CSR: The Missed Opportunities of Choosing Cosmetics over Impact

Posted by Thomas Kruiper / 29th January 2015 / Categories: Analysis / Tags: Corporate Social Responsibility, Creating Shared Value, International Corporations / -

When it comes to integrating corporate social responsibility (CSR) into business models, cosmetics still seem to matter more than actual impact. Even as consumers grow increasingly sensitive to CSR, claims are more important than real performance. By doing so, many companies are missing out on business opportunities. If businesses were to take more seriously the concept of creating shared value (CSV), they could create measurable social impact as well as business impact at the same time. Successful CSV creates healthy value chains, safe products, happy employees and local communities, and above all profits.

Doing Good Sells…

Corporate perspectives on CSR have changed from a necessary evil to a marketing opportunity. At the turn of the millennium, much in line with Friedman´s critique on corporate citizenship in the 1970s, commentators argued that business should focus on making profits and sticking to the law. CSR departments existed, but often only as reactions to appease activists; companies could not afford not to have them.

In 2015 companies still cannot afford not to do CSR, but rather than a necessary cost, businesses see CSR as a brand building opportunity. In a world where people define themselves through consumption, doing good is the ultimate brand strategy, whether it concerns being green, going fair trade, or supporting charity. Corporate citizenship, by many regarded as a synonym of CSR, has a future too; consumers from generation Y (21-34) are much more conscious as consumers than baby-boomers (46-65), and consumers in growing markets in the global south are substantially more sensitive to CSR and sustainability than their peers in the US and Europe.

… But doing better does not sell more

Unfortunately, it does not seem to matter much whether companies actually do good or whether they just claim to do so. Studies tend to measure consumers´ perceptions of CSR claims; not their actual impact. An increasing amount of businesses publishes annual reports on CSR performance, but there is no comprehensive framework that allows for true comparison. The notion that the creation of social value and the creation of corporate value can go hand in hand is one that has not received sufficient attention.

Experts on CSR recognise that one of the main obstacles for executives is the lack of data to prove the return on investment on activities. The prevailing approaches to CSR are too fragmented and disconnected from business and strategy to reach any real conclusions. As a result, giving to random (but well-known) charities is still a much favored strategy; it´s easy for consumers to identify with such causes. As long as consumers cannot objectively compare impact, the relation between CSR performance and sales-records is likely to stay inelastic.

Creating Shared Value – Having Your Cake and Eating it Too

Those that can truly deliver on CSR still have a lot of unconquered ground to win though; a 2013 report by the Reputation Institute showed that 73% percent of consumers across the 15 largest markets in the world are willing to recommend companies that are perceived to be delivering on Corporate Social Responsibility. The problem is that only 5% of companies are seen as actually delivering on their promises.

It is therefore strange that still relatively few businesses have integrated the concept of creating shared value. Introduced in 2006 by Michael Porter and Mark Kramer, the concept explains that if “corporations were to analyse their prospects for social responsibility using the same frameworks that guide their core business choices, they would discover that CSR can be much more than a cost, a constraint, or a charitable deed—it can be a source of opportunity, innovation, and competitive advantage.”

The essence of CSV lies in creating business value through the creation of social value. It means understanding the core needs and interests of not only consumers, but also those of employees, retailers, local communities, and society in general. Companies that understand their relationship with all of these actors truly understand the market, rather than just the consumer at the end of the chain. Motivated employees, capable retailers, and happy local communities make business more productive, more committed, and safer to shocks.

Unfortunately, many businesses continue to view value creation narrowly, optimising short-term financial performance in a bubble, while missing the most important customer needs and ignoring the broader influences that determine their longer-term success. The banking sector, for example, has long lost its boring but reputable status in society as an institution that caters the needs of households and businesses needing credit. The disconnection from society has hurt society as well as the banks themselves. Meanwhile, those banks that incorporate concepts such as impact investing are thriving. In the long run, those businesses that are able to create business value through creating social value survive. Those who make profits at the expense of society can do so temporarily, but in the end they are shooting themselves in the foot.

Examples show that CSV has many advantages; companies can create business value, marketing value, and social value all at the same time. For example, Coca-Cola´s Colectivo initiative in Brazil, in an ingenious attempt to improve the business performance of Coca-Cola retailers, connected retailers with unemployed business graduates who served as consultants. In doing so, the program increased the performance of its retailers, helped unemployed Brazilian graduates in getting their first job and work experience, and boosted brand connection all at the same time. CSV strategies have also helped companies like Intel, Nestlé, and Novo Nordisk in improving business performance and social performance at the same time. The results are seen in terms of higher quality products, more satisfied and better educated employees in developing countries, better safety standards, and happier customers.

Not unimportantly, the rate of return can often be predicted and monitored too. For a long time the traditional ´triple bottom line´, conjured up by CSR consultancies to promote a mix of economic, environmental, and social activities, did not convince executives very much. At the end of the day, shareholders and investors only look at one bottom line. Integrated CSV strategies actually help businesses turn their corporate citizenship into real business plans, including projections for cost-reduction, product quality, productivity, and more stable supply chains. Projects that proove to investors they have their cake, eat it too, and then still give a slice to society are by all means possible.

