Home The Washington Diplomat August 2011 Slashing Global Poverty By Scrutinizing the Rich

Slashing Global Poverty By Scrutinizing the Rich

Slashing Global Poverty By Scrutinizing the Rich

Nancy Birdsall spent 14 years in research, policy and management positions at the World Bank, and later served as executive vice president of the Inter-American Development Bank.

She also spent a few years — from 1998 until 2001 — thinking big thoughts about global development at the Carnegie Endowment for International Peace. That’s why now, armed with that invaluable experience, Birdsall feels perfectly qualified to critique those other institutions as founding president of the Center for Global Development, which recently marked its 10th anniversary.

“You can’t sit in the World Bank and be very effective at criticizing what the World Bank does,” Birdsall said with a laugh during a recent interview with The Washington Diplomat. “Places like the World Bank and United Nations are full of enlightened people who are trying to do the right thing and because of that, they are not that easy a target.

“You have to understand what they are doing, and their problems and their constraints,” added Birdsall, who also boasts a Ph.D. from Yale University. “I wanted to have a place that was independent but had people with that kind of insider knowledge. I wanted it to be independent.”

Independent — it’s a word that crops up frequently in Birdsall’s discussion of her think tank dedicated to global research and policy analysis, with special emphasis on crafting messages and communicating them to the outside world. Whether taking on Nigeria’s debt crisis or ranking nations on their propensity to help the poor, the Center for Global Development (CGD) aims to cultivate a sense of shared global prosperity — using rigorous policy analysis and innovative thinking that pairs research with action. In particular, CGD analyzes the effectiveness of foreign aid and shines a spotlight on how rich countries impact poor ones in terms of education, health, migration, trade, climate change and a host of other issues.

“We call attention to the fact that what happens in rich countries can affect poor countries,” Birdsall said.

Photo: Center for Global Development
Nancy Birdsall

To do that, CGD’s work spans the development spectrum. There’s practical advice in the form of “wonkcasts” discussing how the U.S. and G-20 can better scrutinize the billions of dollars spent on food assistance, for instance, or working papers on why increasing temporary labor migration to the United States would be a more effective humanitarian response to natural disasters in other nations than traditional disaster relief.

Among its more far-reaching accomplishments, CGD advocated for a “cash on delivery aid” approach that dovetailed with its efforts to make foreign assistance more accountable. CGD took the idea further by linking payments more directly to a single specific result — “kids who actually complete school and take a test, for example, rather than inputs such as classrooms and books,” Birdsall said.

The center also pushed for a landmark $1 trillion international effort to help developing countries cope with the 2008 economic crash. It also advocated for debt relief from the International Monetary Fund for the world’s most heavily indebted countries and the creation of a club to independently evaluate development investments in response to what the center calls “the shocking lack of knowledge about what works and what doesn’t in development.”

Birdsall cultivated the idea for the Center for Global Development in the late 1990s. While at the Carnegie Endowment, she crossed paths with Ed Scott, an immensely successful businessman and philanthropist who, impressed with Birdsall’s vision, helped provide the resources to make her ambition for a new global poverty think tank a reality.

“It was a huge opportunity,” Birdsall said. “He made it possible for me to go out and get some of the very best people to do some things that required the kind of independence we needed.”

There’s that word again — independence. Although Birdsall constantly stresses CGD’s ability to operate without pressures from government, business or other interests, she said the center’s approach isn’t adversarial. She explained that her strategy is to pick the right targets and work with — not against — government and quasi-governmental bureaucrats who direct money and implement policy decisions.

“The treasury and trade representatives in government and people who work in public service face all kinds of restraints,” Birdsall said, sympathetically. “It’s more about working with them and picking our targets. But developing ideas from the outside is what really matters.”

One of those ideas is the center’s Commitment to Development Index, which Birdsall calls CGD’s “signature initiative.”

The basic idea is explained on the center’s website: “Which rich countries are doing the most to help poor ones? Rich and poor nations are linked in many ways — by foreign aid, commerce, the environment, and more. Each year, the CDI rates rich-country governments on how much they are helping poor countries via seven key linkages: aid, trade, investment, migration, environment, security, and technology. The CDI then takes the average for an overall score.”

