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World Development Report 2004 "Making "Services Work For Poor People"


September 21, 2003
Dubai, United Arab Emirates

PROCEEDINGS

MR. HAY:  Good morning, everyone, and welcome to the launch this morning of the World Development Report 2004, "Making Services Work For Poor People."

Just before I introduce the members of the panel up here, let me ask if everyone would turn their cell phones off or, at the very least, put them on vibrate, and if you do have to make a call, perhaps just leave the room out of courtesy to the people near you.

And the other bit of housekeeping to pass on is that the report and the contents of the press conference here this morning are embargoed until midday here in Dubai.  So that's 12:00 midday here in Dubai.

So, without any further ado, let me give you some brief introductions before we get underway.  The gentleman on my left may be familiar to a good many of you--Nick Stern.  He's the Chief Economist of the World Bank.  And this may be, on a poignant note, one of his last press appearances on behalf of the Bank because in a matter of days, Nick, you're going off to join the U.K. Treasury to assume the position of Second Permanent Secretary and Managing Director for Budget and Public Finances in the U.K. Treasury.

On Nick's left is Jean-Louis Sarbib who, up until a few days ago, was the Vice President for the World Bank's Middle East and North Africa Region and has just become the Senior Vice President for the Human Development Network of the World Bank in Washington.

On his immediate left is Shanta Devarajan.  He's the Director of the World Development Report 2004.  So, in other words, he and his team have written this report.  And Shanta also has changes afoot in his tea leaves, and towards the end of the year will thereabouts go off and become the new Chief Economist for South Asia.  For the moment, he's the Chief Economist for the Human Development Network.

So, without any further ado, let me ask Nick Stern if he'll give us a sense of the global context around this report.

Nick?

MR. STERN:  Thank you very much, Phil.  I do actually have two more weeks to say outrageous things in my current position as Chief Economist.  So I'm looking forward to that.

The big picture for this report is the participation of poor people in the whole story of development.  If poor people are to have a chance to participate in and help drive growth, then, it's crucial that they have access to, and can make use of, the basic services, and particularly we think of health, education, and water, which are the main topics of this WDR.  So this is about the participation of poor people in the whole story of growth and development.

Now, what the report shows us is that we have learned a great deal about what is involved in making services work for poor people.  It is difficult.  There have been failures, but we've learned a lot from the successes, as well as learning from the failures, and the evidence is set out carefully and systematically in the World Development Report.  In my view, it's a very strong example of what evidence-based policymaking is all about.

And if we can discover what works and what doesn't work, on the basis of evidence, then we're in a position to scale up what does work and avoid what doesn't work.  And that's the way in which we can move to get the results on scale which are fundamental, if we're to have any chance of meeting the Millennium Development Goals.

Third, if we think about what's involved in making services work for poor people, it's clear that both aid and growth are important, aid and growth because they will generate the resources that are going to be necessary if we're to make services work for poor people.

But just as important, and this is the main thrust of this report, is how we use resources.  We can use resources well or we can use resources badly relative to the objective of making services work for poor people.  And what the report tells us is that we know quite a lot about how to use resources well relative to that objective.

And I said that the purpose of all of this is the goal of enabling poor people to get involved in development.  In fact, the message of the paper, the message of this report, is that by involving poor people in the process of services, you will actually generate much better services.  So the involvement of poor people is not only the broad goal, it's also the means by which services will be improved for poor people, and that is really the central message of this report.

Now, Shanta Devarajan, who is the Director of the Report, will present the basic findings, and Jean-Louis will tell us about how some of the lessons of this report apply to the Middle East and North Africa.  And that will be a very important example of another of the central messages of this report, which is that, whilst there are basic principles--I've already stated one, the central one, the involvement of poor people--whilst there are central principles for making services work better for poor people, there is no single model.

There are broad understandings, broad lessons, but there's no template, there's no single model of how we do it, and the MENA Region, the Middle East and North Africa Region is a clear example of that.

So I think that this WDR is of crucial importance to the arguments concerning where we now stand on accelerating development and making progress towards some Millennium Development Goals.  It's not only an important contribution in its own right about how to make services work for poor people, it's a fundamental piece of the argument about why we need extra resources.

We're not credible in asking for extra resources, if we cannot also show how those resources can be used well.  But I think we can show how those resources can be used well, and I think that is why the current very low levels of aid are so regrettable.

Forty years ago, the rich world, when it was much poorer than it is now, was giving something like 0.5 percent of its GDP in aid.  It now gives just over 0.2 percent of its GDP in aid.  We know much more about how to make aid work well, and this paper, this report here, is a very important example demonstrating that knowledge based on hard evidence.  Developing countries have created conditions where aid has never been more productive by improving their policies and governance.

