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Economic Issues
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Economic Issues
Overseas Development Assistance (ODA) is five percent of
GNP in Africa, with major impact on government policy (Alderman), human
development (Noorbaksh) and civil society (Edwards). Efficiency in the use of
ODA is of great concern (DiS).
Author(s):
Alderman, H., and Shively, G. Title: Economic
reform and food prices: evidence from markets in Ghana Source: World
Development, 24 (3), 521-534, 1996 Key words:
structural adjustment, economic reform, Ghana Description:
Countries wishing to renegotiate debts with multilateral or
bilateral funding agencies have adopted structural adjustment programmes. This
work uses empirical data to study assess whether economic reforms have had a
significant impact on the cost of food in a country considered to have a good
track record with its structural adjustment programme. The Authors investigate trends in food prices in Ghana in
the period 1970-1993. They review
the ways in which adjustment policies are linked to agricultural prices,
examining the salient features of Ghana’s structural adjustment program, then
evaluate whether Ghana’s economic reforms had a significant impact on the cost
of food. They also examine price
variability from the perspectives of storage and marketing.
Their analyses confirm that real wholesale prices of food in Ghana have
been declining, slowly in the 1970s and more rapidly in the 1980s. They did not address the issue of household purchasing
power directly, but they noted that the minimum wage for many years of the past
decade was insufficient for an individual to adequately support dependents.
They suggested that there may be an opportunity here for government
efforts to enhance household welfare by considering income and employment
policies as part of their macroeconomic considerations for sustainable growth,
if prices continue moderating and markets remain functioning. They argue that severe currency devaluations associated
with the economic recovery programmeappeared to have had little impact on the
overall price level for food. Available
data on food prices indicated volatility in prices, but did not point in the
direction of increases in volatility. Possible
reasons in support of their argument: First, this could be possibly because spatial markups are
predominantly real costs of transport and handling, or because survey evidence
indicates that monopsony purchased and tied transactions are not widespread and
that market traders are not contributing to price volatility. This points to an
opportunity to control prices through reduced transport costs with public
investments in improved infrastructure, or to aid volume transactions by
improving access to working capital. In
either of these areas, the continuing fiscal implications of adjustment may be
important. A third reason for their conclusion lies in evidence from
storage practices. They found that
farmers carry appreciable stocks into the post harvest period, mostly at the
farm household level. They suggest that the government could replace a portion
of household level storage, and perhaps reduce price variance further, though
this would be at considerable cost and with little gain to consumers. A final reason they offer is that, although prices may be
increased as a result of overreaction to new information, they found no evidence
that this was due to systematic uncompetitive behavior on the part of market
traders. Given sharp price
movements in Ghana that are not easily explained by changes in supply or supply
forecasts, they agree that hyper-responsiveness in price expectation may well be
the case. However, they argue,
beyond credit shortages that could have welfare impacts through reduced trader
stocks, adjustment, per se is not at issue here. Author(s):
Centre for Partnership in Development (DiS) with Nordic Consulting Group
(NCG) Title: Institutional
development in Norwegian bilateral assistance: Development through institutions?
Synthesis report. Source: Centre for
Partnership in Development (DiS) with Nordic Consulting Group (NCG). Ministry of
Foreign Affairs, Oslo, Norway, 1998 Key words:
institutional development, programmeevaluation, bilateral assistance,
Mozambique, Namibia, Tanzania, Zimbabwe, Indonesia, Norway, NORAD Description:
Institutional development, the process by which individual,
organizations and institutions increase their abilities and performance in
relation to their goals, resources and environment, is resurfacing as a key
factor that promotes economic growth and development in Third World countries.
This report is a synthesis of case studies in Mozambique, Namibia, Sri Lanka,
Tanzania, Zimbabwe and Indonesia, countries that have a bilateral support
arrangement with NORAD. These are
information-rich cases that could potentially illustrate important dilemmas,
best practices and future opportunities for institutional development. Profiles
of the case studies are provided in an annex. Much of institutional development discussion has sought to
address and balance four perspectives. Among
the major findings for these four perspectives: (a) On increasing the effectiveness of
programmeimplementation - new policies of institutional development have led to
more symbolic changes, but the realities of programs tend to remain unaffected
or to encounter problems in accommodating new approaches. It was noted that
interventions are strongly influenced by the political and economic context in
which institutional development takes place.