2015 – Time to Rethink Global Decision Making

Posted by Balder Hageraats / 15th January 2015 / Categories: Analysis, Opinion, Polis / Tags: Globalization, Governance, International Institutions, Leadership / -

As harbingers of a troubled 2015, last week’s events in Paris were a stark reminder that the world is facing a year desperate for clear and benign leadership: the ever increasing complexity of our societies requires thoughtful and wise decision making. Any balance in the globalised world is easily disturbed, and difficult to restore. While humanity as a whole possesses resources as never before, the ways those resources have been allocated in recent times does not bode well. This is particularly visible in international policy making. With organisational bureaucracies bloated, it is increasingly unclear who is responsible for global politics and choices on war and peace, poverty and prosperity, destruction and creation. The world is inevitably turning into a system where no one is in control, and no one is responsible for centralised decisions. The necessary response to this is one of stimulating natural checks and balances, thereby ensuring flexible response mechanisms to disasters and global opportunities alike.

2014 was a year in which the flaws of international decision making processes were painfully exposed, ranging from continued violence around the globe to failing global economic policy and ever present local hardship. The fundamental problem is not one of lack of potential, or of large scale conspiracies, nor of conscious manipulation by those in power. It is one of system creep, in which the answers that human structures provide no longer coincide with the reality of the problems. The invasions of Afghanistan and Iraq only exacerbated the position of Western nations, causing destruction and mayhem along the way. Huge budgets spent on fundamental issues such as European and global governance, on development cooperation, on human security and economic stimuli show very little bang for their buck.

Those who benefit are people working within the system, within the tools that supposedly serve the wider population; they make a living- and therefore are the primary beneficiaries- by spending money on taxpayer’s behalf to provide specific services. And yet, the productivity of such expenditure is typically alarmingly poor. Trust in European institutions is at an all time low, and the UN is increasingly farcical, with workers and consultants all around the world facing increasing moral dilemmas about their own standard of living compared to those local populations that they are supposed to serve. The Pentagon has consistently failed to show how its actions make the world safer for the average American, but on the flip-side, it does have over 200 golf courses.

The issue is not even limited to the public sector. Share and stakeholders are increasingly left out of the loop in ever-expanding private companies, with internal benefits to be reaped from expansion, even if it makes the general outcomes of operations less effective. One of the main causes of the economic crisis of the past decade was a private sector run amok, without any counterbalance to internal interests and system creep into competitive enterprise. CEO-employee wage ratios are higher than they ever have been in modern society, without any proven increase of CEO importance in company success. That is not the sign of an evil elites, but of a system not working properly.

Humanity is currently suffering from its own structures, its own institutions; their added value is too low for the resources we spend on them, while their costs are still increasing. System creep is eating away at our structures, and the most fundamental challenge for 2015 will be to halt that trend.

A problem as old as civilisation itself

Throughout history, civilisations ended when clear lines of responsibility faded. During the heyday of the Roman Empire, its bureaucratic bulwarks were unable to react to new threats, leading to unresponsive policy making. These ills were later inherited by the Byzantine Empire, which was also unable to cope with autonomous organisational growth, with systemic interests crowding out effective leadership. China’s Ming dynasty fell from grace in large part because of quarrelling, inward looking bureaucrats and corrupt eunuchs. Tsarist Russia had been in steady decline for decades before revolution finally struck administrative incompetence. Similar explanations have been used to explain the decline of Babylonian, Egyptian and Classical Mayan empires.

The pattern here is one familiar in current global society: steady growth of social structures and economic welfare, followed by a rapid boom signifying the zenith of society, which then leads to failing checks and balances on ever-growing human organisations. Initially these institutions have clear purpose and add value to society’s growth and wellbeing, but once a certain peak has been reached, they tend towards slow endemic corruption of their original purpose and nature. They begin to hog resources and stifle critical thought, while becoming vehicles for internal interests rather than tools in the hands of political and social leadership. Personal interests by insiders begin to trump social interests, and growth of the system becomes a primary objective, regardless of whether this caters to the needs of its wider environment.

The problems that this systemic expansion brings often remain hidden when social and economic conditions are favourable. They only rear their ugly head when crisis strikes. Then, all of a sudden society is confronted with an inability to react to barbarians at the gates, environmental collapse or internal strife, with institutions consuming the resources necessary to face such existential challenges. Having grown fat and lazy through economic boom, the ability to deal with unexpected downturn evaporates. What is even worse is that these once proud institutions not only have lost purpose, but typically resist attempts to bring back political strength and leadership. They have become hijacked by countless individual, mall-scale agendas that will resist personal loss of status or income. The role large scale organisations play is too abstract to be able to compete with the livelihoods its employees count on. There is no general decision-making process anymore; the initial tool for greater purpose has come to life, and has turned into an independent creature no longer be controlled by its original masters.

The beginning of the end…

The events after 9/11 and the War on Terror were not those of institutions solving existential threats, but rather of using such threats to remain relevant, despite their tremendous costs and long-term destruction. The UN and European Union, having started off with clear direction and purpose, are now mere shadows of their former selves, inhabited by anonymous employees whose livelihoods depends on ever-expanding departments and institutional agendas. Original purpose be damned, the main objective of transnational organisations is their own survival, like an aging male lion increasingly monopolising food supplies to stay alive while the pride that it was supposed to protect starve.

