Whose Knowledge? The challenges for North-South development co-operation

The varying degrees of participation in the Global Partnership for Effective Development Co-operation’s High-level Forum in Mexico demonstrated how wider stakeholders’ co-operation has ever been. More than 1,500 participants from more than 130 countries with different agendas and expectations took part in the conference in Mexico on 15-16 April, 2014. Northern partners offered their willingness to work with all parties to tackle global challenges under common goals with differentiated responsibilities. However, the legitimacy of the forum has been debated. The decline in the participation of China and India, as well as apparent disagreement from Brazil, despite its attendance, raised questions over how this new partnership can be further developed. It would be very difficult to imagine the future of the partnership without participation of these three countries.

As soon as I arrived in Mexico, I was immediately asked at the hotel reception: “Why didn’t China come? Will China still come?” These questions reminded me of the situation at the Busan Forum on Aid Effectiveness in 2011. China did take part in that event, but in a relatively lower profile group. It is natural to ask why China, India and others have been reluctant to participate in this ever-open forum. Wouldn’t these countries like to share their responsibilities for international development? With South-South Co-operation given high recognition at the Global Partnership’s High-Level Forum, why were those countries still unhappy? Are they really so difficult to “engage”?

To respond to those questions, one should briefly review how this new partnership was developed, and, importantly, note the huge knowledge gap that existed at that time, affecting real and equal communication.

Development assistance after the Second World War was provided mainly by the United States until the 1960s. The US called for the establishment of the “Development Assistance Group” in 1960 with 11 allies. This was the first expansion of a Western-oriented international development agenda. The group was then further institutionalised into the Development Assistance Committee (DAC) within the Organisation for Economic Co-operation and Development in 1961. This Western-dominated international development agenda continued until the new century, alongside other forms of international aid provided by other players like the former Soviet Union and Arab countries. The Rome from different stakeholders, particularly from recipient countries. From a Chinese perspective, the subsequent formation of the Working Party on Aid Effectiveness and The Busan High-Level Forum signalled further expansions of the Western-dominated international development discourse. The West has been using a similar approach through its controlled institutional structure and well-elaborated framework to secure the “buy-in” of others in order to sustain its basic agenda. China and, I believe, others have been very cautious not to be “bought in”.

China and others felt very much in the position of being “engaged” even though the partnership has a well-legitimised governance structure. The question was not so much about the structure, as the approach and framework which are deeply rooted in Western-based knowledge for development. The modern knowledge for development is very much a marriage of neoliberalism and neo-institutionalism. It addresses “conditional change” – that social transformation or poverty reduction must be based on “good governance”. Furthermore, international development co-operation works only upon a good institutional base, therefore, building good institutions should be the major task of such assistance. Alternative development stories – from China for example – provide different perspectives, for instance,firstly to prioritise infrastructure and agriculture even if they do not run entirely against this norm.

In my view, the West has established well-elaborated knowledge production systems via huge tax-payer funding to constantly generate seemingly undeniable theories, creating the field of Development Studies, and producing ‘independent development industries” to justify, modify and sustain this development business. This has at least created deep knowledge and path dependence, even if we ignore the element of self-interest possessed by the development industries. This system intends to continue while China and others might find difficulties in owning this process, or phasing in to share the costs. This knowledge dominance has affected to a certain degree the mutual and equal communications between the North and South. At the same time, in recent years we have witnessed other actors playing an increasingly important role in development co-operation, for example the Arab donors, civil society and philanthropic foundations.

Rather than completely joining the system, China and others insist upon South-South Co-operation by advocating a “non-interference” policy toward partner countries focusing on an “, or not focusing on immediate institutional reform. The South-South Co-operation providers also felt that a knowledge gap existed between Southern and Northern partners. Unlike the mainstreamed development knowledge produced by the West, South-South Co-operation providers have little knowledge on their own development assistance, while large bodies of knowledge are generated by Western research institutions.

It is essential to have a balanced knowledge base for real and meaningful development co-operation between the North and South. This co-operation relies upon an interaction of knowledge, reflecting each side’s comparative advantage.

Think tanks from South-South Co-operation provider countries during the Global Partnership’s Mexico High-Level Forum agreed to develop a network focusing on generating its own understanding of its members’ development assistance. This initiative will not only help South-South Co-operation providers to strengthen and improve their development assistance programmes, but also aid mutual communication between North and South in international development. The Global Partnership can serve as nuanced platform for think tanks from the South to share their knowledge with those from the West. Also, the Global Partnership can facilitate exchange among southern partners to strengthen their solidarity. The voice from Southern countries about their own development can be better heard here, as the platform is widely attended.

