Tackling rural poverty in developing countries

Transcription

1 Departmet for Iteratioal Developmet Tacklig rural poverty i developig coutries REPORT BY THE COMPTROLLER AND AUDITOR GENERAL HC 322 Sessio March 2007

2 The Natioal Audit Office scrutiises public spedig o behalf of Parliamet. The Comptroller ad Auditor Geeral, Sir Joh Bour, is a Officer of the House of Commos. He is the head of the Natioal Audit Office, which employs some 850 staff. He, ad the Natioal Audit Office, are totally idepedet of Govermet. He certifies the accouts of all Govermet departmets ad a wide rage of other public sector bodies; ad he has statutory authority to report to Parliamet o the ecoomy, efficiecy ad effectiveess with which departmets ad other bodies have used their resources. Our work saves the taxpayer millios of pouds every year. At least 8 for every 1 spet ruig the Office.

3 Departmet for Iteratioal Developmet Tacklig rural poverty i developig coutries LONDON: The Statioery Office Ordered by the House of Commos to be prited o 12 March 2007 REPORT BY THE COMPTROLLER AND AUDITOR GENERAL HC 322 Sessio March 2007

4 This report has bee prepared uder Sectio 6 of the Natioal Audit Act 1983 for presetatio to the House of Commos i accordace with Sectio 9 of the Act. Joh Bour Comptroller ad Auditor Geeral Natioal Audit Office 1 March 2007 The Natioal Audit Office study team cosisted of: Emily-A Bowde, Robert Cook, Jey George, Xavier Gilqui, Kellie Herma, Pey Jackso, Victoria Lasore, Adrew Maki, Nick Sloa ad Hugh Waddigto. This report ca be foud o the Natioal Audit Office web site at For further iformatio about the Natioal Audit Office please cotact: Natioal Audit Office Press Office Buckigham Palace Road Victoria Lodo SW1W 9SP Tel: equiries@ao.gsi.gov.uk Natioal Audit Office 2007

5 CONTENTS SUmmarY 4 part oe The challege of tacklig rural poverty 7 Poverty the global positio 7 The extet of rural poverty 7 Developmet targets ad rural poverty 9 Chagig patters of aid to tackle rural poverty 9 DFID s sped i rural areas 10 part two DFID s coutry programme assistace 11 to the rural poor A overview of DFID s bilateral spedig 11 i rural areas Aalysis of itervetios with a rural focus 11 Budget support ad rural poverty reductio 13 The cotributio of projects to rural 18 poverty reductio part four maagemet of the aid budget 25 The desig of coutry programmes to reach 25 the rural poor uderstadig other doors i coutry 25 programme desig ad maagemet Chages i the Departmet s overall 26 advisory capacity Gaiig the views of the rural poor 27 appedices 1 The milleium Developmet Goals 28 2 Study methodology 29 3 The iteratioal aid cotext 32 4 Projects ad programmes cited i the report 35 5 Case study coutries 39 GloSSarY 41 part three Reachig the rural poor through other 20 fudig streams DFID s egagemet with multilaterals 20 DFID-fuded research 21 Cover, cotets ad page 4 photograph courtesy of Alamy.com

6 SummARy 1 The World Bak defies poverty as those livig o less tha two dollars a day, some 2.7 billio people, ad extreme poverty as those livig o less tha oe dollar a day, some 1.1 billio. The Uited Natios Milleium Developmet Goals aim to halve these umbers by 2015 (Appedix 1). The Departmet for Iteratioal Developmet (DFID) has set Public Service Agreemet targets to use its developmet aid programmes to cotribute to this reductio. Some 75 per cet of the world s poor live i rural areas ad the proportio is eve higher i the coutries which DFID prioritises uder its Public Service Agreemet targets. The Departmet caot achieve its targets without sigificat reductios i rural poverty. 2 There are ofte wide variatios i poverty levels withi coutries, with may of the very poorest livig i remote areas, which usually beefit little from geeral govermet expediture icludig that fuded through developmet aid. Rural areas are usually sigificatly poorer tha o-rural areas. I some coutries this gap is shrikig, but i others it has remaied steady or eve icreased. Despite treds towards urbaisatio two-thirds of the world s poor will still live i rural areas i TACKLING RuRAL POvERTy IN DEvELOPING COuNTRIES

7 summary 3 This report examies rural poverty i the cotext of the overall global problem ad the way DFID tackles the issue, i particular i the short ad medium term. Our methodology icluded three coutry visits ad review of 515 projects ad programmes ad is set out at Appedix 2. Our specific fidigs ad recommedatios are as follows. The sigificace of rural poverty 4 DFID plas ad moitors its assistace usig regioal, coutry ad sector based targets ad idicators i lie with its Public Service Agreemet ad the Milleium Developmet Goals. Its assistace to rural areas has delivered importat beefits. It does ot have specific targets for the rural poor but estimates that two-thirds of its bilateral spedig directly beefits them a sigificat proportio but less tha that of the poor who are rural. There are also additioal costs ad complicatios i reachig rural areas which makes delivery of services to the rural poor relatively expesive. 5 I recet years DFID, like other doors, has icreased its spedig o the social, ecoomic ad goverace sectors. The rural poor have shared i the geeral beefits that have resulted. But the proportio of DFID expediture specifically for traditioally rural sectors such as agriculture has declied a tred mirrored iteratioally. Rural developmet geerates broad based growth across atioal ecoomies, while the way urba growth beefits rural developmet is less clear. Tacklig rural poverty 6 DFID has a rage of aid mechaisms to tackle rural poverty, the largest i expediture terms is the bilateral aid programme. DFID has assessed that early threequarters of its bilateral projects ad programmes with a rural emphasis were completely or largely achievig their objectives. We foud that rural programmes were ot sigificatly more or less successful tha o-rural oes. But DFID s ow evaluatios ad the examples we examied idetified differeces i the beefits produced by DFID aid. Commo characteristics ifluecig the degree of success were: Depth of research ad flexible desig. Good research ito the causes ad ature of poverty ad a degree of flexibility i desig helped esure the iteded beefits were achieved. Full stakeholder cosultatio ad ivolvemet. Cosultatio with local commuities, govermet ad other doors helped to improve desig ad operatio of the projects ad guard agaist risks from uforesee chages which udermie the project. Uderstadig the circumstaces of remote areas. Aid has sometimes lacked a focus o the practical difficulties of tacklig rural poverty leadig to partial failure. I remote rural areas it has bee difficult to get good iformatio o poverty or to moitor the effects of assistace. More precise targetig has helped to focus o the poorest ad improve beefits. 7 DFID cosiders the rural poor whe desigig its coutry assistace programmes. But while the majority of DFID s rural itervetios achieve most of their objectives, there is scope for additioal aalysis to improve the targetig of DFID s programmes o the rural poor. DFID ofte makes some use of available data. But it could make more cosistet efforts to moitor the available data o poverty, govermet budget allocatios ad service delivery to establish what fuds ad services reach the rural poor. Beeficiary govermets allocatios of fuds to districts do ot always reflect the distributio of poverty betwee districts. 8 DFID allocates some 38 per cet of its budget to multilateral istitutios ad their expediture o rural poverty varies widely. Some, which put a strog emphasis o rural poverty, attracted low DFID ratigs for effectiveess, which limits the beefits of DFID s fudig. It is therefore workig with some multilateral agecies to improve the effectiveess of their rural based aid. 9 DFID speds sigificat sums o research to help reduce rural poverty; for example recetly committig 200 millio over five years to research ito sustaiable agriculture. It is icreasig its emphasis o the dissemiatio ad use of its research results. But the coutry teams ad o-govermetal orgaisatios we cosulted were dissatisfied with the dissemiatio of fidigs. Tacklig rural poverty i developig coutries 5