Other global challenges, such as climate change, violent conflicts and lacklustre economic trends, remain largely unsolved, without any serious attempt to deal with such existential threats. Some are even fed to the beast in order to satisfy its hunger. Eisenhower’s warning of the dangers of the military-industrial complex is as valid as it has ever been. Companies, conferences, academic departments and armies of specialists and consultants work on the issue, but they become part of the very same animal that is starving the system. Instead of serving societal needs, they endanger them.

The problem can even be seen at a national level, especially in Western countries. After decades of social and economic growth and steady improvements in democratic and welfare structures, the peak seems to have been reached- perhaps sometime in the 1990s- and the state has well and truly started to move downhill. Governments seem rudderless, managing rather than leading their country. Populism and centric mediocrity compete for favour. Beholden to special interests, and living in fear of losing influence or power, politicians feed the institutional beast rather than putting it on a diet. Après nous le déluge.

…Or the end of the beginning?

Despite similarities with past civilisations, not everything in history repeats itself, and there are a number of fundamental differences between then and now. Firstly, 20th and 21st century globalisation and technological advances increasingly allow for global dynamics, and therefore global responses. This ability to globally communicate, analyse and find solutions dramatically changes the range of options available. Secondly, unlike historical cases, there is no clear antagonist, no barbarians at the gates, attempting to spur on our civilisation’s decline. Thirdly, we have come to understand and appreciate the strength and elegance of natural, decentralised dynamics without heavy handed interference from above, even in societies that emphasise social cohesion and the welfare state. Fourthly, we have the benefit of hindsight. More than ever before we understand the past, and know how and why societies collapsed.

Unlike empires of the past, human society in 2015 is much closer, much more united through natural flows than it has ever been. Even if this increase in scale of operations may have contributed to the system creep discussed above, it also allows for a reversal of such dynamics. Unlike other ages, the current world is in it together; there are no new tribes ready to sack and pillage a decaying empire. No one benefits from collapse, and people all over the planet are facing very similar challenges.

Without downplaying substantial differences in agendas between specific human groups, there is no reason to believe that the general masses around the world are in opposition to each other. There is no such thing as Huntington’s Clash of Civilizations, however much certain self-serving institutions and small groups of violent fanatics would have us believe exactly that. The dynamic nature of a planet facing success and failure together means a constant stream of new ideas and alternatives to reverse global society’s fortunes. Dynamic competition and cooperation between ideas, projects and outcomes tend to stimulate the best in human beings. As long as there are no stifling institutional monopolies and systemic beasts starving global society of resources, its modern worldwide nature is in a unique position to bounce back. If society can make institutions work for them, rather than being beholden by institutions’ insatiable appetite, global civilisation could benefit tremendously from technological progress and opportunities.

All of this requires from politicians and social leaders an adjusted set of priorities; not the kind that bloats the circles around them, but the kind that strengthens micro dynamics in their respective societies. We must return to smaller-scale lines of responsibility, with dynamic cooperation and competition in which outcomes, rather than size, are recognised. This also reduces the margin of error, as small scale mistakes, failures or corruption are much more quickly corrected by other micro dynamics than large, centralised, error prone bureaucracies can ever hope to do. Encouraging institutional cultures in which small is beautiful, and effective outcomes are all that matter, is therefore an absolute priority. The inverse relationship between organisational size and purpose must be understood and recognised. It is a matter of taking pride in small-scale success, and taking responsibility for personal outcomes. It is about not letting the eunuchs get in the way of our civilisation’s survival. Eugene O’Neil sagely wrote that “there is no present or future- only the past, happening over and over again -now”. It is time to prove him wrong.

Syria, the West, and the incompatibility of military operations with humanitarian action

Posted by Isadora Loreto / 4th December 2014 / Categories: Analysis / Tags: Humanitarian Aid, Islamic State, Local Populations, Syria, United States / -

A recent report of the UN Secretary-General states that in Syria as many as 4.7 million people are residing in places that are difficult or impossible for humanitarian actors to reach. Of this group, 241,000 are from besieged areas. Reaching local populations in need has been problematic since the beginning of the conflict, but over the past two months it has become even more difficult to deliver aid where the Islamic State (IS) controls the territory – among the provinces of Raqqa, Hasakeh, Aleppo, Deir Ez-Zor.

The involvement of Western states in the war against IS, while being the most important aid providers in Syria, has further complicated the situation and is narrowing the window of humanitarian aid in northern Syria. This brings back the complicated question of the politicisation of humanitarian assistance. The higher the politicisation gets, the more likely it is to have deeply harmful consequences for the populations most in need. The Syrian actual context is another example of the impossibility for humanitarian aid to remain neutral when international actors are simultaneously pursuing a military and a humanitarian agenda. A choice between playing a military or a humanitarian role is essential in order to deliver proper aid to local populations in need.

