Designing the development agency of the future

The task of designing a development agency is far from theoretical. Cabinet seats are at stake. And power in Government. And jobs. And, oh, I nearly forgot, reach, and impact on the lives of poor people. That’s why the topic attracts fevered attention, as when DFIDDepartment for International Development was created in 1997, or, more recently, when Canadian CIDACanadian International Development Assistance Agency was merged into a new Department of Foreign Affairs, Trade and Development, and Ausaid was merged into a Department of Foreign Affairs and Trade. Both these decisions sparked controversy – see, for example, here and here. There have been similar reorganisations or changes of job description in other countries, for example in Denmark, which now has a Minister for Trade and Development Cooperation.

I’ve had a long-standing interest in this topic, which is why I have been pleased to be involved in a new ODI project on the subject, and also in the Enquiry by the UK Parliament’s International Development Select Committee on the Future of UK Development Cooperation. The terms of reference for the latter ask ‘whether a stand-alone Department for International Development has a long-term future?’. There’s plenty on my website on the topic, including thematic pages on aid, and on  ‘what’s next in international development’. See for example, my piece from 2005 called ‘Spyglass, Spigot, Spoon or Spanner: what future for bilateral aid?’, or my contribution to the new ebook edited by Andy Sumner and Tom Kirk, The Donors’ Dilemma: Emergence, Convergence and the Future of Foreign Aid. My contribution to thatdeals with the future of DFID.

There will be more in coming months, but to keep the ball rolling, here is a summary of a workshop we held at ODIOverseas Development Institute (London) in April, along with the powerpoint for the event and the background paper. The ODIOverseas Development Institute (London) project is led by Mikaela Gavas, with Raphaelle Faure.

Workshop report

An informal roundtable on the Future of Development Agencies was held at ODIOverseas Development Institute (London) on 8 April. There were over 20 participants, including academics, NGONon-governmental organisation representatives, development professionals and former diplomats. The meeting was held under the Chatham House Rule.

The starting point was that ‘international development’ is not just about ‘aid’. The new challenge to development policy arises from the fact that:

• There is a declining number of low income countries, currently 36 and forecast to fall further (World Bank, 2014).
• Many of these are fragile states or conflict-affected, posing specific problems that require multi-dimensional responses beyond aid (World Bank, 2013).
• There is a growing list of issues which impact on national development and welfare in developing countries at all levels of income – and indeed in developed countries – but which require a response at the global level. 

To put the argument most starkly, aid in very poor countries has been essential in the past, remains important today, but will be of declining relevance in the future. Are development agencies whose sole purpose is to deliver aid becoming redundant? What other functions will these agencies perform? Who will they work with? What modalities of implementation will they have to develop? And what skills will they need?

The paper reviewed the background literature on organisational theory and on the organisation of external affairs. It also examined experience of managing development cooperation (drawing on research by the OECD). It concluded that

‘The test of any government system is whether it can deal efficiently and effectively with the challenges it faces. In this case, the system needs to deliver aid at country level, integrate the instruments of foreign policy in complex political emergencies, and help broker the global deals that are necessary to provide global public goods.

There are many different models of organisation and path dependency is an important determinant of institutional design. Nevertheless, there are core principles at stake.

First, both national interest and development coherence require that a joined-up approach be in place.

Second, these approaches need to be articulated, possibly in the form of national strategies.

Third, different instruments need to be integrated, but without sacrificing the special characteristics of each. In particular, the principles of humanitarian aid, including impartiality, must be protected.

Fourth, there needs to be strong leadership from the centre, to prevent inter-institutional conflict.

Fifth, the necessary skills need to be in place, both at country level and internationally.

Sixth, there needs to be constant assessment of performance, including through monitoring and evaluation.’

There were four discussants:

• Adolf Kloke-Lesch made an important distinction between ‘normative’ development agencies and ‘instrumental’ foreign affairs ministries: the roles should not be confused. He suggested that governments had a tendency to fall back to vertical pillars as the default mode, but said that when a different approach prevailed, there were usually three factors at work: (a) an urgent problem to be solved; (b) the importance or ‘strength’ of the issue; and (c) the desire for ‘something new’. He cited as examples Germany’s experience with renewable energy, the fall of the Berlin Wall, post-9/11, and the sustainability agenda (including climate).
• Sir John Holmes said that he was, in general, sceptical about tinkering with the boundaries of Government. In the UK context, he was also supportive of DFID, which had the experience and wisdom, as well as the capacity to manage a large budget. Rather than changing the structures of Government, he thought it would be better to retain silos of expertise and concentrate on making Whole-of-Government approaches work – for example, using the National Security Council. He did not think a development ministry could become a Ministry of Global Affairs.
• Andrew Sherriff highlighted the three elements behind the European External Action Service’s successful role in facilitating dialogue between Kosovo and Serbia. These were a sense of urgency, political leadership and an uncharted territory. As a result, money was made available, the best expertise was brought together from across the EUEuropean Union institutions (e.g. experts on issues like integrated border management or education qualification recognition) and there was a high level of political engagement which was crucial in making this possible. This was, however, an exceptional case.
• Hetty Kovach was unable to participate, but sent speaking notes. She describes two key trends across DACDevelopment Assistance Committee (of the OECD) donors: i) DACDevelopment Assistance Committee (of the OECD) development agencies are increasingly leveraging policy expertise from other parts of government to achieve their development aims in partner countries and ii) there is an increasing integration of development and foreign policy objectives (diplomacy and trade) within DACDevelopment Assistance Committee (of the OECD) countries. The second trend presents challenges and opportunities: it offers greater opportunities for a more co-ordinated and coherent approach in partner countries but this is at the risk of development policies and practices becoming increasingly subservient to donor’s national economic, security and political interests, ultimately leading to less effective development measures. DACDevelopment Assistance Committee (of the OECD) Peer Reviews demonstrate that, at present, there is a lack of clear processes for managing competing interests and tackling inevitable conflicts of interests in a transparent manner among DACDevelopment Assistance Committee (of the OECD) donors.

