Docstoc

Fragile States by Paul Collier

Document Sample
Fragile States by Paul Collier Powered By Docstoc
					Netherlands Chapter




 Fragile States


       by


 Paul Collier
It is quite clear what I would like to be able to say, and I think also what you would like to
hear. It is that if we only could get democracy in these fragile states all would be well.
Democracy is the solution to their problems. That was more or less the diagnosis as of about
1990. By then it was clear that something had gone wrong with the African development
process over above Africa being a victim, it was that something was going wrong internally in
Africa which stagnated the development process. The obvious diagnosis by around 1990 was
to say: „it is dictatorship. It is these awful autocracies that are more prominent in Africa than
anywhere else, if only we could get rid of them thigs will be alright‟. Most of them, not all of
them, were got rid off through the wave of democratization that spread in Africa and other
low income fragile states following the collapse of the former Soviet Union. And tha was a
pretty hopefull period and I was part of those hopes. I don‟t think they were foolish hopes.
The hope was that now that we have democracy that will basically fix the problem. They were
not foolish hopes, but I don‟t think they were right. My own intellecual journey from those
hopes to a more bitter reality is what I am going to share with you tonight. I am going to look
at two sets of questions: does democracy resolve the problem of violent conflict in Africa?
Does it help? And does it resolve the problem of economic stagnation? Does it help?

Let me start with democracy and violent conflict. It is quite clear why we would have thought
that democracy would reduce the incidence of violent conflict. At least two things would
make democracy peace-promoting in these societies. One is it would end exclusion and the
other is it would confer legitimacy on governments. Both of these things, you would imagine,
would be stabilizing and reduce the incentive of violence. Is that what actually happens?
Well, I have looked globally at all the large scale violent conflicts and civil wars from the mid
1960‟s to 2005. I did some published work called Greed and Grievance. What I am going to
draw on tonight is not this, but an unpublished paper which you can find on my website called
Beyond Greed and Grievance. This work goes beyond the earlier work partly by updating
with the 5 most recent years, so it goes to 2005, but more importantly, it pretty much doubles
our data set of observed civil wars and it also massively increases the number of possible
explanations I can measure.

