There remain many flaws in the UN Development System, arising from the bureaucratic waste typical in any multilateral agency. But because there is no money in the sort of basic-level technical assistance in which the UNDP specialises, it may turn out to be the sole effective repository for experts in the field.
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By Matthew Parish
The United Nations Development System may sound like a dry subject. But it is not. It is a central pillar of the system of United Nations agencies, principal amongst which is the United Nations Development Programme. This is, or purports to be, a vehicle of development economics. The idea underlying development economics is that institutional quality is central to economic growth and therefore to the progress of a nation from developing to developed status. When we speak of institutions, we mean public administration in its widest sense: courts; land registries; government departments implementing regulations; import, customs and excise; regulation of professions, and everything else that government properly does.
People are naturally inclined to be entrepreneurs and form companies to do business with whatever resources a country may have at its disposal. According to the theory underlying development economics, the principal hindrance to people engaging in useful economic activity is the absence or inadequacy of government institutions that may facilitate or hinder commerce. For example, it is difficult to buy and sell real estate unless there is a functioning land registry that records ownership. The land registry must also record mortgages, so that lenders in respect of property purchases can take security over the land being purchased with borrowed funds. As soon as land can be used as collateral for loans, economic activity can be accelerated as spare capital can be loaned securely, for new economic activities or extensions of existing ones.
A land registry must be secure, with a backup system in case of failure. It must be as error-free as possible. It must accept entries and amendments quickly and efficiently, and it must be open too straightforward public inspection. There must be not the remotest possibility of corruption. Enforcement of mortgages must be relatively prompt where there has been default. An effective land registry is the catalyst to lending that will facilitate economic growth, but it is an immensely technical exercise to establish one that will serve this purpose.
Development economists as a profession provide the expertise to construct such a land registry, or to improve an existing dysfunctional one. Having analysed functional land registries in a number of different jurisdictions, they offer expertise upon what core features an effective land registry needs, and they offer their expertise for transplant into a developing world recipient country. They may draft the legislation for a land registry. They may recruit and train the professionals who work there. They may choose the way the building is furnished; write the registry’s administrative procedures; design a system of judicial oversight; consult with banks about their requirements; choose the computer software. Everything depends upon the starting point – assessing the current system of recording and ownership, and using that as a basis for development into a modern land registry system. Such work can be enormously complicated, because to succeed a detailed understanding of the country’s legal history, history of land ownership, and history of government and administrative structures, is likely required.
One fairly certain insight of development economics is that a pure tabula rasa (or blank slate) rapproach – starting again with a system transplanted from another country – never works. The transplant is rejected. The only way to achieve reliable institutional improvement is to start with the existing system, irrespective of how defective it is, and to improve it gradually. The result must look something like the beginning, only better. Incidentally, this is a particularly important consideration for land registries, that inevitably have a series of pre-existing records of greater or lesser quality and reliability but that in any event cannot just be discarded. Somebody owns the land before the development economists arrive, and their rights must be respected.
Land registries may have received disproportionate attention but are just one part of development economics. (A book by one of the first development economists was about land registration.) Equivalent arrays of complex issues arise in every area of public administration in which development economics is attempted: police reform; court reform; central banking reform; identity cards, passports and local government; building permissions and zoning; and a host of other issues of inordinate variety. Development economics is an enormously varied subject, replete with experts of different kinds.
Why would a state ever accept development economists’ assistance? The answer is almost always twofold: because accepting it is a condition for something else; and somebody else is paying for it. The government structures of countries that need development economists’ assistance are generally predisposed against it by reason of vested interests. Implementation of public administration reform may involve elimination of corruption from which existing public officials benefit: removal of incompetent or obstructive officials; changing human resources structures in government; requiring staff to retrain or work harder; compelling transparency in hiring and contracting, thereby reducing patronage; and other changes that an existing bureaucracy is unlikely to welcome. The changes yielded by public administration reform are for the benefit of the public, not for the benefit of the administrators. Moreover democratic impulses are seldom sufficient to push administrative reform in developing countries.
It is typically donor nations under aid programmes who insist upon public administration reform as a condition of donor activities. That is because they see the anticipated benefits in terms of economic development as being critical to cessation of their donor programme and/or demonstrating the success of that programme. Hence we see development economics projects annexed to peace agreements; projects for refugee assistance; peacekeeping missions; and all manner of bilateral and multilateral aid and assistance programmes to the developing world. Another circumstance in which public administration reform programmes may be popular are where a state is seeking accession to an international treaty structure such as the EU or the WTO, and a minimum level of institutional quality is a precondition for accession.
Why does the United Nations get involved in development economics? The short answer is that public administration reform is part of the programme of multilateral assistance over which UN missions typically have comprehensive oversight. Some level of development economics is typically seen as valuable in any troubled country where the United Nations is operating. Plenty has already been written about the history of the UN development system, and I shall not recreate that work here. Suffice it to say that development goals are pursued through a variety of UN agencies, and there is inevitable overlap of mandates, with consequent wastage. While regarded as a relatively effective, if patchy, branch of the UN architecture, the United Nations Development System could certainly be reformed.