So aid has never been more productive, but the level of aid, as a fraction of rich-country GDP, has never been lower.  That, in my view, is a very sad position, and we must hope that the rich countries, on the basis of this hard kind of evidence, will move much more strongly to increase aid.

Thank you very much.

MR. HAY:  Thank you, Nick.

Jean-Louis Sarbib?

MR. SARBIB:  Thank you very much, Phil, and good morning, everybody.

Let me just talk and change hats in the middle of my talk.  I'll start first about our experience in the Middle East and the North Africa Region, which very much bears out what Nick just said about the importance of using resources efficiently.

I think it is no secret that the countries in the Middle East and North Africa have made very generous investments in health, in education, in water.  At the same time, I think as we're hearing in the various seminars that the results have not always been commensurate with the efforts that have been made, and in large part this underlines the importance of the efficiency of services.

And as we look through the region, we can see again more evidence of what Nick just said and what the report documents even more fully, which is that the participation of people makes a difference in the efficiency in the delivery of services.

Whether it is water user associations in Egypt which are improving the proportion of irrigation water that actually gets to the crops, whether it is education, the participation of parents in education reform and the delivery of basic educational services in Yemen, whether it is again the role of community associations in the improvement of water harvesting in the western and northwest province of Tunisia, whether it is the participation of population in the health clinics in Yemen and Morocco, the participation of people which serves in the way in which the report documents very well to improve the accountability of the people in charge, to make sure that people have a sense of responsibility for what happens, I think all of these really emphasize the fact that the delivery of services when associated to the participation of the people who benefit from those services is a much more efficient way of doing business than just about anything.

So in these meetings, we're going to talk a great deal about the importance of having the Monterrey Consensus, the emphasis on the Millennium Development Goals, and making sure that the funding that has been promised whether it is for Education for All or fighting HIV/AIDS or meeting the health and the water Millennium Development Goals, that this funding is there.  But I think what this report says is that as Nick emphasized we can be much more confident that this money, this funding, will achieve the results that we all would like to see if we go in the way that is adapted to each country through participation, through making poor people participate, that will improve the results.

And this is true in poor countries.  This is true in middle income countries, as the example of MENA amply demonstrates, and I would even venture to say that it is true in rich countries where in the areas that are the most backward in rich countries, also the example of the results through participation are true from some of the poor neighborhoods in the United States, to some of the poorer regions of Europe.

So I think this report is making a very important contribution, and in my new role as head of the Human Development Network of the World Bank, I really hope that this notion of participation, this notion of looking at the poor as actors in their own development, makes its way very much not only in the programs supported by the World Bank, but as a help to mobilize the resources needed so that the Millennium Development Goals do not remain an empty promise.  Thank you.

MR. HAY:  Jean-Louis, thanks very much.  Shanta Devarajan, over to you.

MR. DEVARAJAN:  Thanks, Phil, and thank you, Jean-Louis and Nick for an excellent introduction to the report.  It's my pleasure to introduce the report to you and give you some if its main findings.  Let me start by saying that our messages are both positive and negative.  Too often key services such as health, education, water, sanitation, electricity, are failing poor people in access, in quantity and in affordability.

But as Nick mentioned earlier, we have strong examples of where services do work for poor people, and the common feature we find among these examples is that they all have to do with empowering poor people, and empowering them in three ways.  One is to give them the ability to monitor, encourage and where necessary discipline service providers.  The other is to raise their voice in policymaking.  And finally, to give incentives to service providers to serve poor people.

Now, let me try to corroborate some of those messages.  First, what do we mean by services failing poor people?  Well, one simple observation is that public spending and these services are fundamentally a public responsibility, unfortunately, public spending in say health and education is typically benefiting the non-poor or the rich rather than the poor.

Here's a sample of the incidence of public spending.  That is who benefits from public spending in health and education in a sample of countries, and the red line there represents the share going to the richest 20 percent of the population, the richest fifth of the population, and the blue line is the poorest, what goes to the poorest fifth of the population.

As you can see, in a poor country like Guinea, 48 percent of health spending benefits the richest fifth of the population, and less than eight percent benefits the poorest fifth of the population.  Now, as you can also see from there that primary spending and primary health and primary education spending is slightly more pro-poor.  And many countries reallocate spending towards primary schools and primary clinics as a way of making their spending more pro-poor.  But that's where we run up against the second problem.

And the second problem is that money intended for primary education or primary health often fails to reach the front-line service provider.  In a landmark study in Uganda, my co-director Ritva Reinikka showed that for every dollar of money that was due primary schools in Uganda, only 13 cents actually arrived in the schools, and that was the average and there was a range around that average with poorer schools getting much less.

