introduction to from poverty to power

Introduction to

From Poverty to Power: How Active Citizens and Effective States Can Change the World

by Duncan Green, Head of

Research at Oxfam GB

June 2008

Introduction: The Unequal World

What is it?

A book (300+ pages)

Spin off print and web materials

A ‘reflection’, i.e. not a strategy, campaign briefing or agreed Oxfam International policy position

Comprehensive – a ‘state of the world’ publication

Who’s the target audience?

Next generation leaders and opinion formers, North and South

Current development practitioners, policy makers, influencers

What’s the vision?

Women and men in communities

everywhere who are equipped with

education, enjoying good health, with

rights, dignity and voice - in charge of

their own destinies

“

”

So what’s the problem? InequalitySo what’s the problem? Inequality

These children’s life chances are already shaped by their: Sex Race Nationality Parental income Parental education

Za

mb

ia1

99

3-2

00

3

Bra

zil 19

93

-20

03

Decreasing Inequalities

Annual % Gini

Annual % Gini Change

0

-1

-2

-3

Inequality is falling in some countries…

Ho

nd

uras 1986-1999

Co

lom

bia 1991-2003

Rw

and

a 1985-2000

Increasing Inequalities

…but rising in many more

Annual % Gini Change

4

3

2

1

0

Global inequality is obscene

Ending poverty would cost $300bn – a third of global military spending

Top 500 billionaires earn as much as the 416 million poorest people

Average global income is $9,500 – 25 times more than that of the bottom billion

What’s happening with inequality?

The answer? RedistributionThe answer? Redistribution

Of PowerOf Power

Of OpportunitiesOf Opportunities


Of AssetsOf Assets


What's needed:

Active Citizens

What's needed:

Effective States

The urgency of now Climate change makes development more urgent

than ever

It means dirty growth is no longer an option

We need to move poor countries onto a clean growth path as soon as possible

If we fail, and carbon becomes either forbidden or too expensive, poor countries and communities may be stuck outside the ‘carbon curtain’ in a new Dark Age

The urgency of now

Human progress is neither automatic

nor inevitable... Over the bleached

bones of numerous civilizations are

written the pathetic words: Too late.

Martin Luther King, 1968

“

”

Power and Politics

Main messages

Rights and dignity are a crucial part of development and well-being

Achieving these requires involvement in power and politics

Ability to exercise rights requires access to essential services, information and knowledge

Active citizenship, including civil society organization, is essential to development

Democracy is beneficial on both intrinsic and instrumental basis

Effective states play a central role in development

And rights are about power - Picture

Development is about rights

Development is about rights

Rights are long-term guarantees that allow right- holders to put demands on duty bearers

Capabilities = rights + ability to exercise them

Involves crucial shift from treating poor people as ‘beneficiaries’ to seeing them as active agents

Rights = lawyers and scholars; development = economists and engineers

And rights are about power

Power over: the power of the strong over the weak

Power to: the capability to decide actions and carry them out

Power with: collective power, through organisation, solidarity, and joint action

Power within: personal self-confidence

How change happens: the Chiquitanos

How change happens: the Chiquitanos

3 July 2007: Chiquitanos win title to 1m hectares of traditional lands in Eastern Bolivia

Lived in near-feudal conditions up to 1980s Activism began on margins of football league Marches to La Paz forged links with highland

Indians and built ethnic identity Chiquitanos elected as mayors and senators Evo Morales’ 2006 election, the turning point

First build the people…

Education, healthcare, water, sanitation and housing are basic building blocks of a decent life

Education: need improvements in both quality and quantity (esp. for girls)

Health: maternal mortality as example of gender and wealth-based inequalities

Control over fertility is both a rights and health issue

The state must be central to provision

Then ensure access to knowledge and information Steady improvements in access to knowledge, e.g.

radio, mobiles, internet

Technology holds enormous potential

But current incentives bias R&D against the needs of the poor

And intellectual property rules act as a barrier to technology transfer (pharmaceuticals, biopiracy)