When IS started consolidating territory in Syria, it allowed aid groups to work in areas under its control with few restrictions. The relationship between aid agencies and IS worsened in September 2014 with the beginning of the air strikes conducted by the United States (U.S.) led-coalition over Syria. Since then, the US and its allies as well as IS encounter problems distinguishing their fight on the one hand and their necessary humanitarian collaboration on the other hand. This complex double role played by Western actors undermines neutrality of humanitarian assistance and as a result has made it even harder for aid agencies to work towards getting aid to the populations in need. Those issues pose a dilemma for aid agencies that have to decide whether to keep providing aid.

In October, the U.S. was believed to carry on delivering aid into Raqqa and Deir Ez-Zor. But by late November, it had been forced to cut back. “We have not avoided an area because IS has taken control of it”, a State Department official said. “But in some areas where IS commanders are in control, they’ve interfered with the way we’ve delivered aid, so we stopped.” Some would argue that the solution to this problem is to keep humanitarian aid clearly separated from military action. This, however, is not a realistic possibility in situations where the same actors play both roles simultaneously. The case of Syria provides further evidence of this insurmountable conflict of interests.

With this double role played by the U.S., IS fighters do not consider American – or western – humanitarian aid as neutral. The organisation is showing ever more reluctance to work with agencies representing the governments involved because they are seen as being part of the American military agenda. It results in flawed humanitarian assistance with high risk for aid workers as well as of aid being misappropriated. Not only the aid about to be delivered is in danger, products and facilities that are already installed suffer from the same problem. A similar situation has been already faced in Somalia with the Al-Shabab group as well as in Afghanistan with the Taliban. In both cases the same actors have been conducting humanitarian and military actions at the same time.

By pursuing both a military and a humanitarian agenda, the U.S. cannot credibly remain neutral as an aid provider. Even if warring factions are genuinely interested in humanitarian concerns, they tend to find that mutual distrust and antagonism makes it impossible to negotiate terms. Moreover, the U.S. has no other priority than to “defeat” IS, and any attempt at humanitarian cooperation is half-hearted at most. Since the summer, IS is indeed perceived as “the enemy” to defeat and it appears then ethically unacceptable for the U.S. and its allies to negotiate with the organisation.

In such a context, local populations cannot see the U.S. as a humanitarian actor either -as long as the state is also engaged in military activities-, leading to mistrust and misunderstanding about who is what. In the US, the population’s perception of the role of the U.S. is very much a military actor to the conflict before it is a humanitarian actor. This explains why even if aid agencies want to engage real humanitarian negotiations with IS, they do not want the population to know about it. In northern Syria, since the air strikes, local populations also principally consider the U.S. as a military actor. It indeed appears to local people that the U.S. priority has shifted from humanitarian assistance to military action.

Most importantly, not only aid coming from the United States Agency for International Development and other governmental agencies is at risk, the whole humanitarian assistance to those in needs is endangered by the double role-play. The politicisation of the humanitarian aid goes indeed beyond the actors directly involved. When governmental actors are simultaneously pursuing a military and a humanitarian agenda, humanitarian actors which are not engaged in the fight and intrinsically neutral suffer from similar consequences: they have difficulties reaching people in need. In the Syrian case, the same behaviour is adopted by IS towards all aid providers which means that aid is hardly delivered to people living in the areas controlled by IS. This is the most dangerous consequence of the politicisation of aid because it endangers people’s lives whose most basic needs cannot be met.

Lessons from Somalia but also from Afghanistan must be taken into consideration. In order to avoid reaching such situations, international actors like the U.S. cannot carry out a military and humanitarian action on the same soil if they want any of their activities to be effective.

Funding development cooperation: Time for donors and local people to unite

Posted by Balder Hageraats / 17th November 2014 / Categories: Analysis, Polis / Tags: Development Cooperation, Donors, Gates Foundation, NGO, The Polis / -

Earlier this month a report was published by GRAIN on the Bill & Melinda Gates Foundation’s expenditure and impact. The research shows how little of its roughly €3bn funding has gone to local initiatives, with roughly 80% of grants spent on European and North American organisations. The Gates Foundation refuted some of the conclusions from the report , but its factual claims remain uncontested. The fact that the development sector in general spends most money on itself- rather than on its supposed “beneficiary populations”- is nothing new, and the Gates Foundation is not an exception in this regard. The most relevant and urgent question for donors such as Gates is how their mission statements and overall objectives are best achieved. Is this by stimulating a strong development sector and spend money on governments and institutions, or by more direct support of local populations and thereby cutting out the sectorial or governmental middleman?

The answer is increasingly clear: effective human development requires local-led approaches. The development sector is too administrative, too institutional, too focussed on process and procedures, and too obsessed by internal evaluations to have the impact one would expect from such a billion euro industry. But most importantly, outsiders are not very good at knowing what is needed on the ground. Funders need to change tack if they are serious about achieving their own organisations’ objectives.

People have questions, needs and ideas. Foundations and other funders can- and want to- help them answer and achieve those. This requires not only greater focus on Southern organisations and people, but a move away from the development sector in its current form. In order to effectively achieve stated objectives, less money needs to go to sectorial actors, administration and institutional support. More needs to be spent on direct support of local ideas and initiatives.