But even if you can raise this as the Ugandans have done, that number has gone from 13 all the way up to 80 cents on the dollar, there's a third problem, and that problem is that the quality of services that poor people receive is often very low.  Here's just some examples.  One symptom of this is the high degree of absenteeism we observe in schools and in clinics.  In primary health clinics in Bangladesh, the absenteeism rate for doctors was 74 percent, and there are examples of abusive treatment that poor people receive in some of these areas, and the disappearance of theft of pharmaceuticals such as a 70 percent disappearance in Guinea is another symptom of the poor quality of the resources that we poor people receive.

Now, our view in the WDR, and as mentioned by my colleagues on the table already, is that these problems, the poor allocation, the fact that money fails to reach the front-line service provider and the low quality are all symptoms of a fundamental failure of accountability.  What do we mean by that?

Well, let's think in terms of a simple competitive market transaction.  Say I buy a sandwich in the market.  In that situation, there's a direct relationship of accountability between me as the purchaser and the sandwich maker as the seller.  I give resources directly to the sandwich maker.  I can observe whether or not I got a sandwich and most importantly if I don't like the sandwich, the sandwich seller knows that I will not come back to him.  He will not get repeat business from me.

Now, as I said at the beginning, for the services that we're talking about, health, education, water, sanitation and electricity, societies have decided for good reason that these services should not be provided through competitive market transactions or could not be provided through competitive market transactions, but rather that they are provided by government because they're a fundamental public responsibility.  They're provided through what we would call the indirect route of accountability.  That is by poor people or citizens influencing policymakers or politicians and then the politicians influencing the providers.

And as you can see, there are at least two legs in this long route of accountability, which means that there are at least two places it can break down.  And let me just illustrate the first one.  The first is the relationship between poor people as citizens and politicians.

This is politics.  This is the fundamental process of political decisionmaking.

What we find in this report is how profoundly political public services are; that in many societies, including in electoral democracies, politicians often use public services as the currency of political patronage.

Let me give you one example.  In the early 1990s, Mexico had a program called PRONASOL, which is a large poverty alleviation program.  It consumed about 1.2 percent of GDP per year to provide water, sanitation, education construction, and electricity to poor communities in Mexico.  But even though it used 1.2 percent of GDP per year, over the 6-year period, the results showed that it reduced poverty only by 3 percent.

There are some studies that showed that had it been perfectly targeted, it would have reduced poverty by 64 percent.  In fact, had they just given it out equally to the entire Mexican population, it would have reduced poverty by 13 percent.  Now, what's going on here?  How can a program like this happen?

Well, the graph over here shows you the per-capita PRONASOL expenditures to different municipalities, depending on which party the municipality voted for in the 1988 election.  And you can see that the party in power at the time, PRI, is the red line.  So, the municipality that voted for the party in power got a significantly higher share of the PRONASOL expenditures, as opposed to the other municipalities, and it's not surprising that the effect of this on poverty was so minimal. This was basically not a poverty alleviation program, but a political patronage program.

Now, that doesn't mean that all electoral democracies have this.  There are democracies and other types of regimes, including one-party states, that have managed to achieve pro-poor public services.  Countries like Sri Lanka, Costa Rica, Cuba, China and others have managed to achieve a level of outcomes in health and education that are extremely favorable.

But even if the politician or the policymakers care about getting services to poor people, there's a second problem, which is that the policymaker is not the person teaching in the classroom.  The policymaker is not the person working in the clinic, so he or she has to get the provider to actually deliver the service, and this is often a difficult problem, where the absenteeism and the others are symptoms of that problem, which is that the policymaker may not be in a position to monitor and may not be giving the provider the incentives to serve the poor.

Now, that doesn't meant the problem is insurmountable, and let me give you another example where they have made some progress on this, which is in Cambodia. Cambodia was coming off a Civil War, and they needed to get rural health care to the clinics very quickly--rural health care to rural areas very quickly--and they introduced a system of contracts.

In fact, they had two types of contracts, called contracting out and contracting in, where NGOs would provide the services, and they would be compensated in return for independently observed quality of health and service delivery in those districts.

And the important thing here to keep in mind is that the Cambodians wanted to learn from this experience.  So they introduced a control group, which was the government's own health clinic, and they randomly assigned these contractual arrangements across 12 districts, so at least the information might have some value.

The results are quite surprising or quite striking.  The biggest increase, in just on this one indicator, but it's the same for most indicators, the biggest increase or improvement was in the contracted-out districts, the second biggest in the contracted in, and almost no change in the government's, the control--the control group.  And this program has now been scaled up, not just in Cambodia, but around the world, thanks to the solid and rigorous impact evaluation that was introduced.

Now, this doesn't mean that all services can be contracted out.  Indeed, most services are very difficult to write contracts for because it's very difficult to monitor whether or not the service is being provided.  You can monitor whether a child has been immunized, but you can't really monitor what goes on in a doctor's clinic or what goes on in a classroom.  You can monitor whether or not students have been enrolled, but you can't really monitor whether they have actually learned something, and this is what leads the some of the problems.