LiBioXiaoyun Li is Dean of the College of Humanities and Development at China Agricultural University, and Chair of the China International Development Research Network. He is also a member of the Rising Powers in International Development Advisory Council, as well as the Future International Cooperation Policy Network.

How we can benefit from better tax administrations

No one likes paying taxes. But everyone benefits when collection of those taxes is efficient and fair. For almost all developing countries, building more effective and trusted tax administrations is critical. This helps finance much needed social spending, infrastructure, and reduce dependence on aid, now subject to its own pressures. It’s also a key pillar in building accountable, effective and respected government institutions.

Achieving this is partly down to good tax design. But it is also largely a matter of building strong tax administrations. This is not easy. A new instrument being developed at the International Monetary Fund with donor support and technical input from a wide range of experts — the Tax Administration Diagnostic Assessment Tool (TADAT) — aims to help.

The tool — which is welcomed in the Communiqué of the First High-Level Meeting of the Global Partnership for Effective Development Co-operation — provides an independent, standardised, evidence-based, quality-assured, all-round assessment of the performance of a tax administration. All of these adjectives are critical, as will become clear. TADAT provides, in effect, a revenue-side analogue to the highly successful Public Expenditure and Financial Accountability (PEFA) framework.

The technical design of TADAT will be completed in the next few months. The tool itself will be posted on the TADAT website for public comment in a few weeks. It has already been piloted in three countries – in Zambia, a low-income economy; high-income Norway; and the emerging economy of South Africa. Countries differ greatly in circumstances, culture and organisational/legal structures, and it is important that the tool be robust enough for use under a wide range of circumstances.

With several more pilots planned, results have been uniformly encouraging so far. All three pilot countries have found the tool extremely helpful. One striking regularity is that administrations often found that they were not performing as impressively in some areas as they had thought — but that they were also not doing as badly in others as they had feared. This is exactly the value of an independent, standardized assessment.

TADAT works by evaluating a tax administration in each of nine ‘Performance Outcome Areas’ (POAs), shown in the TADAT ‘wheel.’ This starts with taxpayer registration — making sure all are in the tax net who should be, and that records are up to date – and goes all the way to looking at how tax disputes are handled and whether the tax administration is working transparently. A score is given for each area, with 27 ‘indicators’ forming part of 54 detailed ‘dimensions.’

This is all much simpler than it may sound. Take, for instance, POA 5: Payment of Obligations. Clearly any tax administration wants to make sure that taxpayers pay on time and in full – so one of the two indicators here is timeliness of payments. We can assess this by looking at such things as whether VAT payments are made on time, recording an ‘A’ if the proportion is above 90 percent to ‘D’ if it is below 50 percent.

This exercise doesn’t aim to reach some overall score or country ranking. Nor does it come up with immediate recommendations or advice. This is diagnosis, not prescription.

The idea, rather, is to help countries themselves to identify their own tax administrations’ relative strengths and weaknesses, and develop reform strategies accordingly. TADAT’s standardization and rigid insistence on firm evidence for all assessments will make a major contribution to more effective development co-operation, helping donors and other stakeholders identify and agree on the areas where support is most needed, coordinate their efforts and debate the issues in an agreed framework.

And with repeat assessments, TADAT will give a systematic and structured view of progress being made.

Importantly, TADAT is not only for developing countries. Tax administrations in all countries face the same basic challenges, and indeed the years since the 2008 financial crisis have exposed weaknesses in many tax administrations in advanced economies, and lent renewed urgency to fair and effective tax collection in many more. At the same time, many have been asked to do more with fewer resources. For them too, a hard-nosed and independent assessment of their strengths and weaknesses can provide an invaluable perspective in deciding their own priorities for improvement.

Its implementation is being overseen by a Steering Committee of enthusiastic donors – the European Union, Germany, Japan, Netherlands, Norway, Switzerland, and United Kingdom along with the IMF, World Bank and South African Revenue Service. A technical advisory group provides, well, technical advice. Day-to-day operations are overseen by a small secretariat within, but at arm’s length from, the IMF.

This secretariat will be responsible for developing the tool, and — crucially — for assuring the quality of TADAT assessments.

These assessments will be undertaken by a wide range of organisations: regional development banks, international organisations, consultancy firms and others. A key element of the TADAT philosophy is that assessments should be undertaken only by tax administration experts specifically and extensively trained to do so. Over the next few months, a core goal is to build up a highly professional pool of accredited assessors to undertake the substantial work ahead and ensure that the unique and exciting potential of TADAT is fully realised.

