If we don’t get a strong climate deal, the Sustainable Development Goals are doomed
By Professor David Hulme
The imminent announcement of the UN’s Sustainable Development Goals (SDGs) is generating real debate amongst researchers, NGOs and academics about their level of ambition and the likelihood success. Will they be business as usual for the aid industry, or something truly transformational?
At the World Social Science Forum earlier this month there was a consensus that the SDGs are an advance on the MDGs, yet they still met with major criticisms. As one conference delegate told me, “they are just the MDGs with knobs on – these are not about global justice!” The MDGs focussed largely on reducing extreme poverty – according to Thomas Pogge seeking only to secure a minimalist set of basic needs for the world’s poorest people.
Universal access to sanitation requires a revolution in understanding
By Professor Diana Mitlin
Goal 6 of the Sustainable Development Goals (SDGs) makes a clear commitment to universal access to sanitation: Ensure availability and sustainable management of water and sanitation for all. This wording may have been tricky to negotiate, but it will be considerably trickier to turn into practice.
One of the most difficult aspects is determining how access to improved and adequate sanitation is measured. The scale of the task is immense, and it is equally evident that ‘progress’ appears to have been abysmal to date.
Business as usual on migration & climate change won’t produce sustainable development
The impacts of climate change are likely to be severe. Extreme weather events, heat stress, rising sea levels, infections and disease are just some potential results, which will hit poor and vulnerable populations in developing countries hardest. Yet the current ways in which international climate policy is incrementally formed through elite conversation is proving totally inadequate to deal with the growing threat.
The SDGs in Pictures
We’re counting down to the UN summit to ratify the 17 Sustainable Development Goals. Over on Twitter and Facebook, we’re sharing an SDG a day along with a morsel of research from our academic staff and students. Below are a selection of this images, showing the breadth of The University of Manchester’s research on Development.
From the MDGs to SDGs: Has Anything Changed?
Professor David Hulme is currently at the World Social Science Forum in South Africa, where he delivered the following presentation, charting the shift from the Millennium Development Goals, to the Sustainable Development Goals.
You can also watch a recording of the presentation.
For further detail on Professor Hulme’s research in this area, please read ‘The Millennium Development Goals: A Short History of the World’s Biggest Promise.’
Forget the aid obsession: development needs redistribution through fiscal policy
By Professor Armando Barrientos
Perhaps the greatest failing of the Millennium Development Goals was their focus on aid as the main financing tool for development. This ‘cosmopolitan’ perspective has often misdirected attention away from basic fiscal policy in developing countries, which has a much greater impact on the lives of citizens.
Taxes and transfers are the most important instrument at our disposal to redistribute opportunity in low- and middle-income countries. Yet research and policy debate on international development has failed to maintain a consistent focus on fiscal policy. The extensive international consultations around the Sustainable Development Goals may have produced a rather unwieldy list of 17 ‘priorities’, but it has given an opportunity to re-establish the centrality of national tax and spending policies within the development agenda.
National governments collect taxes from citizens and companies, then deploy these resources to provide transfers in kind – through public provision of services like education, health care, sanitation – or transfers in cash – pensions, family allowances, disability benefits or scholarships. Even in low income countries domestic tax collection far outweighs international aid.
Where governments get it right, fiscal policy supports human development and economic growth leading to poverty eradication and low inequality. Where governments get it wrong, human development and growth stagnate, leading to high levels of poverty and inequality.
Getting it right or getting it wrong are not just a matter of technical advice (although this is essential), but primarily a matter of politics and institutions. There are many different ways for countries to establish effective fiscal policy – reforms that work in one country may be ineffective in the next. The important role of institutions in fiscal policy suggests a degree of path dependence. Citizens and companies are more likely to pay taxes if they perceive fiscal policy to be fair and effective.
In evaluating fiscal policy it is imperative to start from the whole, not the parts.
Initiatives like Commitment to Equity led by Nora Lustig provide valuable insights into the distributional outcomes of taxes and transfers for a growing number of middle-income and low-income countries. Based on responses to household surveys, they identify the incidence of taxes and transfers in cash. Transfers in kind are estimated from household demographics and aggregate budgets, for example children are allocated schooling costs. Overall, they find that the redistributive effects of fiscal policy in low- and middle-income countries are small, relative to high-income countries, and vary significantly across countries.