The wider discussion focused on the changing poverty landscape and development agenda, the growing task list for development actors, the pros and cons of different development agencies’ models and the types of competences needed for these agencies to be most effective. Among the points made were the following:

1. The world is at the beginning of a completely unpredictable process of change (think Russia, China, the Middle East). Therefore, flexibility is a key requirement. It is very difficult to design new structures that will be suited for unknown needs in the years to come. Instead of creating agencies that will cope with unknown challenges, there should be a centrally driven structure that ensures proper cooperation is happening between agencies – the UK’s National Security Council was cited as an example that worked rather well since it was set up. It was felt that the way forward may be to have solid line ministries, while putting in place flexible mechanisms that allow for coordinated work between institutions when needed ‘What you need is good solid pillars and lots of hooks for hammocks. The problem is that you need to make sure you undo the hammocks once they’ve served their purpose’.
2. In a world where solving the development agenda will require going beyond traditional aid, overcoming the confusion on what aid is for (interest vs. altruism) and agreeing on what we mean by development cooperation will be key. Development agencies are trying to tackle too many issues through a poverty eradication lens.
3. The answer to the question about architecture is context-specific. In some countries (e.g. the Netherlands), integration will work well because they are not major global, foreign policy players; in other countries (e.g. the UK, the US), there is a greater risk of aid being instrumentalised.
4. However, it is also important to understand that institutional design is not rational. It reflects bureaucratic politics (e.g. Australia, Canada).
5. The option of creating a ministry for global affairs was deemed to be unrealistic as it would have to tackle more issues than any one ministry can handle. Rather, processes facilitating joint work between institutions need to be created (at the national, regional and international levels). Nevertheless, in practice, creating and sustaining such processes can be very difficult. Examples include:
6. The European External Action Service’s role in facilitating dialogue between Kosovo and Serbia as described by one of the discussants.
7. The UK’s coordinated engagement in South Sudan – the UK set up a joint unit between the FCOForeign and Commonwealth Office and DFIDDepartment for International Development under a joint leadership which worked well in the beginning but lost momentum, leadership and direction over time as political interest declined.
8. Three areas were identified as having the potential to improve joined-up approaches: the institutional structures themselves, the processes in place for inter-institutional cooperation (formal/informal arrangements) and the competences and capacities available.
9.   In governments, some ministries have a normative purpose (e.g. development) while others have a more functional role (e.g. foreign affairs). If a development ministry is integrated in another ministry such as foreign affairs, there is an increased risk that aid will be instrumentalised to achieve the functional purpose such as pursuing security policy objectives.
10. Discussions on the UK institutional architecture pointed to the fact that DFIDDepartment for International Development has a lot of money – if not too much – and this limits the options for reforming the system. ‘If the Foreign Office were to integrate DFID, it would be dwarfed by it’. Furthermore, DFIDDepartment for International Development is experienced at spending large amounts of money whereas the FCOForeign and Commonwealth Office is not. A consequence of DFID’s increased budget was described as leading to greater pressure to demonstrate effectiveness which increases the risk for policy decisions to be driven by national interest.
11. Several participants made the point that global public goods (e.g. climate change, health, etc.) represent a field that is so broad, and which requires financial resources that are so great, that a poverty focused agency would not have the elasticity to deal with these issues. In the post-2015 discussions, too many dimensions are being wrapped together and elements such as climate mitigation should be taken out of the aid discussion altogether.
12. On the other hand, there is an argument for organising an agency around a set of global issues together with the relevant instruments and financial resources. Development agencies have certain strengths that may make them better candidates for playing such a role as they know how to run and implement large programmes. ‘Why should their expertise not be used to run programmes that go beyond poverty toward providing GPGs?’
13. However, traditional donors are less confident about their role in the world and less inclined to be altruistic. This was said to be obvious in the area of environmental issues which is dropping down the political agenda. Talking of GPGs and getting traction is a struggle, you have to answer questions such as: ‘Why should we penalise ourselves when the Chinese don’t play along?’.
14. The point was made that you should not only focus on bilateral systems as closed systems, but also think of system-wide coherence at the regional and multilateral level (e.g. EEAS, UN). It is important to acknowledge that we are in a multilevel system; agencies need to think beyond their own borders to look at how they can ensure coherence with the work carried out by regional and international organisations.

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Raphaëlle Faure, Mikaela Gavas and Simon Maxwell

April 2014

Image: http://magazine.iupui.edu/11Fall/img/photos/features/large/design.jpg