But I think here, and this is the point that Nick and Jean-Louis were mentioning earlier, here's where we sometimes forget the fact that there's somebody else who can monitor the service provider, and that's the client.  Even if the policymaker in the capital city doesn't know whether the teacher is showing up for work, the student knows, and the student's parents know.

And this is one way in which we can make a lot of progress, and the evidence shows this, if we allow, and enable and empower clients to be active participants in the service provision process; that is, reinforce the direct route of accountability between clients and providers when there are problems in the long route.

Let me give you just one example from Bangladesh.  In Bangladesh, there's a program called the Female Secondary School Assistance Program which gives scholarships to girls to encourage them to go to school.  In fact, it's interesting.  It's a scholarship that is paid directly in a bank account in the girl's name, provided she meets these three criteria.  It also gives a stipend to the school based on the number of girls they enroll.  And this program is having two effects:

One is that secondary school enrollment is rising quite rapidly in Bangladesh and is rising faster, twice as fast, for girls than for boys, but it also has the effect that many schools that previously didn't have separate latrines for girls and boys have now constructed separate latrines because they have an incentive to try to attract the girls into their schools.

This is just one example of many that are documented in the report, where when poor people participate actively in the service provision process, we get much better service delivery.

Now, what does this mean?  And coming back to a point that Nick made earlier, it should be clear from this reasoning that there is no one size that fits all.  It isn't the case that public sector provision fulfills all of the requirements or will work in all circumstances, nor is it the case that private-sector participation will work in all circumstances.  In fact, the way we say it, somewhat tongue- in-cheek, "While no size fits all, maybe eight sizes do," and let me tell you why we say "eight sizes."  Because we really think that the important characteristics that give rise to a favorable service delivery arrangement are based on three questions:

The first is, is the service easy to monitor or difficult to monitor?  School enrollment is easy to monitor; student learning is difficult to monitor.  Immunization is easy to monitor, but clinical or curative care is difficult to monitor.

Second is whether the relevant client base is homogeneous or heterogeneous.  And what that means is that, for instance, in the case of the Bangladesh example, the girls had different preferences.  It was a heterogeneous group.  They had preferences for separate latrines and so on, and there was a way to take that into account in the arrangement that was implemented.

And, thirdly, and perhaps the most difficult is, is the politics in the country subject, is it pro poor or is it subject to clientelism?  And this is fundamentally very important because, if the politics are subject to clientelism, then we have to be careful about service delivery arrangements that feed this clientelism, as opposed to ones that actually work for poor people.

Let me just quickly give you two examples where the answers to these three questions actually determines service delivery arrangements.

Take the easiest one.  The easiest one would be a service that's easy to monitor and one in which the population is homogeneous and the politics in the country is pro-poor.  People ask me, what kind of place are we talking about?  Think about a Scandinavian country and its service provision arrangement.  And this one there's no question about.  It doesn't really matter what kind of arrangement you have.  You can have central government provision of the service.  You could have--because it's easy to monitor, you could have central government provision with contracting.

Second, there's just one slight deviation from that is we're still in this pro-poor, homogeneous country but with service provision that is difficult to monitor, such as student learning.  That's the case in which you want central government provision.

But now finally, let's take the other extreme, the polar extreme: a service that's hard to monitor in a country that's extremely heterogeneous and one in which the politics are not pro-poor, they're subject to clientelism.  This is the most difficult, but this is where the service delivery arrangement needs to emphasize the power of poor people.  So things like demand side subsidies, something like the PROGRESA Program in Mexico which gives conditional cash transfers to poor people, or the Bangladesh FSSAP which essentially gives power to the girls to be able to choose the school that they want to go to, this is where that's extremely important.  Because leaving it to the political system to deliver it on its own may not necessarily lead to poor people benefiting from the service.

So these are the cases where demand side subsidies, and indeed, copayments and other forms of participation by households has a high premium.  It doesn't mean it always is the case, but in this one case, in this extreme case we may need to think about it.

Let me conclude there and leave it to questions.  Thanks very much.

MR. HAY:  Shanta, Thanks very much indeed.  Just for the sake of the transcribers who will give you a transcription pretty quickly after this, let us know who you are, if you will, and which organization that you represent.  We have microphones in the front so let's just--the lady in the third row had her hand up pretty smartly.  Let's go to you.

QUESTION:  Hi, my name is Lila Scandar.  I'm from Egypt.  I work with people in slums and villages.  I have a few questions, please.

MR. HAY:  Make it one, if you will, and then we'll come to you if we've got time.  We don't have terribly long.  I'm sorry.

QUESTION:  Okay.  First, thank you for this excellent report.  In the civil society sector we could have told you everything you've known 40 years ago.  Will you now listen more closely to civil society?  Enabling poor people to participate to deliver services, how do you reconcile that to the Bank's thrust towards the privatization of services?

