GLOBAL POLICY WORKSHOP
The Development Impact of
Rich Countries’ Policies
Fourth Annual Conference of the Global Development Network
Cairo, January 16-17, 2003
Contents
Workshop statement
3
Summary of discussions
6
Participants
22
Background papers
23
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GLOBAL POLICY WORKSHOP
The Development Impact of Rich Countries’ Policies
Cairo, January 16-17, 2003
WORKSHOP STATEMENT
To help identify knowledge gaps about the development and poverty impact of rich
countries’ policies and related opportunities for action-oriented policy research, a
workshop sponsored by the Global Policy Project was held under the aegis of the Global
Development Network in Cairo, Egypt on January 16-17, 2003. Forty development
practitioners and analysts from the North and the South participated.
Rationale
The meeting endorsed the view that rich countries’ policies need scrutiny and adjustment
to enhance the prospects for sustainable poverty reduction. Over eighty percent of
humanity and the bulk of the world’s poor live in developing countries. Their voices are
muted in the debates that shape aid, trade, private capital flows, migration, intellectual
property regimes and environmental practices.
Agreement was reached on the following propositions:
ƒ Beyond the millennium development goals, the concept of a global development
partnership consecrated at the United Nations Conference in Monterrey implies
reciprocal obligations between rich and poor countries;
ƒ In an increasingly integrated global economy, it is the combination of rich and poor
countries’ policies that drives the quality of life in the zones of turmoil, development and
transition around the world where over 80 per cent of humanity live;
ƒ Past development research, monitoring and advocacy efforts have not given sufficient
weight to the influence of rich countries’ policies on sustainable poverty reduction;
ƒ The current “aid centered” development paradigm needs broadening and rebalancing
to give adequate weight to global policy reform.
Knowledge gaps
Identification of precise knowledge gaps requires systematic literature reviews. However,
the “first cut” assessments included in the background papers suggest that a lot is already
known about the quality of rich countries’ policies in such areas as aid and trade while
effective functioning of the other major transmission belts of economic globalization
(especially migration, intellectual property and the environment) would benefit from
additional research based evidence. For example, the impact of policies that influence
poverty trends through cross-border labor movements are poorly understood, due to
inadequate data and limited understanding of the economics of migration.
More generally, coherence and impact research cutting across policies (i.e. research
designed to enhance the consistency and effectiveness of rich countries’ policy designs
and the policy responses of developing countries so as to facilitate poverty reduction) is
severely lacking. Good coordination among on-going or planned research efforts focused
on development policy coherence and impact is needed to avoid duplication and tap
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synergies. Active participation of developing country policy research institutions is
critical to the quality and legitimacy of the research. To achieve these objectives requires
active follow up and consultations among developed and developing country research
institutions.
Research priorities
Based on background papers and workshop deliberations, the participants identified the
following areas as deserving attention for new and coordinated policy research:
ƒ Migration: development impact of remittances; influence of education, social and
labor policies on migration patterns; winners and losers.
ƒ Environment: impact on developing countries of climate change; impact of domestic
policies, regulations and product standards on waste, pollution, trade patterns and the
global commons.
ƒ Science, technology and intellectual property: development impact of patent and
copyright impediments to poor countries’ access to intellectual property; science and
technology; protection of traditional knowledge; and capacity building assistance;
ƒ Private capital flows: influence of debt, taxation, regulatory and export credit
agencies policies on the quantity, quality and distribution of foreign direct investment;
ƒ Agriculture: farm production and export subsidies; agricultural research and
development aid;
ƒ Aid: how to increase aid volumes while reducing its transaction costs and enhancing
its quality through untying, enhanced coordination and harmonization.
ƒ Trade: reduction of tariff and non-tariff barriers, including subsidies; reconsideration
of standards and regulations from a development perspective and emphasis on nondiscriminatory multilateral agreements.
ƒ Political economy of policy change: identification of winners and losers, the
mitigation of impacts on losers; the political force fields within which policies are framed
and the identification and dissemination of good practice in rich countries’ policy reform.
Research modalities
The group concluded that policy research in the areas listed above should be grounded in
shared objectives and mutual accountability between developed and developing
countries. It should be comprehensive, pragmatic, crosscutting and oriented toward
developing an action agenda to foster greater coherence in rich country policies and
positive policy responses in poor countries. Wherever practical, it should be connected to
current global policy negotiations (e.g. Doha).
Given the diversity of rich countries’ policy environments and the variable impact of
individual policies on differently situated developing countries, impact research should
be targeted to representative developing countries based on a balanced taxonomy of rich
and poor countries that takes account of initial conditions, geography, trade and migration
links, etc.
To achieve high quality and relevance, the research should be framed by the following
considerations:
ƒ It should include be geared to current needs;
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ƒ It should focus on governmental actions but also address corporate policies and the
actions of non-governmental organizations;
ƒ It should avoid duplication, take account of past and on-going research and reach out
to existing centers of excellence and knowledge hubs.
