To the President of the House of Representatives of the States General Binnenhof 4 Den Haag

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1 To the President of the House of Representatives of the States General Binnenhof 4 Den Haag Sub-Saharan Africa Department Central and East Africa Division Bezuidenhoutseweg AC Den Haag Date 1 September 2004 Contact Fons Gribling Our ref. DAF-297/04 Tel Page 1/10 Fax Encl. IOB evaluation report no. 296 fons.gribling@minbuza.nl Re IOB evaluation report no. 296: Poverty, policies and perceptions in Tanzania, an evaluation of Dutch aid to two district development programmes Dear Mr President, I am pleased to present to you the report by the Policy and Operations Evaluation Department (IOB), entitled Poverty, policies and perceptions in Tanzania, together with my response. The report refers to an evaluation of Dutch support for two district development programmes in Tanzania between 1987 and I consider the subject of this report to be of primary importance. It offers new insights into the crucial relationship between government policy at central level and the implementation of concrete activities at local level. In addition, the evaluation adopts an unusual approach in that poverty is seen through the perceptions of the local people rather than the frequently changing perspective of the policy objectives of the programmes. It makes use of innovative research methods, including a videotape in which a number of poor people from one of the two districts talk about their situation. Like IOB, though, I feel that certain aspects of this approach require comment. The opinions of poor people themselves, important as they are, are only one marker for poverty policy and AVT04/BZ

2 evaluation. Other relevant factors include the perceptions of other partners, such as those who make and implement policy, the more or less objective possibilities for development (e.g. the physical and economic context) and the impact of the macro context. Having said this, I do believe that the evaluation offers important pointers for the future, for example the need to devote constant attention to a clear focus on poverty, the relationship between needs at micro level and policy at macro level, good governance and the associated capacity development, and partnership. My response is structured around the report s five main findings. After that I indicate what adjustments in policy and other action the evaluation implies. The evaluation s findings and lessons for the future 1. IOB concludes that the District Rural Development Programmes (DRDP) have not succeeded in realising their primary long-term objectives, to improve living standards and achieve a structural reduction in poverty. The report does not provide sufficient evidence to support such a far-reaching and absolute conclusion: it states that we do not know exactly what impact the programmes have had on living standards and poverty because the evaluation includes no relevant programme-specific data at local level. There may be an impression that, as elsewhere in Tanzania, poverty has not decreased substantially in the districts included in the study in recent decades, but nothing can be inferred about how much this is due to the district development programmes. In concluding that their effects have been limited, it is important to realise that the scale of Dutch support per capita was relatively small and that there were negative factors at national level, outside the scope of the programmes, such as disappointing market development, high population growth and inadequate government policy. Although the videotapes are an innovative method of research which deliver images that appeal to the imagination, it is unclear how representative those interviewed are of the poor as a whole. In addition, to say that the programmes AVT04/BZ

3 did not produce the expected improvements certainly does not mean that the position of the local population has not improved. In my view, it is important to note that, with relatively limited resources, the DRDPs have successfully completed a large number of activities over the years for the benefit of the local people, including building schools and laying roads. Despite the fact that it is not simple to establish the ultimate impact of the programmes, the evaluation clearly indicates ways in which the effectiveness of such interventions can be improved. For example, the policy objectives and implementation in the various phases of the DRDP were not sufficiently based on an analysis of the poverty situation and the processes that keep poverty in place. These analyses now receive much more attention. In addition, interim evaluations and monitoring were largely restricted to the formally agreed objectives of the programmes, and activities took insufficient account of the results to be expected from poverty reduction at micro level. Thirdly, in as much as these evaluations concluded that there was only a limited structural reduction in poverty, this did not lead to fundamental changes in the programmes to tackle the problem more effectively. This study, too, reaffirms the necessity of the current improvements to evaluation as an instrument. 2. IOB concludes that changes in the focus of the DRDPs were largely inspired by Dutch development policy and were favourably received by Tanzanian politicians and civil servants. I would like to place this observation into a broader context in which the Netherlands and Tanzania are players in the international field of development cooperation. The shifts in focus from improving income to a sustainable increase in well-being (improved social services) and strengthening local government reflect insights at the international level. What these shifts have in common is that they are more likely to be based on the outcomes of the international development debate and scientific research than a specific analysis of the poverty situation of those directly involved. As far as the Netherlands is concerned, the decision to strengthen local government was AVT04/BZ

