International Development, Where Now?

Loosely defined as the transfer of funding and decision-making powers to local actors, localization is certainly not a new concept – phrases such as ‘locally-led development’, ‘community-led development’ and ‘doing development differently’ have been pretty commonplace for years.

But as an all-encompassing narrative, localization took centre stage a few years ago when US Agency for International Development administrator, Samantha Power, outlined it as the rhetoric at the centre of what her department does. it has gained further momentum through the movement to decolonise aid – itself a reaction to a number of external factors, not least the Black Lives Matter movement and the need for greater inclusivity around language used within the aid sector.

But what is local? How can we ‘localize’ in a meaningful way and what’s our role as development consultants in all this?

These are just some of the questions we tackle in this latest episode of our ‘International Development, Where Now?’ podcast.

We’re not afraid to face up to some of the thorny issues in the sector in this soul-searching discussion that sees us delve into what it really means to go beyond the ‘fly in, fly out’ nature of development consultancy, whether there’s still a role for global communities and how we do away with knowledge hierarchies.

We also cover some of the potential risks and barriers to localizing and try to offer some achievable, pragmatic solutions.

Can leaders choose a development path? Who decides and how? What conditions lead to a pro-development agenda and what’s the role of external agencies in all of this?

We ask leading economist and former policy advisor to the UK Foreign Secretary, Stefan Dercon, these questions and more in our latest podcast: International Development, Where Now?

Chatting about his revealing book, ‘Gambling on Development’, Dercon draws on his long and far-reaching experience as a senior civil servant within the UK’s Department for International Development, to explain why some countries - like China and Indonesia - seem to opt for a growth-based future while others, like Malawi, remain poor.

Stefan Dercon is the Professor of Economic Policy at the University of Oxford, former Chief Economist at the UK Department for International Development and former Development Policy Advisor at the UK’s Foreign, Commonwealth and Development Office. He chats to Stevan Lee, Chief Economist at Oxford Policy Management.

In the fourth episode of the latest series of our popular podcast, Nigerian economist, Adedeji Adeniran, tells us how initial optimism turned to panic when Covid first hit the country two years ago.

While the Government’s response had proved effective at containing the Ebola virus just a handful of years earlier, Dr. Adeniran describes how it soon became clear that this new shock brought new challenges – as well as aggravating emerging ones.

2019 saw some of the fastest growth to the Nigerian economy since the recession of 2014/15, with growth consistently at an annualised 2% every quarter that year, sparking a sense that the country was on a path to recovery.

This optimism proved short-lived, however, when the pandemic and resulting global recession struck, exposing Nigeria’s already highly constrained fiscal space and a lack of response possibilities.

In this illuminating episode, Dr. Adeniran, describes how the limited options left to the government have acted to emphasise a trend that was already emerging within the country: the rise of a ‘new urban poor’.

Despite the promising economic growth witnessed just before the pandemic, government finances weren’t keeping up and, with a growing population, GDP per capita continued to fall, with those in the informal urban sector hit the hardest. Covid simply acted to build on this, tipping those not already classed as poor into poverty.

In this episode we find out what this all means for Nigeria’s recovery prospects, and how this is likely to play out against the backdrop of another global crisis: the Russia-Ukraine conflict.

In a country where oil still contributes more than 50% of revenue, despite accounting for less than 10% to GDP, how will the conflict’s effect on fuel prices affect the Nigerian economy? Is there scope for the Government to harness rising international demand to help redress fiscal imbalances and set the country on course for Covid recovery?

Covid in Pakistan: Financial consolidation vs. damage limitation – who wins and who loses?

The fifth most populous country in the world, Pakistan has witnessed four waves of Covid, yet deaths to date – while high – have not amounted to the numbers seen in some less populous countries.

Pakistan is used to macroeconomic shocks and crises. The boom and bust cycle of economic growth in Pakistan has continued since independence and is closely linked to the country’s electoral cycle – towards the end of each government’s five-year term, the fiscal and external account deficits tend to increase, leading the country towards financial crisis and an approach to the International Monetary Fund (IMF) and other creditors for support.

Inevitably the pandemic struck against this backdrop, and at a point in the cycle where the Government was gearing up to raise revenues and cut back on spending in a bid to restore some financial stability within the country.