The current situation

Just like the answer provided above, the basic facts are clear: the development sector spends more money on itself than on people outside of the sector. Funding goes to NGOs, experts, evaluators, government institutions, expatriates and a whole host of other such typically “Northern” destinations. Take the typical NGO or institution receiving those funds, and their own expenditure reflects a similar pattern. Even those who claim low “overhead” – i.e. central office expenditure, administrative costs, etcetera – conveniently ignore that overhead does not tell the whole story. The remainder typically goes to sector experts, sector evaluators, sector expatriates, local sector employees, and very little actually ends up in the hands of the groups they aim to serve.

There are three general reasons why this may not be a bad thing. Firstly, money needs to be spent on those who do the best job, regardless of whether they come from Seattle or a village near Lusaka. If it is a non-monetary service that needs to be provided, then it is logical that the funding goes to the expert providing such a service, regardless of origin.

Secondly, unlike other sectors, development cooperation does not have natural adjustment or correction mechanisms. In private sectors, both shareholders and consumers exert daily pressures on companies and service providers to act effectively and in accordance with overall objectives. The development sector does not have such natural adjustment tendencies. It therefore requires, or so the argument goes, significant internal evaluation and assessment.

The third reason given for current approaches is that even though it may not be perfect, there is no practical way for donors to approach non-sectorial actors in an effective and meaningful way. Human development requires significant insight into people’s daily challenges. Donors themselves have neither the infrastructure nor the desire to spend significant amounts on developing such expertise themselves. There are just too many potential targets to support to do so directly, and therefore it needs to be contracted out to partner organisations and experts. These then become responsible for interacting with local communities and individuals that the funder wants to support.

The meaning of impact

GRAIN writes that ” of the $669 million that the Gates Foundation has granted to non-governmental organisations for agricultural work, over three quarters has gone to organisations based in the US. Africa-based NGOs get a meagre 4% of the overall agriculture-related grants to NGOs”. The Gates Foundation replied by stating that “the central assumption is that only organisations located in Africa can benefit African farmers – and we think that is incorrect.”

This is often true of course. Most organisations working on these issues will have some positive impact on local farmers or other groups. But the word “benefit” covers a wide range of results, from minimal and inefficient outcomes to significant success and effectiveness. Moreover, it does not cover the longer-term dynamics related to this issue. The sector is continuously and rightly criticised for ineffective behaviour and for not offering sufficient bang for the buck. The sector’s tendency to look inward rather than outward is one of the main reasons why: by supporting itself rather than more directly supporting local ideas and initiatives, its eventual benefits to local groups are much less than they could be.

Sector-heavy approaches tend to lead to administrative deliverables rather than true local improvements to people’s livelihoods. They are designed to focus bureaucratic patterns, rather than on the outcomes for targeted people. This problem is almost inevitable given the scale of the development industry, and can only be avoided by micro approaches in which the target population becomes the client of a service provided, rather than a beneficiary who is supposedly being helped. Only then will systemic dynamics start revolving on the right kind of human impact, rather than intra-sectorial results.

Development’s original sin

The origins of the development sector are one of “aid”, rather than “outcomes”. This is still visible in current thinking. National and local governments as well as NGOs are supported in their efforts to help target populations. As long as that help is visible by means of awkwardly named “measurables”, “deliverables” and project evaluations, funders tend to continue their support. Sectorial organisations, especially of the northern kind, are very good at providing their paymasters with such numbers: the number of children gone to a newly built school; the number of tools provided to organic farmers; the number of seminars given on gender equality. This is both because of decades of experiences as well as due to high comfort levels with process and procedure as opposed to outcome. The content and impact of these numbers, however, are much harder to quantify and qualify. Hence the typical ineffectiveness of such measures. To make matters worse, when asked about their levels of satisfaction, local populations have little incentive to be critical; better something than nothing at all.

Local organisations are also becoming pretty good at this please-the-donor game, with many African and Asian NGOs popping up mimicking Northern language on both website and in grant proposals. Local experts and evaluators are becoming increasingly popular in the sector as well, especially among progressive development NGOs and north European governments. Admittedly, this in itself has two positive consequences. Firstly, it ensures that some more money goes into the local, rather than European, economy through expert and evaluator fees. In other words, if you are going to spend money on the sector, it is better to do it on those that actually live among target beneficiaries. Secondly, supporting local experts and evaluators strengthens local capacities rather than those in Northern countries.

Unfortunately, the main problem remains, regardless of where organisations and experts are based: those working in the sector are focussed on satisfying the sector. Evaluators do not write their report for the target population of the project, they write it for the responsible NGO or the foundation financing the project. This is a completely different exercise than evaluating outcomes for local populations. Similarly, grant writers do not send project proposals to funders based on what is best for the beneficiary populations; they write project designs so as to maximise their chances of success during the grant process. That does not necessarily lead to bad designs, but it is nonetheless a perverse mechanic that reduces effectiveness and impact.

Listening to the wrong people

In one project evaluation I carried out years ago, I had to evaluate its peacebuilding outcomes. This was the main stated objective of both the project and the funder, and the basis for the grant. The executing NGO did this through building a medical centre that was to be open to all the different ethnic groups present in the region. Many of these groups had until recently been at each other’s throat in a bloody civil war. During the evaluation it turned out that originally the NGO had- on request of locals- just wanted to build a medical facility without the political baggage. Because of lack of funds, it eventually rewrote the whole grant proposal to make it suit the funder’s peacebuilding agenda. Locals always knew that this would never work, and indeed: because of all the political infighting that occurred between towns because of the imposed multiethnic approach, the project eventually failed. No peacebuilding; no long-term medical centre.