My whole approach in trying to understand civil wars is statistical. I see potentially that
anything could be the deep cause of civil war. Whatever we can measure we put in and we
will whitle it down just to see what is actually left there in a core of significant variables.
What comes up is first of all? Well the same economic drivers of conflict as I have found
before are still there. That is, the propensity to conflict is much more likely if your country is
low income, if you got stagnation or worse, economic decline, and if you are dependent of
primary commodities. That cocktail of all three: poverty, stagnation and primary comodities is
a dangerous combination increasing the risk of conflict. I have also been able to study for the
first time a range of things which in effect proxy the feasibility of conflict. For example, what
is the terrain like: is it as flat as The Netherlands? Or as mountainous as Nepal? And I can say
catergorically now that the reason why The Netherlands has not had a civil war for a long
time is that you are flat! It also helps also that you are high income. One of the reasons why
Nepal has conflict is that it is not flat. The risk of conflict goes up a lot if the terrain is
conducive to rebel armed groups. That sort of causal explanation, things like mountainous
terrain, do not fit very naturally into an explanation based on motivation. Why are rebels
rebelling? Because of a lot of mountains? Motivation, I have come to conclude, does not give
a lot of explanatory power. Of course there are always stories about what motivates the rebels
and in one sence that accounts for what they have done, but it does not account for why it is
possible in some societies for large scale organized violence to be feasible where as in other
societies it is just not feasible, no matter what people‟s motivation is. So I have come to a
rather depressing conclusion that usually rebelion with large scale violence is just not feasible.
It is not feasible no matter what the grievances where. Is is not going to happen by definition.
But where it is feasible it is going to happen. Somebody, some social entrepreneur, is going to
occupy that niche. What their agenda will be, could be anything, and that seems to come out
pretty strongly in the latest statistical work that proxies for feasibilities such as mountains that
do a lot of the work. Now, where does democracy fit into all this? How do we measure
democracy? Political scientists now have a scale to measure democracy. From extreme
autocracy, - think North Korea - through all singing, all dancing democracy, - think
yourselves. Is there anywhere on that spectrum that makes a difference to the risk of civil
war? The answer is, it depends. Unfortunately it depends upon the interaction with the level of
per capita income. It works like this: in rich societies democracy makes things much safer. In
poor societies it has the opposite effect. What do I mean rich and poor? There is a level of
income at which democracy makes no difference and that is about 2.500 dollars per capita per
year. Above that level democracy makes things significantly safer and below it, it makes
things significantly more dangerous. All the countries that I am interested in, the Africa‟s of
this world, which are not just Africa but central Asia, are impoverished countries way bellow
2.500 dollars per capita income, so unfortunately we are in a range where democracy appears
to increase the risk of civil war. This is as depressing for me as it might be for you. That is, if
you like, the deep risks. Now let us get more precise because half of all civil wars occur in
post conflict situations gone wrong. Post conflict situations are very fragile, 40% of post
conflict situations get back into civil war within a decade. I looked at all post conflict
situations I could find, 66 of them, and I have looked year by year to see what happens to the
risk of going back into conflict during that first decade. I have seen what role democracy
played in that. Again, I used a 21 point scale between the extreme autocracy of North Korea
and yourselves to see if there is anywhere along the spectrum where there is change, and there
is. There is a point about midway along the autocracy part of the spectrum where the risks on
one side look different from the risks on the other side. But it is not something that I want to
tell you or that you want to hear because the results are as follows: the risks of going back into
conflict are lower in the severe autocracy bit. Outside the range of severe autocracy it really
does not make much difference where along that spectrum you are. All the way along that
non-extreme autocracy part of the spectrum, the risks are pretty high. As I said, the risks
overall for these countries are 40% but if you rule out the range of severe autocracy the risks
are more like 70%. The democracy agenda we naturally and rightly promote in these post
conflict situations (and I don‟t want to oppose it) we cannot really sell as peace building
unfortunately. We have to face up, I fear, to the fact that we are actually building extremely
fragile situations by insisting on democracy. The message is not „don‟t do democracy‟ but
„recognize that it is not the solution to these highly fragile post conflict decades‟. We better do
something else to restore peace.

As well as insisting on democracy and democratic constitutions and all that, we are also, as an
international comunity very clear on how we implement democratic legitimacy and that is:
post conflict elections. I have looked to see what post conflict elections do to the risk of
revertion to conflict, the way, actually to settle things. There are 2 schools of thought of
political science on this: one thinks that post conflict elections bring risks down, the other
thinks that post conflict elections bring risks up and they can‟t both be right. But they can
both be wrong and as far as I can see they are. Because what post conflict elections do is shift
the risk from the year before the election until the year after the election. In the year before
the election the risks go down a lot and in the year after the election they go up even more.
Now, that is kind of worrying. Can we think why on earth might that be the case? And I think
that as soon as we think why that might be the case it is blindingly obvious. In the year before
the elections there are incentives to take part in the electoral contest, - you might win. So all
the different players struggle politically and then after the election there is a winner and a
looser. There are to groups that see the election as legitimate - one is us, the international
community (we are the guys who thought this was a good idea in the first place, it makes the
government legitimate). The other guys who think it is legitimate are the guys who win. What
they tend to say after they won is, right, we have won and we can do whatever we want and
we will. What about the loosers? They tend to say, you cheated and we are worried, because
we see that this government can do whatever they like and we see our friends, the
international community, getting on a plane and flying away and so we will defend ourselves
in the one way we know works. That is why you tend to get into another conflict after an
election.

Now, we are the friends, we are the peace keepers in this and what do we tend to do?
Unfortunately we use this post conflict election as the milestone to withdraw. In case you
think I am exaggerating, let us look at the Democratic Republic of Congo. Here we had a big
peace keeping force and we insisted on democracy and we insisted on an election. The date of
the second round of the elections was October the 29 th and the date for withdrawal was
October the 30th. That was so crazy that pretty late in the day we had to discover that we had
to send more troops in instead of flying them all home. That approach does not work. If we
are going to have democracy and we have to have elections then we need our international
peace keeping forces there for a long time.