8 summary 10 DFID eeds sufficiet advisory capacity i coutry as well as i the UK to desig ad implemet soud programmes. As DFID aid for livelihood ad rural developmet has declied, the umber of advisers for these areas has decreased. DFID s advisory groups are buildig a reputatio for effectively ifluecig beeficiary govermets policies ad systems. But the groups that have icreased most i recet years goverace ad ecoomics are ofte ot closely egaged o issues cocerig rural ad remote areas. Recommedatios a b c DFID s targets are coutry ad sector based, i lie with the Milleium Developmet Goals. But if it is to meet those targets, poverty i rural areas must be substatially reduced. It should cocetrate its efforts o what it kows works well ad avoid what does ot work well i practice. DFID should have a more explicit recogitio of the rural poor i its aalysis, plaig ad moitorig of coutry assistace. This will allow it to assess progress at a appropriate level ad adjust programmes as ecessary. DFID s ability to research poverty or focus assistace most effectively at district levels is limited by the lack of data o poverty ad achievemets. DFID should work with developmet parters to obtai better data while makig full use of existig data to verify the appropriateess of its plas ad give early warig of emergig problems. d e f g h Where DFID idetifies problems with a developig coutry s resource allocatio or service delivery i rural areas, it should apply its stregths i ifluecig policy to secure improvemets. Where such chages are resisted or the developig coutry eeds time to respod, DFID should cosider direct assistace for the rural poor. Experiece shows that such assistace must be kept tightly scoped if it is to be successful. DFID may eed the cooperatio of other doors to obtai the ecessary chages ad to avoid duplicatio or gaps. DFID should promote ad support reviews of the scope ad effectiveess of the rural activities of multilaterals similar to the oe coducted by the World Bak. DFID eeds sufficiet expertise o rural developmet issues withi its advisory groups at the cetre ad i coutry offices to esure that its programmes are effectively addressig the eeds of the rural poor. DFID eeds to seek closer egagemet with coutry teams o the use of research, as well as buildig better dissemiatio arragemets for future research projects. 6 Tacklig rural poverty i developig coutries

9 PART ONE The challege of tacklig rural poverty 1.1 The majority of the world s poor live i rural areas ad a reductio i rural poverty 1 is crucial if the Departmet for Iteratioal Developmet (DFID) is to meet its targets. This Part cosiders the extet of rural poverty, treds i DFID s ad other doors assistace to rural areas ad the implicatios of developmet targets for tacklig rural poverty. Poverty the global positio 1.2 The World Bak has estimated that some 2.7 billio people live i poverty, i.e. o less tha two dollars a day, ad that 1.1 billio are i extreme poverty, livig o less tha oe dollar a day. The first of the eight Milleium Developmet Goals adopted by the iteratioal commuity is to Eradicate extreme poverty ad huger (Appedix 1). This goal is defied to: Reduce by half betwee 1990 ad 2015 the proportio of people livig o less tha a dollar a day. Reduce by half betwee 1990 ad 2015 the proportio of people who suffer from huger. Achievig this goal will also help to achieve other goals. 1.3 The resposibility for achievig these aims rests with the govermet of the coutries cocered but they ca oly do so with the full support of developed atios ad the iteratioal aid bodies, such as the Uited Natios agecies, other multilateral istitutios ad volutary orgaisatios. 1.4 The maagemet ad allocatio of Uited Kigdom govermet aid to developig coutries is the resposibility of the Departmet for Iteratioal Developmet. DFID s expediture was 4.4 billio. Of this, DFID allocated the largest part, some 2.5 billio (57 per cet) i bilateral aid to 119 coutries, icludig may of those with the most serious levels of poverty. A further 1.7 billio (38 per cet) is beig chaelled through iteratioal bodies, with the Europea Uio receivig the largest share 0.9 billio. The remaiig five per cet is spet o admiistratio. The extet of rural poverty 1.5 Approximately 75 per cet of the world s poorest people live i rural areas. The defiitio of the term rural varies betwee coutries 2, ad rural ad o-rural areas are ofte liked, particularly through migratio ad trade. However, rural poverty does have specific characteristics. For example, the rural poor ofte suffer from log-term poverty ad are more vulerable to exteral factors such as market fluctuatios, poor harvests ad climate coditios. They ofte have limited opportuities to geerate icome ad difficulties i accessig services ad ifrastructure. Service providers also face higher uit costs i deliverig services to rural people, as access problems drive up costs ad high quality staff are ofte uwillig to live i remote areas. 1 The term poverty is used here i its wider sese, to iclude deprivatio i access to services such as health ad educatio as well as low icome. 2 Each coutry has a atioal defiitio of rural ad urba. We use these throughout our report. TACKLING RuRAL POvERTy IN DEvELOPING COuNTRIES 7

10 part oe 1.6 May poorer coutries are becomig more urbaised, as some of the rural poor migrate to tows i search of higher icomes ad better opportuities. Eve takig accout of urbaisatio, however, we estimate that two thirds of the world s 800 millio poor i 2015 will still live i rural areas (Figure 1). Moreover, those who do migrate to urba areas ted to be the fit ad ecoomically active. Migratio leaves more vulerable groups such as childre ad the elderly i rural areas. Ad for the poorest coutries. acceleratig growth i labour itesive agriculture is fudametal to reducig poverty ad eablig ecoomic trasformatio. 3 For these reasos, successful developmet i rural areas remais a essetial compoet of overall success i poverty reductio. 1.7 There are also ofte wide variatios i poverty levels withi coutries, with may of the very poorest livig i remote areas, which beefit little from ecoomic developmet. Rural areas are usually sigificatly poorer tha o rural areas. I some coutries this gap is shrikig, but i others it has remaied steady or eve icreased. Figure 2 shows that, for example, people are as much as 60 per cet more likely to live below the icome poverty lie i rural areas. 1.8 Tacklig rural poverty is importat to meetig DFID s targets for poverty reductio. DFID is curretly off track for achievig its Public Service Agreemet targets for poverty idicators such as uder-five mortality rates i Asia ad use of skilled birth attedats i Africa. Rural populatios fid it particularly difficult to access services i these areas. For example, oe of DFID s targets is to reduce uder five mortality by 24 deaths per thousad live births i Asia. 4 But rural areas were laggig behid, with a average of 28 more deaths per thousad i rural tha i urba areas. 1.9 The rural poor beefit from programmes which target them specifically, ofte i traditioally rural sectors such as agriculture, ad from broader social sector programmes i health, educatio ad eve from goverace reforms. Over the loger term rural areas may idirectly beefit from assistace to urba areas, although research idicates that urba growth does ot ecessarily reduce atioal poverty All this meas that rural poverty must be specifically addressed by the coutries cocered ad the iteratioal commuity if the poverty reductio targets set out i the Milleium Developmet Goals are to be achieved. 2 Rural populatios are o average poorer tha urba populatios Measure of poverty rural Urba average 1 average 1 Icome poverty levels 46% 28% (percetage of populatio livig i poverty, based o atioal poverty lies) Ifat mortality (umber of ifat deaths, 0 1 years, per 1,000 live births) Uder five mortality (umber of child deaths, 0 5 years, per 1,000 live births) Source: Natioal Audit Office calculatios usig data from Milleium Developmet Goals idicators database ad the World Bak developmet statistics database Note 1 The average give is for DFID s target coutries, where data was available. Averages are ot weighted by size of populatio i coutries. 3 Growth ad Poverty Reductio: the role of agriculture, DFID, December DFID works i ie key coutries i Asia. The target applies to those coutries rather tha the cotiet as a whole. 8 Tacklig rural poverty i developig coutries