As the GRAIN report argues, “it is hard to listen to someone when you cannot hear them. Small farmers in Africa do not participate in the spaces where the agendas are set for the agricultural research institutions, NGOs or initiatives, like AGRA, that the Gates Foundation supports. These spaces are dominated by foundation reps, high-level politicians, business executives, and scientists”.

These people from the development sector- as well as those hovering in its periphery- work in order to obtain funds. Without it, their organisation or their personal employment will be terminated. It is true that funders know this potential flaw in the system, and therefore impose a whole range of administrative measures to ensure compliance with their ultimate goals. This does not work, at least not in general terms. Not only does it make the sector slow and bureaucratic, it also makes it hopelessly ineffective in achieving desired outcomes. It is almost paradoxical: as long as the sector works to please funders rather than local people, the funders will not get what they ultimately aim for.

The Gates Foundation, as well as many others, is aware of this challenge: “The needs of millions of smallholder farmers – most of whom are women – are very much at the centre of the Gates foundation’s agriculture strategy. Our grants are focused on connecting farmers with quality farming supplies and information, access to markets, and improving data so that government policies and resources are in line with their needs. Listening to farmers to understand their needs, and to developing country governments to understand their priorities, is crucially important“, said spokesman Chris Williams.

Less oversight, more results

The challenge for the development is not related to changing general objectives or having better intentions. The problem is one of ineffective systemic patterns. Intra-sectorial ineffectiveness is not solved by greater administrative control or simply by employing more local NGOs or experts from Southern regions, even if that is a slight improvement by itself. No, the solution lies in making the relationship between funders and beneficiary populations as direct as possible.

Let the people who are referred to in foundations’ mission statements and governmental policy papers decide how to spend the funds that are ultimately supposed to improve their lives. Remove the middleman, stop encouraging the sector’s excessive administrative processes, and create direct connections between local people and financing. That kind of local-global alliance can then contract services from organisations and experts, instead of the sector contracting itself. This will not only reduce overhead and intra-sectorial spending, it will create a natural market mechanism in which all those currently trying to win favour with donors need to show outcomes to developing communities. Fortunately, if you are a foundation or a development NGO, this is a change that you will surely welcome. After all, your mission statement says that satisfying local needs is what you are all about.

Full disclosure: the above article makes the case for ReSeT’s current Polis Project. Our team is setting-up such a local-global mechanism to link local ambitions with global resources. Bringing this project to life involves a lot of grant writing to please-the-donor. Local populations will have to wait. As always.

The inefficiency of international actors’ involvement: time for a change

Posted by The Polis Team / 9th October 2014 / Categories: Analysis, Polis / Tags: Development Cooperation, International Actors, Local Populations / -

In the current development system, international actors – international non-governmental organisations (INGOs) and foreign development agencies – frequently decide which challenges to address in developing countries. Local populations are then not the ones who design or implement the programs that are supposed to improve their livelihoods. This development approach often makes international actors’ contributions ineffective and potentially harmful. As a result, international actors are often criticised regarding their involvement, even if there is a very simple solution: in order for international actors to contribute to effective development, they need to listen and respond to local demands. To do so, international actors must abandon their leading position in the design and implementation of development programs and support existing local initiatives instead.

Needs and wants of people often diverge; depending on the society or the country they live in. International actors, however, frequently push for what they perceive as being the priorities of locals. Yet, most of the time, it doesn’t coincide with local populations’ real wants and needs. What is a priority in Italy is not one in Peru or Malaysia, and international actors often disregard these disparities.

International actors design most development programs and projects, without taking into account what already exist on the ground. They arrive on the field, and efforts are made, but the results are hard to see. Local populations usually welcome internationally designed programs because they expect real improvements to their lives. They hardly ever say “no” to the implementation of projects defined abroad. But, as these types of programs do often not correspond to local priorities, in the end they do not receive the expected local response. It is indeed difficult to persuade someone to be enthusiastic about an idea that is not his/her own.

Since the 1990’s, international actors have assessed the need to take into consideration local population’s views when implementing projects. The development of concepts such as local consulting, participation, involvement, ownership, community-driven or empowerment is evidence of it. But international players often consider local participation sufficient to enhance effective development – although the concept of local participation has been criticised over the past decennia – and thus do not give much credit to existing ideas and initiatives.

Current ways of defining international development policies,indeed, often imply that ideas and projects developed by local populations are not interesting or good enough. Local initiatives, however, do exist and they are innovative as well as adapted to local demands. There is no country in the world in which people do not want to improve their living standards, and societies so far have evolved without the need of external actors coming to show the way. If the inhabitants of a country are the ones who, by definition, know better what their problems and ambitions are, and are the ones responsible of solving them, then why should development projects be designedabroad? Neither economic poverty nor technological challenges mean that local populations do not know what they want to improve in their lives or how to achieve it. Maintaining this common belief of local populations lacking innovative and interesting ideas and initiatives only leads to missed chances of using their capacities that are so essential to eventual success. On the contrary, by assessing the complexity of local realities and the existence of initiatives, international actors are making the first essential step to contribute to effective development.