ƒ It should be constructed on the basis of genuine engagement and collaboration
between relevant institutions as well as “real people” in rich and poor countries.
Monitoring and advocacy
Developing countries’ poverty reduction strategies are currently subjected to rigorous
review and monitoring. Conversely, workshop participants endorsed more systematic
measurement of the development impact of rich countries’ policies, regular reporting and
independent evaluation of the progress achieved in their adjustment.
Participants stressed that a more effective interface between research, evaluation and
decision-making should be promoted. They recognized that reform is unlikely without
prior coalition building involving government officials, parliamentarians, academic and
policy researchers, non-governmental groups; business and labor organizations as well as
bilateral and multilateral development agencies.
Next steps
Beyond the design of a responsive research program based on the above principles,
stronger linkages ought to be forged between research and advocacy so as to achieve
results without endangering the objectivity and rigor of the research. To explore the
issues involved at the interface of research and advocacy, participants suggested that
another workshop be convened to allow interaction between potential users of policy
research; civil society representatives from developed and developing countries; as well
as representatives of business and other groups that have a stake in global policy reform.
Such a workshop would also facilitate networking arrangements to improve the
connectivity of organizations and individuals committed to the reform of global policies
so as to benefit the poor.
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SUMMARY OF DISCUSSIONS
To help identify knowledge gaps about the development and poverty impact of
industrialized countries’ policies and related opportunities for action-oriented policy
research, a workshop sponsored by the Global Policy Project was held under the aegis of
the Global Development Network on January 16-17, 2003 in Cairo. Financial support for
the workshop was received from the Swiss Agency for Development Cooperation and the
UK Department for International Development. Forty development practitioners and
analysts from the North and the South participated.
The goals of the workshop were to:
ƒ Identify research priorities on the development effectiveness of industrialized
countries’ policies.
ƒ Develop initial ideas on how to translate research findings into action, and identify
implications for advocacy to promote constructive policy change.
ƒ Comment on tentative proposals by the Center for Global Development for a
development friendliness index of OECD countries’ policies.
This summary report captures the main points made and the main questions raised in the
course of workshop deliberations. It supplements the background papers, which will be
published separately.
THE CASE FOR GLOBAL POLICY REFORM
(Day 1)
Globalization has yielded some positive results, especially in Asia. But the overall
development record is mixed. In Africa, especially, today’s state of affairs is cruel and
inequitable. The Millennium Development Goals are an admirable attempt to make
development problems real to taxpayers in industrialized countries, but they have yet to
evoke broad and deep support for development assistance.
The Monterrey and Johannesburg international meetings endorsed the concept of
reciprocal obligations between rich and poor countries so as to make globalization work
for all. But in terms of rich countries’ policies only aid and trade have been singled out
for reform subject to improved governance in developing countries. The declining trend
in aid volumes may have been reversed, but even so, the overall operating environment
for developing countries remains harsh, given the global economic downturn and the
uncertainties created by emerging threats to peace and security.
Thus, the development consensus is an important achievement, but it is still characterized
by asymmetry in policy reform and by perceptions of “do as I say, not as I do” attitudes
from the North toward the South. Development indicators are tracked only for countries
of the South. Industrialized countries have disproportionate control over international
decision-making and policy formulation.
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The rules of the game of the global economy are biased against the poor. As international
rules and standards evolve, their actual and potential consequences for the world’s poor
are often ignored. In a multitude of areas, the playing field for developing countries needs
to be leveled to allow the benefits of global economic integration to be sustained and
shared equitably.
The current development consensus acknowledges that aid works in the right
circumstances; that its effectiveness has improved but that further reform is needed. Aid
practices need to be simplified, harmonized, and oriented toward results. The prospects
for aid have improved somewhat but security concerns dominate in developed countries;
donor economies do not provide the stimulus needed for rapid growth and support from
public opinion is weak. The increased aid commitments made by donors at Monterrey are
not cash on the table. Public opinion of aid remains poor.
The aid community has been all too willing to present aid as the key development
ingredient. Yet, given globalization, to achieve sustainable and equitable development,
industrial countries’ policies affecting foreign investment, trade, intellectual property,
migration, and the environment also need review and adjustment. By putting the spotlight
on all the key developed country policies that are aggravating poverty in the developing
world, the workshop aimed to broaden and eventually improve the quality of the
development debate.
TOWARD A GLOBAL POLICY REFORM AGENDA
(Modules A and B, Day 1)
Module A focused on the main transmission belts of economic globalization: aid, private
capital flows, intellectual property rights, trade, support policies for agriculture, the
environment, and migration. Module B addressed three topics: the combined impact of
industrialized countries’ policies on the poor; the coherence of industrial countries’
policies; and the interaction between rich and poor countries’ policies. Participants
reviewed the state of knowledge and identified needs for policy-oriented research.
