26 June 2010

Aid in the UK: Ring Fenced or Wrung Out? Expanding the Evaluability of Aid

With most government departments in the UK facing 20-25% cuts over the next year or so, DFID employees are sheltering behind a funding ringed fence. They must be pinching themselves at their good fortune. But their privileged position also forces them to be as penny-pinching as possible--if not, other departments will do the pinching.

But how sturdy is the fence and are there any gaps through which resources can leak out?

The fence is coming under increased fire. The recent article in the Daily Mail was particularly scathing. These attacks, in turn, generate stock responses about aid's all-conquering properties.

In an era where the aid debate risks becoming ever more polarised we are in need of nuance. But for busy UK policymakers nuance is about as welcome as England having to face Germany in the round of 16 (I suspect this may not hold for German policymakers).

For most aid policymakers the three tests for aid spending seem to be:
  • can aid deliver the output or outcome?
  • can these outputs or outcomes make a long term difference?
  • can impact be demonstrated in a relatively short time period?
You can see the potential contradictions. It is difficult to show the short term impact of things that can make a long term difference (e.g. investments in innovation in science and technology). Things that aid can deliver (e.g. more children in school) may not make a long term difference (e.g. if class sizes are so large that the average student's ability to learn diminishes). Things that aid can deliver (e.g. stronger health systems) can present problems for the demonstration of impact (e.g. in terms of lives saved).

What can the development community do to make these contradictions more visible but less severe?

One key contribution is to inject some nuance into the impact evaluation debate. There are 5 dimensions of this debate that are woefully under-represented. A strengthening of them would make it easier for policymakers to contemplate more nuance:

Question the questions
The effort required to deliver a convincing answer often dwarfs the effort put into thinking about whether it was the right question to answer in the first place (e.g. why has no-one asked whether conditional cash transfers make sense in sub-Saharan Africa? Most of the effort has been spent on answering if cash transfers have an impact on hunger. Of course they do.). This means consulting with a wide range of stakeholders about the questions worth asking (see "this book fills a much needed gap").

Deepen the evaluation story
The "randomistas" and even the quasi-experimentalists often answer the question "does it have an impact?", sometimes "for who?", but rarely "why?". This requires innovative issue-driven blends of quant and qual.

Broaden the portfolio of what an be evaluated
It will always be more challenging to evaluate policy changes that generate consequences that are indirect and lagged, for which indicators are not yet developed, and for which all the pathways of change are not yet fully understood. But we must help to expand the set of things that are "evaluable" by developing methods to consider these dimensions.
Refine impact
Your idea of success is probably not the same as mine. Add in experiential, cultural and value differences and the gap may widen. Getting multiple views of success from different stakeholders will help to home in on what really counts and help uncover unintended consequence land mines further down the road.
Increase the genuine portability of evaluations
Most methodologically rigorous analyses--whether quant/qual or some blend--have, by definition, high degrees of internal validity. They are fit for purpose in the context in which they are applied. But by building in more variation and diversity - either within the context or across it by, say, systematic case study meta analyses--we can make plausible guesses about how portable an intervention is and the associated risks of assuming it is.
In short the development research community must nuance the impact debate, not disown it.
If we do the latter, then aid will only be used for things where it is easiest to demonstrate impact and the rest will be wrung out of DFID, despite the ringed fence.

We need to expand the radius of evaluability if we are to help protect the parts of the aid spend that may do the most good.

22 June 2010

Assessing the Gleneagles Commitments

Last month One.org released their DATA REPORT 2010: Monitoring the G8 Promise to Africa. It just hit my desk today.

