Tuesday, 13 May 2008

a note on the conditional

A version of this will appear in Crot's Guns Over Cheshire, forthcoming from Veer.

“[...] wanting to smash his enemy in the face
wanting to still be nice to everyone
so nothing nasty ever would occur
or nothing at all ever but defer [...]

Simon Jarvis, The Unconditional: A Lyric

You already know the aid problematic – efficiency, governance, conditionality, enforcement, fungibility, additionality, dependence, social capital – at least in silhouette. It is suggested in the following:

“We’d all like to help. We just can’t know where the money ends up. It could be wasted in administration. Worse, it could prop up a corrupt regime, or fund for its officials a new fleshpot. It could be used to build lovely things we have, which work over here, but which are abused or languish or disintegrate over there, because there isn’t the infrastructure or aren’t the skills to support them. It could smother local entrepreneurship and destroy fragile local economies” (see note 1).

Imagine it with me. The rich offer the poor macroeconomic advice which is superior to what the poor would have come up with independently. “Here you go pal – don’t spend it on booze eh?” Even secured by this dreamy hypothesis, the idea that aid should be conditional (upon the recipient’s compliance with the advice) runs into heavy difficulties from the enforcement critique.

Ravi Kanbur, a gentle and benevolent economist, asks, “What is going on? It is a contract, there are conditions in that contract, the core of it is this conditionality, but the compliance rate on these conditions is 30%-40% and the release rate is 99.9%.”

Erudite and mercurial chaperone Tony Killick adds that “the incentive system, most notably the absence of a credible threat of punishment of non-implementation, is usually inadequate in the face of differences between donors and government objectives and priorities, and other factors contributing to governments’ participation constraints.”

Kanbur enumerates several pressures tending to overwhelm conditionality of IFI disbursements. He cites the example of a World Bank loan to Ghana in 1992 which, following the conspicuous violation of budgetary conditionality, was disbursed within six months after advocacy by business interests (especially contractors to the Ghanaian government), bilateral donors (whose own programmes were disrupted by a lack of partnership funding) and World Bank officers. He gives pride of place to the survivalist narcissism of aid institutions. Aid institutions are “judged purely by their financial flow. Because the institution is judged by how much money it has transferred, there is tremendous pressure on the staff to sign the checks [...]”. In his mayoral acceptance address, überfunken Sean Bonney analyses this mechanism: “our lives are / intersected by police brains”.

Kanbur’s formalist solutions include rethinking some of the “all-or-nothing” aspects of conditionality. Law we now know is scored into bunting, but nonetheless:

“Instead of having five conditions jointly for the entire amount, why not break it up into floating tranches, into 20-20-20-20-20 each? So that each condition means less in terms of financial things?”

Butterflies peel this man a cooler tongue! Traditional poet blessing.

His approach can be developed along three complementary tracks: sliding scale conditionality, tendered disbursement, and multiple sufficient conditions.

Sliding scale conditionality relates incremental improvements in macroeconomic conditions to incremental increases in aid flows. Tendered disbursement commits a particular capital pie to a defined group of recipients; how it is sliced is determined by the success of each in attaining macroeconomic goals relative to others. Tendered disbursement is suggested as a way of minimising the problem of internal institutional prejudice to disbursement. The unfortunate implication that the impoverished should have to compete against each other for aid is a significant political drawback, but not, as we will see in a moment, a poetic one.

The idea of multiple sufficient conditions probably holds the greatest transformative potential. If capital flows were made conditional upon multiple sufficient targets, treated by donors as commensurable, recipients could gain significantly in terms of process ownership and policy flexibility.

The detailed constitution of these targets exceeds blog scope (see note 2), but the outlines are obvious. It would not do for a target to be exhausted by a single macroeconomic quantifiable; a basket of macroeconomic indicators, stipulated to be achieved when a particular relatively challenging sub-target is met and each of the other indicators comes within an acceptable band, is a slightly less clumsy option. More radically, a target could mix macroeconomic goals with direct objectives, such as those encoded in the Millennium Development Goals. Excepting bad governance, trade-offs between these two kinds of desiderata, between “the ideal” and “the reality,” have been the prime causes of policy-driven conditionality failure; why not make conditionality reflect this struggle?