KeenBioMichael Keen is Deputy Director in the Fiscal Affairs Department at the IMF, and Acting Head of the TADAT secretariat. For more information on TADAT, see www.tadat.org or contact secretariat@tadat.org.

Civil Society’s Campaign for Effective Development: the Istanbul Principles

How has civil society adjusted to the shift in global dialogue from aid to development effectiveness? Civil society has been at the forefront of campaigning for effective development, while still recognising that aid has the potential to help eliminate the root causes, as well as the symptoms of poverty, inequality and marginalisation.

Under the banner of the CSO Partnership for Development Effectiveness (CPDE), civil society has committed to the three-year programme “Civil Society Continuing Campaign for Effective Development.”

The programme, announced at the Global Partnership for Effective Development Co-operation’s High-Level Meeting in Mexico in April 2014, aims to make several concrete contributions to global development. At the end of the three years, CSOs in at least 50 countries should be able to claim their rights in multi-stakeholder development effectiveness policy arenas, as well as working on their own effectiveness. By then, CSO advocacy positions should also be clearly influencing global development and development co-operation policies. Finally, multi-stakeholder initiatives should be advancing an enabling environment for CSOs at relevant national, sub-regional, regional and global policy arenas.

Looking at our own effectiveness

In the two years since Busan, CSOs around the world have been actively promoting the Istanbul Principles for CSO Development Effectiveness and the International Framework for CSO Development Effectiveness. Hundreds of CSOs at the country level have developed initiatives to assess and improve their practice to make sure development has more positive effects on the lives of poor and marginalised people.

CPDEquoteDespite strong evidence of shrinking spaces for CSOs as independent development actors, stories of good development practices attest to the commitment of CSOs to work in ways that are consistent with the principles of development effectiveness.

For example, a “Training of Trainers” workshop in Johannesburg, South Africa involved 45 trainers from around the world to develop regional plans and advance development effectiveness in their region. Codes of conduct, workshops and learning tools have been adapted to country contexts to increase awareness of the Principles and their practical implications. This work includes promotion of the Principles with official aid provider agencies and partner country governments; workshops to strengthen Human Rights-Based Approaches to development co-operation; promoting gender equality as an essential condition for CSO development effectiveness; and developing tools and workshops to strengthen understanding of development relationships that reflect equitable partnerships. Finally, CSO are working to be more transparent and fully accountable for their development efforts.

Reflecting on emerging results

These efforts are starting to show results. For instance, the Istanbul Principles helped grassroots communities in Cameroon to participate in local development plans. They also helped establish five citizens’ councils across the country to give the people a voice in local governance.

In Georgia last year, a Memorandum of Understanding (MOU) was signed between local CSOs and the Parliament, officially endorsing the Istanbul Principles. The MOU institutionalised policy dialogue based on mutual respect, trust and fair co-operation between legislative bodies and CSOs —reflecting the beginnings of equitable partnerships and solidarity.

In Asia, CSOs in Cambodia developed their own Code of Ethical Principles and Minimum Standards for NGOs to support their work on their own organisational practices. Cambodian CSOs also played a pivotal role in developing their own self-regulation system to practice transparency and accountability.

CSOs’ commitment to maximising their development impact is starting to bear fruit, as shown by some of the many examples of CSOs working on their own effectiveness and accountability as independent development actors.

Continuing the Campaign

The fourth High-Level Forum on Aid Effectiveness held in Busan in 2011 was a breakthrough in its acknowledgement of the link between effective CSO work and the conditions that enable them to maximise their contributions to development. The policies and practices of governments, donors and the private sector all affect and shape CSOs’ capacity to engage in development practices. Progress in realising effective development, therefore, depends not only on CSO initiatives but also equality among all stakeholders involved in shaping the global development architecture.

Despite strong evidence of shrinking spaces for CSOs as independent development actors, stories of good development practices attest to the commitment of CSOs to work in ways that are consistent with the principles of development effectiveness. Clearly, challenges remain and more progress is needed, which is why the CSO Partnership is more committed than ever to continue its campaign for effective development.

AkakpoBioPatricia Blankson Akakpo is one of the CPDE Co-Chairs and Senior Programme Officer/Head of Secretariat for the Network for Women’s Rights in Ghana (NETRIGHT). She has a Master’s degree in development studies from The Hague, Netherlands, and more than fifteen years of experience in the field of gender and development, human resource management, labour relations and programme management.