Aid
Aid allocations tend to be guided by geopolitical concerns, and aid agencies lack political
weight within governments. There is substantial scope for making aid more effective and
allocating it more efficiently and fairly. Like trade policies, aid has been better researched
than most of the other policy areas addressed by the workshop. Enough is known to
mobilize aid reform efforts that focus on raising volumes and improving quality through
untying, improved coordination, and harmonization of donor practices. The DAC Task
Force on Donor Practices should identify constraints to reform, encourage untying of aid,
and reconsider current delivery mechanisms for technical assistance.
Aid tends to be ineffectual in countries with poor policy environments, and donors should
be vigilant about the misuse of aid. But assessments of the policy environment in
recipient countries need to be based on a transparent system that all parties can use. There
are proven ways to help the poor even in countries with very poor policy environments
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and these should be used to promote governance improvements and policy reform. The
Poverty Reduction Strategy Paper process—which is meant to improve beneficiaries’
ownership of programs, and hence the effectiveness of aid—will need continuous
upgrading, and improved integration into aid recipient countries’ national budget
processes and medium-term expenditure frameworks. Harmonization of aid practices is
essential to reduce transaction costs. Half of aid is still tied, and the common pool
mechanism has yet to be practiced to any significant degree.
More transparency in aid transactions would lead to improvements in the poverty impact
of public expenditures. Budget monitoring by civil society groups (e.g. diligent tracking
of “aid paid in and paid out”) would give parliamentarians and the public in donor and
recipient countries vital assurances of accountability and provide a better basis for
judging aid effectiveness. Research is also needed on how advocacy campaigns in
developed countries might shift public opinion toward aid.
Private capital flows
Analysis of developed country policies toward private capital flows should extend to
corporate as well as government policies, and cover the influence of these countries’
debt, taxation, and regulatory policies on foreign direct investment.
The policies of developed countries have been increasingly laissez-faire toward outward
investment by their corporations. No international agreement exists. Transnational
corporations are a significant global force, employing 54 million people and accounting
for 10 percent of GDP and a third of exports. Of the FDI to the developing world, four
fifths goes to only ten countries, but for many more developing countries, FDI inflows
have important influences (pro- or anti-poor) on the economy, society, the environment,
and politics. Positive spillovers from FDI include technology and skills transfers,
improved competitiveness, and links into the domestic supply chain.
Quality of FDI matters. Timely disclosure of the probable social and environmental
impacts of proposed FDI projects, and of what corporations pay to governments for rights
to exploit oil and mineral resources, would increase the likelihood that FDI will benefit a
host economy and that revenues will be reinvested locally to create new forms of capital.
Legal provisions in rich countries could encourage and/or mandate the disclosure of this
type of information by transnational corporations.
A proposed multilateral investment agreement was rejected in 1998, partly because it was
seen as creating a rich-country club and did not include adequate social and
environmental safeguards. Further discussion of an international investment agreement
designed to be equitable and fair to the developing world would be a positive feature of
the WTO Doha round. By introducing better social and environmental rules for their
export credits (an OECD initiative is underway in this area), developed countries could
also raise the standards for private firms making foreign investments.
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Issues for research
Developed country policies create incentives/disincentives for outward FDI. What forms
do these incentives take and what are their effects in different country groups? A punitive
tax regime can lead to capital flight and affect corporate decisions on where and how to
locate. Does the world need an international approach to taxation? How regulatory policy
frameworks in the north affect the volatility of capital markets in the south deserves
research attention. Beyond economic incentive structures, as traditionally conceived,
what affects the ability of different developing countries to attract FDI? What is the
importance of a country’s labor practices and environmental safeguards in its ability to
attract foreign investment?
Intellectual property rights
International rules on intellectual property are developing very fast, and as they evolve
their actual and potential impact should be properly understood. In this field, policies
have been largely shaped by knowledge-intensive industries in developed countries that
exercise considerable power over policy-making. Research results can affect IPR policy,
not only through a process of evidence-based rational debate about what is in the public
interest but even more through changing the center of gravity of public debate and
mobilizing key constituencies.
Understanding of the relationship between IP protection and development is still quite
limited. Weak IP protection may promote technology transfer better than strong IP
protection. As well as increased understanding of the impacts of IP rules, a key need is to
strengthen the bargaining power of developing countries in negotiations on intellectual
property rights, so that science and technology can be better harnessed for these
countries. Developing countries also need to build capacity for IP policymaking,
administration, and enforcement. Aid has an important role to play in this connection.
Issues for research
Further evidence is needed on the effects of introducing stronger IP protection in
developing countries—particularly those with low incomes that lack a viable
technological base; on the consequences of full implementation of the Agreement on
Trade-related Intellectual Property Rights for the developing world, including the
provisions relating to enforcement; on the impact of alternative policies on different types
of economies; on the implications of the movement to harmonize and integrate patent
systems internationally; on the impacts of patents and other IPRs in new or rapidly
advancing fields of technology; and on the application of intellectual property regimes to
traditional knowledge.