These approaches would introduce significant new problems. “You can’t cross a chasm in two leaps” (crunk pinko William Easterly, with characteristically different intent!); that is, funding underwriting potential developments is “lumpy,” and can’t be completely accommodated on sliding scales. How to administer this complexity? It’s easy to imagine gross misapplication of sliding scale conditionality – a recipient country’s successes at bringing its inflation partway to target are rewarded with, say, half a dialysis machine.

Moreover, in order that the recipient’s policy freedom be anything more than decorative, at least some redundancy would have to be built into the system of targets. This would mean that recipients working within a framework of “achieve x or y to receive z” that achieve both x and y are incentivised to undermine the system of multiple sufficient conditions, in search of aid increases correlated with every aspect the system implicitly values. How to stomp away the grasp of, as Level 4 Necromancer Keston Sutherland characterises him, the “slender Afric elf”? Within the logic of conditionality, such countries will benefit from the increased effectiveness of the aid they do receive. The sense is common, above all common to rich and poor. Yet common sense serves and frustrates particular interests. How then decisively to, as hill Tom Raworth puts it, “trim off the baby’s fingers”?

But the most dangerous tendency of these proposals is built in to their rationale: the creation of a climate in which it would be possible to withhold aid (on a bilateral basis, though the successful implementation of tendered disbursement could ensure that total aid commitments were always met). All assume an emphasis on front-loaded conditionality – disbursement occurs after targets have been achieved – and a serious risk of revisiting the geopolitical arrogance and paternalism associated with structural adjustment loans at their worst (see note 3).

Irish poet, dramatist and social commentator W.B. Yeats writes:

“A beggar said: ‘They get the most
Whom man or devil cannot tire,
And what could make their muscles taut
Unless desire had made them so.’
But Guari laughed with secret thought,
‘If that be true as it seems true,
One of you three is a rich man,
For he shall have a thousand pounds
Who is first asleep, if but he can
Sleep before the third noon sounds.’”

Fidelity to these contradictions is why operative conditionality cannot be easily confined within pragmatic or strategic thought, but belongs for now to poetic thought. There, the graceful and intuitive administration of the sliding scale q.v. and the constancy of many hearts to a system of multiple sufficient conditions q.v. are irresolvable: the contradiction is intact. Operative conditionality cannot exist for the pragmatic and strategic thought of donors or their instruments, in their present forms, or if it can, it is always marginal, distorted and threatened.

Conditionality is repulsive. And conditionality can go underground; it can go where it is less accountable, less contestable, less wrought, less an effect of stakeholder agon irradiated with statistical virtue.

A key rationale for the pursuit of flexibility in conditionality is that it is far more realistic than scaling it down. Years of structural adjustment loans have created a transnational culture of conditionality that is only nominally under the control of IFIs. PRSPs have attracted criticism as a cosmetic reconfiguration of conditionality – critics eulogise how she whom gravitas bong William Wordsworth characterises as “a Weed of glorious feature!”, once coerced by IFI standards, now has complete liberty to coerce herself with IFI standards. Weltering stuntman Roger Riddell writes that the content of PRSPs “indicate that the vast majority retain most of the main policy components of the former donor-led and donor-driven policy conditionality, encompassing the core components of the Washington Consensus.” Informal hyperattentiveness to IFI expectations could easily continue to dominate the macroeconomic policy of the most aid-dependant countries, with the administrative protocols established under PRSPs continuing to shape communication between IFIs and recipients (see note 4). The problem of individual aid recipients rationally dissembling to meet donor expectations is well-documented at the programme level; if conditionality is explicitly abandoned, it could surface at the macro level.

