Monday, April 25, 2011
A dispute is brewing at the World Bank that is likely to reveal the outlines of development assistance in the coming decade. That dispute is over the energy source that supplies much of the world’s power – coal. The World Bank is in the process of developing a new Energy Sector Strategy, which will establish lending priorities and project guidelines in its energy sector investments. As Lisa Frieman reports in a recent New York Times article, a discussion paper circulated for a World Bank meeting between country representatives recommended that financing for coal-based power be limited to the world’s poorest countries, leaving middle-income countries behind.
Representatives from some of the world’s fastest emerging economies, including China and Brazil, have objected vigorously. Similar to negotiations that have played out under the United Nations Framework Convention on Climate Change, representatives from these emerging economies argue that climate change is the legacy of industrialized countries, and that it is unfair to limit their growth when industrialized countries continue to have higher per capita emissions. While this larger dispute over the responsibility for addressing climate change is unlikely to be resolved anytime soon, decisions about the future of energy sector lending at the World Bank will.
Most World Bank observers maintain that the US and other industrialized countries exert substantial influence in steering lending to preferred countries and sectors. Under the Obama administration, the US has made it official policy to oppose coal-based power lending at the multilateral development banks. Despite this policy, lending for coal-based power projects at the World Bank has actually increased in recent years according to the AidData database, after falling sharply in the early-2000s, as displayed below. The highly-controversial $3.75 billion loan for the Medupi coal-fired power station in South Africa was also approved in 2010, the largest loan in the history of the World Bank.
The recent uptick in coal-based power lending might indicate that donor countries like the US no longer exert the influence at the World Bank that they once had. Instead, middle-income countries are increasingly making their voices heard and challenging the donor-driven model of development finance. If in the coming weeks they are able to successfully beat back restrictions on energy sector lending, we will have witnessed a fundamental power shift at the multilateral development banks.
Donor countries have driven improvements to environmental practices at the MDBs over the past two decades. Environmental NGOs have typically sought to influence environmental practices at the MDBs by getting donor countries to support their policy preferences. In the future, they may have to look more widely for support.
Monday, April 18, 2011
Time for some mashups: World Bank and AidData released geographic data for 81 countries and launch open.aiddata.org
The World Bank has just released maps of its activities in 81 countries as part of the Mapping for Results initiative, a partnership between the Bank and AidData. The geocoded data represent more than 16,000 locations for more than 2,700 active Bank activities in all 79 IDA countries, plus China and the Philippines. The Mapping for Results initiative is part of the World Bank Open Data Initiative and is fully committed to open, free and easy access to raw data. The socioeconomic and geographic location data displayed on the Mapping for Results platform can be downloaded, expanded, manipulated, and re-used without restriction. All of the geographic location data can also be accessed through the World Bank Open Data API.
Today, AidData in partnership with the World Bank Institute launched open.aiddata.org, a new toolkit for aid transparency with tools and data for donor organizations that want to make information on their activities more accessible, and for those who want to better understand and access aid information. At Open.AidData you can download the Geocoding Methodology behind the mapped data, which can be used by other organizations that want to geo-enable their work.
The Mapping for Results dataset is the output of nearly one year of collaboration between AidData and the World Bank Institute—but this is only the beginning. We are working together to expand the initiative to other organizations, with the goal of helping donors to better coordinate their country strategies and governments to harmonize on- and off-budget aid-funded activities. At the country level, we are looking for new ways to make this information more accessible and relevant to governments and citizens.
Mapping can advance the development agenda in a number of ways:
· Aid maps can help citizens and CSOs monitor and give feedback on aid activities in their communities or sectors of interest
· Maps are a strong visual aid that facilitate decision making between donors and partner countries on where and how to allocate development investment
· Overlaying aid information with development statistics helps development stakeholders assess whether aid flows to areas of greatest need
· Development actors can use maps to coordinate activities, thus preventing duplication of work.