This could be taken to mean that institutional development is only
feasible in stable countries. The
case studies suggest that programs must take different levels of development
into account and prepare strategies accordingly. (b) On strengthening the capacity of organizations and
institutions to take the responsibility for their own development - while
financial support to institutional development has increased, there is not a
clear vision of how this is to be carried out. There is little link between
institutional cooperation and institutional development and no link in systems
for monitoring and evaluating institutional development.
Furthermore, there is no evidence that twinning provides “more value
for money” than other means of technical cooperation. (c) On restructuring the public sector as a result of
political and economic conditions they note that the strategic role of the donor
is more critical than its level of involvement in institutional development.
Also, for a complex phenomenon like institutional development, there is
need for systematic preparation, clear policy guidance, proper evaluation and
studies of organizations and their environments. (d) On addressing the formal and informal policies, rules
and regulations, cultural norms and values in society, they note that cultural
dimensions are not considered as critical determinants by either Norwegian or
Southern institutions. A key recommendation calls for the development of other,
e.g. blueprint, approaches to institutional development, and not rely on process
alone. Other recommendations are
addressed to the Norwegian Ministry of Foreign Affairs (policy), to NORAD
(processes) and to Norwegian organizations (operations). Author(s):
Edwards, M., and Hulme D. Title: Too
close for comfort? The impact of official aid on nongovernmental organizations Source: World
Development, 24 (6), 961-971, 1996 Key words:
NGO, non-governmental organizations, ODA Description:
Donors tend to finance non-governmental organizations
(NGOs), which they believe are more efficient and cost-effective service
providers than governments, giving better value-for-money, especially in
reaching poor people. In support of
a “New Policy Agenda” which gives renewed prominence to the roles of NGOs
and grassroots organizations (GROs) in poverty alleviation, social welfare and
the development of “civil society,” NGOs are seen to be the “new wave”
that could be as significant a social and political development of the latter
twentieth century as the rise of the nation state was of the latter nineteenth
century. The Authors document the continued rise of NGOs, then
assess NGO programming and performance, i.e. service provision and
democratization. They also evaluate
performance measurement, legitimacy and accountability of NGOs. Regarding service provision, NGOs are considered to provide
“money for value.” Support to NGO service provision is increasing, with an
attendant expansion in the size of the NGO.
The cost-effectiveness of NGO service provision has not been empirically
demonstrated for a general statement that it is “cheaper” than public
provision. Furthermore, the
sustainability of large-scale NGO service provision has been called into
question, as virtually all such NGOs operate on large subsidies from external
donors, resources that increasingly are denied to governments. NGOs and GROs are increasingly involved in democratization
issues, with GROs lobbying and sometimes entering into formal party politics,
and with NGOs engaged in mediation, advocacy, training and “civic
education.” In Africa, they are unlikely to have significant impact on
political reform, partly because “African governments have become adept at
containing such a possibility through regulation and fragmentation of the NGO
“movement,” and partly because NGOs themselves have failed to develop
effective strategies to promote democratization¼.”
NGOs and GROs face a dilemma of how to engage in the political process in
order to achieve fundamental changes in the distribution of power and resources
without becoming embroiled in partisan politics and the distortions which
accompany the pursuit of state power. They tackle questions such as how legitimate NGOs are when
they are increasingly reliant on official donor funding, and whether it is
possible to have an independent mission while relying on donor funds.
They use an African proverb “if you have your hand in another man’s
pocket, you must move when he moves” to illustrate the point. They also
question the claim for NGO legitimacy, when, because of the funding, the
relationship between NGOs and donors changes from partnership to contractual.
The legitimacy of the NGO is no longer based on values and voluntarism
but on its contract to a legitimate agency – much like the private sector. How accountable are NGOs and GROs, who have multiple
accountabilities “downwards” to partners, beneficiaries, staff and
supporters; and “upwards” to their trustees, donors and host governments?