And the right to organise Increasing range and complexity of civil society

organizations

Role of CSOs as catalysts and watchdogs

Intrinsic and instrumental benefits of CSO involvement

Civil society activism waxes and wanes

Civil society is very involved in decentralization processes

How change happens: winning women’s rights in Morocco

How change happens: winning women’s rights in Morocco 2004: Moroccan parliament approves new Islamic

family code that strengthens women’s rights Changes driven by Union de l’Action Feminine,

working within Islam, e.g. quoting Koran Counterattack from conservative activists and

clerics Women’s movement used insider-outsider tactics -

petitions and marches to fend off conservatives King formed commission which led to law change

Property rights matter

Property rights matter to poor people

Women often excluded from full rights to property

Many systems of property rights, e.g. customary law

Role of property rights in development: important but not a panacea (de Soto) and can have negative impacts

The importance of land reform to equality and growth

Democracy works

Spread of democracy was a feature of the 20th century

Democracies– Produce more predictable long run growth rates– Produce greater short term stability– Handle shocks much better– Deliver more equality

Democracy in many countries is ‘exclusionary’, with flawed party systems and patronage politics

But for most people remains the ‘least worst’ alternative

Corruption is often linked to natural resources Corruption is both a cause and effect of poverty Impact on development varies (10% v 100%) Active citizens can curb corruption, while rich countries

and corporations must also put their houses in order Natural resources can undermine the social contract

between state and citizen But some countries have managed natural resource

wealth well (e.g. Botswana, Malaysia)

States are at the heart of development (and growing in importance) Nation states play a core role in providing essential services,

rule of law, economic stability and upgrading Weak or absent states are often worse than bad ones, but can

be turned around, often after a ‘shock’ Looking at East Asian tigers, successful states:

– Govern for the future– Promote growth – Start with equity – Integrate with the global economy, but discriminate – Guarantee health and education for all

Taxation is central to the citizen-state relationship Globalization and orthodoxy make building effective states

harder

Dilemma: are Effective States compatible with Active Citizens?

Dilemma: are Effective States compatible with Active Citizens? Aka would you rather be poor in China or Bolivia? Nation builders are often undemocratic But selection bias excludes states that are now

developed Autocrats often fail and civil society is less tolerant of

‘benevolent dictators’ Democracies:

– Produce more predictable long run growth rates– Produce greater short term stability– Handle shocks much better– Deliver more equality

Section 3

Poverty and Wealth

Main messages

Orthodox economics must be expanded to incorporate environment and unpaid work

Markets, and poor peoples’ involvement in them, are evolving rapidly, raising new threats and opportunities

Redistributing power in markets is essential to reducing inequality and overcoming poverty

Redistribution is not the only issue: effective states are needed to generate growth where it benefits poor people most, provide infrastructure, and build national technological capabilities

Economics for the 21st Century

Orthodox economics and its indicators (income GDP etc.) lead to biased policies and blind spots in crucial areas of poverty and inequality

A new economics of human sustainability must address:– Environmental constraints and sustainability – Non-monetary economics, e.g. unpaid women’s

work– Weighting policies and outcomes for equity– Focus on well-being, not just income

Economics for the 21st Century

Making agriculture pro-poor

Small farmer based agricultural growth has led to take-off in Viet Nam, India, etc.

Requires both Effective States and Active Citizens acquiring power in markets

Active Citizens: producer organization, consumers Effective States: access to credit, investment, pro-poor

technologies Good news: commodity prices, biofuels (perhaps) and shift

to low carbon production Challenges: supermarketization; outmigration Dilemma: food v feed v fuel – can we have all 3?

How change happens: winning ‘pond rights’ in India

How change happens: winning ‘pond rights’ in India Fishing ponds crucial to 45,000 families in

Bundelkhand Technology change (new fish varieties and

stocking) prompted a new wave of seizures by landlords

Protests got support from state government for fishing cooperatives – basis for mobilisation

Dirty tricks and some violence were a turning point NGOs brokered relations with police and

politicians 100 ponds now under fishers’ control

Decent work

Decent work

Several trends are driving up inequality– Flexibilization and rise of the informal economy– Downward pressure on labour rights

Incorporation of women brings mix of costs and benefits

What needs to change:– Rebuild and change trade unions– Reform supply chain management– Recognize role of unpaid work

Private sector, public interest

Private firms create jobs, buy and sell to the poor, pay taxes and generate externalities

The human impact of any firm is firstly determined by sector, but within that different firms can choose to be more or less pro-poor