Trade
Trade has enormous potential to affect living standards in developing countries: a one
percent rise in exports of developing countries as a group could reduce the numbers of
people in poverty by nearly 130 million (12 percent of the world total), with the greatest
gains likely in Africa. Issues for study and action include: reduction of developed
countries’ tariff and non-tariff barriers, including subsidies; reconsideration of standards
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and regulations from a development perspective; and further work on services—
particularly tourism and maritime transport—and on special and differential treatment.
A research program should contain a mix of studies, including work that will yield quick
results to help developing countries’ negotiators to achieve the most from the Doha
round. Longer-term research is also needed to explore which changes in developed
countries’ policies would have the highest payoff for developing countries and which of
those changes stand the best chance of being implemented.
Issues for research
Tariff reductions could benefit both poor and rich countries; for developing countries,
they would yield more opportunities for income and employment growth and enhanced
revenues, and for developed countries, lower consumer prices. They may also have a
negative aspect (e.g. for Caribbean and Pacific Island countries that have shaped their
export sectors in response to preferential access arrangements provided by the EU and
others). The negative repercussions need to be better understood. What are the costs and
benefits, and to whom, of eliminating preferential tariffs for small developing and least
developed countries?
The General Agreement on Trade in Services contains few commitments on liberalizing
trade barriers. But the potential gains from liberalizing trade may be greater in services
than in goods, because protection tends to be higher on services than on goods and
because services liberalization is likely to create positive spillovers from the associated
movement of labor and capital. For what aspects of GATS would developed country
liberalization reduce costs and prices in developing countries? More specifically, further
work to assess the impact of anti-competitive practices in the tourism sector could be
useful. Research could focus on the economic effects on developing country service
industries of the discriminatory use of information networks, ancillary services to air
transport, and the abuse of exclusivity clauses, tied sales, and quantitative restrictions.
With regard to maritime transport (currently not on the GATS negotiating table), the
focus needs to be on the economic effects of restrictions in force in developed countries.
One obvious knowledge gap is the economic impact of “cabotage” restrictions, whereby
a number of developed countries restrict the use of non-national flag vessels within their
national territories.
Voluntary environmental standards such as eco-labeling schemes can become de facto
market standards, difficult for some developing country producers to meet. Often vested
and protectionist interests are involved in devising these standards. Is there really a price
premium associated with private voluntary environmental standards? How significant is it
and does it outweigh the costs of certification and compliance? In what ways do
industrial country regulators consider the impact of their decisions on developing
countries, and what kind of meaningful Third World participation in industrial standard
setting is feasible?
For policy coherence reasons, policy makers and negotiators need access to information
that goes beyond the economic implications of trade policy changes. What, for instance,
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would be the wider effects, environmental and social, of expanding access to markets in
the developed world, and of increased production levels? What are the tradeoffs and who
makes the key decisions on these tradeoffs? What policies (e.g. on technology transfer or
technical assistance) may help to mitigate negative environmental and social effects?
Agricultural protection policies
Agriculture policies should be considered separately to ensure they get enough attention
in the framing of research and advocacy programs. The Doha Declaration promises that
countries will work towards “phasing out all forms of export subsidies” and substantially
reduce trade-distorting domestic support. But despite the commitment, the trend is in the
opposite direction. Reform of these subsidies would yield benefits for both developed and
developing countries.
Research topics include industrialized countries’ subsidies on farm production and
exports, agricultural research, agricultural development and food aid, and the impact of
agricultural subsidies on food security in developing countries. More information is also
needed about the political economy of decision-making in developed countries regarding
agricultural support programs, and about who are likely political allies in industrial
countries in an effort to cut farm subsidies.
Migration
Data on migration are too poor to provide an adequate basis for policy making. Better
data and some very basic research are needed to answer such questions as who migrates,
where, and why, and what makes migration beneficial, under what circumstances, and for
whom. Labor migration is only a small part of total migration —13 percent in the US and
8 percent in Europe—yet it has important impacts on both source and host countries.
Migrant remittances amount to $100 billion a year; of which $60 billion goes to poor
countries. Arenas for policy include migrant recruitment policies; legal status/migrant
rights/border enforcement; transaction costs; transferability of pensions; family unity; and
the coordination of migration policies with development policies.
Because there are no adequate mechanisms for global governance or enforcement of rules
on migration, the burden of debate is transferred to policy forums designed for other
purposes, notably trade, that are poorly equipped for the task. A new and credible
international migration policy forum is needed for discussion and resolution of policy
concerns.
Issues for research
Better data are needed in particular on regulatory issues and basic legal frameworks,
including migrant rights treaties and their operation, and on repatriation and
undocumented workers. Remittance data need to be disaggregated by country of origin so
they can be correlated with policy and other kinds of financial flows.
Costs and benefits: for host countries, the benefits of in-migration most likely outweigh the
costs, though this is not the popular perception. The costs and benefits of migration need to be
better documented and analyzed as a basis for reviewing migration policies. For source
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countries, there is a need to assess the effects of migration on development prospects. What are
the effects on their education and investment levels of open migration regimes? Under what
conditions does a country benefit from losing some of its population? What is the balance of
benefits from remittances; the costs of the brain drain and the (public and private) costs of, and
returns to, the professional training of emigrants? Under what conditions does a migration flow
result in closer investment and trading relations among sending and host countries?
