New emphasis

[ By Ludgera Klemp ]

The era when ideological concerns linked to the East-West conflict had an impact on development discourse was finally over in the 1990s. The 1980s were then judged harshly; and they are still referred to as the “lost development decade” today. Critics spoke of the bankruptcy of earlier strategies, which had been geared towards modernisation and industrialisation according to western models of development. It was understood that economic and societal preconditions are crucial for development. Neither structural causes of poverty nor social, economic and political unfairness were any longer considered givens.

At the time, the BMZ decided that the extent and nature of assistance provided to any country should henceforth depend on such matters. Moreover, assistance would have to be geared to improving partners’ economic and social environments. From then on, the focus was on governance. In other words, policy-makers looked at the misuse of political power and public resources as well as at the violation of human rights. Public-sector reform and support for it received more attention. Increasingly, the role and legitimacy of institutions were emphasised. On behalf of BMZ, a team led by Klemens van de Sand (1992) defined five core criteria for development cooperation:
– respect for human rights,
– public participation in the political process,
– rule of law,
– creation of a market-friendly economic order and, finally,
– governments’ development-friendly orientation.

With the endorsement of the OECD’s Paris Declaration on Aid Effectiveness in March 2005, the governance debate reached a new level. In the Declaration, developing countries have pledged to exercise stronger leadership in terms of policymaking (ownership), whereas donors have committed to better coordinating and harmonising their efforts, and to using locally established institutions and procedures (alignment). Furthermore, both sides acknowledged the need to manage for results and strengthen mutual accountability.

For international donors to be able to directly support other countries’ budgets with development funds, certain conditions must be met. Among the key requirements are transparent, accountable and effective state institutions. Accordingly, the debate on how to measure and assess the quality of governance has intensified.

Today, the BMZ’s updated criteria set new standards. Taking account of the recent international debate on issues such as human rights, gender, statehood, crisis prevention and conflict management, the list is organised in five chapters:
– “Pro-poor and sustainable policies” focuses on whether partner governments’ activities are geared to reaching the UN Millennium Development Goals (MDGs).
– “Respect for, protection and fulfilment of all human rights” looks at governments’ efforts to gradually implement all human rights for all segments of the population – regardless of ethnicity, religion, culture or gender. Matters examined in this context include not only the ratification and implementation of international agreements, but also whether governments and officials act in biased, discriminating ways when delivering services.
– “Democracy and rule of law” addresses aspects of legitimacy, constitutional rule according to the separation of powers and the extent to which a given state is able to impose an operational monopoly of force.
– “Efficiency and transparency of the state” deals with how the public sector implements official government policy. In this context, attention focuses on the efficiency of government agencies, the existence and strength of reform-blocking veto powers as well as on possible links of state and government to criminal or even terrorist organisations. External aspects may also matter: an influx of refugees from some other country, for instance, or a conflict raging on the other side of a border.
– “Cooperative stance within the international community” considers the way partners behave in global, regional and subregional settings.

Policy relevance

BMZ uses the updated criteria catalogue as an internal planning and management tool. It is relevant for all country-related decisions – from drafting policy and choosing instruments through to coordination with other donors. The list is essential for drafting country concepts, the tangible policies for dealing with particular partners. It also matters for engaging in constructive dialogue with their governments.

In the original catalogue of 1991, it says: “The BMZ does not see the new criteria as thumbscrews, but rather as an attempt to put cooperation with developing countries on a new footing.” That is still the case. The list of criteria remains geared towards answering one key question: How is cooperation possible in spite of evident governance shortcomings in any individual case? It is not predominantly about how much money should be earmarked for any given country.

Even though the catalogue is, of course, relevant for allocating funds, the criteria do not set conditions for disbursement. At stake is not so much the amount of official development assistance (ODA), but rather how cooperation with a partner country can – and should be – done. The idea is to design strategies and instruments according to the particular situation, in order to use funds to maximum effectiveness. If measures are designed well, after all, it is possible to support processes of transformation even with relatively little money. For the sake of benefiting poor and disadvantaged groups, all German engagement must aim for societal and institutional change.

Recent experience shows that poorly governed, fragile states, which may also lack any orientation towards reform, are particularly challenging for development agencies. Accordingly, the updated criteria are especially relevant for countries that are stuck in conflict, have recently emerged from strife, are exposed to deteriorating governance or even in danger of institutional disintegration. The updated catalogue enables the BMZ to come up with a differentiated and graded picture of each country on the base of uniform criteria.

Compared with the conventional governance indices, the BMZ catalogue goes far beyond assessing only the effectiveness of the public sector and the viability of formal democratic procedures. It assesses all sorts of opportunities for public participation in the political process, looking beyond parliamentary and presidential elections. What is more, it looks at the range and depth of a state’s legitimate monopoly of force, also considering informal powers and veto agencies. The BMZ takes the MDGs very seriously in the context of economic, social and cultural human rights. It also considers women’s rights a touchstone for governments’ development orientation.

The criteria category of “Cooperative stance within the international community” merits special mention. While such conduct matters very much to German development policymaking, the majority of conventional governance indicators do not even take it into account, mainly focusing on domestic matters instead. Given the large number of politically relevant international and even global challenges, however, rating a government’s development orientation needs a more convincing foundation.

Moreover, the conventional indices hardly reflect the most recent developments. Compiled annually, the data normally refers to the year before. For that reason, the BMZ draws on other sources as well – including rapid appraisals of a country’s political economy, indicators of crisis and reports from the embassies. The result is a comprehensive and competent assessment of countries’ situations on a reliable and up-to-date base. Therefore, the catalogue is one of BMZ’s indispensable management and planning instruments.