In my analysis there is a package that sort of works. I think of it as „politics plus‟. I can show
that international peace keeping forces are effective in bringing the risks down. For the first
time I managed to pull out the United Nations data on its peace keeping missions and I put
them into this analysis and peace keeping works, it is actually effective. But unfortunately the
risks in the post conflict period do not fall very rapidly at all, they fall decade by decade.
Time does heal, but is a very slow process. Within that first post conflict decade there is no
statistically significant reduction in risk over time. So we need these peace keeping troops for
at least a decade. When can we ever pull them out? What is the exit strategy? The exit
strategy is not political design, the exit strategy is economic development. Economic growth
significantly and substantially brings post conflict risks down, both in the year in which the
growth occurs and cumulatively because it is raising income. The higher is the level of
income, the safer is the society. The problem with economic growth is that it takes a long
time! It is going to take a decade before growth at 10% cumulates to something that is
significantly enough to bring risks down in low income places. Here is a complementary
package: the economic development needs the external peace keeping and the external peace
keeping needs the economical development. Peace keeping needs economical development
because without it there is no credible exit strategy. But economical development needs the
peace keepers beacuse without them the risk of going back to conflict is so high that you
won‟t get any investment and if you don‟t get any investment you won‟t get the economic
recovery. So external peace keeping and economic development are complementary. How do
we get the economic development? It is a mixture of what we can do and what governments
can do. What we can do is big aid packages post conflict, they do work, they need to be
sustained much longer than we sustained them in the past, they need to be sustained through
that decade, not just the first couple of years, which is technically what we have been doing.
And there needs to be a very vigorous economic reform. Because typically post conflict
countries come out of conflict with terrible economic policies. There is a very simple reason:
during a civil war governments are just snatching at whatever resources they can find with
very short term economic policies, never mind the disastrous consequences in the future, we
are fighting a war, it is desperate - we do what we need to do to win that war. So the inherited
economic policies are terrible and need to be reformed rapidly, otherwise you don‟t get that
rapid growth. If you get economic reform quickly anough, you can get very fast growth.
Mozambique managed to sustain 10% growth a year for a decade. But typically, we are so
focused on political design, everybody is so focused on it in the first years, that economic
policies go to the back burner. Nobody pays any atention.

So that is the democracy and conflict story. Let me turn to the democracy and economic
development story. Supose that we are maninging to keep the peace, is democracy going to be
helpful in promoting economic development? I am going to have 3 points here. The first is
does democracy help the process of policy reform from inicially very poor policies and
governance? There are windows of oportunities for policy and political reform. All of these
reform policies have basically to happen within the country: they cannot be externally
imposed by donors, that does not work. We tried that with policy conditionality for 20 years
but it is just a failure.

In all these societies with very poor policies in governance there are reformers and
periodically these reformers come to power. There is a change of leader, there is a change of
minister, elites get weakened because economies collapsed catastrophically and so even
corrupt elites become desperate and are willing to support a bit of reform. But does
democracy itself speed up that process? Not as far as I can see. In fact, elections during these
incipient procesess of reform acutally chill the reform process, they slow it down. I think there
is one simple reason for that which is the very low income and very low education
environments. Elections tend to be overtaken by populist agendas. Populism is going to
technically win out over more sophisticated strategies. Not always, but there is that very
considerable danger that populism would be triumphant in environments of very low income
and very low levels of education. Basically most of these societies do not have an informed
media and don‟t have educated citizens. They don‟t even have very educated elites, because
from the 1990‟s onwards the donor agenda on education has been focused on primary
education and neglected terciary education. So the terciary education systems in these
countries, universities, are falling apart. Elites, educated elites, have acutally withered in these
societies. There are in many ways tinier than they were. And yet a critical mass of well
educated people is necessary in my view for the society to undertake serious reform. It can not
be done externally but is has to be done through internal debate, critiquing what is going
wrong in the society. If you think about it, China and India had policies that were every bit as
bad as anything you could find in Africa then. The difference is that India and China were
able to turn themselves around much faster than Africa. The difference here is scale. India and
China have big educated societies. If you have enough educated people you can sustain an
informed media, you can have, for example a financially literate press. A newspaper that has a
circulation. In Africa, other than South Africa, you won‟t find any financially literate press.
When I was in Angola there was not a single newspaper, never mind a financially literate one.
If you go to the Central African Republic you can put all the people who know how to read a
financial newspaper under one roof. There is just no market for such a newspaper in these
societies. These societies are tiny. In that context, democracy is very prone to a populist
agenda. That is in the case of reform in low income countries. Now, let me focus on not only
low income countries but on resource-rich countries.