11 part oe Developmet targets ad rural poverty 1.11 The Milleium Developmet Goals do ot differetiate betwee rural ad o-rural poverty with the exceptio of the Goal for improved water ad saitatio. Nevertheless to meet the Milleium Developmet Goals it is essetial to tackle poverty i rural areas. DFID s ow Public Service Agreemet targets create short term goals based o the Milleium Developmet Goals. As the majority of poor people i DFID s target coutries live i rural areas, rural poverty reductio is essetial i achievig its targets. The Departmet also has a clearly stated policy that reachig the very poorest is importat. However, ulike the Milleium Developmet Goals, DFID s Public Service Agreemet targets do ot take depth of poverty ito accout. This meas that DFID is ot required by the Public Service Agreemet to evaluate whether particular areas or regios are beig left behid, though i practice DFID staff do so i some cases. This is importat, as poverty reductio rates ca be as much as te times faster whe ecoomic growth is liked to a more equitable distributio of wealth. Chagig patters of aid to tackle rural poverty 1.12 Most of DFID s expediture o poverty reductio is through bilateral ad multilateral aid. So this report focuses o the use of aid. A wide body of research has liked aid to ecoomic growth ad i tur liked ecoomic growth to poverty reductio. Rural based ecoomic growth has bee show to help reduce atioal poverty rates whereas this coectio is less clear for urba based growth. While approaches must be tailored to specific coutry circumstaces, research also idicates that geerally aid to sectors such as agriculture ad educatio is particularly effective i achievig poverty reductio ad ecoomic growth (Appedix 3) I additio to providig aid, other importat types of DFID assistace iclude ecouragig policy coherece o major iteratioal issues such as climate chage ad trade, ad promotig cross-whitehall co-ordiatio. The volume of all global aid is far less tha global levels of trade or of foreig direct ivestmet. Aid ca also be outweighed or udermied by corruptio, climatic chage or other egative impacts, which ca have disastrous effects o the livelihoods of rural people. DFID has bee heavily ivolved i activities such as lobbyig to reduce iteratioal trade barriers to developig coutries ad to promotig debt relief I lie with a wider iteratioal tred DFID is chagig its approach to deliverig aid, both i terms of the emphasis of DFID s sector spedig ad the systems used to deliver the aid such as through projects or govermets. The emphasis of DFID s sector spedig 1.15 Over the past two decades DFID has bee movig its aid from the productive sectors to the social sectors. For example, the proportio of fudig to agriculture has declied sigificatly while that to educatio has rise. Over the last twety years the UK s shift towards the social sectors has bee above the Orgaisatio for Ecoomic Cooperatio ad Developmet average (Appedix 3) Noe of the sector classificatios map accurately oto the rural poor. They should beefit from geeral social programmes such as educatio, as well as from improvemets i goverace although issues of targetig will determie the extet of beefit. Of the traditioal classificatios used by the iteratioal developmet commuity, agriculture is the most closely related to rural life as most of the rural poor deped o agriculture for their livelihoods. I the last five years developig coutries ad some doors have show reewed iterest i supportig productive sectors, particularly agriculture. However, DFID is likely to cotiue focusig o the social ad goverace sectors as: The 2006 White Paper prioritised goverace ad itroduced spedig targets for educatio ad water; ad Most Coutry Assistace Plas emphasise goverace ad the social sectors. Coutry teams also idicated i respose to our survey that they thought that the goverace sector was the most importat to poverty reductio DFID s maagemet iformatio system uses sectors to categorise its spedig. Oe of these is livelihoods (formerly called rural livelihoods), which seeks to improve opportuities for poor people to make a livig. Most spedig i this sector clearly beefits the rural poor, although much expediture i other sectors such as health ad educatio also beefits rural people. The Departmet s expediture o livelihoods has remaied almost the same i real terms over the last five years, while the total coutry programme budget has rise by 50 per cet. Expediture o livelihoods ow represets six per cet of the total coutry programme expediture. Tacklig rural poverty i developig coutries 9

12 part oe How DFID delivers its aid 1.18 May doors, icludig DFID, are committed to chagig the way they deliver aid from fudig discrete projects to providig programme based aid, particularly through budget support directly to parter govermets. This approach supports the implemetatio of a agreed poverty reductio strategy where DFID judges the parter govermet to have the ecessary systems ad fiscal safeguards. DFID has bee at the forefrot of this chage ad iteds to icrease further the proportio of budget support as far as coutry circumstaces allow. This approach, if maaged well, ca have beefits for aid effectiveess. But it is also more difficult for DFID to esure that its fudig is beefitig the poorest i rural areas. DFID s sped i rural areas 1.19 DFID operates through a rage of fudig streams, all of which help to reduce rural poverty. These are: Bilateral aid: this is the largest fudig stream which is targeted primarily o the poorest coutries, most of which have a high icidece of rural poverty. But, like other doors, DFID caot easily aalyse the allocatio of aid withi coutries or how much of it is reachig rural areas. This is partly due to poor quality sub-atioal data. DFID staff estimated that two thirds of their bilateral expediture beefited rural areas (Part 2); Multilateral aid: may multilaterals have substatial programmes with a rural focus. But most of these istitutios do ot aalyse their effectiveess or spedig i rural areas so it is ot possible to quatify expediture o rural areas (Part 3); ad Research: the growth ad livelihoods team sped oe third of total research fudig, although other research areas such as health, educatio ad eviromet also beefit the rural poor (Part 3). 10 Tacklig rural poverty i developig coutries

13 PART TWO DFID s coutry programme assistace to the rural poor 2.1 I this Part we estimate DFID s expediture o the rural poor through its coutry programmes ad explore the success factors of itervetios with a rural focus. We the look i more depth at the impacts of differet forms of aid o rural poverty reductio, focusig o projects ad budget support. A overview of DFID s bilateral spedig i rural areas 2.2 DFID s maagemet iformatio categorises assistace by sector but ot by type of beeficiary such as the rural poor. We asked DFID coutry teams for their estimates of the proportio of their expediture beefitig the rural poor. Fewer tha half described their coutry programmes as more rural tha o rural. Our aalysis of their estimates from a sample of 515 projects ad programmes foud that approximately two thirds of bilateral assistace had a rural focus. I the same coutries, aroud three quarters of the poor live i rural areas. 2.3 Rural expediture estimates eed to be iterpreted with cautio. Estimates sometimes have to be based o icomplete or weak data. Ad assistace to urba areas may idirectly help the rural poor. O the best estimates available, the rural poor receive less direct DFID assistace per head tha the o-rural poor. Other factors also place the rural poor at a disadvatage. I geeral, ecoomic developmet teds to favour urba ad coastal areas or areas where there are good trasport liks. Further, the uit cost of deliverig services i rural areas is geerally higher tha i other areas so that more moey would have to be spet o rural services to meet ay give stadard of service. 2.4 Our aalysis of 515 projects ad programmes idicated that whether or ot a project or programme has a rural focus makes o sigificat differece to DFID project performace ratigs. Withi our sample performace was more likely to relate to sector ad the risk ratig give by DFID. Projects which DFID assessed as low risk durig plaig were more likely to be successful. Projects ad programmes i the educatio sector scored particularly well compared with other sectors while goverace ad livelihoods projects ad programmes scored less well. Aalysis of itervetios with a rural focus 2.5 Our aalysis of a smaller sample of DFID projects ad programmes with a predomiatly rural focus showed that most were rated as largely or fully achievig their objectives (Figure 3 overleaf). Oly aroud five per cet were rated as ulikely to be realised or likely to be achieved to a very limited extet. This patter is broadly i lie with our wider sample which icluded rural ad o-rural itervetios. TACKLING RuRAL POvERTy IN DEvELOPING COuNTRIES 11