The essential question is why do international actors decide to disregard local populations‘ priorities and initiatives and to follow their own agendas. The focus of international organisations is very often on administrative priorities rather than on producing effective outcomes at a local and human level. Internal pressures on having rapid outputs and outcomes push actors to design programs without properly listening to the needs and wants of local populations, on the one hand, nor searching for initiatives that already exist, on the other. The belief among international actors that they represent universal values of human rights and such also makes them design the development agenda regardless of local wishes. Furthermore, individuals work in the development sector for a wide variety of self-interested reasons – like in any other sector – and the challenge is to align those with the sector’s goal: improving people’s livelihood and helping them building their future.If international actors take decisions that satisfy their interests without being in line with the sector’s purpose, effective outcomes at a human and local level cannot be reached.

The external design and implementation of development programs means that the money is not spent in accordance to local needs and ambitions. As a result it often leads to the waste of large amounts of money spent year after year. Program and project’s external imposition can also lead to the perpetuation of the problem that those projects want totackle, or even to its exacerbation. This is specially the case when addressing cultural, social and more traditional issues. The misunderstanding of local realities or the meddling in private affairs can very easily produce unfortunate results. A very clear example is the international campaigns for the abolition of female genital circumcision. In the Republic of Mali, the practice was banned from the medical centres in 1999, with the support of the international community and several INGOs campaigns. Far from ending the practice, the ban led to a bigger exposure of women to its dangers: the practice was maintained but banned from the health centres. This resulted in less hygiene, recourse and oversight, and thereby to greater suffering among affected women. The banning of female genital circumcision did not emanate from the society. Besides, international community support to the ban and the several campaigns held in place, spread the feeling that foreign interference and a breach of sovereignty were taking place. As a result, the negative rejections towards the ban increased. This case is an unfortunate example of international actors pushing for changes without society asking for them, without local populations leading their own development.

If improving people’s livelihoods is the goal of both local and international actors, the best way to achieve it is to work together according to each other’s comparative advantages. Indeed, the involvement of international actors is a highly valuable asset, if it is done to support existing local initiatives. Local actors and populations have knowledge of the field and a local legitimacy on the one hand, while international players have access to resources and technical capacities, on the other. Yet, international actors’ approach to development initiatives must be a supportive one in order to achieve effective development. Locals must always be leading the development process and this goes beyond the concept of local participation. Supporting local ambitions differs from imposing a program designed by external actors. Giving support to local actors and populations means that international actors listen to local wants and perspectives and then provide the requested resources.With this approach, local populations are the ones in charge: they are the deciders and shapers of their development. Some international actors have already adopted such an approach, underlining the need to listen to local populations wishes and existing ideas. But yet more actors should embrace the same method in order to call it a real change within the development sector.

International actors have a great expertise acquired through decades of work, which gave them considerable value in the sector. But the world is extremely heterogenic and local needs and ambitions vary from one place to another. Thus, INGOs and development agencies cannot expect to fully understand local realities, and then to take decisions and define their future. Local populations have the responsibility to do so. Following local leadership, instead of importing projects, produces real outcomes. And that is called real cooperation between local populations and international actors.

This article is written by Isadora Loreto and Ivanka Puigdueta Bartolomé

MDGs, SDGs and the road to change: An outlook for sustainable development

Posted by Joanna Klever / 6th October 2014 / Categories: Analysis, Polis / Tags: Development Cooperation, Millenium Development Goals, Polis, Sustainable Development Goals / -

Fourteen years into the 21^st century global poverty and underdevelopment remain a crucial problem for millions of humans. At the turn of the millennium, the United Nations (UN) and other international organisations rallied to announce the Millennium Development Goals (MDG), setting the path to change the livelihoods of those living in poverty by 2015. The goals ranged from reducing global poverty by half, to providing universal primary education to everyone as well as halting the spread of diseases such as HIV/AIDS or malaria. As ambitious and idealistic as the goals were, as detached they were from reality in their method and procedure. Instead of focusing on the people on the ground, including them in the process and ensuring that the goals were feasible, the stakeholders rushed to spread the news of change with bold statements and glorious outlooks to the near future. As a result today – one year before the MDG agenda expires – the outcomes are far from complete. While some significant results have been achieved, such as the reduction of global poverty and improvement of health standards, other goals require more effort and dedication.

Today, not enough attention is given to the structural failures of the MDG design, which was built on donor interests rather than developing countries’ needs. Instead, currently the same stakeholders who designed the MDG agenda are feeding a heated debate about the post-2015 framework including the development of the Sustainable Development Goals (SDGs). Without taking the time to understand the underlying misconceptions about global development and the need for the inclusion of local actors, the coming agenda is bound to fail.