Resource rich countries are at the moment very important for the low income societies. Two
related procesess have slammed up resource revenues: one is very high prices, the other is the
US and Chinese agenda of diversifying away from the Middle East into Africa and Central
Asia. So both through new discoveries and high prices a lot of these societies are now
resource rich: low income, small, low education, but big resource rents flowing into the
government. Historically those resource rents we have used very badly. If we go back to the
last big wave of resource rents in the 1970‟s there were missed opportunities. I have looked
statistically at the effect of all the resource rents on growth over the last 45 years and globaly
there is a pattern. The pattern is this: If prices go up, for say, oil exports, for the 1 st five years
growth goes up, but if you come 20 years later the society is poorer than it was before the
whole thing started. I have simulated what the present resource booms will do for Africa if it
just repeats the history of the last 45 years. At its peak Africa‟s growth will be 10% up and
after 25 years it will be 25% down. So it is vital that we don‟t repeat history. The question is
then will democracy be the change which enables us not to repeat history. In the 1970‟s
Africa was not democratic, now it is much more democratic, is that going to make things
better? Unfortunately, there is evidence globally that democracy uniquely in resource rich
countries makes things worse.

I can promiss you that this lecture will get more cheerful because this is as bad as it gets. So,
the global evidence is that outside resource rich countries democracy actually accelerates
growth but in resource rich countries it reduces growth. Something about resource richness
contaminates democracy. If this would be the end of the story, it would be too depressing to
give it. You need to distinguish between two kinds of democracy. In a mature democracy, like
the Netherlands, of course you are very aware that democracy means one thing, which is
electoral competition, you are about to have one. But democracy is not just that. Somebody
will win in a couple of days, but what happens then? Then the other aspect of democracy
kicks in. Elections just determine how governments acquire power, but then there are a whole
load of aspects about democracy which determine and constrain and limit how governments
use power. They are called checks and balances. A mature democracy has loads of checks and
balances. A free press, scrutiny by parliament, the courts, due process, masses and masses of
checks and balances. So govenment performance does not just depend on the electoral
contest. It depends on these other aspects of democracy: the checks and balances.