14 part two 2.6 We foud a umber of factors which DFID staff ofte idetified as key to the success or failure of projects or programmes. These factors ca broadly be grouped uder three themes: Good backgroud research ad flexible desig. The ability to refie details or maagemet durig a project helped to improve fial outputs. We also foud examples where repeated pilotig of strategies esured the success of the fial programme. For example, detailed desig followed by iterim reviews of the Gasu basic educatio project i Chia helped DFID to idetify ad the address emergig problems. 5 We foud examples where poor backgroud research of local circumstaces led projects to uder perform. For example, oe public works programme i Malawi paid poor people for their labour but the wages were too low to allow workers to retai or ivest moey, coverig oly basic expediture o subsistece. This meat that the project failed to brig about a log term improvemet to the lives of the iteded beeficiaries; Good parterships ad full stakeholder ivolvemet. We saw good examples where other stakeholders, icludig govermet ad local commuities, had bee ivolved from the earliest stages ad positive relatioships were established. A key success factor of the Shiksha Karmi primary educatio programme i Rajastha i Idia was i establishig good relatioships with both the state ad atioal govermet. The project was also strog i ivolvig members of the commuity by traiig them as teachers. But we also saw examples where poor relatios with govermet officials had led to failure. For example, i Bagladesh a techical assistace programme aimed to icrease capacity of a miistry failed whe the govermet chaged ad the official who had champioed the project was sidelied; ad Uderstadig the circumstaces of remote areas ad targetig assistace to disadvataged groups. We foud that uderstadig the cotext was importat i reachig remote rural areas. For example a rural road project i Mozambique had difficulty i assurig road quality ad maiteace as it had uderestimated requiremets for supervisio i remote areas. Targetig specific groups was also very importat. For example, DFID staff oted for a midwifery project i Nepal that specific targetig was required to reach the poorest groups ad remote areas. Figure 4 gives two examples of programmes where icreased targetig by DFID would have improved outcomes. 2.7 Coutry teams were strog o idetifyig risks but less cosistet i examiig the cotiuig viability of itervetios ad learig lessos from previous oes. Issues regardig sustaiability were cosidered i more detail at the desig tha evaluatio stage. This tred was particularly clear i itervetios i agriculture, eviromet, educatio ad o-farm rural livelihoods. 5 Appedix 4 presets basic iformatio o this project ad the others metioed i the text. 12 Tacklig rural poverty i developig coutries

15 part two 4 Examples of DFID itervetios i rural areas where icreasig the extet of targetig would have improved results Aga Kha Rural Support Programme i Chitral (phase 3) ra from 1998 to 2005 ad cost 7.4 millio. DFID Pakista estimated that 100 per cet of the programme s beefits wet to rural areas. DFID reviewers gave the project a score of 2 (largely achieved). The programme s aims The programme aimed to support local people ad commuity orgaisatios to facilitate local developmet. For example it supported locally ru microfiace groups ad a rage of commuity traiig such as basic accoutig traiig. It aimed to icrease the ivolvemet of wome i commuity orgaisatios ad to help commuity groups lik together. Key achievemets agaist targets 40 per cet of the volutary wome s orgaisatios formed local federatios (early meetig the target of 50 per cet). 70 per cet of their members reported icreased ivolvemet i decisio makig (exceedig the target of 50 per cet). 91 per cet of projects were beig maitaied at the ed of the project, agaist a target of 90 per cet. The role of targetig Though the programme was desiged to reach oly the Chitral regio it icluded a broad rage of activities. The reviewers oted that was essetial to focus specifically o the poorest ad most excluded, icludig wome. I the begiig the programme focussed oly o geder but later bega to focus o the poorest ad excluded groups, which icreased the quality of results i the later stages. Reviewers also oted that local commuity orgaisatios ca have a very importat role to play i developmet i remote areas which are ofte ot reached by govermet. Zambezia Agricultural Developmet Programme i Mozambique ra betwee 1998 ad It cost 7.3 millio. DFID Mozambique estimated that 100 per cet of the beefits wet to rural areas. DFID reviewers gave the project a 3 (oly partially achieved). The programme s aims The programme aimed to icrease household food security ad agricultural productio i the regio by helpig smallholders to diversify food ad icome sources, for example by itroducig differet crops, ad o-farm icomes. It also aimed to develop self sustaiig commuity orgaisatios such as farmers groups. Key achievemets agaist targets The target of reducig the hugry period by three moths for 15 per cet of poorest families was maily achieved, although there was some slippage at the ed of the project. The target of icreasig the levels of basic food crops by 10 per cet was achieved for most crops although there was slippage at ed of project. The target of commuities takig 20 per cet of products to market was geerally ot achieved. The role of targetig Oe key lesso leart from the project was that tryig to operate i three separate areas made the project uecessarily complicated to ru ad cocetratig o oe area would have bee more effective. By spreadig the project across districts too little attetio was give to some of the key objectives. Furthermore at review stage DFID staff oted that while the programme did achieve desired levels of coverage, detailed iformatio o the impact it had withi those areas was ot collected. Source: Review of DFID project documetatio For example the beefits of oe project i Keya desiged to help farmers icrease their icome earig opportuities were all lost whe the project s fudig eded. Although it was kow that fudig would ed it seems that isufficiet preparatio was made to esure that the project s outputs could become self sustaiig. 2.8 We foud little aalysis of the efficiecy of itervetios or of uit costs. I may cases the defied target group was too broad for ay calculatio of the cost per beeficiary to be meaigful ad the documetatio for two thirds of the sample gave o estimate of the umber of beeficiaries. We did ot fid evidece that DFID coutry teams used or sought uit cost or bechmarkig estimates i desig of itervetios. Budget support ad rural poverty reductio 2.9 DFID is chagig the way it delivers aid from fudig discrete projects to providig aid directly ito the atioal budgets of parter govermets where the coutry shows sufficiet commitmet to poverty reductio ad there are adequate cotrols to safeguard the use of public fuds. DFID believes that, give these coditios, budget support is a more effective way of deliverig aid. I , DFID spet 25 per cet of its bilateral fudig through budget support; up by over 100 millio o the previous year. DFID s use of budget support is likely to cotiue to icrease, i respose to its aim to icrease the proportio of aid chaelled through programmes rather tha projects. Tacklig rural poverty i developig coutries 13