Key findings:
  • G7 commitments on aid to Sub-Saharan Africa have been more than half met. The target increase for 2009 was about $18bn, with actual G7 increases standing at $9.9bn.
  • UK is the star performer on aid in terms of increasing proportion of gross national income to aid, and the US is the G7 country with the highest increase in absolute aid (but with a lower increase in the proportion of GNI to aid than the UK)
  • not enough progress on aid quality
  • investments in agriculture, primary education, malaria, HIV/AIDS and child survival are rated as good, but water and sanitation have lagged behind.
  • the G7 has failed on trade, but G7 foreign direct investment has increased
  • the G7 has delivered on some debt cancellation, but not all donors have followed through
  • lessons learned: need to engage with new partners (e.g. new non G7 donors); accountability of donors and African governments is key; Africa is "teeming with new opportunity"
  • what is needed beyond 2010: strengthening the accountability of African leaders to their citizens; developing initiatives that regulate natural resource extraction and capital flight; fairer trade and investment rules - globally and within Africa; investments in renewable energy; develop smart aid mechanisms for areas in which success is lagging - e.g. maternal health
  • the TRACK principles for aid are introduced (Transparent, Results-oriented, Additional, Conditional, Kept)
Quick reactions?
  • An impressive amount of analysis in this report (the last but the meatiest in the series)
  • Still too much of a focus on aid--probably because this is the easiest to monitor and has some good news. But I would have liked to see more on trade and investment
  • The K in TRACK will be the most difficult to monitor and is the area where most innovation is needed
  • The report would be so much more powerful if it were written by an African group of analysts and advocates
  • The way forward says that no group of countries have put forward a comprehensive and collective plan focused on how to help support the vision of "an Africa driven by its own citizens", but it would have been useful to provide a forum in this report for African voices to say where and how they would like that support to be focused.

This is the last in a series of very useful reports, but I hope the next set will be less about aid and more about development and less about donors and recipients and more about development partners. I also hope it will be led by Africans.

16 June 2010

The Taxing Issue of the Tobin Tax: What Does the Evidence Say?

The Tobin Tax is a proposal to tax financial transactions and is named after the Nobel prize winning economist, James Tobin. Its advocates say financial transactions taxes will reduce market volatility thereby increasing investment and will raise much needed revenue for public goods. Detractors say they are unworkable and that in any case we should be working to lower not raise transactions costs.

So who is right? Hot off the press comes an IDS review paper written by Neil McCulloch and Grazia Pacillo and supported by DFID.

The paper reviews the evidence from around 100 papers on these four questions:

1. What is the impact of financial transaction taxes on volatility?
2. Is a financial transactions tax feasible?
3. How much money would a financial transactions tax collect?
4. What is the incidence of such a tax? In other words, which groups in society would it affect?

Will a Tobin Tax Reduce Volatility?

The theory here is that a tax on each transaction represents a much heavier relative burden on a short term than a long term investment, hence incentivizing long term investments, which are thought to lead to greater stability, less uncertainty and higher overall investment. Theoretical and simulation work confirms this intuition. However, the empirical evidence suggests no decrease in volatility and in a few cases, even an increase.

Is a Tobin Tax Workable?

The devil is in the details here. Which financial instruments to tax (futures, swaps, equities, bonds, spot transactions)? Should the tax rate be the same for all instruments? Should taxes be national or market based? At what point should tax be imposed in the system—at deal, at booking or at settlement? Do all countries have to act together? Although these questions are not easy, there is a large literature on these questions and the consensus is that a Tobin Tax could be successfully implemented.

How Much Money Would a Tobin Tax Collect?

There is a huge variation in the estimates, depending on the resources liable for tax, the tax rate applied and the assumptions about lower volumes of trade as a result of a higher price of trading. The paper constructs a range of meta–estimate of revenue potential. For example a tax equivalent to 10% of transactions costs applied to forex, equities and derivatives would raise $415 billion world-wide and $135 billion if only applied in the UK. If a tax rate of 0.005 % was applied only to spot transactions it would raise $26 billion globally and $11 billion in the UK only.

Who Would be Affected by a Tobin Tax?

Would this really soak the rich? Or would it simply be passed on to consumers? The evidence base is weakest here, but given the likely higher cost of capital, the authors tentatively conclude that the Tobin Tax would likely be no less progressive than other forms of taxation. For me, this is the weakest section in an excellent paper.

What is really interesting is that we get a sense that the authors were surprised by their findings. The review made them more predisposed to a Tobin Tax than they were prior to having done the review. For why that is so you will have to email them yourselves!