Now we can measure checks and balances. So we can now decompose democracy into 2
components: electoral competition and checks and balances. Some societies have a lot of
electoral competition but no checks and balances. Others have lots of checks and balances but
only modest electoral competition. So let‟s see whether that matters for this unfortunate effect
of democracy on resource rents. The answer is it does. Uniquely in the resource rich societies
electoral competition is severally disfunctional whereas checks and balances are extremely
useful. If a society has enough checks and balances it can make a democracy work very well,
harnessing those resource rents for growth. If it has no checks and balances at all and intense
electoral competition this analysis predicts that the society is in deep trouble. Why is that? So
far we have talked about the dangers of societies turning into populism as a result of low
education. The other danger that democracy can walk into is patronage politics. Imagine there
where 2 political parties in a resource rich country, The Netherlands minus checks and
balances. One political party is honest and the other is not. Let us not play this in The
Netherlands, let us play it in Africa, that‟s more real. What does patronage politics look like
on the ground in a low income African country or in a low income Asian country for that
matter. It looks like the following: the political boss says: “ Hmm... there is a village there,
how am I going to win the votes of that village? I could offer lots of public goods, I could say
you are going to have a school, you are going to have a health clinic, in fact since I have been
in power for 5 years, I could have actually done that, but I did not, because that is a very
wasteful strategy. If I go for national public goods like health and education, it is wasteful
because everybody benefits. I don‟t need that to win, I can get all the votes in this village
because that guy, in the middle, he is actually the power in this village. He is the guy who
basically tells everybody how to vote and they follow him. It will cost me $50.000 to put a
school and a health clinic in this village, but I can buy his support for $5.00 I just give him
the cash and he tells everybody, you vote for this guy, he‟s good” That is patronage politics.
In most of these societies it‟s unfortunately more cost effective in attracting votes than the
honest party strategy: health, education, good policy and the rest. You don‟t need to take my
word for it. An ingenious political scientist from Benin managed to persuade political parties
to run randomly in different campaigns in different parts of the country: patronage politics
versus public goods politics. Patronage politics won! That is the bitter reality of democracy in
these societies at the moment.

If patronage politics is a winner why does it not happen everywhere? Why is it associated
with resource rents? Why does democracy get undermined by resource rents? But democracy
works ok without resource rents? Here I will give you my explanation. I cannot prove it is
right, but I think it is right. When you have a lot of resource revenews coming into the
government, the government does not need to tax. If it does not need to tax, it does not
provoke citizens into very much anger and scrutiny about what it is up to. Scrutiny by
ordinary citizens is the life blood that makes the reality of checks and balances. Checks and
balances are not just a set of legal rules, they are people actively reinforcing them. Scrutiny is
what‟s called a public good. Everybody benefits from it. The tragedy of public goods is that
because everybody benefits from it it‟s in nobody particual interest to supply it. “If you
benefit from it, why should I supply it?” “I will concentrate on the things that benefit me, you
can do the things that benefit all of us” That is the problem with public goods. It is high
taxation that provokes citizens to scrutinize the government. I have spoken to the economic
advisor of the president of Nigeria a couple of weeks ago. Nigeria is a federal sistem with 36
states. He told me that he had been to the states to look at what state governors are up to and
some of them are deliberately avoiding any taxation because they just do not want to provoke
any scrutiny. They want a quiet life. And that is the on the ground reality of the relationship
between big resource revenues, low taxes and low scrutiny. If you get no scrutiny, what can
you do with these resourse revenues? Well, you can embezzle them, and what you do after is
not just build palaces for yourself, - you finance patronage politics. If patronage politics is the
electoral winning strategy because it‟s cost effective getting votes, the only way to stop it is to
make it infeasible to embezzle public money, so that although parties would like to do
patronage politics, they cannot finance it.

What we need in resource-rich Africa is lots of checks and balances and what we get is
intense electoral competition. Electoral competition is dead easy. You can even do it in
Afghanistan and Iraq, why? Because it is not a public good. Private incentives to participate in
an election are overwhelming, that‟s how you get to power! It is especially overwhelming if
there are no checks and balances. The message is then: „democracy, yes, but...‟ There is
evidence on democracy and economic development that is more hopeful in one sense. It is not
a message of hope, it is a message of necessity, and that is: in ethnically diverse societies
autocracy, dictatorship, is economically ruinous. Where you have ethnic diversity, unless you
have democracy you are really in a mess. Ther is a very simple reason for that. Put yourselves
in the position of a dictator who‟s got some power base in the society. The power base is
military and the military is your ethnic group and you have to look after your ethnic group.
That is how you stay in power, you look after your own. What I am going to do is change the
size of your ethnic group relative to the whole society. As we increase diversity of the society
your ethnic group in power is getting smaller and smaller and smaller. You now have 2
strategies that you can use to benefit your ethnic group: you can deliver national public goods
like good policies, and health and education that benefits everybody. They will benefit your
group-this is what you care about- but other people as well. Or you can adopt predatory
policies that grab off the groups you don‟t care about and give to your group. In the process
you will kill the economy because the grabbing is so damaging that it has costs. Now, when
do you take the 1st strategy and when do you take the second? It depends upon how big your
group is. If your group is say, 70% of the whole society, even if you don‟t care about the 30%
there is not enough there to grab off them. You just have to deliver the public goods that are
for the 70% of the people you care about. Unfortunately this will benefit the 30% of the
people you don‟t care about, but never mind....it is the winning strategy for benefiting your
group. Now, let‟s shrink your group to 10% of the society. Now the winning strategy is for
you to grab and to hell with the consequences. Because you can predate on 90% of the
population and that is going to make your 10% well off, no matter what happens to the whole.

