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"There are times when the enunciation of even the most elementary common sense
has an aspect of eccentricity, irrationality, even mild insanity."
- J.K. Galbraith
Introduction
The partnership between rich and poor countries takes many forms, including foreign aid or official development assistance. In essence, there are two major dimensions to that partnership: one is concerned with 'money changing hands' the other with 'ideas changing minds'.
The former covers the important aspects of budgeting, accountability and transparency; addressing the question where to spend aid money-geographically and sectorally-and how to spend it-direct budget support vs. technical assistance; bilateral vs. multilateral channels; government vs. non-government projects; development vs. humanitarian programmes; project vs. programme aid; centralised vs. decentralised management; etc. In essence, they represent a one-way street focused on money matters; often leading to micro-management at the expense of the larger objective of reducing human poverty. Once money is put on the table, the nature of the partnership between poor and rich countries changes dramatically; with concerns about procurement, accounting and reporting often overshadowing the pro-poor dimensions of aid. Therefore, it is best to keep the money outside the room until the broader issues of development are discussed and agreed upon.
When the partnership is too much focused on money issues, little time and energy are devoted to the crucial dimension of 'ideas changing minds'. However, it is only when the ultimate purpose of foreign aid is made clear and agreed upon between the recipient and the donor-mostly through active listening on the part of the latter-that its effectiveness and efficiency will measurably improve. Indeed, the issues related to 'ideas changing minds' involve a two-way traffic for advancing a genuine pro-poor partnership.
This paper focuses on the dimension of 'ideas changing minds'. It asks whether the Millennium Development Goals (MDGs) and the Poverty Reduction Strategy Papers (PRSPs) offer new opportunities for enlarging pro-poor policy choices at the country level. This question is broken down into more specific questions, including: Can all MDG indicators be taken at face value? Are we on track to meeting the MDGs by 2015? Does equity matter for the MDGs? What are pro-poor policies? Is narrow targeting always good for the MDGs? Are policies becoming more pro-poor and MDG-friendly? Can foreign aid help enlarge pro-poor policies and accelerate MDG progress? The paper concludes by proposing seven practical steps for operationalising the MDGs, based on country experiences where a target-driven approach to development has made a difference in the past.
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