Currently, AidData is using the Mapping for Results data to develop new web/mobile applications (such as Development Loop, with Esri) and to inform new research in aid allocation, donor coordination, and impact monitoring. More eyes on project implementation at the local level is likely to mean that a larger share of funding makes it to the intended destination and is used productively. This “Democratization of development through open data” can broaden the dialogue so that citizens have a voice in the development planning process, and can report back on whether roads are maintained or schools have textbooks. AidData, Ushahidi, and UNICEF are currently exploring the feasibility of testing a crowdsourcing approach to development monitoring in Uganda, with technical support from the World Bank Institute.
AidData is also working with the Climate Change and African Political Stability Program (CCAPS) at the University of Texas and Malawi's Ministry of Finance to geocode aid activity information at the country level. Recently, several CCAPS research assistants traveled to Malawi for the initial stages of the project, which will result in a geocoded set of all development assistance projects currently tracked in the government's Aid Management Platform (AMP). Once mapped, Malawi's geocoded aid projects will be presented on a simple visual platform that will help government and donor staff ensure that aid is targeted to areas of greatest need.
Our hope is that more transparent, better data will lead to greater development impact. Look forward to seeing how others take the newly released data and mash it up with other kinds of information to pose (and answer?) some interesting questions.
Thursday, April 14, 2011
Tuesday, April 12, 2011
Loyal readers of the First Tranche will recall that last week I was singing the praises of James Vreeland and his new paper, "Foreign Aid and Global Governance." He shows that the Swiss government gives more bilateral foreign aid to those developing and transition countries that vote to give Switzerland a seat on the IMF and World Bank Executive Boards. Vreeland even estimates a price for the two seats (around $71 million in 2008).
In any description of an economic exchange you need to know the amount of money paid and also what the consumer receives in return for the payment. Vreeland's paper, and my blog post, gave the impression that it was about $71 million per year for two seats on IO boards. But, it turns out the Swiss almost certainly got more for their money than we thought. In fact, they might have gotten many more unobserved things, but one thing I know they got was a seat on the GEF Governing Council.
It turns out that the multi-country constituency that elects the Swiss representative to the Council is almost identical to the group of countries represented by the Swiss at the World Bank and the IMF -- Azerbaijan, Kyrgyz Republic, Tajikistan, Turkmenistan, Uzbekistan, and (the only "new" member of the constituency) Kazakhstan. (In the conclusion of his paper Vreeland actually explains the addition of Kazakhstan to the traditional constituency as an effort to compensate for the coming reduction is Swiss voting shares at the Fund and the Bank.) Turns out that group of countries acts in concert within more than just the "big two" Bretton Woods organizations. So, now we know the Swiss get at least three seats for their aid allocations to this bloc of countries. Of course, none of this undermines the logic of the "trade" that is at the heart of Vreeland's paper, but it does encourage me to think harder about what is being traded.
The other fact that lends support to the general logic of Vreeland's argument -- that Switzerland is trading aid money for seats on IO governing boards -- is the fact that at the GEF there are 14 seats reserved for developed countries, 16 seats for developing countries, and 2 seats for "countries in transition." However, while almost all of the other transition countries are represented by individuals from countries in transition, the transition countries that are members of the Swiss bloc (the "Stans" and Azerbaijan) are represented by Switzerland! This is a trans-organizational trading coalition and, who knows, it might extend beyond these three organizations.
Finally, while some representatives who vote on the GEF Governing Council have day jobs as Executive Directors at the World Bank or the IMF (for example, India's ED at the World Bank also represents a South Asian constituency at the GEF), the Swiss have appointed two individuals to serve as EDs at the Bank/Fund and have appointed different individuals to the GEF Council -- the folks serving on the GEF Council actually have an environmental portfolio within the Swiss government. This observation is consistent with Vreeland's broader argument about how seriously the Swiss take their role as global governors in the area of global finance. It appears the same may be true about global environmental issues.
While this is all very exciting to a student of IOs and foreign aid, the greatest thing about this paper we are writing is NOT that it is teaching me about the politics of representation and accountability within multilateral development agencies. No. The greatest...thing...ever: The paper will be presented at a conference held in Dublin, Ireland! And the venue....the Guinness brewery. I am not making this up. I will attend a three day academic conference in a brewery. There is a God and he does love me.