Climategate and the 3 Tests of Trust

I attended a Panos London Board meeting yesterday. Panos London is an NGO focusing on communication: voice, dialogue, ICT and media in areas such as climate change and public health. It is doing a lot of innovative work and I urge you to check them out.

At the end of the Board meeting I participated in a panel on "From Emails to Firestorm: the role of the Media in Climategate", set up to coincide with the completion of the UN Framework Convention on Climate Change meetings in Bonn.

Six months on from Copenhagen I argued that the "climategate" fiasco set up 3 tests of trust for the science community -- and that we failed two of those tests.

First, the trust in the credibility of the science base. This was attacked for sure, and took some hits, but my sense is that it emerged bloodied, not bowed. That's largely because of the multi-sited nature of the IPCC. It's not seen as a rich country club--it brings together perspective from all over the world, and because of that roundedness, it is more resilient to attacks from the media and elsewhere. So I think we passed that test of trust--just about.

I think we failed the second test, however, and that is the test of communication. Science is not easy for most scientists to communicate to nonscientists, and much of the furore could have been prevented and dampened with better communication: why were the data "altered"? What does "altering" mean? What are the uncertainties around the conclusions? Which phenomena can't be attributed to climate change? If you don't agree with me does that mean you are against me? When public opinion is with you these questions seem less important, and when the tide inevitably turns you realise how ill-prepared you are. We need to spend more time and care in dialogue with the media, resisting the temptation to polarise the debate.

Third, we failed the information openness test. By not releasing publicly funded climate data it looked as though something was being covered up. The scientific process is also stymied by this. No-one is covered in glory by this withholding. Scientists (including social scientists) have to realise that they do not own the data--especially when it guides public money spent on public goods. They may have spent a long time getting it into the necessary shape to analyse it, but surely their rights are to first analysis, not lifetime patent. The story cannot be about the withheld data, it must be about what the data say to a range of different researchers.

If there was one thing the research councils and DFID could do to vastly increase the value for money of research they fund and build trust with the media and public, it would be to incentivise open access data.

15 June 2010

A New Manifesto for Innovation, Sustainability and Development

Today the Royal Society hosted the launch of the STEPS Centre Manifesto on Innovation, Sustainability and Development. STEPS is supported by the ESRC and hosted by IDS and by SPRU at the University of Sussex.

The Manifesto draws on work that STEPS has done over the past 4 years and over the past year it has been co-developed in over 20 roundtables from around the world, a process convened by Adrian Ely of SPRU. The Co-Directors of STEPS are Melissa Leach and Ian Scoones of IDS and Andy Stirling of SPRU.

The starting point for the Manifesto is the massive disconnect between ever expanding volumes of research and development in science and technology (S&T) and the persistence of poverty, social injustice and environmental damage. How can these resources be made to work for goals that go beyond commerce, beyond economic growth and beyond simple private gain?

The Manifesto focuses on the 3Ds of S&T processes:

Direction – often we think that the dominant pathway of innovation is the best one. But often this is simply a reflection of path dependence in investments or a manifestation of the power held by those who support the pathway. In reality there are many candidate pathways if we can only open up spaces for them.

Diversity – this has to be deliberately constructed – otherwise the most powerful will drown out the rest. Diversity is important because it is a hedge against an uncertain future and it can throw up creative and previously unimaginable questions, pathways and options.

Distribution – diversity, yes, but what kind of diversity? The poorest and most marginal are those excluded from choices about which science and technology is prioritized. These voices must enter the debate in ways that give them some chance of influencing the debate.

The 3Ds generate an action agenda in 5 areas that shape science and technology processes:

• Agenda setting—who decides what are the key questions to address through S&T?
• Funding—what are the institutional incentives to align public and private S&T spending towards poverty alleviation, social justice and environment?
• Capacity development—in particular of “bridging professionals” that can connect science and society
• Organising—invest in organizational arrangements that promote bridging
• Monitoring, Evaluation and Accountability—measure the effect of S&T on things we really care about, report funding allocated towards development goals, report back to national parliaments on the 3 D impacts of investments in S&T.