TNCs differ from large national firms on linkages, technology, capital flows and employment

Active Citizens ensure the private sector benefits the poor (trade unions, consumer organizations)

Effective States need to regulate and refocus attention on SMEs and national capital

Trade and development

Trade is booming Trade can be a crucial tool in overcoming poverty Rigged rules and double standards Official story in conflict with evidence on trade liberalization:

– Some liberalization-led take offs in agriculture– In manufacturing protection and state-led

industrialization is the norm– Liberalization as an outcome not an initial condition

Rise of China could change the script, by overcoming commodity trap and kicking away the ladder from other developing countries

Average annual growth 1990-2005

Making growth work for development

Growth has always been central to development – redistribution on its own seldom works

But growth is becoming more disequalizing and less effective at reducing poverty

So how to make growth work for poor people?

How change happens: Botswana

Should be a basket case: small, arid, land-locked and dependent on diamonds

Instead is Africa’s most enduring success story – GDP per capita is up 100x since 1966

Reasons include traditional inclusive governance system, leadership, hands-on role for the state, lucky timing on diamonds and good use of aid and technical assistance

Section 4

Risk and Vulnerability

Main messages

Risk and vulnerability are central to the experience of being poor

Shocks reinforce each other and have long-term impacts on health and well-being

Real (human) security lies through a combination of empowerment and protection by effective, accountable states

But the concept of security has been devalued by the war on terror

Causes of vulnerability

Causes of death worldwide

Social protection is spreading

Social assistance and social insurance One of most effective ways to reduce vulnerability,

esp. for the chronic poor (elderly, disabled etc.) Response to failure of targeted safety nets and food

aid Social protection bridges gap between emergencies

and development – challenge to Oxfam South Africa, Brazil arguing for universal basic

income guarantee – could it work at a global level?

How change happens: India’s employment guarantee scheme

How change happens: India’s employment guarantee scheme All rural Indians are now guaranteed 100 days work

a year Grew from activist legal campaigns in Rajasthan

and spread of ‘rights consciousness’ Congress adopted scheme in 2004 election

manifesto, not expecting to win Sonia Gandhi and activism were crucial to ensure

implementation after the election

Finance and vulnerability

Finance and vulnerability

Access to credit, insurance and savings are critical in coping with shocks

Microcredit is booming and going commercial, and is now being followed by other microfinance

8 out of 10 borrowers are women, with very high repayment rates (98% according to Grameen)

Has microfinance been oversold? Indebtedness, repayment burden and ‘forced borrowing’

Hunger and famine

Hunger and famine

Until current price crisis, hunger stuck at 850 million, but famine deaths have fallen

Hunger reflects power and inequality - 400m people in developing countries are now obese

Undernourishment in foetus and infancy are particularly damaging

Dealing with hunger relies primarily on self reliance and effective accountable states

Current crisis driven by switch to meat, biofuels, climate change, oil prices, and possibly speculation

Health and maternal mortality: one woman dies needlessly every minute A woman’s risk of dying ranges from one in seven

in Niger to one in 47,600 in Ireland Children who have lost their mothers are up to ten

times more likely to die prematurely More progress on other health issues, e.g. access

to water and sanitation, immunization, life expectancy

‘First world’ ailments such as heart disease, diabetes, and cancer are on the rise

Answer lies in investing in public health systems

Pandemics such as HIV will persist, but can be contained Illness and death drives individuals and families into

poverty At societal level, pandemics can set development back

decades New ‘zoonotic’ diseases may follow HIV in years to

come (e.g. avian flu, SARS) Active Citizenship is particularly important for diseases

that have no cure, like HIV Political leadership can make or break response (Brazil

v South Africa) Global collaboration showed effectiveness in case of

SARS outbreak of 2002/3

How change happens: the Treatment Action Campaign

How change happens: the Treatment Action Campaign TAC is an organization of HIV positive people in

South Africa

Led a campaign against big pharmaceuticals in court cases of 2001, then moved on to South African government, demanding access to antiretrovirals

Used legal challenges, official participatory structures, outsider tactics and alliances

Partial progress in changing government policy

Natural disasters

Deaths have halved over last 30 years (to 200 a day) due to risk reduction such as early warning systems