The question I wish to focus upon now is rather one of principle: what are the circumstances in which the United Nations is the most auspicious vehicle to pursue development economics, and in such cases what should its role be? Consider the following. Firstly there is a question as to whether so-called “technical assistance” – that is to say, delivering experts plus money to undertake public administration reform, including things as diverse as refurbishing a building, installing a computer system, or outfitting Police officers – is better undertaken on a bilateral or multilateral basis. Secondly, there is a question as to whether a multilateral organisation should merely administer donor funds and subcontract expert functions to specialist development consultancies, or whether an institution such as the United Nations should actually have on its staff experts who themselves manage and/or participate in projects.
The history of bilateral development economics projects may be illustrated by the world of the US Agency for International Development (USAID) which often works bilaterally, managing development projects and their funding using US taxpayer funds and subcontracting expertise and local project management principally to a series of private US development consultancy companies. Applying for a tendered USAID project is itself a work of art, and one can hope to be successful only if one has on one’s team a series of former USAID officials who understand the complex way in which applications are assessed. USAID favours US development contractors, of which there are several who compete with one-another for USAID grants. The USAID view is that US taxpayers’ funds should be spent on US companies, to the greatest extent possible employing US citizens themselves paying US taxes: not an entirely unreasonable view. Hence the US adopts the bilateral administrative model. USAID administers budgets and contracts. It does not itself provide project expertise. The development consultants do the work on the ground and report to USAID, that assesses whether they undertook the project effectively. If something goes wrong or does not work (and development economics is far from a perfect science), the contractor may be held responsible rather than USAID itself that may retreat behind the tender procedure.
It is impossible in this essay to compare the relative effectiveness of a bilateral agency such as USAID and a multilateral administrator of technical assistance programmes such as UNDP (United Nations Development Programme). The issue is rather when it would make sense to act multilaterally. The most natural such circumstance is where there is more than one state donor for an aid programme. Imagine that five states want to contribute to a common programme of technical assistance to a single country. The United Nations offers an umbrella forum for receipt of funds, a neutral tender system for contracts, and an administrative bureaucracy for the management of budgets.
When UNDP works well, it may be because this is a service that the contributing member states actually want. Their domestic aid and development ministries may not want to undertake financial or management responsibility for a development project. The United Nations Development System enables them to share responsibility through UN project vehicles. This may be particularly attractive where the project is risky because the recipient state is politically unstable or in a post-conflict stage of development. Anything could go wrong, and multilateralism serves as a shield behind which to hide responsibility in the event of a failure. The UN development system is therefore useful in places where practising development economics is extremely risky, and as a general rule that is where tend to find UNDP operating.
At its best, UNDP is a field operation managed by experts. Hence UNDP mostly (but not always) occupies a role of managing some of the most difficult projects. Whereas the ambitions of bilateral aid projects may be grander, the United Nations Development System often operates in environments in which institutions are either absent altogether or extremely primitive. Whereas a bilateral development project might be funded or self-interested reasons of the donor state – it anticipates the recipient state as a potential future trading partner or recipient of investments, if institutional quality can be improved – in some countries in need of development assistance, that motive may be missing. This is particularly so in territories recovering from civil conflict. The abdication of donor government responsibility inherent in funding a UNDP or similar multilateral project (this is now the UN’s responsibility, not ours) is unlikely to be acceptable If private enterprises in the donor state are pressing for results to secure legal rights in respect of their latest sugar factory (to pick a purely arbitrary example).
Using the United Nations to promote technical assistance is therefore more likely in difficult institutional circumstances where there is an absence of external economic incentives. UNDP programmes may be smaller, focusing upon specific public sector activities that are important to the government of the country that one is trying to support. UNDP has a reputation for propping governments up, and it may acquire this image from its role in providing so-called “capacity building” (i.e. the development of public administration) in countries with very serious political and administrative problems, and in which few bilateral agencies will fear to tread unilaterally. Developing very basic public services may help a government, that donor nations wish to support, to survive.
The principal criticism of development economics is that it places the cart before the horse. Improvements in institutional quality do not lead to economic growth; rather it is the other way round. As the economic grows, successful entrepreneurs demand better government and have the domestic lobbying potential to achieve it. For this reason, substantial bilateral technical assistance programs may fail: they are premature. The key is to initiate a virtuous circle of development of a politically influential entrepreneur class that presses for institutional improvement, that in turn grows the economy, is the facilitation of international trade and the abolition of tariffs. By contrast, the goals of the UN Development System may bypass the fallacy inherent in much development economics. That is because UN capacity building is more often aimed at political, rather than economic goals: keeping a preferred and, one hopes, stable and democratic government upon which one rests one’s hopes, in power. Hence paradoxically, In the multilateral context capacity-building programmes may work more effectively than in the bilateral context. There remain many flaws in the UN Development System, arising from the bureaucratic waste typical in any multilateral agency. But because there is no money in the sort of basic-level technical assistance in which the UNDP specialises, it may turn out to be the sole effective repository for experts in the field.
Matthew Parish is an international lawyer based in Geneva, Switzerland and a former UN peacekeeper. He has published two books and over 250 articles on the subject. In 2013 he was elected as a Young Global Leader of the World Economic Forum and he has was listed as one of the three hundred most influential people in Switzerland. He is currently a candidate of the United Kingdom of Great Britain and Northern Ireland for appointment to a position of Under Secretary General of the United Nations with an agenda for institutional reform.
The views expressed in this article do not necessarily reflect the views of TransConflict.