The flawed design of cooperation

The MDGs were crafted on a very short notice in the late 1990s. At the turn of the century, international organisations and donor governments decided to use the momentum of turning millennia and organise for long-lasting change. In only fifteen years the decision-makers sought to – amongst others – eradicate absolute poverty (humans living on less than 1$ per day) and significantly reduce child and mother mortality. The process resulting in the proclaimed eight MDGs with 18 targets and 48 indicators has been described as top-down, westernised and incognizant of voices from developing countries. The main criticisms are that the UN, which as an institution in itself is dominated by western nations, who also are the main donors in development cooperation, has driven the MDG process. Furthermore, the supporting institutions as the International Monetary Fund (IMF) or the World Bank pressured participating nations to follow a development agenda suiting western interests and hegemonic structures. While serving western interests little space and attention was left to incorporate the needs of local people or developing nations. Even more severe was the disregard of national circumstances such as historical burdens, environmental dangers as well as vulnerability due to other causes. Thus it does not come as a surprise that in many developing countries no coherent MDG processes were incorporated resulting in poor outcomes of the MDG agenda.

In the past efforts to support local people have been made on various levels. The execution lacked the transfer of project ownership to the people. Donors held on to their own agendas without allowing for genuine local lead. As a consequence sustainable local development did not become a widespread movement because donors failed to give adequate solutions to the causes of underdevelopment. Therefore local people remain dependent on donors.

Western donors are having difficulty knowing about local needs because they are not measurable and difficult to advertise. It is not in the donor’s and global institutions’ interest to support individuals in developing countries and transfer them the power to change. Furthermore, developing countries do not enter negotiations on an equal level, marked from the long history of skewed cooperation mechanisms. On top of that regional, cultural and historical differences frame development cooperation today as much as they did throughout its past. As a result countries that have received development assistance over a long time carry the burden of previous agreements and are heavily indebted towards donors. This hinders current negotiations from being unbiased and fair. Also, two structural flaws are apparent: Local people are not included into national development plans and national governments have trouble being accountable actors to their electorate while having to following donors’ agendas. Caused by this discrepancy, today’s development cooperation is biased towards the donor, following their lead rather than strong governments’ from developing countries representing their people’s needs.

The new agenda

With the MDG period drawing to a close at the end of 2015, a new agenda is currently drafted. At the heart of the post-2015 agenda are the Sustainable Development Goals (SDG), which have been designed since the early 2010s and will replace the MDGs. At the core of the SDG is the aim to focus on environmental problems and combine the quest against poverty with measures against climate change. By the time of implementation, the SDGs will consist of similar targets and indicators, in essence continuing the legacy of the MDGs. Similar to the MDGs; the SDGs are being drafted throughout a series of High-Level meetings involving stakeholders from multiple counties. Actors from the south raise their voices claiming the right to be involved in the drafting process, especially in the light of the failures within the previous MDG process.

Necessary ingredients for change

Observing how the global community develops and implements abovementioned frameworks underlines inherent problems. Global indicators with measurable outputs and outcomes are far detached from the individual human living in a developing country. Certainly the ideal scenario expected within the MDG/SDG framework would entail a trickle-down implementation where national leaders develop strategies that work within the MDG’s vision and support individuals. However, little action has been observed.

The essential question is whether national governments are willing and equipped to support local change and development, but also – whether they should. Developing countries as aid-recipients and shapers of their own national future need to be heard when global policies are crafted. Western leadership and proactivity aiming at sustainable change can only be successful when interacting with developing countries in a serious and unbiased manner. Otherwise development cooperation becomes a farce disguising western interests without truly devoting itself to alleviating developing countries. Such policy includes the establishment of feasible implementation plans at regional and country-level as well as a move away from geostrategic interests and prioritisation aligned to trade interests.

Simultaneously, local people need to be included in national plans. More recognition of local efforts through governmental support and global development plans would have aided the quest of the MDGs and resulted in better outcomes. The power of local change and its triggering effect at regional or even national levels may not be underestimated. On the contrary, global development plans using the inspiration and force of local people are most likely to incur significant change. Local people know what they are missing and a capable of assessing previous failures. The power of local change can transform the development sector if used accordingly. Together with national governments – acting as the middleman between donors and individuals – those stakeholders are the key to sustainable change. The interplay between local, regional, national and global level must become more coherent and focused.

Advancing human development, changing people’s livelihoods and increasing their resilience is most effective if it is an effort sought after by the people themselves. Individual people and local communities know best what they need and where their weaknesses are. Therefore, they ought to be consulted for the design of development agendas. Those agendas need to be adapted to local specifications and supported by the administration. In that case, instead of following global agendas, national governments will request global money for local solutions. If local people became the leaders of their own development they would make choices that they deem most suitable, and support the necessary efforts to develop sustainably.

Therefore, developing nations taking the center stage of the current post-2015 process and raising their voice will have the power to change their futures. Governments as true representatives of their people advocating for their needs, will turn the SDG process towards becoming inclusive and local-led, and thus more effective. Developing countries must use the momentum – the creation of a post-2015 agenda – and turn it into a southern momentum. A success of the MDG process was the placement of development efforts on the global agenda. For the first time global development actors decided to cooperate in order to solve global poverty together. As flawed as the MDG process may have been, as useful it was to tie development efforts together. Now, in the second stage of global development, developing countries need to enter the drafting process with clear cut requirements that will help the nations to advance as well as incorporate the needs and ambitions of individuals in order to make development the process it should had always been: a unified effort between individuals, groups and their representatives.

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