Conclusion: What a mess!

It is a sad commentary on 40 years of development effort that there are now a record numbers of people in poverty, and there is a global fear of terrorism and there is hopelessness more than there is hope.

Failed development

The phrase “failed development” is not in common usage, but it should be. Development performance is not just failure at the margin. It is failure that affects the whole of the global economy. It has a devastating impact among the world's poorest.

There is something wrong when the functioning of the global economy results in around 50% of the planet's population being in abject poverty and hungry ... while the rich countries have a problem with obesity. Something is surely wrong. I have the temerity to suggest that this is not a chronic problem, but a problem of poor decision making and misused resources, and a dysfunctional global system that allows this to happen, not once, but over and over again

In the broadest sense the development paradigm that has prevailed for the past three or four decades just does not work. Bits of it work OK, but most of it consumes resources and destroys economic value.

Bluntly put, the world is neither more secure nor much happier, nor much better fed than fifty years ago. The euphoria and expectations for post-independence countries in the 1960s has not in any way been realized in the past four decades. So little of what was projected by the development experts of 50 years ago has been achieved. The only people who appear to have been right are the reactionary critics of independence who said that developing countries would never amount to anything.

Thirty years ago there were a lot of trends that were favorable, and expectation of life, a very basic measure of economic performance, was going up. But in recent years, this very basic measure is going down. That failed development is causing a vast number of people to be dying prematurely makes the need for solution to the development crisis so very important.

There has been immense technological and economic progress in some parts of the world, but as much as 50% of the world's population is hungry, and will be hungry for their whole lives. Most of the world's people live a life that is best described by the old phrase “Life is brutish and short”

Not now, but soon, the crisis of development failure is not going to be confined to the poor people of the world who just get hungrier and die quietly. The crisis of development is going to get translated into a different sort of crisis where poor people get angrier and angrier and though weak, will start to challenge the comfort and security of the world's rich. The SOUTH is not going to let the NORTH have it all. The stage is set for global terrorism in a way that has never been seen before. It might be very messy. In time, failed development is going to have a devastating impact on the quality of life in rich countries.

I first wrote the above some years before 9/11. The events of 9/11 should have been a wake up call about global wealth and the opportunity gap, but instead those in power chose the policy option of a global 'war on terror' that had no element that would address the root cause of discontent and a key driver of anti-social violence.

The developing world, the SOUTH, is facing economic disaster. Even though health and education have been improved, the standard of living is far worse for most people in developing countries today than it was 50 years ago

For fifty years, most development resources have flowed through the public sector, with questionable results

The paradigm for development has not worked and is not working. There has been a long time continuum of economic value destruction in most developing countries.

Look at the market price history of all of the products originating in developing countries and see what these countries have to deal with.

In this chapter some of the symptoms of failure will be looked at, recognizing that treating symptoms does not cure the underlying disease. But what we will see is a generalized pattern that seems to suggest a way forward that can be extremely successful.

As a starting point, then, the following:

1. Hunger and famine (food, water and basic necessities)

2. Violence, war and insecurity (also refugees, IDPs and victims of trauma)

3. Poverty, economic value destruction and the distribution of wealth

4. Balance of trade, currency crises and government insolvency

5. Health pandemics

Development performance ... a mess

What has been done in the name of relief and development for the past forty years has been ineffective. Why ... and equally important ... how?

The ways in which development is implemented, in particular the “project” form of organization that dominates official development assistance (ODA) are ineffective and result in “economic value destruction”.

Most interventions in the past forty years have removed wealth from developing countries rather than creating wealth in these countries. How? Why? Development resources are used ineffectively throughout the ODA community. How? Why?

The processes in development do not result in minimum cost and maximum outcome. The procedures and systems will not allow that to happen. Good people are beaten by bad systems and bad processes and ineffective organizations.

Development has failed because of process. There are examples of success, of development excellence, but in the aggregate development has failed. While the amount of money involved in “development” is small compared to the funding of the international oil industry, or the trade in illegal drugs, it is substantial. There have been some successes, but the total performance of development expenditure is terribly poor. The development situation would have been better served by putting development money into a savings account and just leaving it to accumulate than using it in the way we have, and now having to face an enormous debt overhang, that just will not go away.

Clearly something is wrong.

Why is development analysis so poor?

Incompetent analysis

The outcome of analysis suggests that the analysis has been incompetent ... but the problem is much more systemic than it is personal. If the questions being asked are wrong, then the analysis is likely to be wrong as well. I believe there is actually a lot of very good analysis ... but it is about the wrong things. Neither institutions nor the key leadership wants analysis that highlights what is wrong and needs to be fixed, rather, they want analysis that shows how good the performance has been.

Good analysis is dangerous

The fund flows in development are huge ... with most of the money important to a whole chain of beneficiaries to the process. The use of money to deliver value to the nominal beneficiaries of the fund flow is detrimental to those that are feeding from the process.

The ORDA world is not much different from the corporate world. Independent objective analysis is not welcome anywhere ... the only analysis people want is analysis that shows what people want to share ... and people want to be in control of the analysis. So much for independence ... and so much for objectivity.