Natural disasters highlight inequality– hit poor countries and communities hardest

Disaster preparedness and risk reduction require Active Citizens and Effective States

Improving ‘downward accountability’ is a priority

Climate change is already hitting poor countries and people Rich countries created the problem; poor

countries/communities will be worst hit through drought, floods, disease and falling agricultural yields

Impacts already occurring (e.g. for pastoralists) Helping victims adapt will be essential whatever

happens on reducing GHG emissions (mitigation) Will also mean ‘climate proofing’ existing development

programmes This requires technology transfer, self organization,

diversifying livelihoods and effective state support i.e. climate change means that good development

becomes more urgent than ever

Conflict is both symptom and cause of poverty and inequality Violence, poverty and inequality are interwoven –

against women, crime, abuse by authorities, civil war Progress on gender-based violence through legislation

and women’s organization After bloody 20th C, post Cold War has left rump of 30

‘poverty conflicts’ mainly in Africa Conflict = failure of politics, but some have acquired

economic logic of their own Active Citizens: self organization to reduce conflict Effective States: including providing livelihoods for ex-

combatants

Dilemma: shocks and change

History shows that shocks and their aftermath are crucial ‘moments of opportunity’ for change

But when shocks hit, outside ‘change agents’ like Oxfam either leave or go quiet!

How could we change our response to shocks in order to promote positive change as well as humanitarian relief?

The International System

Main messages

International system must do more of some things, less of others. This includes:

More attention to governance of global public goods and bads, including climate change, migration, taxation, and knowledge

‘Stop doing harm’ on issues such as trade, arms trade, corruption, climate change

Support national development processes, by backing Active Citizens and Effective States

Democracy and accountability in global institutions

Global governance growing but no overall plan. Ideally, role includes: Regulating the global economy Co-ordinating big countries (e.g. via G8) Redistributing wealth, technology, and knowledge Averting environmental or health threats Avoiding/managing war Preventing powerful countries or corporations

from harming weaker and poorer ones Protecting the most vulnerable Changing attitudes and beliefs

World Bank and IMF

25 years of adjustment-based lending are coming to an end (thankfully). IFIs are at crossroads

Failure and eclipse of Washington Consensus, but– Bank has changed more than the Fund– Washington changed more than ‘the field’

New direction should involve:– Focus on global public goods– Separate policy advice from lending– Return focus to rich country policy failure– Reform institutions (starting with the bosses)

Finance

Finance

$3 trillion crosses borders every day (100 x trade) Finance most volatile form of cross border flow and

least suitable for rapid liberalization Financial crises becoming deeper and more frequent,

usually followed by massive bailouts, ratcheting up inequality

Capital controls can be useful tools, but are being pegged back by BITs, RTAs

International action is needed to reduce tax evasion/avoidance (est. $385bn per year)

International taxation (e.g. carbon, arms, Tobin) and global tax institutions could raise $, or agree global floor on corporation tax

Trade: rigged rules and double standards Prevalent in 5 areas: barriers, subsidies, forced

liberalization, intellectual property, and migration Global focus on WTO has hidden growing

importance of RTAs and BITs with ‘WTO plus’ clauses

Paralysis of Doha is a symptom of shift to multi-polar world v mercantilist negotiating

Trade realities remain more important than trade rules

TNCs have imbalance of rights v responsibilities

Intellectual property: knowledge protectionism IP = patents, copyrights, and trademarks A developed, innovating “North” and a developing,

imitating “South” makes knowledge flows crucial Balance between encouraging innovation and

spreading knowledge destroyed by TRIPs– In 2005, developing countries paid out $17bn in

royalty and licence fees– TRIPS keeps medicines expensive– Biopiracy is widespread

Replace TRIPs with an access to knowledge convention?

Migration

A common and effective response to poverty The last great protectionism (along with knowledge) Those who do migrate face barriers and

mistreatment Current remittance flows to developing countries =

$240bn – poverty reduction and protection against shocks

Objections are often misplaced, but a political minefield

Best option: enhanced temporary migration Do we need a World Migration Organization?