Comments from the conference participants were very positive:

• The emphasis that there are choices in S&T and that they are as much political as technical
• The emphasis on diversity of pathways to innovation and the creation of deliberate portfolios of innovation
• The ambition of the manifesto was much appreciated—here was a clear break from business as usual

There were words of warning too:

• Watch out for the over-reliance on jargon
• Learn from past experiences (good and bad) such as the Millennium Ecosystems Assessment
• Don’t let engagement with policy detract from the content

Overall, the Manifesto team was commended for its vision, energy and inclusiveness. Many opportunities for influencing were noted (ranging from the UK’s Research Excellence Framework to DFID’s Emerging Technologies funding window to the new Government’s focus on transparency and accountability).

The key question for me was “does the Manifesto action agenda rely on a powerful actor seeing the light?” If it does, how will this happen? Can it be accomplished by mobilizing civil society? Or will the action agenda have to bypass the powerful status quo organizations and rely on change from the emerging voices who are at the margins now?

The STEPS team knows that these kinds of changes don’t come quickly and they were clear that this report is just one moment in a longer process.

The Chair of the ESRC, Alan Gillespie, reminded us how long change processes can take. In reflecting on the original Sussex Manifesto from 1970 he noted that the report called for the UN to establish clear outcome orientated development goals. The MDGs were established 30 years later.

I encourage you to keep tabs on this important social change process at http://www.anewmanifesto.org/

11 June 2010

Is the World Cup Half Full or Half Empty?

Being born in South Africa I had to find a reason to get a cheesy picture of the World Cup into the blog.

It's fascinating to see how much stuff has been written about World Cups and economic development. It seems to fall into two camps:

1. What are the economic determinants of World Cup success?

2. What are the economic returns to hosting a World Cup?

On the determinants, some very serious econometrics have been dedicated to this issue (see this one from the International Association of Sports Economists!). Population seems to matter more than GDP/capita and past performance in Cups seems to matter more than the proportion of professional footballers in the population. Being the host country is important for success. Goldman Sachs also get in on the act with their World Cup and Economics Report--they find little correlation between a country's 2009 Growth Environment Score (GES) and FIFA football rankings although improvements in the GES are correlated with improvements in the FIFA rankings. Their picks for the semi finals? England, Argentina, Spain and Brazil.

More important, what are the economic returns? This is more serious but very difficult territory. What has been the infrastructure addition? Is it multi-use? Was it geared towards labour intensive job creation? What has been the increase in tourism? Have football tourists spent more than non-football tourists? What have been the spillovers in terms of kickstarting sport, tourism, and opening up the country to new investments? The evidence is all over the place (where are those systematic reviews when you need them?).

For a country like South Africa, with unemployment rates of about one third, this is no joke. We know that public works projects can have very different impacts on poverty depending on how they are designed (some work I was involved in in the late 90s showed that for 100 public works projects in Western Cape, the ones led by communities were the most cost efficient at transferring resources to the poorest), so it will be interesting to see how many jobs were created and if the differences at the 10 stadium sites and economic hinterlands can be explained by process, institutional and infrastructure design features.

However the most interesting paper I found from a quick look argues that it is the non-economic impacts, especially the internal "psychic income" (estimated using contingent valuation technique) that really matter when economic communities invest in large sports events. Civic pride, identity and a sense of belonging really seem to matter.

But the economists always seem to win out when it comes to these kinds of valuations, and I had to smile when, at the end of a long serious paper on the impacts of the 2006 World Cup in Germany,Wolfgang Maennig states " To end on a positive note, mention must be made of a reported increase in the birth rate nine months after the soccer World Cup – anecdotal, although not yet statistically confirmed. The World Cup is seen as the cause, because many people in Germany were led by the relaxed, happy atmosphere of the World Cup to forget their cares and stresses … In view of the low birth rate in Germany, this could be not only one of
the finest, but also one of the economically most long-term effects of the 2006 World Cup."

I hope you enjoy the tournament and the positive image of Africa that it will surely present.