16 part two 2.10 A recet evaluatio, coverig all of our coutry case studies, cocluded that budget support had helped to improve the efficiecy of public expediture, stregtheed owership ad cotributed to improvemets i public service delivery, particularly i terms of quatity, rather tha quality of provisio i health ad educatio. 6 However, little work has bee carried out to quatify improvemets i rural areas or how they affect those most i eed, such as those i remote areas. We saw some specific examples of improvemets i rural areas durig our field visits, as Figure 5 illustrates DFID assesses the risks of budget support as part of its plaig. For example DFID looks at: 5 the way parter govermets allocate fuds to lie miistries, programmes ad local govermet; the quality ad comprehesiveess of parter govermets public fiacial maagemet; ad the extet to which the parter govermets are committed to poverty reductio ad supportig private sector developmet. Educatio fudig ad erolmet has improved i Samora Machel School, Mozambique There has bee a icrease i erolmet betwee , with the percetage of females attedig icreasig slightly: Year total umber percetage of of pupils females (%) , The headmaster reported that he had received the budget to recruit additioal teachers as the school has expaded, ad that the curret pupil-teacher ratio was 50:1, compared with a atioal average of approximately 72:1. Oly oe of his teachers was utraied. He had also received per capita fudig from the govermet for books ad materials for the past three years. He said that this has delivered beefits, although it was still difficult to provide sufficiet school materials such as sports equipmet ad uiforms. Girls ad orphas received a basket of food at the ed of each moth as icetives to atted the school. Source: Head teacher, Samora Machel school Note 1 The temporary declie i umbers was due to a ew school opeig close by This risk assessmet is particularly relevat to the circumstaces of the rural poor, who ca be disadvataged by a rage of factors whe developig coutry govermets allocate scarce resources: By their ature, rural areas are difficult to reach, ad it is easier for govermets to focus their limited resources o areas with better access. It is difficult for govermets to recruit ad retai high quality staff to work i the more remote regios, leadig i tur to problems i capacity ad ability to use available fuds efficietly. There may be a urba bias, with policy makers livig i urba areas ad focusig o spedig there. Bias or political rivalry betwee the govermet ad other parties or groups ofte has a geographical dimesio ad may affect allocatios I oe of the coutries we visited, Vietam, the govermet had demostrated a clear commitmet to poverty reductio i its budget, by allocatig more fudig per capita to poorer provices. It had also idetified the eed for supplemetary fudig for developmet i the poorest areas which were remote, rural ad ofte moutaious. I these circumstaces, DFID decided to support the govermet s budget usig geeral budget support. This provided broad-based assistace to the govermet s poverty reductio plas, ad gave DFID a seat at the table i discussig major policy issues. But DFID also earmarked some support for specific sectors or govermet programmes eablig them to target their assistace, while still supportig the govermet s developmet strategy, ad miimisig the costs ad complexity of assistace (Figure 6) I Ugada, where DFID has bee providig budget support sice 1998, govermet allocatios to districts had ot always bee clearly related to the eeds of the poorest. Although the govermet revised fudig allocatios i 1999 to reflect populatio levels ad poverty rates, Figure 7 shows that uder that system district budgets did ot rise with icreasig levels of poverty. It also shows that spedig per head i districts with similar poverty levels varied by more tha 100 per cet Similar variatios existed i idividual services. I the Govermet s expediture plas for the water sector allocated 29 per cet of total fudig to rural areas. Urba areas received 50 per cet ad the remaider was used for water resource maagemet. Figure 8 o page 16 shows that although the Easter regio had the highest sickess rates ad lowest proportio of medical staff, it attracted the lowest per capita trasfers from the Miistry of Health. 6 Orgaisatio for Ecoomic Co-operatio ad Developmet, Developmet Assistace Committee Joit Evaluatio of Budget Support, Tacklig rural poverty i developig coutries

17 part two 6 DFID provides assistace to the Govermet of Vietam at differet levels to help it to target the rural poor DFID cotributes 20 millio per year as geeral budget support to Vietam via the World Bak. While this compoet of DFID s support is ot targeted it provides a opportuity for ifluecig the atioal govermet o a broad rage of policy issues. DFID also fuds several more targeted approaches. These iclude the educatio sector i Vietam through support to the Educatio for All programme, ad a govermet iitiative called Programme 135 which is specifically aimed at the poorest commuities i the coutry. Vietam has made substatial progress i tacklig poverty over the last decade. But pockets of chroic poverty remai ad 92 per cet of the poor ow live i rural areas. The Vietamese govermet has idetified the poorest commuities throughout the coutry for targeted supplemetary assistace o basic ad social ifrastructure. Most of these commuities are i remote rural areas, particularly i moutaious regios. DFID cotributed 10 millio i support to the programme betwee 2005 ad 2006 ad a further 250,000 to be used as techical assistace or capacity buildig. The programme is implemeted by local govermet officials who cosult local people about priorities i their area. We spoke to local people livig ear basic ifrastructure built as part of programme 135. They emphasised the positive impact the ew roads, bridges ad schools had had o their lives. They also cofirmed that ivolvig them i the maagemet of these idividual projects icreased their sese of owership. Other doors cosider the programme highly successful ad several are also ow supportig it. Source: Natioal Audit Office coutry visit Tacklig rural poverty i developig coutries 15

18 part two 8 Regioal variatios i health spedig ad outcomes i Ugada Regio estimated percetage of Estimated days populatio per Health trasfers populatio fallig sick lost to illess medical staff per capita durig past 30 days per moth (2002) (Ugada shilligs) (%) West ,500 5,790 East ,700 5,090 North ,400 6,480 Cetral (excl. Kampala) ,000 6,240 Source: Data provided by PricewaterhouseCoopers from the Ugada 2002 cesus, the 2004 service delivery survey, the Ugada Natioal Household survey , ad the 2005 statistical abstract 2.16 While there are may factors which ca reasoably ifluece resource allocatio, patters such as these caused doors some cocer. DFID, for example, had raised regioal disparities i health idicators with the Miistry of Health ad were tryig to egage key parters to do the same. I 2004 the Ugada govermet reviewed the formulae it was usig to allocate fuds to districts. A ew allocatio system has ow bee developed which accords poverty levels more weight i makig allocatios to districts. The system is beig itroduced over a four year period. Projected district allocatios for basic educatio ad primary health idicate that budgets are becomig much more resposive to poverty, although there will still be sigificat variatios i resourcig for districts with similar poverty levels I the third coutry we visited, Mozambique, high rates of ecoomic growth had ot reduced poverty equally across the coutry. Though there has bee some developmet i rural areas atioal growth was partly drive by a small umber of big idustrial projects i the south 7. There were stark differeces i the extet ad success of programmes to address poverty i differet parts of the coutry. For example Figure 9 shows that levels of child immuizatio vary widely betwee the orth ad south of the coutry. Levels of childre immuized were also higher i urba areas, averagig 81 per cet, compared with 56 per cet i rural areas. 7 The World Bak has estimated that i 2001 oe sigle compay located just outside Maputo cotributed 10 per cet of the coutry s ecoomic growth. 16 Tacklig rural poverty i developig coutries

19 part two 2.18 Variatios i service delivery are also apparet withi districts. WaterAid is curretly udertakig a project, fuded by UNICEF ad DFID, to map water poits withi districts. This project is revealig some iterestig patters: those who live i the admiistrative cetres of districts are relatively well served with water, as are those who live close to roads. But there are whole commuities which do ot have ay improved water poits at all These examples of cocers about developig coutry budget allocatios ad resultig variatios i service provisio are ot isolated istaces. I our survey of coutry offices, oly half of those coutry teams usig budget support reported they were satisfied with govermet spedig i rural areas or its broad geographical focus. Oe of the causes of cocer is the lack of good data o rural poverty or services at district or similar levels. We saw that i some coutries sub-atioal data were beig examied by DFID advisers. However, most of the idicators formally used to moitor progress of poverty reductio strategies i the coutries we visited, for example, do ot disaggregate iformatio below the atioal level (Figure 10). So risig iequalities will ot affect achievemet of govermet or liked door targets Few coutries routiely aalyse poverty or services split betwee rural ad o-rural beeficiaries. But data are more frequetly available by regio or admiistrative area which ofte provide useful proxies for rural data. We foud the quality of geographical aalysis of poverty varied betwee coutries. I Vietam, for example, oly pockets of extreme poverty remai, so geographical factors are itrisically importat ad well-kow. I Mozambique, where poverty is still more widespread, some geographical data are available, which provides a isight ito rural poverty rates. But, apart from district data o services to childre ad immuisatio rates, either DFID or its door parters ofte used them to moitor progress despite clear differeces i poverty betwee the orth ad south DFID is a strog supporter of goverace reform ad better public fiacial maagemet. It is also active i pressig atioal govermets for reform i idividual sectors. But DFID does ot cosistetly take a strog lie i pressig govermets to target fiaces to rural or the poorest areas. For example, i Mozambique, civil society orgaisatios were cocered about emergig iequalities, the politicisatio of regios ad therefore cetral fudig allocatios. But we did ot see evidece that DFID raised these issues formally with the Govermet of Mozambique. 10 Poverty reductio idicators ofte do ot iclude sub-atioal data Coutry Mozambique s Poverty Reductio Pla (PARPA II) Strategic Idicators Matrix Ugada s Poverty Eradicatio Actio Pla Vietam s Comprehesive Poverty Reductio ad Growth Strategy to 2010 Disaggregated idicators Total idicators: 200 Regioal/district data: 18 Rural/Urba: 2 Rural-specific: 8 Urba-specific: 4 Total idicators: 83 Regioal/district data: 3 Rural/Urba: 4 Rural-specific: 2 Urba-specific: 0 Total idicators: 136 Regioal/district: 24 Rural/Urba: 3 Rural-specific: 0 Urba-specific: 8 Details I Mozambique there are a umber of geographically disaggregated idicators, i areas such as poverty aalysis, public sector ad justice reform, disadvataged childre ad health. There are also separate targets for rural developmet ad access to water ad saitatio i rural areas. There are two rural/urba targets: oe covers the availability of cosultatios by health specialists ad the other covers the proportio of the populatio with access to computer techology. I Ugada there are idicators o service provisio for iterally displaced people i the orth of the coutry. But idicators used for the rest of the coutry are ot disaggregated, except for separate targets for rural ad urba access to water, saitatio, electricity ad percetage of titled lad. Vietam has a umber of idicators disaggregated by provice. Poverty is particularly cocetrated i rural areas ad the govermet has developed programmes to target remote regios. But more idicators relate to urba poverty tha rural poverty. Source: Poverty Reductio Strategy idicators for Mozambique, Ugada ad Vietam Tacklig rural poverty i developig coutries 17