They experience difficulties in prioritizing and reconciling these
multiple accountabilities (e.g. why are staff paid at
“less-than-market-value.” A
government concern might be how much influence foreign donors are having on
NGOs). The Authors note that performance indicators are based on
qualitative and contingent service provision, e.g. “empowerment”, which are
difficult to measure. However, they
concur with findings by others, that without accurate ways of measuring
performance, it is very difficult to be accountable to anyone. The Authors make three conclusions in relation to their
working hypotheses. These are:
(a) the New Policy Agenda and donor funding present NGOs and GROs with
both threats and opportunities; (b) there are sound theoretical reasons, and
some empirical evidence, to suggest that these threats are real and must be
dealt with consciously and deliberately; (c) there are no universal
relationships between increasing dependence on official aid, and particular
trends in NGO programming, performance, legitimacy and accountability. Author:
Hyde, K.A.L. Title: Mulan/Phalombe
fish-farming project: socio-economic impact assessment. Source:
Centre for Social Research, University of Malawi, Zomba, 1992 Key words:
agriculture, fish, nutrition, gender, training, Malawi Reviewer:
Patricia Hari, Kenya. Description: The Mulanje/Phalombe Fish-Farming project, funded by the
British Development Division of Southern Africa (BDDSA) and operated by the
Fisheries Department, is part of a continuing effort on the part of the
Government of Malawi to raise the nutritional status and incomes of the
smallholder population of Malawi. This
report is a summary of the findings of a formative evaluation of the project.
This evaluation focused on three aspects of the project; the
socio-economic impact; the technical and the managerial. Data was collected through focus group interviews with
representative samples of farmers with and without fishponds; open-ended
interviews with the extension officers connected with the project; all project
personnel on site concerned with the management of the project and Blantyre
Agricultural Development Division (BLADD) personnel involved in the project.
Also interviewed was the former supervisor of the project.
Desk review of monthly and quarterly reports and other project and other
project documents was also carried out. The evaluation of the socio-economic impact of the project
found that the households that adopted fish farming were those that had land
holding sizes large enough to give them the flexibility to use a portion of it
for fishponds. Household heads that
adopted fish farming were more likely to be male, have twice as much education
and were four times as likely to belong to a fish farmers club.
This meant that the families that benefited from the cheap, regular
source of protein and additional income were already privileged within rural
society. At the same time, the
project’s inability to meet its targeted number of fish farmers and fish
production had meant that the availability and cost of fish in the area had not
improved enough to have a significant impact on the nutritional status of the
communities in general and especially those without fish farms.
Gender bias in terms of perceived competence in fish farming was thought
to negatively influence extension officers’ recruitment of women into the
project. This was despite the fact
that the project data had did not reveal any significant differences in the
fishpond size of female- compared to male-headed households.
However, it was noted that the project had proved that fishponds were an
economically viable alternative land use for the farmers in the area. The issue of training was one of the areas of concern in
the technical aspects of the study. Only
one of the four project staff involved in management had received any training
in fish breeding. The extension
officers felt that their training had been inadequate and as a result they
lacked the confidence to answer questions or assist farmers with any but the
most basic of problems. Lack of
resources had resulted in limited ability to supervise field staff, visit
farmers as often as necessary and also limited the production of fingerlings for
distribution to fish farmers in the project. In addition to this, the stunted growth of the fish species
selected for the project had resulted in reduced yields and earnings leading to
disappointment on the part of farmers. The
project also had also failed to ensure a spillover of the benefits of fish
farming to other agricultural activities. The management of the project was constrained by a number
of factors, including the limited number of field staff, distance between
project office and project site and lack of linkages and collaboration with
other governmental bodies involved in agricultural and fisheries extension work. One of the key recommendations was the need to re-focus the
aims and related strategies of the project.