My pick: Spain. Any team that cannot find a regular place for Cesc Fabregas must be seriously good.

10 June 2010

Can DFID Leverage Reform in the Multilateral Aid World?

DFID, as part of its review of spending has launched a review of its multilateral aid spend.

Is the UK taxpayer getting value for money from 30 or so global organisations? Let's look at some of the potential criteria.

Transactions costs. Channeling money through multilateral aid agencies may reduce transactions costs for recipients and for bilateral donors. But on the ground, countries still have to deal with 30 or so bilateral donors and 30 or so multilaterals. In addition the UK taxpayer may simply be paying two sets of administrators--in the UK to get the money out and in Washington, Rome and New York to allocate the money.

Ownership. Can multilaterals support government systems better than direct budget support? I'm not sure. And I'm not even sure the best way to find out-who to ask? Civil society in the South? Recipient Governments? The new Aid Watchdog?

Impact. It is harder to demonstrate to donor citizens that their taxes are having a particular effect when resources are pooled in multilaterals. Interesting to note that the main point made by the International Development Select Committee when they reviewed the DFID-World Bank relationship in 2008 was that the World Bank needed to do better on making impact a central part of how it measured its effectiveness.

Credibility. This depends on governance and representation. While the heads of multilateral agencies bypass standard human resource best practice (job and person description, open competition, selected on merit by internals and externals) it is hard for these agencies to lecture on governance. On representation, change seems to be happening very slowly.

It seems to me that the multilateral agencies should prioritise their efforts on things that the bilaterals cannot do or at least cannot do as well. This means focusing more on:

* dealing with collective action failures around climate, trade and security--all the while making sure that they are fair and focus on poverty reduction
* setting norms for our collective visioning about the kind of word we want to live in
* setting standards that promote sustainable and equitable growth
* developing data sources and methods that allow us to measure and monitor the things we really care about
* being highly alert about and responsive to disasters

Perhaps the multilateral review can incentivise some movement along these lines.

There are lots of people out there who are much more knowledgeable than I am on these global public goods issues. I would love to hear from you.

09 June 2010

What is the Role of Faith in Development?

The events of the past 2-3 years should have re-focused the development community's attention on ethics, faith and morality. The Global Financial Crisis has made a few of us turn our attention again to the values underlying the global economic system. Climate change has highlighted the purpose of consumption int he rich countries, and has forced us to consider tradeoffs between our consumption opportunities and those of future generations.

In this spirit, the Re-imagining Development Initiative held a roundtable last week with 6 leaders of international faith based organisations based in the UK . It was a fascinating meeting. Three things emerged during the course of the afternoon:

1. these faith based organisations clearly felt that trust in outsiders is vital if outsiders are going to have any traction, and that being identified as "faith based" is very helpful in establishing such trust quickly--even across faiths.

2. the organisations are actively questioning the very nature of progress. For example, CAFOD, Tearfund and Theos are involved in a project considering Human Flourishing in development which will be launched in the Autumn. Here is one background paper from Bath University on this issue.

3. they feel they have a lot to contribute to the current debate about the effectiveness of aid. Through their strong local connections and trust dividends they think they can contribute a lot to assessing impact--both in terms of defining impact from the recipient perspective and in terms of getting feedback on what is and is not working.

The ideas from this roundtable will be more fully reported back to this group and will influence the Reimagining Development Report due out later in the year.

Also later in the year is the Development Studies Association Annual Conference (November 5, in Church House, Westminster, London). The theme is Values, Ethics and Morality. There are already some terrific sessions lined up, including:

* Morality of the Media
* Implications of Religious Beliefs for Development Thinking, Policy and Practice
* Behaviours of Emerging and Non-Traditional Donors
* The Politics of Happiness
* Multinationals and Equitable Sustainable Development

For more information contact the Executive Director, Frances Hill, at admin@devstud.org.uk

08 June 2010

Dear Prime Minister

This is in response to David Cameron's June 3 article in the Guardian “Our aid will hit the spot”.