So in ethnically diverse societies it has to be democracy and as it happens the typical African
country is much more ethnically diverse than anywhere else on earth. The typical African
society actually does not have the choice, it‟s got to make democracy work. Unfortunately it
does not make it any easier to make democracy work. All the things I have said so far are still
right. Democracy is going to increase the risk of conflict, it is going to make reform processes
slower, but there is no alternative to democracy because you turn to a dicator and you get
Mobutu. So where does this leave us?

I think democracy has been oversold, missold and undersold. Let me try to explain what I
mean by that. It has been oversold: we used that image of the East European revolutions as a
model for what would happen everywhere. Eastern Europe was most peculiar, it was the
extreme end of the most likely democratization process to work. In Eastern Europe there had
been democracies, they were European cultures, they were middel income, they had the
prospect of the European Union membership if they abided by specific aspects of democracy,
and if they could get into the European Union, then they would be saved from the menace of
Russia. The incentives to get democracy right and the feasibility in those societies were
overwhelming. Just because democracy could work in Eastern Europe does not mean it could
work elsewhere, but that was part of the oversold image. If you don‟t believe me think about
the big television image in Iraq on those first few days. It was of that statue of Saddam
Hussein being pulled down and what was that echoing? It was the statue of Lenin coming
down: Irak was supposed to be going to be Eastern Europe too. But it was not. And nor will
low income Africa, unfortunately. So, oversold in this sense, oversold in a more disturbing
sense I think. We really have pushed the sequence, first democratize then do the economic
reform, and that might not work. It might be that by democratizing these low income societies
while they still have very bad policies we kind of lock them into this trap with high risk of
conflict, and very difficult to get any policy change. We might need the sequence that China
is adopting. First do the economics and then the political reform will come down the line. Just
to concretize that, ask yourselves this question, to which there is no obvious answer: in 30
years time, which of these countries will be more democratic: China or the Democratic
Republic of the Congo? It is clear which is more democratic at the moment, The Democratic
Republic of the Congo, they just had elections, remember? Which in 30 years time? We don‟t
know, I don‟t know, just guess. My guess would be probably China. So it is oversold in the
Eastern European image, is oversold in that sequence of politics, politics, politics, let the
economic bagagge come later. We might even sometimes have to settle for less than
democracy, maybe we should sometimes settle for stability. So it is oversold and it is
misssold.
It is missold because of the image that we push down the throats of developing countries, has
been an image of elections. It is not what we mean by democracy in our society, we mean
something much more than elections, we mean checks and balances, but the image we have
presented and the money we have presented has been virtually entirely for elections. We have
to rebalance that, because, as I said, elections are easy but checks and balances are really
difficult because nobody is their friend – they are public goods. So we need to get behind an
agenda of building the checks and balances in these societies. It is also being missold in that
elections as being presented as the solution to the problem of violent conflict. When they are
not, I think.The message there is not : „Don‟t hold the elections‟, but rather that we need some
complementary policies that are effective in containing these risks of reversion to violence.
The key strategy there is peace keeping. If we are going to have elections we better have those
troops in there and not pulled out the day after the elections: as it turned out in the DRC
instead of the troops being flown out on October the 30 th, more troops had to be flown in. As I
said before, we have to reinforce those forces, not pull them out.