It was suggested that if the aim remains the improvement of nutritional
and socio-economic status, then the emphasis should be active recruitment and
promoting the development of small holders fish ponds and especially those of
female headed households. Technical
and managerial recommendations focused on the need for increased inputs and
especially increased project staff combined with a scaling down of the project
area for increased effectiveness and efficiency. Improved pre- and in-service training, especially for
agricultural staff and farmers was also recommended especially with regards to
integrating fish ponds with existing agricultural activities, alternative
management strategies and fish culture. Management
would best be improved through increased staffing, training and improved
supervision of field staff. Also
recommended was the formation of linkages with other relevant governmental
organizations for improved technical support and efficiency in the use of
resources. Author(s):
Kandil, S.H. Title:
Evaluation Report. Cast Iron
Production from Sponge Iron (Egypt). Sponge/Cast
Iron Technology Transfer (Egypt). Egypt Source:
IDRC Evaluation Report, 1997 ([email protected];www.idrc.ca/evaluation) Key Words:
project evaluation, small scale industry, industrial processes,
industrial engineering, foundries, castings, iron, new technology, innovation
diffusion, Egypt, IDRC Reviewer:
IDRC Evaluation Unit Description:
The Cast Iron Production from Sponge Iron Project was
designed to develop appropriate industrial practices suitable to small scale
foundries in Egypt for the production of ductile iron made of sponge iron.
The resulting technology would then be transferred to small and medium
size enterprises to widen the scope of implementing this technology to ten small
and medium size foundries in Egypt. This
report evaluates the impact of the two phases of the project on the targeted
group, the delivery agents and others. The project provided the CMRDI (Central Metallurgical
Research and Development Institute) with the expertise to develop a technology
package to produce cast iron from sponge iron. Microstructure and other analysis showed the quality of
products to be comparable, impacting
the knowledge base of the metal industry. The
process was very economical at one stage, when sponge iron produced from ANSDK
(Alexandria National Steel and Iron Company at Dekheila) was sold at a low
price. This was reflected in the
income of the beneficiaries. Although
the process is not economically feasible at the present time due to the
increased price of sponge iron, it is envisaged that its price will recess again
due to the surplus of production expected at ANSDK.
The best practice for the technology of producing cast iron
from sponge iron was made available to various foundries, impacting their
performance and production as they adopted new methods of monitoring and
evaluating the quality of their casts. The
project strengthened the infrastructure of the CMRDI.
Software for analyzing chemical composition of a cast became available
via the project, and analytical equipment, including an emission spectrograph
was acquired. These items and the
developed techniques extended the CMRDI capabilities of providing certified
analytical services to industries and universities.
The skills and knowledge of the young engineers and
researchers involved with the project have been developed.
The project added to the training material and practical experiments
conducted by the CMRDI. A training course on cast iron was developed and taught to
trainees in the metal industry, impacting on their knowledge.
Those who helped in developing the technique gained self confidence and
professional pride. This project created the opportunity and mechanism for
interaction among research and development institutes and small industries, an
avenue which needed support. The
development of the appropriate atmosphere led to the foundries’ continued
cooperation with CMRDI after the project experimentation. Author(s):
Noorbakhsh, F. Title: Standards
of living, human development indices and structural adjustments in developing
countries: an empirical investigation. Source: Journal of
International Development, 10, 751-775, 1998 Key words:
structural adjustment, standards of living, human development indices, WB Description:
This study looks at whether the World Bank’s structural
adjustment programs have improved the standards of living and human development
indices in countries that have received World Bank support for structural
adjustment. In the approach used to evaluate countries, the researchers
compared what has happened with the programme with what they assume would have
happened without it. They compared
countries that had received support with those that had not.
To reduce bias of results based on countries that are basically
different, the researchers applied their analysis to two time periods –
pre-structural adjustment loans (pre-SAL): 1979-85 and post-SAL, 1986-92.
They adopted the classification proposed by The World Bank, which
recognizes three groups of countries: those that received early-intensive
adjustment lending (EIAL), those that received other adjustment lending
(OAL) and those that received no adjustment lending (NAL) for comparative
purposes. They selected five social
indicators: infant mortality (IMR), life expectancy (LE), adult literacy (AL),
gross primary enrolment ratio (PER) and per capita calorie supply (CAL) for
comparing living standards. They found that although there was a relationship between
the human development indices and income for the countries considered, the
income elasticity of the non-income components of the human development indices
examined are very low for the EIALs, but also for NALs. It appears from these
findings, that the physical standards of living examined in this study, though
depending on per capita income, were relatively more influenced by factors other
than income. OALs, on the other
hand, had high enough income elasticities to suggest that targeting growth in
income for these countries seems to be justifiable. The overall policy implication, according to the author,
“has to be that the structural adjustment programmes should include components
aiming at the non-income aspects of human development, where the relative extent
of such components may be different for various countries, depending on their
circumstances.” |