And with the mega-projects you have been sponsoring that have destroyed livelihoods all over the world, not in services, but farmlands, fishing rights, forest rights, indigenous lands and economies have been destroyed, would you describe that as pro-poor policies?

As far as our partnership with you goes, the examples you've given are excellent but they don't--they pass by tokenism.  So will you, since you are a major player in the field of development, influence governments, maybe put conditionalities, to make sure that voices of the poor are heard in their own countries?  While we're not suggesting that you interfere in national sovereignty plans, we are proposing you're a major actor.  Just as you have with great energy forced them to provide PSRPs, will you now say, provide ingenious, innovative ways of making sure the poor participate?

Thank you.

MR. HAY:  Thanks very much.  What we'll do is we'll take a couple of questions.  Nick Stern's got to go in about 20 minutes, even less than that, so let's see if there's a couple of others that we can take in the meantime and maybe we'll do--yes?

QUESTION:  Tonya Beckett, BBC News.  Whenever I've been to a World Bank press conference, some of the analysis that you've done is unquestionably very impressive.  But what I'm never clear on is exactly what power the World Bank Group has in order to influence all of these things that are structurally wrong, because the World Bank is, in press conferences at least, spectacularly unforthcoming in describing its activities.  But the analysis that you've given is really interesting and I'm sure very accurate, but I want to know what you're going to do about it.

MR. HAY:  Okay, let's take another question.  Gentleman just in the back with his hand up, and then we'll get to work pretty quickly and be forthcoming.

QUESTION:  Sriram from Press Trust of India.  Sir, I would like to know whether you have made any studies of the Panchayati Raj institutions in India which have been successful in ensuring the greater attendance in school and the teachers in schools especially.  Thank you.

MR. HAY:  Okay.  Nick Stern, why don't we get you to perhaps take them in the order we got them.  Let's start with the last question and then maybe we'll work through.  If I could just encourage brevity on the part of everyone up here in the interest of time.  Nick, why don't you start us off?

MR. STERN:  The one question was several questions, but let me try to take as many of them as I can.

The first is the importance of evidence-based policy.  There are many people, whatever you say, if I say black or white or gray, there will be some fraction of the audience that says, I always knew that, why were you working away for all those years to discover it.  What we try to do in this kind of study is really to appraise the evidence as a whole and look at the evidence as a whole.  And I think that that is what we've done in this WDR, and the conclusions I think are very clear.

It's good that they're conclusions that you feel that you've known for some time, but I don't think everybody would take the same position as you, and it's therefore important to set out the evidence in a careful way so that we can convince not the people who think they know, but the people who are doubters.  That's what we've tried to do in this case.

You also asked, and it really was in the BBC question also, about power and conditionality.  My reaction is that's actually the wrong way to go.  There have been occasions in the past, particularly in the 1980s, when the Bank knew, thought it knew what was right and tried to push that, in my view, excessively hard, on populations.  I think we have to go the other way.  I think we have to try to set out the analysis in a way that's convincing, help in the preparation of proposals, and support those kinds of proposals which we think, on the evidence, are likely to help poor people.  I think power, conditionalities dictating is, on the whole, the wrong direction to go.

So I believe in the power of the evidence, the power of the argument, and the power of supporting people who you think, on the basis of the evidence and the arguments, are going in the right way.  So I think that's the route to go.

Privatization of services.  Most of our loans are to government and most of our loans are in support of government activities.  There have been clear examples of areas where we've helped support privatization.  Some of those, for examples, in telecommunications I think, on the whole, have been right.  There are other areas where the arguments for privatization depend very much on the circumstance of the country, and I personally would be cautious about encouraging the privatization of water indiscriminately.  It depends on the situation.  But there are examples where privatization of water has worked well in improving the services; other examples where it's not worked well.

As someone--you can tell by my accent that I come from the U.K.--I would be very hesitant about telling anybody to privatize the railroads.  So you've got to look at these things country by country and case by case.  I think the dogmatic approach is wrong.  I think the evidence-based approach which we try to adopt in this WDR is right.

I'll leave for my other colleagues to talk about mega-projects, but I think a description of what the World Bank does and a description of what the World Bank has done over the years, so-called mega-projects are actually quite small in relation to the whole area of Bank activity.

Finally on the Panchayati Raj, as someone who's lived and worked over the years and been following one particular village in India for 30 years, I must say I find some of the achievements of the Panchayati Raj very impressive.

MR. HAY:  Jean-Louis, Shanta, just any quick thoughts on the questions we've had?

MR. DEVARAJAN:  Yes.  Let me just take a couple of points about the questions.  First of all, you did mention that civil society has been saying this for a long time, but I think as Nick mentioned, we're trying to provide the evidence to support those conclusions, and let me just give you one example that's in the report.  We did the first survey of health care services in Uganda by nonprofit providers, for-profit providers and public providers, comparing them across the board, and we found--the paper is called "Working for God"--you found that the religious-based providers, actually the wage rates are 28 percent lower than either the public or the private provider, for-profit private providers, and customer satisfaction of the services is higher.  So this is, you know, I know that civil society has been saying this, but we actually have a quantitative estimate.