20 part two The cotributio of projects to rural poverty reductio 2.22 Eve i coutries where most of DFID s fudig is i the form of direct budget support, sector programmes ad discrete projects remai a sigificat part of its assistace. Where projects are oly part of a coutry programme they ca add most value if they complemet the effectiveess ad outputs of other types of aid. I other coutries, projects remai the mai way of providig aid. Here, projects have particular value where govermets do ot address aspects of poverty as a matter of policy, or lack the capacity to deliver appropriate services Projects are subject to similar risks to other types of itervetio, though they have particular pitfalls ad advatages. We foud that where projects had performed poorly the reasos icluded: Problems with the capacity of DFID s parters. For example a project i Keya to feed poor childre at school was hampered by the limited capacity of DFID s parter. I Pakista DFID s support to a o-govermetal orgaisatio s primary educatio project had to ed due to poor relatios betwee the orgaisatio ad the govermet. Poor sustaiability of outputs a commo problem with projects is that the beefits may ot be permaet. For example i Keya a scheme to help farmers icrease productio ad gai better access to markets was udermied by DFID s decisio ot to reew its support to the project. This meat that services established durig the project simply eded whe fuds dried up However, good use of project parters ca help DFID to achieve its objectives. For example a project desiged to help eradicate polio i Pakista was successful i raisig the profile of polio i the coutry. It ivolved low trasactio costs for DFID as the parter agecy implemeted the project efficietly, drawig o lessos of similar projects it had completed i other coutries. I Ugada a project to assist rural people to improve their livelihoods beefited from very strog parterships with local commuities ad orgaisatios. These parterships allowed rural people to lear more about farmig techiques ad techologies. It also allowed DFID to target its assistace to specific regios of the coutry Sustaiability problems ca also be reduced by plaig for them. I Ugada we spoke to local people who were still ruig their local micro-fiace group which a DFID fuded project had helped them establish. The project had bee desiged to provide traiig ad act as a catalyst but to the leave the commuity groups to ru themselves ad also to help others i earby villages to set up their ow microfiace groups We saw evidece of projects beig used to respod to gaps i service provisio or to supplemet support to the poorest groups i remote rural areas i all three coutries we visited. For example, i Vietam DFID is supportig a project to provide primary educatio to the most disadvataged childre. I Ugada DFID has redirected aid to the orth, through Uited Natios ad other agecies, to address the basic eeds of people displaced by coflict We foud evidece from all three coutry visits that teams were usig projects to complemet the maagemet of programme aid. Coutry programmes are icreasig their focus o buildig capacity i cetral govermet to secure ad use resources efficietly. For example i Mozambique DFID has give more tha 16 millio over te years to support reform ad capacity buildig of the customs reveue authority. Parter govermets i case study coutries also emphasised that support through capacity buildig was very beeficial Decetralisatio is a key issue for may developig coutries. All the coutries we visited were devolvig more resposibility for service delivery to local govermet. I Vietam the coutry programme was workig i particular with two provices, pilotig direct assistace o a small scale, as arraged with cetral govermet. However, for most coutries, despite a strog focus o goverace at the cetre (at coutry, or for large coutries such as Idia, at state level), coutry teams are less egaged i goverace or service delivery at lower levels of govermet I the coutries we visited DFID spet more o capacity buildig of cetral istitutios tha o moitorig the outputs or ecouragig accoutability ad trasparecy to poor people. While the extet to which DFID works with civil society varies across coutries, i all three of the coutries we visited projects supportig civil society orgaisatios teded to be small i scale ad limited i coverage. Ofte the poorest groups are the least able to commuicate with those resposible for service provisio. I Ugada however, a small civil society 8 project fuded by DFID is see by the govermet as a model for wider use (Figure 11). 8 Civil society orgaisatios iclude o-govermetal orgaisatios, faith groups ad other bodies. 18 Tacklig rural poverty i developig coutries

21 part two 11 Supportig the rural poor to hold service providers to accout i Ugada As part of its Civil Society Umbrella Programme, DFID Ugada is supportig a Ugada o-govermetal orgaisatio to ru a project kow as Poverty Resource Moitorig ad Trackig project. The aim is to help ordiary poor people to come together ad exercise their voice to hold local service providers accoutable for delivery ad quality of services. We saw discussio groups i a village hall ad ope debate withi the commuity ad iteractio with local officials. Local people also told us how the project had helped them to address past problems. For example, followig a previous discussio regardig staff shortages at the local health cetre, group represetatives raised the problem with local govermet officials who sought to recruit more staff. The group has also used the forum to idetify how to use their ow capacities ad resources to address problems, resultig i the establishmet of a micro-fiace istitutio ad a herb garde for local medicial use. The project is active i five districts i West Ugada ad i some areas i North Ugada. Source: File review ad discussio with DFID coutry staff ad local people 2.30 We foud examples of poor coordiatio by doors i locatig projects ad that doors did ot always esure that more remote areas received appropriate attetio. I Vietam the Govermet cotrolled where doors operated ad was able to esure good coverage ad miimise overlap. It took this step because of past experiece of poor geographical coordiatio by doors. I Mozambique we saw a example of weaker coordiatio. I oe poor provice three differet doors were ruig similar HIV/AIDS awareess projects i a school i oe district. But they gave miimal attetio to aother district which was geographically o further from the local tow tha the first but could oly be accessed by boat. Tacklig rural poverty i developig coutries 19