Harnessing the transnationals

Privileges and powers but few responsibilities Growth driven by changes in business,

technology, and politics Concerns include value chains, labour rights,

extractive industries, and corruption Good progress at UN and sectoral level, e.g. anti-

corruption conventions Disputed progress on ‘corporate social

responsibility’ Rise in southern TNCs e.g. in telecoms, mining,

forestry, infrastructure

Aid

Successes: Marshall Plan, take-off countries, EU structural funds

Altruism, hubris, and self interest Turnaround since 2000, but donors backtracking

on promises and serious quality problems How can aid support development? Do: fund watchdogs, fund long-term, support state

capacity, put government in the driving seat, ensure downwards accountability

Don’t: impose conditions, support parallel systems, and poach staff

How change happens: the Gleneagles agreement

How change happens: the Gleneagles agreement 2005 G8 a high point for aid campaigners: leaders

agreed to raise aid levels by $50bn by 2010 and deepen debt write-off

Despite subsequent backsliding, still an important statement of intent

Combination of government (e.g. Commission for Africa) and civil society activism (Make Poverty History and celebrities)

Repetition important at G8 (cf. climate change) Tsunami and London bombings were factors

Dilemma: is aid like oil?

Impact on – Policy (conditionality) – Institutions (transaction costs, paying the piper) – Politics (severing the social contract)

How big is the political deficit, and how can good aid overcome it?

International NGOs

Growth and shift from project to advocacy, and from national to global

3 main functions: implementers, catalysts, partners Major challenges:

– Accountability– Relationship to local activists and NGOs– Funding/profile driven– Relationship to the state– Make the UN look streamlined…– Being sucked into service delivery– Too cautious

Climate change: a global problem needs global solutions Mitigation involves combination of standards,

subsidies and taxes

Kyoto II = key global governance event in coming years

Adaptation funding also vital, Oxfam estimates $50bn a year needed

Concerns on carbon trading as main response

United States of America

43%

Japan13%

Germany7%

United Kingdom5%

Italy5%

France5%

Canada4%

Australia3%

Spain3%

Others12%

Adaptation funding responsibilities

Dilemma: are there environmental limits to growth? Increasing environmental constraints on growth

have profound implications for economic policy and the battle against inequality

Carbon intensity of growth and its efficiency in reducing poverty and inequality will become more critical

Can the system achieve a low carbon growth model and if not, what has to change?

Carbon intensity: falling too slowly, and has now gone into reverse

What level of technology transfer is required?

1.6

Billions of Tons Carbon Emitted per Year

Current p

ath =

“ram

p”

Historical emissions Flat path

0

8

16

1950 2000 2050 2100

16 GtC/y

Eight “wedges”

Goal: In 50 years, sameglobal emissions as today

15 Wedge Strategies in 4 Categories

Fuel Switching (1)

CO2 Capture & Storage (3)

Renewable Fuels& Electricity (4)

Forest and Soil Storage (2)

Energy Efficiency & Conservation (4)

Nuclear Fission (1)

The humanitarian system

Only 6% of total aid

Improving but still a mess. Main failings:– Too little too late, but CERF is hopeful– Distributed according to CNN or geopolitics,

rather than need– Too many organizations. UN particularly

byzantine

Humanitarian aid warped by food aid – expensive, demeaning and can undermine local agriculture

Peace and peace-keeping

‘Responsibility to Protect’ – an important UN achievement

Force should only be last resort UN blue helmets up 6 x since 1998 Rich countries give $, poor ones give soldiers Does UN need a standing military force? Arms Trade Treaty needed War on terror undermines peace-keeping/R2P

How change happens: the landmines ban

How change happens: the landmines ban 1997 ban treaty has led to a sharp fall in deaths. In

2005 only Myanmar, Russia and Nepal acknowledged using them and producer countries were down from 50 to 13

Ban rode post Cold War wave of optimism International Campaign to Ban Landmines worked

closely with a handful of governments, e.g. Canada, Norway, Austria, and South Africa

Gained momentum by moving outside UN system and insisting on total ban – no watering down

Conclusion

A New Deal For A New Century

Elements of a new deal Active Citizens

Effective States

A new economics

What role for rich countries/institutions?– Do no harm– Solve global problems that need global solutions– Support Active Citizens and Effective States

The last word:

Human progress is neither automatic

nor inevitable... Over the bleached

bones of numerous civilizations are

written the pathetic words: Too late.

Martin Luther King, 1968

“

”