In 2010, Sweden, Denmark and the Netherlands took the top three spots, respectively, while the United States came in eleventh place. Japan and South Korea came in last place among the richest countries.

“It captures very well our whole purpose by ranking countries in terms of their policies, programs and practices across a range of areas,” Birdsall explained. “It’s very solid work but it’s also based on the concept that if you communicate effectively something people can understand … you can help inspire change.

“One of the reasons the index is important is that we are trying to remind people every year that what rich countries are doing in developing countries is not only about aid, it’s about the U.S. — for example, what we’re doing on climate change, which is nothing for all practical purposes,” Birdsall continued. “We are doing harm by neglecting our contributions to the changing climate, which is disaster for poor people around the world.

“What are we doing on trade? The U.S. does better and has had a more open economy than many European countries and certainly more than Japan,” she added. “It’s not just about aid. It’s about all these other facts.”

Birdsall noted that the index is increasingly attracting attention in major traditional and online publications, including the Huffington Post and the New York Times.

“We think we’re starting to shape a little bit how we think about this issue because now there are countries like China and India, while they are relatively poor, what they do in the banking and financial sector and what they do on the climate issue matters for people in Africa and for people everywhere,” she said. “The concept is fundamentally to look at the rich and powerful — rich countries or rich forces — and how they are affecting others.”

Of course, not every nation appreciates the ranking, especially if they are listed near the bottom.

“Every index is controversial and we knew that from the beginning,” Birdsall said. “For every part of that index … we are extremely analytically rigorous and transparent in how each of these factors is being measures.

“Our approach is very much, ‘Great, let’s talk about it and have debate.’ We are not saying this is perfect. We’re putting it out there for others to scrutinize and complain about, and we’ve made adjustments over time when data becomes available that can enrich it or make it better.”

The center also spends a good deal of time analyzing what works in poor countries and what doesn’t. For example, Birdsall said family planning — access to birth control and education about fertility — makes a huge difference in the lives of not just girls, but entire societies. She used the example of Pakistan, which has a relatively strong economy, compared to Bangladesh, which is poorer.

“In Bangladesh, where there is much better access to family planning and there are higher education levels for girls and boys, a lot of things are better there than in Pakistan, although Pakistan’s income per person is higher,” Birdsall explained. “Why are these differences there? That’s an interesting question. What happened in Bangladesh that didn’t happen in Pakistan — we don’t know enough about that. Is it about leadership? Is it about differences in the ethnic makeup of those countries? That’s what we’re trying to understand.

“It’s also worth trying to understand in Pakistan what is the most effective way to get started if you do have leadership that says, ‘We want to have better access to schools and health care and family planning,'” she added.

Speaking of Pakistan, the center has been deeply involved in analyzing U.S. policy in the turbulent South Asian nation — especially timely given the recent announcement that the administration is shelving hundreds of millions of dollars in military assistance to Pakistan, while Congress clamors for further cuts to development aid as well. The study, titled “Beyond Bullets and Bombs: Fixing the U.S. Approach to Development in Pakistan,” draws lessons from past experiences and offers practical recommendations to U.S. policymakers on the effective deployment of foreign assistance and, more broadly, other non-aid instruments for achieving sustainable development in Pakistan.

The study’s findings do not give cause for optimism. As the title suggests, the report denounces the overwhelming security focus “while neglecting low-cost, low-risk investments in jobs, growth, and the long haul of democracy building,” wrote Birdsall, who convened the study group and is the report’s lead author.

But U.S. policymakers have in recent years tried to formulate a non-military development strategy for Pakistan. Here again though there is cause for concern, as outlined in the report’s introduction: “U.S. policymakers view Pakistan as one of the most critical fronts — perhaps the most critical front — in the U.S.-led effort to combat violent extremism. President Obama has said that economic development is the central component of his administration’s Pakistan strategy. And Congress has authorized a three-fold increase in nonmilitary aid — a total of $7.5 billion — to Pakistan over the next five years. Will it work?