Thursday, April 7, 2011
Hats off to Owen Barder for his tour de force of a blog post on what needs to happen in aid transparency! At AidData we cheer his arguments that data should be comparable, open, geocoded, and reusable. This is at the heart of the AidData initiative—ensuring that aid datasets integrated into the database are appropriately formatted and coded so that they can be compared with other datasets; making everything public and easily downloadable; geocoding at the activity level; and enabling raw exports rather than pre-packaged or analyzed data so that information can be (dis)aggregated for all sorts of purposes. Soon, it will be possible to export data in IATI format as well.
While all this raw data is fantastic, especially for researchers and analysts, as Owen points out there are also a lot of people interested in aid who would like their information pre-cooked to some degree: a journalist who wants to know how much donors gave to his or her country; a citizen who wants a snapshot of what donors are doing in his or her community; or an NGO that wants a list of other NGOs active in the same sector. Although AidData at the moment may look like simply a big database, behind the scenes there is a lot of work going on to make it more digestible and visual for the kinds of users who would prefer not to read through pages of codes and standard definitions in order to answer a few burning questions (stay tuned!). Along with geocoding, this will pave the way for new initiatives to crowdsource development information, which the AidData team is looking to pilot in Uganda along with Ushahidi and UNICEF.
Linking IATI-format information with country-level aid management systems will be another exciting step (aidinfo and Development Gateway have tested this concept in Malawi and Burkina Faso, working with the national governments). Some of these systems actually do already link to national budget processes: in DRC and Madagascar, for example, the governments use information in the Aid Management Platform (AMP) to prepare their annual budgets. In Senegal, budget information is imported into the local AMP so that it can be analyzed alongside aid, since as Owen says, most stakeholders don’t care whether resources come from aid or domestic resources—they just want to know what resources are available, period. And although many of these systems are not publicly accessible, they are frequently used to create official aid reports that are made public (some examples here).
Adding IATI data feeds to country systems will help governments track activities that are implemented by donors and NGOs outside government channels. I am skeptical that requiring donors to report aid information according to each country budget classification (as Owen advocates) will be feasible at the donor HQ level, since each country has its own classifications. In the spirit of country ownership, seems to me better left to the partner governments themselves to decide how aid maps to their own codes (assuming that they have sufficiently timely and detailed information, per IATI, to do so). IATI will nevertheless reduce transaction costs and improve transparency at the country level significantly.
Monday, April 4, 2011
In another month or so, users of the AidData database will be able to run queries on aid activities by donor, sector, and country, as before—but with a new twist. The results will be exportable in the new international aid reporting standard recently finalized by the International Aid Transparency Initiative.
The aid transparency movement has gained rapid momentum in the last year or two, with growing interest from both producers and consumers of aid information. Recent high-profile launches of open data portals and dashboards, such as those of the World Bank and the United States, are evidence of this (Sweden just launched its new Openaid site on Monday).
But mounds of publicly accessible data don’t necessarily mean that the people who need to coordinate activities on the ground, or make decisions about aid allocation, or determine whether aid reached its intended destination, will have the information they need at the right moment. Without a universally-accepted protocol on aid information reporting, aid datasets remain isolated and must be analyzed and repackaged individually.
The International Aid Transparency Initiative (IATI) has taken on this challenge by developing a global aid reporting standard, defining the specific pieces of information that should be reported for each aid project and prescribing a universal XML format for this information. In the words of Claudia Elliot of Publish What You Fund, IATI’s efforts mean that “more information will now be better information.”
In February 2011, IATI finalized its standard, and both DfID and the Hewlett Foundation recently published data in the IATI registry. IATI’s sixteen other donor signatories have agreed to do the same by the time of the Busan High-Level Forum on Aid Effectiveness this coming November.
AidData is now working to enable users to export projects from the AidData database in the XML format prescribed by IATI. The AidData database currently accounts for around $4 trillion in development activities funded by nearly 90 donor agencies between 1945 and 2010 - this feature will therefore instantly make a vast quantity of aid information compatible with the IATI standard. The feature will also make it easier to mash up data on development activities with other types of information (such as development statistics, as in AidData’s prototype web app, Development Loop, created with support from Esri).