Fiscal policy is equalising in middle-income countries, but not by much. Redistribution is measured as the difference in the Gini coefficient of market income and final income after accounting for the effects of fiscal policy. Using survey data from 2014/5, they find that fiscal policy is responsible for a reduction in the Gini of less than 1 percentage point in Colombia and Indonesia; around 4 percentage points in Brazil Chile and Mexico; and over 7 percentage points in South Africa.Interestingly, the paper finds that fiscal policy is not always poverty reducing, especially due to the incidence of indirect taxes among people living in poverty.
The challenge facing low – and middle – income countries is to strengthen the redistributive capacity of fiscal policy. There are several areas of policy relevant to achieving this objective, but here we can only mention a few of them.
For most countries, raising tax revenues as share of GDP is a priority. In low-income countries, this is particularly hard to achieve. Improvements in tax administration are needed, but they are more likely to be effective if associated with third party information (payroll, business registration, etc.) And as the example of Brazil demonstrates, social and fiscal contracts are essential to raise tax/GDP ratios.
The tax mix is important too. Low- and middle-income countries rely to an important extent on consumption taxes and revenues from natural resources. The bulk of direct tax revenue collection comes not from personal income tax, but from corporate taxation.
Revenues from natural resources can generate a political resource curse because they insulate elites from the need to persuade citizens to pay taxes. Indirect taxes are easier to collect than direct taxes, but they tend to be regressive – hitting the poorest hardest. The challenge is to find innovative ways of countering the political resource curse, through strong fiscal contracts; and of making consumption taxes less regressive through differential rates or rebates.
On the transfer side, the expansion of social assistance transfers shows the way forward. Strengthening redistribution to low income groups through transfers in cash and through access to public services are an effective way to ensure fiscal policy contributes to growth and human development.
The Sustainable Development Goals have the potential to help shift the international development agenda away from its obsession with aid. Placing greater emphasis on the fundamentals of domestic tax and spending would mark a transformation in how ‘development’ is understood, particularly in the West. As the Goals are finalised in New York, it will be interesting to see if the ‘development community’ will become a bit more honest about how development actually happens.
What does SDG 8 on jobs mean for young people in Arusha, Tanazina?
Dr. Nicola Banks‘ research looks at the experiences of young people in Arusha, Tanzania and their struggles to find employment while living in poverty. During her last research visit, Nicola recorded this video, outlining the potential (and the pitfalls) of Sustainable Development Goal 8 on jobs and growth.
Are the Sustainable Development Goals the world’s biggest promise…. or the world’s biggest lie?
By David Hulme
In New York the finishing touches are being made to the Sustainable Development Goals (SDGs) which are due to replace the UN Millennium Development Goals (MDGs).
With 17 goals, 167 targets and perhaps more than 1,000 indicators those finishing touches remain a large task. The idea behind the SDGs is that they are a global ‘super-norm’, which will re-shape the plans and behaviours of nations, multilateral institutions, companies, development organisations and people, to make the world a fairer and more sustainable place. That’s a pretty grand ambition.
Development is changing – and so is Manchester
By Professor Uma Kothari and Professor David Hulme
The study of international development is undergoing a transformation. Its ideas, institutions, financing and political relations are being transformed by the rise of Asia, climate change and, even more importantly, by the evidence that global inequality is increasing in unprecedented ways.
Rising inequality has two main dimensions. A contemporary dimension, exemplified by estimates that the top 1% of the world’s population have the same economic wealth as the remaining 99%. This situation maintains chronic levels of poverty in an affluent world. It reduces the prospects for growth and damages social cohesion, enabling the elite to capture public institutions and policies.
Making the State Work
The Effective States CEO and Executive Director of Brooks World Poverty Institute Professor David Hulme introduces this new edition of ‘Governance, Management and Development’ outlining how the debates have changed and the four key themes of the book.
The last 25 years have seen the most rapid economic growth and the biggest increases in life expectancy in human history. Still, between 1.5 billion and 3 billion people live in poverty and at least one third of the world’s countries are classed as fragile or very badly governed.
The first edition of ‘Governance, Management and Development: Making the State Work’ rolled off the production line in 1997 when policy debates about governance and discussions about the future of non-governmental organizations in development were in their infancy. Privatization was de rigueur for the World Bank and IMF while public private partnerships were novel arrangements in developing countries.
At that time, my co-authors and I had deep concerns about the newly dominant policy agenda which focused on minimizing the role of the public sector, rolling back the state until it almost disappeared while naively waving the new banner of ‘good government’ for all to cheer.