22 PART THREE Reachig the rural poor through other fudig streams 3.1 I additio to DFID s bilateral programme expediture, its support to multilateral istitutios ad its fudig of research help tackle rural poverty. This Part focuses o how, ad to what extet, DFID s fudig of multilateral istitutios ad research is beefitig the rural poor. DFID s egagemet with multilaterals 3.2 The Departmet s 2006 White Paper emphasises the high priority DFID places o the iteratioal aid system i reducig poverty. Fudig of multilateral istitutios is a importat part of DFID s overall programme represetig early 40 per cet of total expediture i Its fudig of multilaterals is based o strategic priorities, political cosideratios ad orgaisatioal effectiveess, ad does ot directly cosider the impact of its fudig choices o the rural poor. Multilateral istitutios help for the rural poor rages from ifrastructure projects such as those ru by the Regioal Developmet Baks to the policy expertise ad techical stadards provided by the Food ad Agriculture Orgaisatio (Figure 12). 3.3 Few multilaterals assess their impact o rural poverty ad DFID does ot systematically try to aalyse the extet of their rural activities. The Europea Uio ad the World Bak, the two largest recipiets of DFID multilateral fudig, both have substatial rural programmes, supported by rural strategies. The work of the Food ad Agriculture Orgaisatio ad the Iteratioal Fud for Agricultural Developmet is almost etirely relevat to rural areas but the rural focus of istitutios with broader remits is less clear. Ad where a review has bee coducted, the results have bee surprisig. Aalysis published by the World Bak i 2003 suggested that the rural poor had bee losig out. It foud that its ledig to rural areas was approximately $5 billio aually from , represetig oly 25 per cet of its total ledig. This, together with cocers regardig the extet to which social sector spedig beefited the rural poor (Appedix 3), led it to adopt a ew strategy to icrease rural ivestmet ad itegrate the eeds of the rural poor ito atioal policy. 3.4 We reviewed the extet to which DFID-fuded multilaterals focus o the poorest people, ad most rural populatios ad foud wide variatios. This was ofte due to the political ature of aid allocatio ad regioal priorities. As Figure 13 o page 22 shows, some bodies such as the World Bak ad Africa Developmet Bak allocated a higher tha average percetage of their fuds to the most poor ad most rural populatios. But the Europea Uio, the largest recipiet of DFID fudig, speds a sigificatly lower proportio of its fudig o the poorest coutries ad those with highest rural populatios. 3.5 The effectiveess of multilaterals is also importat i assessig how they beefit the rural poor. DFID uses a Multilateral Effectiveess Fudig Framework to assess orgaisatioal effectiveess i areas of iteral maagemet ad coutry-level results. But some of the multilaterals which performed relatively well i terms of the proportio of their spedig that goes to rural areas or the poorest coutries, such as Iteratioal Fud for Agricultural Developmet, are rated by DFID as less effective at reducig poverty (Figure 14 o page 22). DFID fuds projects i some multilaterals to icrease their effectiveess. For example it committed 765,000 to help the Iteratioal Fud for Agricultural Developmet to ehace its performace through a programme to improve the istitutio s maagemet ad its moitorig ad evaluatio. DFID s 2006 White Paper highlights its work with Regioal Developmet Baks to ecourage orgaisatioal chage ad greater effectiveess. 20 TACKLING RuRAL POvERTy IN DEvELOPING COuNTRIES

23 part three 12 Recipiets of DFID multilateral fudig vary i their focus o rural poverty Orgaisatio Europea Uio Iteratioal Developmet Associatio (World Bak) Uited Natios bodies Africa Developmet Bak Asia Developmet Bak Food ad Agriculture Orgaisatio Iteratioal Fud for Agricultural Developmet Plaed DFID spedig millio 573 millio 163 millio 119 millio 57 millio 14 millio 2.5 millio Descriptio of rural focus Rural developmet is oe of five primary themes of Europea Uio fudig. Other themes are also relevat to the rural poor, icludig research, trasport ifrastructure, trade ad access to basic services. 17 per cet of the Bak s fuds are spet o rural developmet: this is the secod largest sector by expediture. The Bak had shifted away from a straightforward agricultural approach ad towards broader rural developmet, although this tred is beig reversed to some degree. The 2008 World Developmet Report will be o agriculture. This icludes Uited Natios Developmet Programme (UNDP), UNICEF ad World Food Programme. UNDP madate icludes rural developmet, goverace work, eviromet ad HIV/AIDS. UNICEF focuses o the rights of childre, icludig health ad educatio. The World Food Programme targets huger ad works to provide food security. Missio is to promote sustaiable ecoomic ad social developmet ad to reduce poverty i Africa. Approvals i 2005 icluded 185 millio (13 per cet of total) specifically for agriculture ad rural developmet. The Bak also speds 550 millio (39 per cet of total) o ifrastructure which has a direct effect o rural poverty reductio. The Bak targets the 1.9 billio people i Asia ad the Pacific livig o less tha $2 a day. Aual ledig totals aroud $6 billio. The Bak does ot have a specific rural poverty programme, but may of its loas beefit rural people. This is a Uited Natios techical agecy, with resposibility for moitorig food security. Work focuses o food stadards, agricultural policy ad practice ad other aspects of the rural ecoomy. This is a specialised Uited Natios agecy, whose visio is to eable the rural poor to overcome their poverty. Objectives focus o stregtheig capacity of the rural poor, improvig equitable access to atural resources ad techology, ad icreasig access to fiacial services ad markets. Source: DFID aual report (spedig plas) 3.6 I additio to expediture programmes, DFID s egagemet with multilaterals allows it to participate i, ad seek to ifluece, policy o rural issues. DFID s cetrally based livelihoods advisers i areas such as agriculture, forestry ad fisheries reported that they work maily o policy discussio, icludig with multilaterals. Key multilaterals we cosulted such as the World Bak reported that DFID s iput has bee extremely valuable i promotig best practice ad advacig techical kowledge. The Europea Commissio also described DFID s ivolvemet i their rural developmet review as both crucial ad timely. DFID-fuded research 3.7 DFID s cetral research departmet spet 116 millio o research i , 40 millio of which was spet through a growth ad livelihoods team. The 2006 White Paper committed DFID to doublig expediture o sciece ad techology research by As part of this DFID ow plas to sped 200 millio over five years o its growth ad livelihoods research. A rage of research topics such as health, educatio ad eviromet will also directly or idirectly beefit the rural poor. But our review looked maily at the impacts of DFID s agriculture-based research, a area where DFID bilateral programmes are ofte less active. Tacklig rural poverty i developig coutries 21

24 part three 13 The proportio of spedig of multilaterals i the poorest coutries Multilateral orgaisatio Europea Uio Iteratioal Developmet Associatio (World Bak) Uited Natios bodies Africa Developmet Bak Asia Developmet Bak 2 Food ad Agriculture Orgaisatio Iteratioal Fud for Agricultural Developmet Proportio of aid give to the poorest 10 per cet (%) Proportio of aid give to the poorest 40 per cet 1 (%) Source: Natioal Audit Office calculatios based o Orgaisatio for Ecoomic Cooperatio ad Developmet Assistace Committee, World Bak ad Food ad Agricultural Orgaisatio data NoteS 1 We compared multilateral fudig allocatios to developig coutries with the average per capita icome of each coutry ad the umber of poor people there. Red colourig idicates that the poorest coutries are ot receivig a proportioate amout of fudig; gree colourig idicates that they are receivig at least a proportioate amout. Statistics are ot available for all coutries o rural poverty. We have used overall poverty. We also re-ra the aalysis usig figures for rural populatio ad foud o sigificat differece i the results. 2 The Asia Developmet Bak s geographical focus is a distortig factor, as most of the very poorest coutries are i Africa. It does perform well i its level of spedig to poorer Asia coutries. 22 Tacklig rural poverty i developig coutries

