitutions (?)
• Risk that they are viewed as donors, or
  governments, and not national documents and
  thus subject to changes in government
• Therefore important to involve not just
  governments and civil society but also
  Parliaments, Local Councils.

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The Democratic Principle (2)

• If PRSP-process too heavily controlled by the
  Min.of Finance/Planning, theres the risk that
  other ministries (e.g. of Social Affairs,
  Education, Health, Agriculture) feel lack of
  ownership and commitment.
• Make sure that you know the status of PRSP, e.g.
  compared to leading Party/Government documents.

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CPIA (1) Country Policy and Institutional
Assessment ( See http//www.worldbank.org/ida/ID
APerfalJan02.pdf )

• 20 aspects of policy assessed, each with a 5
  weight.
• Each aspect of policy should be considered in
  light of its impact on poverty reduction.
• Based on WB Country Teams subjective
  assessments, scrutinized by WB-HQ.
• Clear definitions and presentational tools

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CPIA (2) Country Policy and Institutional
Assessment

• Could this assessment (CPIA) gain in credibility
  if it were done by the wider donor community?
• At the moment country ratings are still not
  disclosed by the WB but country rankings are
  published in quintile groups.

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CPIA 20 policy aspects, grouped into 4 categories

• A. ECONOMIC MANAGEMENT
• 1. Management of Inflation and Macroeconomic
  Imbalances
• 2. Fiscal Policy
• 3. Management of External Debt
• 4. Management and Sustainability of the
  Development Programme
• B. STRUCTURAL POLICIES
• 5. Trade Policy and Foreign Exchange Regime
• 6. Financial Stability and Depth
• 7. Banking Sector Efficiency and Resource
  Mobilization
• 8. Competitive Environment for the Private Sector
• 9. Factor and Product Markets
• 10. Policies and Institutions for Environmental
  Sustainability
• C. POLICIES FOR SOCIAL INCLUSION / EQUITY
• 11. Gender
• 12. Equity of Public Resource Use
• 13. Building Human Resources
• 14. Social Protection and Labour
• 15. Poverty Monitoring and Analysis of Poverty
  Outcomes and Impacts
• D. PUBLIC SECTOR MANAGEMENT AND INSTITUTIONS

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E.g. Tanzanias ranking among the 76
IDA-countries along the 4 CPIA categories ( IDA
Portfolio Performance)

• Economic mngt Quintile 1 (Top)
• Structural policies Quintile 2
• Policies for Social Inclusion and Equity 2
• Public Sector Mngt and Institutions 1
• IDA Portfolio Performance Quintile 3
• --------------------------------------------------
  --
• OVERALL CPIA RANKING Quintile 1

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CPIA

• Ratings Scale 1 (low) through 6 (high)
• Unsatisfactory for an extended period
• Unsatisfactory
• Moderately Unsatisfactory
• Moderately Satisfactory
• Good
• Good for an extended period

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E.g. the criteria for CPIA-dimension nr 12
Equity of Public Resource Use

• INTRO
• This item assesses the extent to which the
  overall development strategy and the pattern of
  public expenditures and revenues favours the
  poor. National and sub-national levels of
  government should be appropriately weighted.

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CPIA Equity of Public Resource Use

• 2 UNSATISFACTORY
• The Overall development strategy and the
  incidence of public expenditures benefits the
  better-off more than the poor, or the incidence
  is unknown. There are few or no policies and
  programs to address disparities among
  individuals, groups or geographic areas in their
  access to public services or outcomes. The
  overall incidence of public revenues is
  regressive.

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CPIA Equity of Public Resource Use

• 5 GOOD
• Public expenditures for social services benefit
  the poor more than the better-off. The government
  has identified individuals, groups or localities
  that are poor, vulnerable or have unequal access
  to services and opportunities, and is designing,
  with their participation, appropriate targeted
  programs. The overall incidence of revenues is
  progressive.

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CPIA 20 policy aspects, grouped into 4 categories

• A. ECONOMIC MANAGEMENT
• B. STRUCTURAL POLICIES
• C. POLICIES FOR SOCIAL INCLUSION / EQUITY
• D. PUBLIC SECTOR MANAGEMENT AND INSTITUTIONS

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A. ECONOMIC MANAGEMENT

• 1. Management of Inflation and Macroeconomic
  Imbalances
• 2. Fiscal Policy
• 3. Management of External Debt
• 4. Management and Sustainability of the
  Development Programme

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B. STRUCTURAL POLICIES

• 5. Trade Policy and Foreign Exchange Regime
• 6. Financial Stability and Depth
• 7. Banking Sector Efficiency and Resource
  Mobilization
• 8. Competitive Environment for the Private Sector
• 9. Factor and Product Markets
• 10. Policies and Institutions for Environmental
  Sustainability

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C. POLICIES FOR SOCIAL INCLUSION / EQUITY

• 11. Gender
• 12. Equity of Public Resource Use
• 13. Building Human Resources
• 14. Social Protection and Labour
• 15. Poverty Monitoring and Analysis of Poverty
  Outcomes and Impacts

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D. PUBLIC SECTOR MNGT AND INSTITUTIONS

• 16. Property Rights and Rule-based Governance
• 17. Quality of Budgetary and Financial Management
  
• 18. Efficiency of Revenue Mobilization
• 19. Quality of Public Administration
• 20. Transparency, Accountability and Corruption
  in the Public Sector.

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Buzz-group excercise Assessing the relevance of
the CPIA-Criteria

• 20 buzz-groups - 20 CPIA policy aspects
• 2-3 members per group
• just turn to your neighbour on the spot
• Each group to read and assess the relevance of
  the criteria for 1 dimension.
• 5 min. for work in buzz-groups
• 20 x 1 min for a very brief feedback to plenary
• Relevance of the policy aspect for PovRed ?
• Relevance of the CPIA-criteria for the policy
  aspect ?
• Total 25-35 min
• Objectives Group dynamics becoming familiar
  with the CPIA. No serious assessment of the
  quality of CPIA.

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• THANK YOU !