Too much an academic exercise

There is lots of analysis of development, but it is not very useful. Most describes the condition, in more or less detail. Almost none of the analysis results in action oriented information or management information. The mindset is research not management. Most analysts seem to have a mindset to have rigor no matter what the cost, rather than most useful at minimum cost. In one case a good outcome is to have data for a research agenda ... in the better case the outcome is to have better development progress.

Highly aggregated reports

The World Bank, UN agencies and others produce a plethora of highly aggregated reports. One of these is the World Bank's World Development Report. Most of the UN specialized agencies produce something similar with respect to their own sector. Over and over again ... year after year ... these reports show that development has failed, and quantifies the scale of the failure.

The key information that I would like to see is the relationship between resources used and results achieved.

In my corporate career we knew a lot about how much things cost. I spent a lot of time understanding not only how much things cost in a static situation, but how costs varied as various production conditions changed. It was not always easy, but it was vital to making the company as profitable as it could be. It was the foundation for strategy and action plans that would work and deliver results.

When I started working in the ORDA world this sort of information was not being used at all. Nobody knew what I was talking about when I wanted to know about costs and the bahavior of costs under different project scenarios. That is not to say that there was little numerical analysis. The World Bank has used numerical analysis to support its decision making process. But the World Bank does a lot of economic analysis, and almost no accounting analysis.

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The development data about Africa are serious. The numbers highlight the RESULTS of a failed paradigm for development that has been used for several decades.

I have tried to draw attention to the need for change and the possibilities that change can result in success. I have tried to draw attention to the many dimensions of the development process that are of great importance, but not being addressed in any meaningful way. This was written in 2003:

Solutions are possible, but not until people who have control of policy and control of resources allow changes to be made.

There are many issues:

• When I first started working on development issues in Africa in the early 1970s, guns were far less widespread....... where do all the guns come from? Who pays for them? What development value do they have?

• What about refugees and internally displaced people? ICARA I and II in the early 1980s highlighted the problem. Why so many? What are the root causes?

• What about hunger? Is the problem food production or food trade or food aid? Or is it poverty?

• What about oil and minerals? Is foreign direct investment (FDI) a blessing or a curse?

• Are the oil companies creating economic value adding in Africa, or is it just for corporate stockholder added value? What about foreign mining companies?

• What about diamonds and gems and gold......... and civil war...... and timber..... and guns and landmines? Where is the economic value adding for the people of Africa?

• What about the health and HIV-AIDS crisis? Is this just another excuse for investors to avoid business and development investment in Africa..... it certainly is having a devastating impact on economic value adding in Africa.

I have been trying to ask meaningful question about the why and how of development failure. I have been trying to get people to think about “value adding” and “value destruction” This was also written in 2003:

The prevailing development process flows almost all the available resources into activities that do very little economic value adding in Africa. Worse, this has been going on for decades. Under the prevailing development paradigm economic value is being systematically removed from Africa....... with benefit accruing to others.... but not Africa.

But nobody is going to pay any attention because the information about development is voluminous but essentially useless. More from 2003:

There is a terrible shortage in information that can help pinpoint what is good and bad about development, and get resources allocated to expanding the good activities. What is clear is that most of the available resources do NOT produce significant economic value adding in Africa. (If I am wrong... give me the facts... and I will be as outspoken about success as I am trying to be with respect to failure.)

These main characteristics of failed development in Africa are rarely talked about by the leading spokespeople on Africa's economic crisis, especially this associated with the official development assistance (ODA) community (World Bank, IMF, UN, USAID, DFID et al.). And ways forward to address these issues do not seem to be forthcoming from our ODA leadership.

Because the high profile academics and development experts don not understand the reasons why and how development has failed, it does not mean that the why and how is not known. This was written in 2003:

I sense that my African professional friends understand the issues very clearly, and would be delighted to see new ways for development resources to be mobilized for use in activities that will address priority development and investment needs in their communities. This is NOT about more welfare handouts, but making it possible to create new opportunities and create economic value in Africa's back yard using new resource flows outside the prevailing FDI and development cartel.

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Colonial overhang

When 'development' first started in its modern form, that is after independence of the former colonies in what I am referring to as the SOUTH, there were a lot of experienced former “colonial” civil servants who were able to do a career change and become 'development' experts and advisers. To the extent that they knew something of the geography, and the culture and the problems and the potentials, these people were an enormously valuable resource. And they made a significant contribution, especially when they were appointed to appropriate positions in the UN and the World Bank and the bilateral development agencies. But they did not succeed as well as they might have, and the reasons for this are many. And of course, much easier to see now with the benefit of hindsight than at the time.

One of the issues that these former colonial officers had to contend with was the whole issue of 'colonialism'. A lot of younger professionals in the development arena had the view that the SOUTH's economic circumstances were a result of “colonialism” and that with the colonial issue out of the way development would now be easy. This view was also popular in government circles in the SOUTH, and development was going to be easy. Essentially a simple equation: money in results in development out. If only it had been that simple.

In the 1980s, there have been lots and lots of times when I have tried to address the issue of development performance with World Bank and UN staff, and the response has been couched in terms that it was a problem carrying over from the 'colonial' era. This was used as an excuse for everything. This happened in Nigeria. This happened in Madagascar, This happened in Ghana. This happened almost everywhere I worked. And it was not long before the dialog between beneficiary government and the donor organizations picked up on this and created a universally acceptable excuse for failing projects