Of course, the information in the IATI exports will be incomplete, as it will depend on what information donors have already reported in the datasets that AidData draws from. However, being able to view this information in IATI format will be an important step in allowing donors and aid information users to assess where the gaps are and what is needed to create a more comprehensive picture. It will be interesting to see how users will take advantage of the ability to compare data from dozens of donors with information posted to the IATI Registry and other sources. Stay tuned!
This week we are talking about foreign aid allocation, aid effectiveness, and aid transparency. As I prepared my part of the lecture I intended to illustrate the ways in which political scientists study these topics and compare these approaches to those taken by economists. What I found in this issue area was convergence (and co-authorship) among economists and political scientists. Some of the best contributions by political scientists focus upon the domestic political factors within donor countries (Examples here here and here) or recipient countries (here, and here). But I found as many or more of these papers written by economists and they often used similar research strategies.
However, a surprising number of political scientists (and a growing number of economists) analyze aid allocation from a geo-strategic perspective where states make aid commitments or allocations in pursuit of other foreign policy goals, rather than just domestic political goals.
David Baldwin and Hans Morgenthau provide the classic treatments of this subject in political science, but recently I have seen a surge of new interest in this approach. Many economists and political scientists argue that bilateral aid flows from the United States are related to a recipient's position and/or voting record on the UN Security Council. But while the U.S. is notorious for such practices, middle powers and even small countries may use aid for strategic purposes...and we should keep this in mind as we attempt to explain their allocation behavior.
Last week my colleague Maurits Van Der Veen suggested that resource poor countries make promises to rich countries that are experiencing natural disasters in the hopes of increasing their aid receipts from those same rich countries in the future. This strikes me as both interesting and testable.
More convincingly, Jim Vreeland just published a paper in the Review of International Organizations showing that even countries not normally considered geo-strategic donors (Switzerland!!) do allocate their bilateral aid in an attempt to secure positions on the Executive Boards of the IMF and the World Bank. Vreeland argues that while some coalitions of countries that elect representatives to Bank and IMF Executive Boards make sense from a geographic, cultural, or historical point of view, Switzerland has assembled an odd coalition (by franc) that includes Uzbekistan, Serbia, Poland, Azerbaijan, and a collection of other countries that have little in common... except that they receive a disproportionate amount of aid from Switzerland. See figure 1 below.
Vreeland puts the cost of a seat on the Executive Board in context by asking: "What is the price of the Swiss Executive Directorships at the World Bank and the IMF?" After much data analysis we learn:
"This produces an estimate of around US $71.4 million annual aid due to their membership in the Swiss-bloc, which amounts to less than 0.015% of Switzerland’s nominal GDP (which was about 492 billion in 2008). In per capita terms, Directorships at the World Bank and the IMF cost Switzerland’s 7.6 million people about US$9.40 each in 2008. To put this in perspective, this is less than half of the hourly wage of a supermarket cashier in Zurich."I have no idea if that is worth it for Swiss taxpayers, but I love the fact that we now know the price.
My favorite recent example of foreign aid geopolitics comes from a paper written not by a political scientist, but by economist Christian Dippel. He shows that Japan uses foreign aid to reward developing countries that join the International Whaling Commission and vote (with Japan) to loosen restrictions on whaling. As compelling, he shows the the United Kingdom will threaten to cut aid (and will actually cut allocations) to developing countries who side with Japan against the UK.
It has become common place (even among economists) to control for domestic political variables within donor and recipient countries when explaining aid allocation and aid effectiveness. These recent studies suggest we should not forget what Morgenthau explained almost 50 years ago...
"A policy of foreign aid is no different from diplomatic or military policy or propaganda. They are all weapons in the political armory of the nation. As military policy is too important a matter to be left ultimately to the generals, so is foreign aid too important a matter to be left in the end to the economists."
Increasingly, researchers seem to have taken that message to heart...even the economists.