Policy formation is handicapped by lack of knowledge about the costs of controlling
migration, and who bears them; the share of remittances that goes into productive
investment rather than consumption; and the best practices in managing, leveraging
remittances, and channeling them toward productive investment.
Migration research would be carried out most effectively by partnerships involving
researchers from countries of origin and destination. The cooperation of governments will
be essential to deal with the data requirements. A major goal of any research agenda
should be to establish common parameters for data collection.
Environment
Industrial country policies that affect the prospects for growth and poverty reduction in
poor countries through environmental means include:
ƒ domestic environmental policies that, for example, influence poor countries’ trade
and investment opportunities;
ƒ international environmental policies that, for example, impose standards on poor
countries or provide technical assistance to them;
ƒ domestic non-environmental policies that affect the environment in poor countries,
for example through degradation of the global commons; and
ƒ international non-environmental policies that impact the environment in poor
countries, for example through shaping international trade and investment regimes.
The impacts may be economic, for example through creation or restriction of trade and
investment opportunities; environmental, for example through pollution and natural
resource depletion, which in turn have implications for growth and poverty reduction; or
political, for example through corruption related to providing access to natural resources.
Using the WTO as the forum for enforcing environmental regulations is not appropriate.
The world needs a better mechanism for regulating interactions that affect the
environment.
Issues for research
We know that climate change is likely to be the most damaging for poor countries, but
good research is needed about the likely costs and their incidence on sustainable
livelihoods in poor countries. Policy formulation also requires better knowledge about the
winners and losers from current sectoral and commodity trade flows, for example in
timber or fisheries. What are the perversities in the status quo, and what are the political
economy reasons within industrialized countries that prevent reforms from going
forward? Equally, to better safeguard the environment it is vitally important to refine the
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roles and adjust the governance of the global institutions, in which rich countries exercise
disproportionate influence.
Possible other broad areas for research
ƒ Policies on gender, structural adjustment, and international financial institutions,
which all affect conditions in poor countries.
ƒ Labor in the north and south, and the interplay of demand between them, by industry
and sector.
ƒ Effects on the environment of genetically modified plants.
Conclusions
A good deal is known about the impact of developed countries’ policies on the poor but
the knowledge is not readily accessible to policy makers or the public. Nor is country
specific knowledge about development impact available to guide monitoring and policymaking.
New knowledge is needed, especially with respect to:
ƒ Migration and its implications. The consequences of policies that influence poverty
trends through cross-border labor movements are poorly understood.
ƒ The political economy of decision making in developed countries. As an essential
prelude to advocacy we need to consider how policy decisions are made. How is
information converted into policy actions? How inclusive are these processes? We need
to be mindful of how political constituencies work, and look at the channels of influence
on them.
ƒ Winners and losers in developed and developing countries. Who would lose from
particular desirable policy changes? How, and by how much? What would it take to
compensate them, particularly in the short term? What would be the tradeoffs and how
could they be managed?
ƒ Positive policy changes that have been made in developed countries and how they
were achieved.
In carrying out research:
ƒ Be mindful of the complementarities among the issues identified for research. For
example, issues in knowledge and intellectual property management, environment, and
migration need to be analyzed in the context of trade and aid policies, not seen as
separate spheres.
ƒ Use a broad conception of policy analysis, to cover corporate policies and NGO
policies, not just government policies. The private sector and civil society are key to a
country’s policy-decision making and hence to progress; governments working alone
cannot set a policy regime.
ƒ Find the points of greatest leverage for achieving more positive, less damaging
policies. This means that among the many research needs identified, work should focus
on those that are relevant to the areas where policy changes are most likely to be feasible.
ƒ Schedule studies so that they deliver results when needed, to support ongoing
negotiations and processes of policy reform. For example, what is coming up
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immediately in the Doha work program that developing countries need to know more
about? What topics could be investigated over a longer time frame?
ƒ Undertake research at the micro as well as the macro level.
LINKING RESEARCH WITH MONITORING AND ADVOCACY
(Module C: Day 2, 9 am – 1pm)
Module C focused on monitoring the development friendliness of industrial countries’
policies; achieving reform through development advocacy; and linking research,
monitoring, and advocacy to achieve changes in policy. The comments below on the
proposed development friendliness index have been transmitted to the Center for Global
Development.
Monitoring the development friendliness of industrial countries’ policies
Comments on CGD’s proposed index. The Development Friendliness Index proposed by
the Center for Global Development is grounded in the notion that the quantity of aid is
not a good proxy for assessing the aggregate contribution of industrialized countries’
policies to global development and poverty reduction. The same rationale underlies the
Global Policy Project. Without a broadening of the development agenda, likely shortfalls
in achievement vs. the Millennium Development Goals could be unfairly attributed to
poor aid performance and induce a reduction in aid levels at the very time when, based on
conservative assumptions, aid should be doubled to help achieve the goals.