The second point about privatization, I think it's important to keep in mind that many of the services that we're talking about are already privatized.  People in poor countries like India, poor people pay five to 16 times the meter rate for water.  They pay water vendors five to 16 times what the meter rate is because for political reasons the pipes don't flow into the poor neighborhoods.  So what we're talking about is that these people are already thrust into the private sector through no fault of their own, and we need to work--because water services are a fundamental public responsibility, we need to find a way of making sure they don't pay exorbitant prices for water.

And finally, let me say on the question of what is the World Bank doing, I think if you just look at it, just two points there, one is the increased emphasis in the World Bank on budget support and programmatic assistance is exactly determined to say we need to be able to improve service delivery in the country.  We need to help the countries, support countries on improving service delivery across the board, and so moving more towards what we call programmatic lending or budget support operations.

The second thing is the increased role of information.  The way that the Ugandans actually were able to increase the 13 cents on the dollar reaching primary schools all the way up to 85 cents on the dollar is that they published that first figure.  They published it in the newspaper, and this became a real cause celebre.  People started monitoring the newspapers.

Every month they would say, well, how much is it this month, how much is it next month?  And today, every school principal has to publish the entire school budget on the school room door.  So again making information available to people is our, I think one of our biggest weapons.

MR. HAY:  Shanta, thanks.  Jean-Louis, a quick thought.

MR. SARBIB:  One more thing about what are we going to do, what are we already doing about this?  If you look at the composition of the Bank's portfolio and compare mega-projects in community-driven development, you will see a considerable increase in the amount of resources going to community-driven development everywhere whether it's in sub-Saharan Africa, in the MENA region, and also the whole idea that the Poverty Reduction Strategy Papers have to be prepared in a participatory way that our Country Assistance Strategies are prepared in a participatory way, is a way for us to introduce often to governments that are not necessarily participatory in their approach the importance of participatory approaches, whether it is for development activities or for strategy making.

And this we do because we do have influence, we do have access, and the importance of a report such as this one is beginning to make it much more difficult to resist the evidence that the results of development, the results of the policies are much better when there is participation.  So these reports are useful for civil society, but they are also useful in convincing those governments that are not prepared to open through their civil societies that there are good dividends for them, even as politicians.

And I have seen this happen in many, many different places where the original reluctance to get involved in participatory activities changes when people begin to see the results that it gets, and the bureaucrat that was the most opposed to participation is the one that has now become an advocate of it because of two things.

One is that they see the results, and, two, in a very humane way, their jobs become much more interesting.  I will never forget an example I had in upper Egypt where we have a participatory development project, and it tries to do things on population and rural development.  And the local bureaucrat had never gone out of his office, and he was bored to tears, and then with participation, he began to go and visit the various centers, he began to have relationships with the local groups, and he now spends about half an hour in his office everyday and cannot wait to get out, interact with people.  They see now a government that is accessible, and he sees that he's making a difference, so that his complaints about how he's paid or his conditions of work have been largely compensated by the satisfaction that this particular person gets of seeing that he's making a difference in the life of his constituency.

And I think that makes a huge difference.  Now this person does not need to be convinced anymore, so multiply that experience by a hundred, by a thousand, by a million, and you begin to change the effectiveness of development administration.

MR. HAY:  Jean-Louis, thanks.  Let's take a couple more.  Nick Stern has got to go in five minutes.  Gentleman down here, we'll take one from you.  Lady over there on the right and I don't see anything--oh, and the gentleman in the middle.  Let's take three really quick ones, and we'll get through them.

QUESTION:  Thank you.  Can I speak in Arabic, please?  (Interpreted from Arabic)  As a matter of fact, the facts mentioned in the report, we believe that they are very important and they are very true, but we want to ask now that you have all this information and all these facts about the services and these services do not reach the ones who should receive these services in many countries, and you have already started to know this fact, can you strike a balance and can you pressure the governments not in the form of intervention, so that the people would not feel that this is an intervention, but can you pressure the governments so that they can render the services to the poor people, and at the same time, the poor people would not feel that this is a foreign intervention, because our people have many reservations against the donors and against the financial institutions?

The question is did you find or can you find a way by which you can give these grants or give this assistance and make sure that it reaches those who should receive it, and the question is do you have hope that many other countries will be able to follow your prescriptions?

MR. HAY:  In the middle there, let's quickly take a question from her mike down there, please, and then the young gentleman over there, and we'll do our best to get through these pretty briskly.