So, it has been oversold, it has been missold but it has also been undersold. In these ethnically
diverse societies like Africa and various other places I think there is no alternative to
democracy. But unfortunately in Africa at the moment, I talk to a lot of African leaderships,
they think there is an alternative. They think China is not only an economic model they think
is is a political model. They think it justifies African autocracy. As sad as it might sound
autocracy has worked pretty well in China. China is a much more homogeneus society in
which the leadership has an ambition for the national good of China and that is just not true in
Africa. African autocracies are going to be ethnically particular devisive and economically
costly. We have to make democracy work and let me conclude with just two sentences, what
does it mean in practice? It means avoiding the twin deformities into which democracy in
these low income countries turns into. Remember, one of them is populism and the other is
patronage.

How can we help the heroic people who are struggeling in these societies against populism
and patronage politics? In all of these societies there are heroes, truly courageous people. One
of my friends in a major African government at a senior level has this year 21 death threats
targeted against him and against his kids, so he moved his kids within the country. So he got
letters saying “we know you moved your kids, we know where they are now.” So his kids and
wife are living in a little flat in London. He is an asylum seeker! He is a big figure in his own
country trying to implement reform and that is the bitter political reality of being a reformer in
these societies, it is just very dangerous. We need to get behind these reformers and in the past
we have not. How can we help? A defense against populism I think in the medium term is
education and not just primary education but rebuilding Africa‟s terciary education system,
rebuilding universities, rebuiliding its think tanks so there is an informed elite able to
navegate their societies out of their present mess. So education and higher education and that
costs money and they do not have money, we have. It is also a case, I think of technocracy,
for example, over the last 30 years in Europe we have moved towards some decisions which
we recognized are better taken by technocrats than by electors. That is why we have built
independent central banks. It is why the European Union created something called a fiscal
stability pact.

Africa needs these sort of institutions to take some key decisions one step away from the
populists. It needs more independent central banks, it needs fiscal stability. What they have
tried in Nigeria is something called the fiscal responsibility bill. It is still a bill - it has not
gone through yet. But it is something a bit analogous to the stability pact. They need these
models. The Transparency initiative is an example. We can build models of governance so
they can then follow. That is guarding against populism. There are also guards against
patronage. Let me finish since my talk has been so uncontroversial, with a controversial point.
How do we strenghten checks and balances in these societies? I have been a passionate critic
of policy conditionality on the part of donors for a long time. I believe that policy
conditionality has been deeply disfunctional because it has confused the lines of
accountability. African governments must be accountable to their citizens not to donors. If
donors start telling these governments the policies they should adopt, that just confuses who is
really responsible for the policies that governments are implementing. But I draw a sharp
distinction between policy conditionality and governance conditionality. I believe that it is
right and proper that donor governments should actually insist on some conditions of
governance. What these conditions would be is basically insisting that governments are
accountable to their own citizens, not to ours, but to their own citizens. We should be part of
that struggle to bring accountability.

On that note I almost finished, but I forgot my advert. I have written -what I hope- will be a
popular mass market book for ordinary citizens to read. It is called “The Bottom Bilion” and it
is coming out in the spring. It is about all the things I have said and more, quite a bit more. It
is short as well. Why did I write it? Anybody who has written a book will know that you don‟t
write books to make money. I have written a book because of what has happened to
development policy in reacent years, - it has been democratized. Minsters of development, in
The Netherlands, in Britain, around the world now start to look over their shoulders to say
“what is the implication of this for votes?” Now the votes they ask about are not the votes
from Africa. They are not concerned about if this works in Africa, the votes they are
concerned about are yours. Does this play well in the Netherlands? If you are badly informed,
than the same sort of populist ideas that I am trying to get rid off in Africa will get dumped on
Africa, because you think: “that is not a bad idea, we should tell them to do it” Our
development ministers are now going to sing to whatever tune you like, that is the reality. So
it is really important that The Netherlands, Britain and the other donor nations have informed
societies. That is why I have come today. Thanks very much.

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:7
posted:2/12/2010
language:English
pages:10