A well-constructed composite index would be a privileged instrument for raising public
awareness of the need to consider the cross-border impact of a range of industrialized
countries’ policies on the poor. Country rankings of policy performance widely
disseminated to the public are likely to generate powerful incentives for “laggards” to
clean up their act.1
Transparency needed. Nevertheless, disseminating a composite policy performance index
is risky without adequate qualification and interpretation—relative rankings of countries’
policy performance could have unintended consequences (e.g. by inducing complacency
in highly ranked countries). To help remedy this, for each of the index components, the
performance of all countries could be benchmarked against good practice standards
derived from historical evidence of superior performance by individual countries.
No composite index can illuminate the distinct ways in which policy distortions affect
individual developing countries. Size and impact matter. The focus on policy
performance instead of impact (with equal weighting for the components) necessarily
obscures the relative importance of particular reforms in specific countries. Critical to the
credibility of the index is transparency about the theoretical foundations of indicator
selection, the limitations of the data, and the biases implicit in scaling methods.
Friendliness or effectiveness? The term “development friendliness” may need further
thought. It could be considered fuzzy and paternalistic at a time when reciprocal
1
Accordingly, several participants from international organizations present at the workshop expressed
willingness to collaborate in providing technical comments, data, and other forms of support.
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obligations between rich and poor countries have become integral to the development
agenda, and when a rights-based approach is gaining momentum in development circles.
“Development effectiveness” might be an alternative. So might “sustainable
development”, though that appellation would require considerable reworking and
deepening of the index. To enhance its legitimacy, proponents of the index should seek
out the participation of researchers and policy makers from developing countries.
Suggested additions:
ƒ Intellectual property: Charles Clift’s background paper identifies possible indicators.
Some of these address the direct impacts of rich countries’ domestic policies (e.g.
patenting of products and processes already in use in developing countries). Others
capture the indirect impacts of domestic policies (e.g. copyright protection that
discourages developing countries’ access to knowledge). Still others address the
development friendliness of national stances with respect to the imposition of new
international standards (e.g. TRIPs plus), the way in which existing standards are
implemented (e.g. with respect to developing countries’ access to basic medicines), and
the quality of technical assistance policies.
ƒ Agriculture: Bundling agriculture with manufactured goods does not bring out
sufficiently the burden that agricultural protection places on developing countries.
Agricultural policy might better be treated as a freestanding component, to give it greater
weight in the index and allow more detailed treatment of the impact of developed
countries’ policies on food security and rural development.
Suggested deletions:
ƒ The validity of the proposed security component is questionable, given that it focuses
largely on United Nations interventions and that thorny conceptual obstacles hinder
expansion of its current scope, e.g. to embrace defense-related expenditures.
ƒ Similarly, the corruption perception index as currently constructed may not capture
fully the impact of developed countries’ policies on the governance of poor countries. It
might be absorbed within the foreign investment indicator.
Refining the design of individual components:
ƒ The investment component is a weak proxy for the development effectiveness of
industrialized countries’ policies. It is extremely important to capture the impact of
volatile short-term flows on developing countries but no good idea has surfaced about
how to capture this dimension in the index. The investment component could be
enriched by indicators of the degree to which rich countries’ governments encourage
sound corporate citizenship principles within the business community, and induce export
credit and guarantee agencies to follow transparent operating practices focused on
sustainable development objectives. Until such enhancements are introduced, the weight
of the investment component might be reduced.
ƒ On trade, the focus on tariffs and the limited range of non-tariff measures covered by
the index may underestimate the effect of restrictive policies. The measure does not
capture the extensive restrictions on trade in services—an area of growing interest and
value to developing countries. The bundling of data on non-trade barriers masks the
restrictive impact that frivolous anti-dumping actions, complex regulations, and perverse
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enforcement standards can have on trade flows. The failure to take into account the
impact of preferential arrangements is also a weakness. Given the importance of
reliability of access, these missing factors have a big deterrent effect that the CGD index
does not capture. The assumptions about elasticities may need research validation and
such key features of policy design and implementation as tariff peaks ought to be
incorporated in the index. No less important is the degree of harshness in the negotiating
postures of individual rich countries’ governments in trade negotiations with developing
countries; this could be measured through perception surveys. Finally, some participants
recommended that a wider index incorporate indicators of environmentally unsound
consumption practices measured through trade flow data, while others stressed the
practical difficulties of doing so and the risks of misuse of such measures for
protectionist ends.
ƒ On aid, substantial common ground was found between the preliminary CGD index
and the background paper on aid. However, ActionAid, recommended additional
indicators of aid quality: (1) poverty focus: share of aid going to the least developed
countries; (2) social focus: share of aid going to basic social services; (3) efficiency: how
burdensome are the reporting requirements? (4) harmonization: what share of aid is
channeled to joint donor or multilateral programs; are aid procedures compliant with
good practice standards?
ƒ On the environment, the proposed index relies too heavily on per capita emissions as
a proxy for policies related to consumption and waste generation.