Dear Prime Minister,

I welcome your focus on greater transparency and accountability for overseas aid Most aid resources are spent in countries that do not receive much attention from the UK media or the UK public and so this commitment to be on the front foot is much needed. Helping communities report on whether the aid reached them is a good way of helping mend the broken feedback loop in international development. Asking these communities if the aid was working would be even better.

But my worry about your approach is that it will slant aid towards items for which it is easy to demonstrate delivery. In others words “the things that aid can best deliver and that can make a real long term difference” may not be things that are easily assessed.

Take the example of declines in UK maternal mortality that you cite. Research shows that those declines were attributable to the quality of care from midwives for home birth deliveries. Where deliveries were by physicians in hospitals, often using chloroform and forceps in otherwise uncomplicated births, maternal mortality was much higher. So high maternal mortality was less about knowledge per se but about whose knowledge counted, and that is about power structures within the health system. In the UK these vested interests had to be challenged by the creation of a powerful midwifery service that you mention. It will be troublesome to evaluate UK aid investments designed to, for example, rebalance power structures in health systems in the currency of “lives saved or improved” and may inadvertently direct resources to lower hanging fruit.

Hard headed about aid, yes, but not if it avoids the hard challenges. The biggest spots that aid needs to hit may be the hardest to target.

06 June 2010

Has Social Protection in Africa Lost Its Way?

Social protection refers to a set of interventions that seek to help families protect themselves against shocks, protect the assets they have, and climb out of poverty.

A new report by the Centre for Social Protection argues that, in sub-Saharan Africa, social protection may have lost its way.

Despite lots of donor investment, many African governments remain reluctant to embark on the high recurrent costs of social welfare and the political irreversibility of its introduction.

The report suggests a change in emphasis. Instead of introducing a plethora of pilots that use imported recipes, focus on the objectives of social protection--vulnerability and poverty reduction--and build on existing government initiatives, innovating and experimenting with these as they are strengthened. Importantly, the report recommends that African citizens are more involved in the upstream design and the downstream evaluation of such programmes. It is noteworthy that the biggest global successes in social protection come from Mexico and Brazil and these were home grown ideas, financed by a mix of domestic and external finance.

But the picture is not that simple--it's not as if there are legions of African leaders straining to get their homegrown social protection policies financed. A report released last week from Kofi Annan's African Progress Panel highlights the disconnects between African countries' GDP/capita growth rates and the continent's lack of progress in poverty reduction. This, it is argued, is the result of weak leadership, capacity and governance. This puts a premium on the donors being politically nimble and switched on to the policy process.

Country-led opportunities for strengthening social protection in Africa will not be commonplace. When they arise, the donors must be ready--not to produce their own solutions but to support the reformers working in the countries they are trying to help.

03 June 2010

When Can and Can't Business Save the World?

I had a beautiful review of Mike Edward's Small Change: Why Business Won't Save the World ready for you and then I accidentally deleted it. Oh well, here is the short version.

As with any Mike Edwards book it is thought provoking and beautifully written. It argues that:

* businesses need to be more like social movements, not the other way around. In other words businesses may be good at delivering technologies, seeds, schools, irrigation, vaccines, but they are not good at being transformational in terms of shifting power relations between various groups. And they have little incentive to change a system that makes them powerful enough to consider being philanthropic.

* there are many types of engagements of business in social change: social entrepreneurs, social enterprises, corporate social responsibility, venture philanthropists, total corporate social responsibility (see Nestle's creating shared value concept from my previous blog)--he does a good job of creating a typology of them all.

* many social movements and community based organisations have more "business DNA" than many businesses--creating change on a shoe string means taking risks, effective communication, establishing a market niche, scanning the external environment very closely, keeping overheads very low, hiring motivated staff and supporting their development and working through networks.

* he suggests a number of ways businesses can improve their social contribution (to all stakeholders, not just shareholders): invest in grassroots organisations with a track record of stimulating positive social change, set up social funds which coalitions of government, business and social movements can work together in using, and apply corporate social responsibility to their lobbying and advertising work.