25 part three 3.8 Util 2004, agricultural research was maily chaelled through two mai routes; the Cosultative Group o Iteratioal Agricultural Research ad the Reewable Natural Resources Research Strategy (Figure 15). Although both have bee successful i providig high quality agricultural research, DFID is improvig the effectiveess of its fudig desig. First it is shiftig its approach from a largely cetrally drive programme to oe which is more demad-led, 9 to ecourage greater uptake i developig coutries. Secodly i , DFID started to lik its fudig allocatios to performace ratigs for research cetres withi the Cosultative Group. DFID gave research cetres star ratigs accordig to criteria such as promotio of uptake, impacts ad beeficiaries. I , oe two ad three star rated cetres received a 40, 50 or 60 per cet fudig icrease respectively over levels. The dissemiatio ad uptake of research 3.9 The quality ad coverage of the iformatio collected o the uptake ad impact of agriculture research is patchy, although impact assessmet has bee cosiderably better uder the Cosultative Group tha uder the Reewable Natural Resources Strategy. Evaluatios have highlighted areas of both success ad weakess i uptake ad impact (Figure 16 overleaf). I respose to problems relatig to the limited uptake of research fidigs, particularly with the Reewable Natural Resources Research Strategy, DFID is committig 37.5 millio of fudig over five years to a Research ito Use scheme DFID sees its cetral research as a global public good, iteded to geerate kowledge ad expertise for a wide iteratioal audiece. Commuicatig research fidigs is particularly valuable for agriculture, give the umber of potetial beeficiaries ad the scope for this to create ecoomic growth. The difficulty of dissemiatig research fidigs to ad esurig uptake i rural areas creates a particular challege for DFID. Historically researchers have bee resposible for dissemiatig research results but DFID is ow makig efforts to promote better commuicatio betwee researchers, policy makers ad poor people. DFID ow requires all research projects to allocate at least te per cet of their research budget to commuicatio, ad a cetral team provide a challege ad review fuctio. The team also dissemiates research results usig a wide rage of commuicatio chaels icludig olie web-based services ad the mass media. DFID fuds two websites: ID21, which dissemiates iformatio o all UK-fuded research, ad Research 4 Developmet, which provides iformatio o DFID cetrally-fuded research. The websites collect performace data o how ofte the websites are accessed but performace data o how the research is used as a result is weaker DFID research aims to reach a wide rage of audieces. But DFID coutry teams ad some ogovermetal orgaisatios are still dissatisfied with the dissemiatio of cetral research to themselves, to policy makers ad to the poor. Oe orgaisatio we surveyed commeted DFID idetifies critical areas to commissio research for topical policy debates but does ot adequately dissemiate the fidigs or discuss how to use the research to ifluece. Oly two of the 25 coutry teams we surveyed were cotet with how research was dissemiated to developig coutry policy makers, although, sice research is ofte dissemiated by others, coutry teams may ot always be aware that research was fuded by DFID. Our survey foud that 55 per cet of staff used ID21 at least quarterly, but oe quarter said that they ever used it. May coutry teams reported that they did ot make use of research either for their ow programmes or to ifluece recipiet govermet policy. The research team is respodig by offerig tailored ewsletters for specific coutry offices where there is demad. 15 Research fudig for growth ad livelihoods pre 2004 Body Reewable Natural Resources Research Strategy Cosultative Group o Iteratioal Agricultural Research Fudig amout 190 millio over through projects 20 millio aually Structure The strategy cotais te programmes which 15 idepedet research cetres, based i developig fud research coutries, maaged by the Cosultative Group. Source: DFID 9 Supply drive research projects are desiged by researchers, ofte i developed coutries. Demad led projects arise from developig coutries requests for assistace. Tacklig rural poverty i developig coutries 23

26 part three 16 Impacts ad uptake of two mai research fudig streams Examples of what has worked well i research activity What has worked less well? Reewable Natural Resources Research Strategy The Crop Protectio Programme vegetable projects were effective i improvig the livelihoods of poor farmers i east Africa. The Good Seed iitiative cotaied a clear programme for dissemiatio. Better cosideratio of geder issues would have improved uptake of research fidigs. Good i-coutry relatioships would have improved dissemiatio of fidigs. The impact of water maagemet research was limited by failure to cosider how fidigs could be used more widely. Poor co-ordiatio i projects costraied uptake i crop productio projects. Cosultative Group o Iteratioal Agricultural Research Plat breedig programmes have produced moder varieties for a rage of food crops. New varieties have icreased yields ad are more resistat to drought ad disease. Restrictios i fudig led to a arrow geographical focus, so fidigs were ot easily trasferred to other commuities. The system failed to develop coheret or systemwide actios o itellectual property rights, biotechology ad liks to the private sector. What was the impact of the work? What was the extet of wider use? DFID assessed that the projects had achieved the desired outputs. Despite data limitatios, quatifiable impacts were that: 40 per cet of outputs icreased crop yield. 30 per cet geerated fiacial beefits. 20 per cet geerated a positive cost-beefit ratio. Programmes had o practical ways of dissemiatig iformatio so uptake was patchy. Moitorig the extet of use after project completio was ot see as priority. Evaluatios provide strog evidece for positive global results from ivestmet i agriculture research. A iteral assessmet estimated a potetial costbeefit ratio of 1:9. Examples of use icluded: More tha 300 ew varieties of wheat ad rice were developed Moder maize varieties are ow grow o more tha 40 per cet of cultivated area of Africa. Blight resistat barley was plated o over 100,000 hectares i Chia. Improved letil varieties were adopted by 78 per cet of farmers i two Turkish provices. Source: PricewaterhouseCoopers evaluatio of DFID-fuded research o agriculture, Research for Poverty Reductio report, 2002, ad Evaluatio of DFID Reewable Natural Resources Research Strategy, Jue Tacklig rural poverty i developig coutries

27 PART FOuR Maagemet of the aid budget 4.1 This Part cosiders how DFID idetifies ad addresses rural issues whe desigig ad moitorig coutry programmes, how they work with others ad the importace of the Departmet s expertise i reachig the rural poor. The desig of coutry programmes to reach the rural poor 4.2 DFID coutry teams, supported by headquarters, desig coutry programmes to support atioal poverty reductio strategies. DFID provides cetral guidace to coutry teams o the preparatio ad cotet of plas ad programmes. This poits coutry teams to the high level objectives set out i DFID regioal plas, but also highlights the importace of desigig coutry programmes to support coutries ow poverty reductio strategies. Coutry teams are give flexibility to idetify areas where DFID will add most value. 4.3 We aalysed the cotet of the 18 Coutry Assistace Plas curretly available from the 25 coutries covered by DFID s Public Service Agreemet targets. The extet to which the Plas explore rural poverty issues varies ad does ot correspod to the extet of rural poverty i each coutry. Most idetified key problems facig the rural poor but less tha a fifth set out opportuities for the rural poor or aalysed likages betwee rural ad o-rural areas. A quarter discussed differeces betwee rural ad o-rural areas i public service provisio. 4.4 These Plas are ot iteded to be exhaustive but rather to idetify priority areas. All the Plas we examied idetified goverace issues as a priority. Over half gave priority to health, ad a similar proportio to educatio. Sectors with a specific rural focus were less frequetly prioritised: oly a third idetified rural livelihoods, ad just oe of 18 Plas prioritised the eviromet. 4.5 Coutry Assistace Plas are desiged to complemet coutries ow poverty reductio strategies. Our examiatio of available poverty reductio strategy papers also idicated variatio i the quality ad breadth of these documets, both i geeral ad i relatio to rural developmet. More recet strategies ted to be more comprehesive ad better address issues such as rural livelihoods ad their liks with wider ecoomic growth. We foud that whe Coutry Assistace Plas are take together with poverty reductio strategy papers they address rural poverty issues to a greater extet. But the attetio paid to rural poverty was oly weakly related to the scale of rural poverty: several coutries where the vast majority of the poor were i rural areas gave the rural poor oly moderate coverage. 4.6 I respose to our survey half of coutry offices said that they always or usually pla the overall coutry programmes o a geographical basis. I some coutries we saw that some projects ad programmes were desiged to address eeds idetified i particular regios or districts. However, we did ot fid that this was cosistetly carried through to the idicators ad targets they use to moitor progress sometimes because data were ot available. I Cambodia ad Malawi less tha te per cet of idicators ad targets were broke dow by regio, compared with aroud fifty per cet for Idia ad Nepal. Usurprisigly, teams workig i larger coutries such as Idia used disaggregated data more frequetly tha those operatig i smaller coutries such as Malawi. Uderstadig other doors i coutry programme desig ad maagemet 4.7 Door coordiatio ad parterships are icreasigly importat for achievemet of targets, although our survey foud that oly two thirds of coutry teams reported satisfactio with parterships o rural issues. Coutry teams have a good geeral kowledge of the sectors other doors are workig i ad their aid programmes. However, the depth of kowledge about what others are doig, their geographical focus ad where their comparative advatage lies, is variable. TACKLING RuRAL POvERTy IN DEvELOPING COuNTRIES 25