Interestingly, the response to the pandemic called for an almost opposite approach and the Government responded with tax exemption and price support policies to help stimulate the economy: quite an easy political option in the short term. Broadly this expansionary policy has been successful at stimulating a strong recovery – there are winners and losers needless to say. But coming on the back of pre-election fiscal expansion, the policy also leaves Pakistan with a severe debt burden and inflationary pressures, even though another election is just over the horizon.

In the third episode of the new series of the Policy in Pandemics podcast, Stevan Lee talks to public finance expert Nohman Ishtiaq, about the story of Covid-19 in Pakistan and the complex route to a position where the government’s policy options might be rather limited.

Join Policy in Pandemics host, Stevan Lee, as he explores the economic impact of Covid-19 in Kenya with economists Wangari Muikia and John Nyangi.

As in many countries across the world, stories of hoard-buying, home working and the emergence of a ‘new normal’ characterised the arrival of the pandemic in Kenya.

The Government responded quickly with an almost immediate lockdown, triggering a wave of urban-rural migration as the urban services sector felt the impact of the strict containment measures. Despite pivoting towards the domestic market, sectors such as tourism and other services were heavily affected – micro, small and medium enterprises in the informal sector in particular, bore the brunt of reduced trade in cities like Nairobi.

Conversely, other important sectors – namely agriculture – were less affected, and their resilience helped to support the economy as a whole at a time when export markets suffered. 80% of agricultural firms remained open and operating compared to around 40% of those firms operating within the tourism sector.

Despite enjoying years of relatively strong growth before the pandemic, a shrinking fiscal space caused by a high debt burden left Kenya with limited options for a stimulus package. With little fiscal buffer, a large bailout of the magnitude seen in countries like the UK simply wasn’t possible. Instead, like may other sub-Saharan African countries, the Government has had to rely on multilateral borrowing from the World Bank and IMF to help weather the economic storm caused by Covid.

This has left the country walking a difficult balance between providing support to households through tax cuts and cash transfers while still trying to raise revenue for public expenditure – indeed, this year saw the reversal of some tax cuts and the introduction of completely new taxes.

What this means in reality is that while estimates for growth and recovery don’t appear too ominous – with forecasts suggesting setbacks equivalent to just a year or two of lost growth – the impact on poverty at the household level is likely to be much more severe and long lasting and is further compounded by pervasive inequality between genders and regions.

Kenya’s recovery from Covid will be very much dependent on the ability of policymakers to recognise this inequality and address it to help reverse the effects of poverty which could otherwise worsen livelihoods for years to come.

In the first episode of the new series of our Policy in Pandemics podcast, Acting Chief Economist, Stevan Lee talks to Selim Raihan, Professor of Economics at the University of Dhaka and Executive Director at SANEM, about the economic impacts of the Covid-19 crisis in Bangladesh – and the Government’s response.

Thanks for listening to the first series of Policy in Pandemics. We're taking a short break while we line up the next episodes but will be back in a couple of weeks.

Despite an unexpected delay in covid-19 mortality rates, Africa is facing an 'unprecedented policy crisis'.

We speak to Kate Dooley, the West Africa Regional Director for the Tony Blair Institute for Global Change. Kate talks about her experience working on Ebola in 2014-15 in Sierra Leone and the differences of covid-19 to Ebola. We discuss what is happening on the ground in Africa, what might be behind the surprisingly low mortality rates, and the impact an economic shock of this size will have on Africa, especially as the rest of the world begins to re-open their economies.

Host: Peter Harrington

Editor: Emmie Fairbairn

Producer: Katherine Valentine

Can covid-19 bring greater transformation and morality in economic policy making? We conclude our conversation with Matt Andrews examining the longer term impact covid-19 might have on the international development sector.

Matt discusses the opportunity for ‘game-changing growth’and his hope that this crisis will accelerate a shift towards countries taking greater ownership over reform, and greater authorship of their own development pathway.

In the first of a two part conversation we discuss what makes good crisis management, good communication, and leadership in the public interest. We speak to Matt Andrews, head of the Building State Capability Programme at Harvard, and Edward S Mason professor of public policy at Harvard Kennedy School of Government.

We explore what some countries have got right, empowering people at all levels of government to lead and take risks – moving from ‘control orientation’ to ‘coordination orientation’ – and the need for mechanisms to enable rapid learning to develop context specific responses.

Host: Peter Harrington

Editor: Emmie Fairbairn

Producer: Katherine Valentine