The Center for Global Development has been organizing a Study Group on a U.S. Development Strategy in Pakistan. It published a report listing its recommendations last June.
Nancy Birdsall, CGD’s president, has also issued a series of open letters to the US government, such as the one posted recently.
CGD should be praised for undertaking such an initiative. Getting aid right in Pakistan matters a lot to US national interests, as well as to the idea that donors can contribute to state building. No fragile state is as important as Pakistan. Its governance problems have allowed terrorists to use its territory to plan attacks, and make its growing stockpile of nuclear weapons less secure. On the other hand, its strategic location and growing population (the country will be the 4th largest in a generation) ought to make it an important emerging market.
It is also rare that any think tank so closely examines aid policy in a specific country, though the importance of Pakistan means that two Washington organizations have done so in the last year (the Wilson Center issued a report in December).
But, CGD’s approach is flawed. Although the report makes sensible recommendations (on things like opening markets, promoting investment, engaging reformers, and improving USAID operations), it says almost nothing specific about Pakistan. There is no attempt to understand the drivers of its political economy, and the causes of its weak governance. There is no attempt to delve into the reasons why its leadership has consistently failed the country or why its state apparatus works so badly, especially for the country’s tens of millions of poor people. All its ideas more or less repeat verbatim what could be said about U.S. aid to almost any developing country. There is no context.
Such mistakes are unfortunately all too common in the aid business, even for an organization staffed by as many talented people as CGD has. Research has consistently shown that understanding politics and context matter tremendously for the effectiveness of aid, especially in fragile states. As a large number of reports (such as the appropriately named “The Politics of Poverty” from DFID) have consistently argued for at least a decade:
Evidence shows that in order to deliver sustainable international development we must be able to understand and work with its politics. . . . Research has shown that political context and process is central to shaping the way politicians and policy makers decide for or against progressive changes that can deliver legitimate, capable, accountable and responsive states. It has helped explain why some countries achieve economic growth and political stability, while others remain locked in conflict and poverty. . . . We still need a better understanding of the politics of development and how to influence it for faster poverty reduction. Donors need to invest in their own capacity to address this new governance agenda.
The Wilson report does much better. Its 28 recommendations include a number that are highly specific to the Pakistan context, and show far greater understanding of the issues hampering the country’s development. It, for instance, talks about the country’s diaspora, rapidly growing urban areas, and need for vocational training. It discusses the need to catalyze small-to-medium sized businesses and to fill the government’s “most critical expertise gaps at the federal and provincial levels.” It attempts to make clear choices on priorities based on its understanding of the local situation when, for instance, it argues that money should not be spent on revamping water management systems because of the complex political and sociocultural obstacles, and that the power sector should be left to “multinational donors such as the Asian Development Bank that have more funds, expertise, and experience.” You may not agree with all its conclusions (and I disagree with how it approaches the country’s governance and leadership problems), but you must applaud its attempt to delve into the specifics in great detail.
Part of the difference in these two reports lies in how they were organized. Whereas CGD’s group is led by and filled with a large number of people who may not necessarily know Pakistan’s political economy well, Wilson’s is led by a South Asian expert and staffed by many Pakistanis and others who know the country on intimate terms. There is a real attempt to understand the country from the inside out, instead of simply using one-size-fits-all solutions. The Wilson team could have gone one step further and organized the group around people working on development issues inside Pakistan itself (something I did at the Global Economic Symposium in October), but that may be asking too much for a Washington based think tank. The latter would probably have produced results that focused more on improving how the state works and on how the intellectual climate within the country might be changed (as my group did).
If aid agencies want to contribute to state building (as opposed to just delivering aid that helps individuals), they will have to first understand the context in which they operate, and, second, come up with ideas on how to make countries actually work better. These things are much harder than building schools and vaccinating children, but they are the only ways to make countries self-sufficient–which should be the aim of all aid programs.
Although the CGD report is worth reading to understand how aid might work better in general, I cannot recommend it as a source of information for those trying to figure out how aid might work better in Pakistan. The Wilson Report, on the other hand, is well worth reading. I would also recommend studying closely Maleeha Lodhi’s edited book Pakistan: Beyond the “Crisis State.” It offers an excellent introduction to Pakistan’s most pressing problems.