Looking ahead
Clearly it is not easy to produce a single index that ranks high on all criteria: relevance,
simplicity, validity, time-series data, availability of affordable data, ability to aggregate
information, sensitivity, and reliability. For the task of assessing the impact of
industrialized country policies on poor countries, issues of policy relevance, data
availability, and ability to aggregate information are especially constraining.
Understandably, efforts have gone into approaches that focus on national-level aggregate
measures and indices that seek to compare environmental performance across countries.
Such efforts are needed as they will promote incentives for reform and attract public
attention to global policy issues. But their direct utility for policy-making is limited,
especially if the objective is sustainable development for all.
Monitoring should be paired with research, evaluation, and evidence-based advocacy in
order to inform policy. Focused monitoring of the direction, magnitude, and transboundary environmental impacts of specific commodity flows may have considerable
relevance for policy making. So would monitoring devoted to capturing key features of
industrial country policies, such as subsidies to fisheries, that directly impinge on
developing countries. Monitoring might also cover the degree to which rich countries
educate their citizens about the policies that affect developing countries, the transparency
of financial transactions involving developing countries, and the efforts deployed to
achieve genuine policy coherence from a development perspective.
Eventually, monitoring might extend to “hidden flows” of natural resources that do not
enter the market, and to the informal (often illegal) exploitation of natural resources such
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as forests and fisheries. In principle, monitoring geared to the environmental impacts
embedded in resources flows, such as carbon and water, would be useful. But for the
most part these are refinements that call for prior research. Progress is achieved one step
at a time and the CGD index is a bold step in the right direction.
Achieving reform through development advocacy
The large gap between words and deeds of developed countries calls for responsible
advocacy in these countries. The underlying goal of an advocacy campaign would be to
instill the norm that developed and developing countries share accountability for living
standards in developing countries.
Channels for advocacy
Channels for advocacy include the media, lawyers, lobbyists, civil society organizations,
businesses, churches, and parliamentarians of the north and south. Participants urged that
a broad view be taken of whom to target, and include people and groups who can act as
re-disseminators of ideas and information.
Engage with bodies already working in this area
Popular constituencies do exist in industrialized countries for aid and poverty reduction.
Just as existing research should be mapped, agencies and individuals working in this area
should be inventoried. Informed choices regarding whom to engage are critical to
legitimacy.
The Global Policy Project should build on existing constituencies and alliances, relate
with existing groups, and study best practices in advocacy. It should not try to go it alone.
It should act as a catalyst and fit into the public policy apparatus of such agencies as
Action Aid, Oxfam, etc., by connecting them to relevant research. Alliances with other
groups with interests that coincide with its own should be explored.
Be cognizant of the political economy
Data are needed to arm the opposition to vested interests in developed countries and put
the development issue on the political agenda.
Identify the platforms where developing countries can be advocates for our cause
These include international forums. How can power be secured for developing countries
in international forums? How can their negotiators be supported in international
negotiations? How can coalitions of least developed countries be forged?
Linking research, monitoring, and advocacy to achieve changes in policy
In recent years the pace of transmitting knowledge to policy makers has dramatically
speeded up, blurring the lines between researchers and policy makers. Now in some areas
there is a constant feedback loop at work (in countries as diverse as Bangladesh, Ghana,
Mali, and Sweden, for example, policymakers have researchers at the table). This means
that the monitoring of key policies needs to be done in real time.
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Linkages are important. GPP may focus on integrating monitoring, advocacy, and policy
change. It should keep in mind what other agencies and networks are doing, and what the
gaps are.
Research must be relevant but objective. Though research should concentrate on topics
relevant for policy campaigns, researchers should not lose their objectivity in carrying it
out.
Recognize concerns of North and South. Any advocacy and monitoring activities for
policy change should give voice and recognition to the concerns of both North and South.
THE WAY FORWARD
(Day 2, 2.30 – 4 pm)
It is time to refocus the development debate, so that improvements in industrial countries’
policies are recognized as an integral part of the agenda. We cannot restructure the
entire development paradigm in a short time. But we need to bring to center stage ideas
that have been barely noticeable hitherto. To influence policy, we shall need to support
and develop pressure groups around the issues, so as to change norms and build
consensus for reform. Changes in the international order will have both benefits and
costs, which we should be mindful of.
Research modalities
Policy research in the areas identified should be based on principles of mutual
accountability between developed and developing countries. It should be comprehensive,
pragmatic, crosscutting, and oriented toward developing an action agenda to foster
greater coherence in rich country policies. It should be connected to current global policy
negotiations, including the Doha work program.
Given the diversity of rich countries’ policy environments and the variable impact of
individual policies on differently situated developing countries, research should be
targeted to representative countries using a balanced taxonomy of industrialized and
developing countries, and take account of existing relationships as well as geography and
existing regional trading arrangements.