* despite the title of the book he suggests that there will be some ways in which some types of businesses can contribute more to positive social change and that we should look for them--this is something he and the new DFID team could agree on!

I have a few quibbles.

First, the book focuses mainly on philanthrocapitalists (the new foundations being generated from late 20th century capitalism) not businesses in general.

Second, Edwards seems to deny the transformative potential of the provision of technology, schooling, health, social protection. Yes, these things don't change the rules of the game in terms of who decides who gets what, but they can lead to more empowered individuals who can find their own ways, individually or together, of challenging unjust systems.

Third, the evidence base he cites is thin. I suspect this is not Edwards' fault as he is a careful analyst, but more (again) a dearth of research in this area--see for example the new IDS report (right) by John Humphrey and Lizbeth Navas-Aleman on Value Chains and Poverty Reduction--the vast majority of the 30 donor-led value chain interventions did not conduct a poverty impact.

Nevertheless, this is a thought provoking book, that will stay with you--after all, I have written this review from memory.

01 June 2010

How Do We Know if Businesses are Doing Good?

For some time now I have been trying to make a greater effort to listen to and interact with folks from the private sector who say they are interested in international development.

This is a set of people who I am not familiar with (I have never worked in the private sector) but a set that holds several of the keys to accelerating and decelerating global development.

The week before last IDS organised a public event at the Brighton Festival, a month long interaction between artists, scientists, and the general public. We invited Chris Davis from the Body Shop and Kate Harrison from Comic Relief.

Then last week I went to a Creating Shared Value Forum sponsored by the International Business Leaders Forum (IBLF) and (gulp) Nestle.

Chris Davis of the Bodyshop basically said that businesses were making am more positive contribution to society, that this was being driven by consumers, and that governments needed to do more to incentivize businesses towards more positive social and environmental outcomes, by for example investing in the start up costs of green technologies, and by incentivising differential maturation of company shares. He also said he wanted corporate social responsibility to engage more with climate change. He said the Body Shop was maintaining its commitment to doing good--but when I asked how the general public would know that, he did not have a ready answer. Admittedly this kind of credible, transparent signalling is difficult to do, but if corporations really want to build trust, this is what they need to do.

I went to the IBLF/Nestle meeting because I was curious. Ten years ago I would not have gone--had things changed? Reports consulted ahead of time, e.g from the Boston College Centre for Corporate Citizenship suggested yes. Nestle have moved from CSR (Corporate Social Responsibility) to Creating Shared Value (CSV). CSV says that for Nestle to be successful in the long run it "must consider the needs of two primary stakeholders at the same time: the people in countries where we operate and our shareholders". The company has aletered its articles of association to reflect these changed aspirations (although I have not checked it). The company seeks to invest in the overlaps of interests in these two areas. Nestle have identified water, nutrition and rural development as the 3 areas where this overlap has the greatest potential.

The conference was a disappointment--its clear that the organisers are out of touch with the cutting edge of developments in these areas in terms of the questions they posed and, in some cases, the panelists they invited. Moreover the idea of CSV seems to be "we will work in the overlaps where they exist" rather than "we will work to expand the areas of overlap".

Michael Porter of the Harvard Business School was present and characterised CSV as the next stage of capitalism--a way that businesses can rebuild trust after the financial crisis.

I was in a session on nutrition, and suggested that businesses could do the following things to advance nutrition:

Non-food businesses, helping the nutrition community in
  • Learning--about scaling up, about messaging
  • Linking--people to central strategies through ICT innovations (Nutrition Watch)
  • Leveraging--helping nutrition leverage non-nutrition resources
  • Leading--helping develop programmes for nutrition leadership
Food businesses should
  • Focus less on the Billion Bottoms (overweight) and more on the Bottom Billion who are hungry.

  • Unlike Big Tobacco, Big Food can actually produce healthy as well as unhealthy things. There is a real gap in the market for a Body Shop or John Lewis good corporate citizenship model of food production and processing.
But I was left with the same question I asked at the Brighton Festival--how do we know if CSV is causing Nestle to do anything differently?

Until independent accountability and transparency indicators are developed, we don't.