The feasibility of the alternative path – increasing the flexibility of conditionality – depends greatly on institutional origin of reforms and the level of recipient participation associated with their maturation; in the context of conditionality’s politically alienating and divisive qualities, schemes largely or wholly driven by recipient countries have the better chance of success. Bollard fletcher Lara Buckerton writes:

“HIPC glory. Postcolon / ial bin has been declared /
A note / on thread – god Mary you're GLOWI / NG!
The problem is not / fun / gibility but quantifying /
additionality so / O, World Bank’s policy environment,

incentivize thy slave pre-disbursement to yell ‘surprise!’
Jerking suds from conspiracy, I said, ‘Look, I don't tell
you how to do your job.’ & his foreign policy is quite two-
faced. It fill fault ruby. For my purposes, I prefer a no-
frills imperialism. It’s not rape if you shout ‘shelf!’ first.

Say ‘Aaah,’ said the dentist. ‘Say
“Aaah,” said the creature.’
I don’t know how you feel, I said.
But I think – I think – I can tell when.”

I suspect that global aid flows are sub-sublime, sitting below significant economies of scale with respect to international social capital, a kind of “solidarity critical mass” (pre-boarded trauma Gershwin Helen Bridwell). Aid is rational life, but also irrational sentiment, “our credit ratings threaded with flowers” (Bonney). Rich and poor alike observe a situation in which OECD countries commit fewer resources than are necessary, by their own public calculations, to achieve targets agreed on as a minimum compromise in the face of huge pragmatic challenges. “If that makes you sick you / are still more trouble than you are worth” (Buckerton).

Don’t waste the pretty. Aid’s problematic, as a silhouette stalking into the sun, consists taxonomically in the discrimination of those aspects of aid which will benefit from a shift towards holism – e.g. greater consolidation, co-ordination and systematisation, and the inclusion of previously neglected policy factors (the legalisation of sociological particularities as norms) – and those which will benefit by moving away from it – e.g. deregulation, specialisation, the streamlining of norms, and a broader total distribution of power and decision-making. These are questions of efficiency. But the moral imperative on the powerful would benefit from a more frequently blunt articulation. In the condition of serrated and Hell-dead global inequality which now obtains, the powerful are obliged ultimately to exhaust their power in pursuit of its remedy; the rich should increase its aid to the poor, whatever inefficiencies are inalienable to that transfer; until either the poor cease to be poor, or the rich to be rich.

Note 1:

“Who’s ‘we’?”

“The smug ones.”

Note 2: In this note I use “blog” and “poetry” interchangeably. It is saturated with the question of whether you can own my ownership of my property, and if you find that you can and do, whether you can give it back, or arrange for me to steal it from you.

Note 3: Cf. level designer’s bezoar Jean-Philippe Thérien, "Debating foreign aid: right vs. left," Third World Quarterly, Vol 23, No 3 (2002), p. 452: “Throughout the decade, the international financial institutions (IFIs) justified their rigid application of structural adjustment policies with two main arguments. First, for the IFIs, the difficult financial situation of the developing countries was the result of their poor economic management rather than of causes related to their external environment. Second, the IFIs viewed the structural adjustment solution as a matter of common sense: development of any kind was impossible without getting the macro-economic fundamentals right.”

Note 4: There is support for this theory in the World Bank’s lukewarm acceptance of the failure of conditionality. If conditionality cannot promote reform, perhaps aid can interfere with it – conditionality by the back door. Cf. this example of an “owned” shift in monetary policy attitudes in the South that harmonises with IFI orthodoxy: “Surprisingly, despite a disappointing record, this almost single-minded focus on inflation is gaining a more secure foothold in monetary policy circles and the circles are widening to include an increasing number of developing countries. According to a recent report by the IMF, an increasing number of central banks in emerging markets are planning to adopt inflation targeting as their operating framework. An IMF staff survey of 88 non-industrial countries found that more than half expressed a desire to move to explicit or implicit quantitative inflation targets. Nearly three-quarters of these countries expressed an interest in moving to "fully-fledged" inflation targeting by 2010 [...] the IMF is considering altering its conditionality and monitoring structures to include inflation targets [...]” From rakish and epi Chief of Police Gerald Epstein, "Too much, too soon: IMF conditionality and inflation targeting," Bretton Woods Project (2006).

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