To achieve high quality and relevance, the research should be results-oriented, and
include syntheses of existing research geared to current needs as well as original inquiry
and independent assessments. It should focus mainly on governmental actions but also
address corporate policies and the actions of non-governmental organizations. It should
avoid duplication, take account of past and ongoing research, and reach out to existing
centers of excellence and knowledge hubs. Finally, it should be constructed on the basis
of genuine engagement and collaboration between relevant institutions as well as
individual researchers in rich and poor countries.
Monitoring
Developing countries’ poverty reduction strategies are rigorously reviewed and
monitored. More systematic monitoring should be done of the development impact of
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industrialized countries’ policies, with regular reporting and independent evaluation of
the progress achieved in adjusting these policies. The weights used in aggregate
indicators should be evidence based and reflect impact as well as level of effort.
Advocacy
A more effective interface between research, evaluation, and decision-making needs to be
promoted. To achieve policy reform will require prior coalition building, bringing in
government officials, parliamentarians, academic and policy researchers, nongovernmental groups; and business and labor organizations as well as bilateral and
multilateral development agencies.
Before moving to advocacy, it is vital to have a credible substantive base, to have
understood who stands to win and who to lose from a policy reform, and to know how
losers can be compensated. How to earn legitimacy is a fundamental issue for advocacy.
How to build effective coalitions is a major unknown.
Next steps
To identify more specifically the links that must be forged between research and
advocacy so as to achieve results, another workshop is needed. It should include potential
users of policy research; civil society representatives from developed and developing
countries; and representatives of business and other groups that have a stake in global
policy reform. Whatever mechanism emerges, it must be connected to political processes.
Institutional aspects need attention: how to get organized to get things done? Who will do
what? Who is accountable for what? A follow-on workshop may help to define efficient
networking arrangements to improve the connectivity of organizations and individuals
committed to the reform of global policies so as to benefit the poor.
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GLOBAL POLICY WORKSHOP
The Development Impact of Rich Countries’ Policies
Cairo, January 16-17, 2003
PARTICIPANTS
Jorge Saba Arbache
Bina Agarwal
Michael Atingi-Ego
Keith Bezanson
Sara G. Castellanos
Merih Celasun
Satish Chand
Charles Clift
Tim Cullen
Dag Ehrenpreis
Augustin Fosu *
Said El Naggar
Otto Genee
J.W.Gunning *
Beris Gwynne
Heba Handoussa
Bernard Hoekman
Torgny Holmgren
Amar Inamdar
Amy Kaslow
Inge Kaul
Marc Levy
Oumar Makalou
Paul Melly
Manuel (“Butch”) Montes
Arpita Mukerjee
Kathleen Newland
John Page
Robert Picciotto
Mustazifur Rahman
Judith Rendel
Aki Sawyerr
Frances Seymour
Salil Shetty
Bruce Stokes
Alexandra Trecziak-Duval
Vangelis Vitalis
Rachel Weaving
John Williamson
University of Brasilia
Institute of Economic Growth, Delhi
Bank of Uganda
Institute for Development Studies
Bank of Mexico
Bilkent University, Ankara
Australian National University
Department for International Development, U.K.
Tim Cullen Associates
OECD
African Economic Research Consortium
New Civic Forum, Cairo
Ministry of Foreign Affairs, The Hague
European Development Research Network
Foundation for Development Cooperation, Brisbane
Economic Research Forum, Cairo
World Bank
Expert Group on Development Issues, Stockholm
Synergy, Oxford
Journalist
UNDP
Columbia University
CSRESD, Mali
Journalist
Ford Foundation
Indian Center for Research in International Economic
Relations
Migration Policy Institute
World Bank
Global Policy Project
Center for Policy Dialogue, Dhaka, Bangladesh
Development Initiatives
Association of African Universities
World Resources Institute
ActionAid, UK
National Journal
Organization for Economic Cooperation and Development
Round Table for Sustainable Development, OECD
Global Policy Project
Institute for International Economics & Center for Global
Development
* Second day only
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GLOBAL POLICY WORKSHOP
The Development Impact of Rich Countries’ Policies
Cairo, January 16-17, 2003
Workshop Papers
Overview
Robert Picciotto
Reducing poverty in a world of plenty: the crisis of aid
Salil Shetty
Discussion: Is there an aid crisis?
John Williamson
Harnessing foreign direct investment for pro-poor development
Amar Inamdar
Impact of developed country trade policies on development in developing countries:
some suggestions for indicators and knowledge gaps
Vitalis Vangelis
Development impact of rich countries’ policies: the case of intellectual property rights
Charles Clift
Impacts of policies of rich countries on prospects for growth and poverty reduction in
poor countries: focus on the environment
Frances Seymour
Migration as a factor in development and poverty reduction: impact of rich countries’
immigration policies on the prospects of the poor
Kathleen Newland
Globalization, developed country policies and market access: insights from the
Bangladesh experience
Mustafizur Rahman
Linking research, monitoring, and advocacy
Keith Bezanson
________________
Proceedings GPP Workshop
020803 rw/rp
2/9/2003 5:18 AM
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