QUESTION:  I'm from Mexico, an independent newspaper.  You seem to very impressed with the Opportunidades Prozresa program.  Can we say then that Mexico is finally on the right track to fight poverty, and if that is so, then can we set that date for that, I mean in a year that Mexico can reduce, for example, in half poverty?

MR. HAY:  Thanks very much.  Gentleman in the middle, and we'll take these three questions, and we'll get to work, just in front you, sir.

QUESTION:  I'm from Press Trust of India.  Mr. Devarajan made a passing reference to monitoring of programs like polio programs.  One of the biggest programs in recent years has been the polio program in India.  Do you have any feedback on that, the efficacy of that?

MR. HAY:  Okay.  Let's take these three.  Nick, why don't we get you started on them?

MR. STERN:  Yes, I'll contribute as far as I can, and then I'm sure my colleagues will come in on other things.

On the first question of how to support good programs without dictating and without incurring understandable resentment of outside interference, this is a very important question.  I tried, in my earlier comments, to begin to answer it.

One part of the answer is to take the examples and the evidence, which are so rich from what people have achieved in developing countries, to take those examples and evidence and make them more publicly available through things like the World Development Report so that governments and people themselves can form policies with the information based on that evidence.

Second is to, ourselves, get involved, if people wish, in helping to prepare programs--so providing analytical support for the preparation of programs.

And, thirdly, to support those programs which we have reason to believe, on the basis of the evidence, really are going to help support poor people.  That, for me, is the right way to proceed, and I think, probably in the past, the international institutions have been too heavy on the conditionality insistence sort of approach.

On the Opportunidades PROGRESA program, I think the lessons are very important.  And, as you know, Mexico, itself, has taken programs which started in rural areas, in some parts of the country, and taken them into many other areas in the country and beginning to take them into urban areas.

So I think those lessons are being scaled up.  And I was in Mexico talking to the government, private sector, civil society just over a month ago, and I believe that those lessons are going more widely throughout Mexico.  And, of course, some of the lessons of PROGRESA and Opportunidades have been taken beyond Mexico.  And we were with President Lula just six months ago, and Santiago Levy, who was one of the progenitors of the PROGRESA project, explained in those meetings to the Brazilian Cabinet the advantages of the PROGRESA Opportunidades' approach.

So I think scaling up the lessons in the way I've described is absolutely fundamental.  I can't tell you exactly when Mexico is going to reach each of its Millennium Development Goals, but I can say that we're working closely with the Mexican authorities and society and do have confidence in the way in which Mexico has been moving forward, both in terms of growth as a whole and in the kind of social policies embodied in Opportunidades PROGRESA.

Personally, I don't know much about the details of the polio programs in India.  I'll have to leave that to some of my colleagues who do.  If none of us here actually know the details of those programs, we would like to put you in touch with our India team.  We actually have Michael Carter, who is the Country Director for India, at the back of the hall, and I'm sure that if he doesn't know the answers to those questions himself, he can put you in touch with people who do.

Thank you.

MR. HAY:  Nick, thanks very much.

MR. SARBIB:  Let me just add a footnote on the Mexican experience.  I had a chance to be briefed, and one of the very important dimensions is the fact that if there is an example of an evidence-based program, it is it, because, as you well know, it has a monitoring and evaluation dimension to it.

And the best proof was that this was a program that was started by one government under the PROGRESA label and was continued by the next government and their Opportunidades and essentially because of evidence base, because the monitoring and evaluation showed that this program was giving results.

So, to me, this is a very good sign of what we can achieve when we go to evidence-based policies.

MR. HAY:  Jean-Louis, thanks.

Shanta?

MR. DEVARAJAN:  Yes; just a couple of points.  I think, on the question about how do we pressure governments to make services work for poor people without pressuring them, the key word there is "information."  I am increasingly impressed at the power of information.  And by information I mean two things:

One is, as Jean-Louis just mentioned, the power of rigorous evaluation.  So you do a rigorous evaluation of a service delivery innovation, as they did in PROGRESA in Mexico or as the Cambodian example that I just gave you.

But, secondly, is to disseminate that information.  Samuel Paul has a small NGO in Bangalore, India, that just went around surveying what poor people's perceptions were of their services--of water, transport, health, electricity and so on--and then they just publicized that information in the newspapers, and this created pressure on the local governments to try to reform services.  And you actually have seen an improvement in services.

Mexico, I fully agree with what my colleagues said, but let me add just one twist to that, which is I think the other reason why we're somewhat enthusiastic about PROGRESA, especially in the context of the PRONASOL experience, is that this program has clearly turned the corner from being a political program to being a real poverty alleviation program.  And I think the evidence base that Jean-Louis mentioned is absolutely critical, but what was also critical was that they actually went out of their way to be apolitical.

Santiago Levy, personally, went to see Vicente Fox when he was the presidential candidate and said to him, "We will suspend PROGRESA payments for three months before the election just so that you know this is not a political program."