“Prospects are not encouraging. The effectiveness of the massive new American aid push is imperiled by the same old problems that have undermined the effectiveness of billions of dollars that the United States and other donors have spent on development in Pakistan over the past three decades: weak governance, political instability, and widespread corruption.”

Birdsall was adamant, however, that those who insist on cutting off U.S. aid to Pakistan because they view the nation as an untrustworthy partner — including some within her own organization — are shortsighted.

“Mend the [aid] program, don’t end it,” Birdsall said.

“You need to have a program that is flexible over time, where people’s judgment matters and you shift [focus],” she explained. “The British and the World Bank have been working for five or more years in the largest single state — Punjab — on reforming the education system. We recommend the U.S. co-finance what they are doing. Why reinvent the wheel?”

She also said Congress should ease up on its pressure to have appropriations sent to Pakistan spent so quickly.

“If you can’t spend the money well, don’t spend it,” she said. “Congress puts way to much pressure to disperse the money. Maybe it wasn’t time to spend it. If there is pressure to spend money, we’re not going to spend it well.”

Birdsall did endorse a controversial plan to build a massive hydroelectric dam in the country, saying it would not only help solve Pakistan’s energy challenges, but send an important signal to the nation’s leaders about U.S. intent.

“A lot of development and environmental people don’t like [hydroelectric dams] because if they’re not done well they displace people and create engineering problems,” she said. “But the fact is, Pakistan is in deep trouble in terms of a lack of energy. It would take five or 10 years to get the thing built, but the U.S. has the engineering capacity and we could bring private sector investors.”

She added: “It would be a long-term commitment and it would have lot of risk, but if they looked at it carefully, it would clarify to Pakistan that the U.S. is in this for the long haul; that we are not just there to try to drive their government into counterterrorism.”

Birdsall also stressed that the center’s report is not all about throwing money at Pakistan.

“The most important thing we said in that report is that it’s not just about aid,” she said. “We should open our markets to exports from Pakistan. If we took Pakistani exports without the very high tariffs they are subject to now, we could generate a lot of jobs for young people in Pakistan who are otherwise in the streets.”

“U.S. aid to Pakistan is not a reward for good behavior,” Birdsall added in a wonkcast. “We have to think about aid as an investment in the future of U.S. security. If you keep in mind the proposed $1.5 billion a year represents less than what we spend in Afghanistan in a week, then you get the point.”

As for foreign aid — which similarly accounts for a small sliver of total U.S. federal spending — Birdsall is a longtime proponent of and expert on the USAID program. Not surprisingly, she has some opinions about the program implemented by President John F. Kennedy as the primary overseer of U.S. civilian aid to other countries that in recent years has seen its stature — and funding and, many say, independence — shrink since 9/11.

“I believe it’s very problematic to have the aid program so embedded in the State Department,” she told us. “The State Department’s work is diplomacy — negotiating and talking and dealing with immediate problems, the urgency of now.

“I’m of the view that the taxpayers would be better off if there were a cabinet-level agency, or not necessarily a cabinet-level agency but an independent agency like the Environmental Protection Agency,” she argued. “Not everyone at the center agrees with me. They might think it’s not practical politically.

“But they [USAID] need more autonomy. The head of the USAID should be reporting to the president and not just responsible for the aid programs, but for being the voice in my government about what our trade policy is and what our climate policy is. They don’t need to be determining our policies, but they need to be a voice in the discussion of what that policy should be.”

For her part, as she celebrates her center’s 10th anniversary, Birdsall seems well positioned to serve as an effective voice not only for U.S. aid but for development issues around the world. And that effectiveness stems from being an honest, independent voice — whether it’s openly talking about how USAID can learn from its mistakes to which wealthy nations are shirking their global responsibility to improve the lot of their poorer counterparts.

“We think of ourselves as a think tank plus,” Birdsall says of her center, which she admits has a “very grand mission: to reduce poverty and inequality in the world.”

“We do that in a very specific and focused way, which is to scrutinize, to gather evidence on the costs and benefits of what the rich world is doing, what the major global institutions that are part of globalization are doing and not doing,” she says. “Those things that are done in the rich world can transform the lives of people in the poor world.”

About the Author

Michael Coleman is a contributing writer for The Washington Diplomat.