Do we know what works in low potential areas?
Désirée Dietvorst
Introduction

Despite decades of international development assistance, mass poverty is not only
persisting, it is deepening.

The macro-economic reforms of the 1990s produced mixed trends in rural regions;

New market opportunities were created (through deregulation and privatisation);

But access to rural and social services deteriorated due to reduced public spending
and private sector reluctance to invest in non-commercially viable services or areas;

There is evidence that these growth-focussed policies led to greater regional
disparities;

This calls for a (renewed) focus on low potential areas.
Key policy issues

What are characteristics of low potential areas? (eg remote; poor natural resources; lack
of infrastructure; lack of service network ( public, private, NGO) etc)

What do we know of the impact on regional disparities of ongoing nation-wide
programmes? With particular reference to Sector Wide Approaches (SWAps), Poverty
Reduction Strategies (PRSPs) and decentralisation efforts under (local) government reform
processes.

Is it possible to modify programme design such that it takes the particular
disadvantages of low potential areas into account? eg public-private partnerships rather
than full-scale privatisation; added incentives for staff in low potential areas; cross-sectoral
pooling of human and capital resources; regional and TA supported advisory units.

What other, complementary interventions should be pursued, continued or
mainstreamed? eg Regional Rural Development or Sustainable Livelihood strategies as
instruments to anchor programme-based approaches to local priorities.
Review of donor cooperation strategies
Sector wide approaches (or sector wide reform)

Since the early 90s, donor support moved from the project-based approach to the
(national) programme approach.

SWAps were introduced (mostly) in the sectors agriculture, health, education and
infrastructure. Over 50 programmes in over 20 countries in Africa.

Pro-poor orientation of SWAps:
i.
Health and education; yes (through focus on universal primary health care and
education);
ii.

Agriculture more a focus on growth (in part also to generate the revenue on which
social (public) services depend).
SWAp impact on poverty is variable:
i.
Education shows positive impact on enrolment levels especially among girls;
ii.
Health’s objective of universal primary health care is financially unaffordable;
iii.
In Agriculture, privatisation efforts led to reduced access to services in remote
areas, for non-commercial services and amongst resource poor clients.

A most critical shortfall of SWAps is that they tend to have failed on their key policy
promise of allowing people a greater say in the delivery of services.

In general: ‘Winners’ of SWAps are characterised by three dimensions of advantage:
i.
by stakeholder category
→ You are in the public sector
ii.
by level
→ You are at national level
iii.
by geographical area
→ You live in an area of high potential

The SWAp ‘losers’, or least advantaged, are people who are placed outside the
public sector, at grassroots level and in low potential areas

This means that the actual winners of sector programmes have only infrequently
been the intended beneficiaries.
Ongoing decentralisation efforts

As part of larger public sector reform programmes which includes the devolution of
powers to local government, and;

As a component of most SWAps in an attempt to bring service management closer to
the end-user.

The aim of both processes is to match service provision more closely to demand and
to build a more responsive government from below.

A review of country experience suggests two broad scenarios:

i.
Sector programmes as the modus operandi; local government’s role (vaguely)
defined as the eventual site of sector-specific sub-committees (eg Zambia,
Kenya and Mozambique), and;
ii.
Decentralisation with a local government focus; local stakeholder demand to
be articulated through (district) assemblies and from there be integrated into
the various sector programmes (eg Ghana, Malawi and Uganda)
Main bottlenecks in both processes are:
i.
Moving resources below the national level and beyond the public sector;
ii.
Attempting to decentralise too much too soon; Risks a U-turn of policy makers
(the so-called re-centralisation trend of SWAps);
iii.
Dysfunctional budget processes at national level mean that resources do not
arrive on time, plans are not implemented and communities and field staff lose
confidence and motivation.
Poverty Reduction Strategies (PRSP process)
•
The ‘HIPC initiative’ promises debt relief in return for effective poverty-relief measures
which has come to be defined as the process towards the preparation of a PRSP.
•
Poverty Reduction Strategy Papers represent a formal political commitment towards
poverty relief and provide a nationwide policy framework
•
PRSPs still struggle with
i.
Deficient poverty profiles (Majority of the population below the lowest denominator
of poverty; Insufficient causal poverty analysis -mention of a lack of things but not why
these are lacking-)
ii.
Only broad action strategies (emphasis on agricultural production; little mention of
targeting to particular categories of people or areas)
iii.
Unclear link to grassroots consultations (ie the relation between people’s priorities
and the government’s programme)
iv.
Implementation issues are as yet unresolved (looks at sector programmes as
pillars of implementation; Little mention of role of private sector)
Need for a regional perspective
National reform strategies have deepened regional disparities

The implementation of sector programmes and ongoing decentralisation processes
both contributed to a more noticeable regional disparity.

In part, sector and local government reform have simply made existing differences
more visible, but there is some evidence that they may also have reinforced the gap
between low and high potential areas.

In Agriculture, the twin strategy of market liberalisation and the privatisation of
services has led to a falling behind of low potential areas. Government services have
been cut back, while the private sector is unwilling or unable to step in.

In Health and Education existing regional disparities in staff and facilities are
consolidated due to the fact that ‘funds follow facilities’ (i.e. even when resources are
brought nearer to the point of service delivery, areas with no school or hospital will continue to
be unable to access them).
Local governments in low potential areas need financial and advisory support

In most countries local taxes are related to local business volume, which
discriminates against poor rural regions.

In low potential areas, tax collection is more complicated due to lack of infrastructure;
a low proportion of wage-income earners and more resistance to payment among
people who may have received little benefit from the state.

As a consequence, councils in low potential areas do not have sufficient financial
resources to fulfil even minimum responsibilities given to them.

Therefore, local authorities in low potential areas rely on national funding which
encourages ‘wish lists’ rather than strengthens financial management skills.

Where financial management is decentralised, be in under a sector or local
government programme, stringent criteria of budgeting and accountability are
normally introduced.

The poorest districts usually have most difficulty in meeting such criteria. It is
important that these districts do not lose funds but instead receive additional support
to enable them to comply so as not to further discriminate against poor areas.
Best practice

Non-commercial, but essential, services continue to be funded by the government but
are contracted out to the private sector. Eg veterinary contracts in Zambia, Kenya and
Uganda.

People in remote areas are helped to produce low-volume and high-value crops to
justify transportation costs to consumption centres. Experiences in Zambia Agriculture.

Equalising measures are built into the allocation of sector programme funds to district
levels. Eg based on population figures in Tanzania Health.

Financial and technical support is specifically targeted to local authorities in low
potential areas. Eg Mozambique (Inhambane) and Malawi (Mzuzu).

Noteworthy experiments to overcome staff’s reluctant to live and work in low potential
areas include: locally recruited teacher assistants; a mandatory first posting and
government contracting out basic service provision to private suppliers. Eg Tanzania
Health, Uganda Education, Kenya Agriculture and Zambia Agriculture.
Policy recommendations

Add geographical dimension to a core-function analysis as part of institutional reform
processes (ie what functions government should retain or release to be decided not only for
different activity but also for different areas)

develop joint initiatives with private sector and civil society (esp sanitary mandates;
community based health care; livestock marketing and animal health care).

Split SWAp activities AND budget into a ‘negotiable’ and ‘non-negotiable’ component
(i.e. split between those activities that are dependent on local and stakeholder demand and
those that constitute government core responsibilities)

Relocate sector fund allocation for negotiable activities into a horizontal cross-cutting
budget;

Distribute these horizontal funds according to need as well as potential;

Link agricultural sector programmes to to infrastructure programmes ('opening up'
isolated areas).