And Fox appreciated it so much that, when he won the election--he also appreciated the fact that he won the election--that he embraced PROGRESA, rather than reversing it or trying to go in another way and scaled it up.

And polio, yes, I don't know much more.  All I would say is that polio programs are easier to monitor than curative care programs, so that they do lend themselves to the kind of monitoring that we talked about earlier.

MR. HAY:  We've got time for a few more questions.  Let's look around the hall.

The gentleman just there on the, just in front of you there?

QUESTION:  I ask in Arabic.

MR. HAY:  Okay.

QUESTION:  (Interpreted from Arabic) Tarik Shamili (ph) from the Yemeni Satellite Channel.

How do you evaluate the strategy that was adopted by Yemen to reduce poverty and to provide adequate levels of education?  You have mentioned that Yemen was one of the countries that have succeeded to involve people in the service provision of education and health.  How much did this Yemeni program tally with your own programs and services?

Thank you.

MR. HAY:  Just behind you, with his hand in the air.  Just wait for the microphone.  Just there with the yellow tie.

QUESTION:  I ask also in Arabic.  Sorry.

(Interpreted from Arabic) Faisal Ahmed (ph) from UAE News Agency.

The report undoubtedly is a very good report, with very important data and statistics.  However, can we consider this report as an attempt by the World Bank to jump forward, leap forward or to beautify the World Bank before the poor?  You are talking about misallocation of income and bad distribution of services in developing countries, while the services in the World Bank themselves have such drawbacks.  How can we solve or understand this contradicting equation?

Thank you.

MR. HAY:  Let's take one more question here.  The gentleman in the front, and then we'll conclude with these answers.

QUESTION:  Morning.  Fernando Kensian (ph) from (?) Sao Paulo, Brazil.

I'd like to have some opinion about the progress made in Brazil during the Fernando Henrique Cardoso era and the prospects to the Government of Lula, with its Hunger Zero, that's still lacking of money.

MR. HAY:  Okay.  Jean-Louis and Shanta, why don't you start us off.

MR. SARBIB:  Well, let me take the questions on Yemen.  I think that Yemen has done a very good job of developing a poverty reduction strategy, which was presented to the international community at the Consultative Group and was extremely well-received.  And we in the World Bank have been quite pleased with the way in which, in spite of a very difficult situation in the region, the Government has continued to implement the program.

What I have in mind is, for example, the experience of the Social Fund; the experience of the public works projects, which are funded by the Government of Yemen and by the World Bank and which are really responding to the needs of the community, whether it's building schools, building water facilities, building village health clinics and doing so in a participatory way with a very good targeting mechanism.  I visited these programs many times, and they have good information as to where the poorer communities are and trying to target and to focus their activities on these poor communities.

Now, Yemen, as you well know, faces very, very difficult conditions in terms of access to water, in terms of natural resources, and in terms of the efforts that it needs to make to go from an economy that is still very dependent on natural resources, oil in particular, to an economy that will be more diversified.  So I think we are satisfied that Yemen is going in the right direction, and we hope that the World Bank's support is helping the Government continue to fight poverty in a participatory way through activities like the Social Funds or the public works program.

MR. HAY:  Shanta?

MR. DEVARAJAN:  Thanks.  I think I will take the second question about whether this report is an attempt to beautify the World Bank vis-a-vis the poor and what we can do about the fact that World Bank services help these misallocated resources that don't go to the poor.  And I think that is precisely what we are trying to do, which is when we provide financial support, we'd like to make our financial support shift--first of all, make sure that our financial support goes to poor people but also use it as a way of inspiring the Government to shift its resources more towards poor people.  That is why there is this emphasis on primary education, as you saw, because that is one of the things that, actually, poor people use.  And certainly, our knowledge services, of which the WDR is one example, are all aimed at trying to help governments change what I would say is a situation in many countries where the services are not reaching poor people.

The question about Brazil, and, you know, I think there has been tremendous progress in Brazil.  Brazil started off with one of the most unequal distributions of income but in the last eight or nine years has made remarkable progress, particularly in the poor areas in the northeast, and I think the Cardoso regime has helped us along.  I mean, they are not the only people doing it.  The tremendous progress in reductions in child mortality in Seira (ph) is one example.  I think the Bolsa Escolar program and the FUNDEF program, increasing incentives for poor people to go to school and for schools to make progress in students' achievements are both in the right direction.  So I think there is really quite a lot of optimism around this in Brazil.

MR. HAY:  Shanta, thanks very much.  Let's conclude now, then, the press conference.  Let me thank you all very much for coming.  I will remind you of the embargo for 12:00 midday, and if you want to come up, ask the participants questions, feel free, and we will work our way through.  All right?  Thanks very much.

(Whereupon, at 11:07 a.m., the briefing was concluded.)





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