4 inspired by the disappointing results at national level and the desire to tackle poverty in rural areas. Tanzanian politicians and civil servants benefited from the shift of focus to local government because it enabled them to show concrete results (schools, government buildings and infrastructure) and afforded them direct access to resources earmarked for capacity building in local government. This leads me to the following conclusions. Firstly, policy aimed at sustainable poverty reduction must be based more solidly on micro and macro analyses of the poverty situation and the processes that keep poverty in place. Secondly, it is important to include the poor themselves more in these analyses and in developing and implementing the policies based on them. Thirdly, it is important to acquire an understanding of the interests of the partners you are working with and their involvement in the changes intended to benefit the poor. In my view, the partners are the people themselves, their representatives in civil society organisations and political fora, the government and the private sector. With hindsight, the Netherlands may have too easily assumed that governments will make enough effort to defend the interests of the poor, and has given insufficient attention to other partners. 3. The IOB evaluation says that the DRDPs have devoted too little attention in both districts to the basic obstacles to poverty reduction, as seen by the rural population, and that removing some of these obstacles was beyond the power of the district government and required intervention at national level. The evaluation shows that, in the eyes of the rural population, the primary obstacles to poverty reduction lie in the absence of a good business climate in which to increase agricultural production and sell their products at a reasonable price. In concrete terms they complain of restricted access to land, inadequate support services for agriculture and stockbreeding, shortage of work and social security, and weak government and legislation. The DRDPs made a conscious choice to support the business climate, social services and local government. It is difficult to say whether this was a good choice because there was no AVT04/BZ

5 thorough poverty analysis. In addition, the DRDPs focused on the district rather than the national level. In my view, an important conclusion from the evaluation is that development partners should make their standpoints on development and poverty reduction explicit and engage in dialogue on that basis. Consensus about the causes of poverty and how to tackle them is essential and determines with whom we cooperate and in what way. In addition, it is important to look at processes of impoverishment and respond to them, rather than basing policy purely on the needs of the poor, as recommended in the DAC poverty guidelines (2000) and the World Bank s World Development Report Another conclusion is that the poor people interviewed by IOB in the two districts give greater priority to support for economic development and creating the conditions in which it can occur than to social services and building the capacity of local government. This emphasises once again the importance of devoting structural attention within development policy not only to social development but also to economic development aimed at poverty reduction. In addition, the example of Tanzania makes it clear that activities at district level can only be effective if they are accompanied by necessary policy changes at sectoral, national and even international level. 4. The IOB evaluation states that little effort was devoted in the DRDPs to promoting political empowerment and strengthening civil society, and that the efforts that were made were largely ineffective. This can partly be explained by the emphasis in Dutch bilateral aid on cooperation with national and local governments, as a result of which there was insufficient awareness during the initial phases of the DRDPs that local government is an extension of the power of political leaders at national level. In addition the ruling party CCM dominated the political arena and there was no organised opposition. In the analysis of poverty and the strategy to tackle it, there has been a growing understanding that all five dimensions of poverty AVT04/BZ

6 specified by the DAC (human, economic, political, social-cultural, security) have to be taken into account. Among other things, this means that political processes have to be explicitly taken into account during analysis and implementation. Full attention should also be given to partnership cooperation between partners with a shared view on poverty reduction. Partners in this sense also include trade unions, cooperatives, traditional leaders and businesses in the formal and informal sectors. 5. Lastly, IOB states in the evaluation that focusing aid in marginal and remote regions reduces the chances of making an effective contribution to poverty reduction. This conclusion confirms the findings of other surveys. The question is what implications it has for policy. Leaving poor areas to their fate can lead to further marginalisation and even greater impoverishment for the poorest groups, and contribute to instability in the areas concerned or elsewhere. I firmly believe that there are very good arguments for supporting marginal regions and that we should therefore make greater efforts to reach the poorest groups in these marginal areas. Action plan in progress A number of the findings and recommendations mentioned above are already taken into account in current policy, as laid out in documents like Mutual interests, mutual responsibilities and Strong people, weak states, and in its implementation at country and regional level. Poverty reduction as the main objective, promoting the business climate for economic development aimed at poverty reduction, responding to the political dimension of development, strengthening capacity in the interests of good governance and a broad definition of partnership are all important pillars of current policy. In this respect, I intend to devote more attention to strategic, multiyear planning for both the ministry in The Hague and for the missions. That will allow me to work on sustainable poverty reduction and the institutional changes necessary to AVT04/BZ

7 achieve it, such as political engagement and social participation, from a multiyear perspective. The above does not mean that the Netherlands or other members of the donor community have ready-made ways of translating poverty reduction policy at macro level into concrete measures to alleviate the problems facing the poor in these two districts. The scope for influencing these processes from the outside should not be overestimated. Strengthening local government, for example, demands a long-term commitment and must be part of a wider strategy of institution building. District programmes, like the DRDPs, do indeed have their limitations, but this applies equally to approaches that focus exclusively on the sectoral or national level. Our understanding of the best relationship between macro and micro approaches is improving. As I mentioned above, what this evaluation shows us about the problems relating to the decentralisation of government services is in line with the conclusions of the last World Bank World Development Report (2004). Poverty reduction and economic development Poverty analyses are now an integral part of policy development but, for me, it is important to continue to devote attention to improving their quality. Embassies in the partner countries base their annual plans and activities on a poverty analysis focusing on the five DAC dimensions. I want this poverty focus also to be the basis of monitoring and evaluation and the accompanying reports on results. The guiding principle of the poverty focus should be the Millennium Development Goals (MDGs) and it should be reflected in the content and implementation of Poverty Reduction Strategy Papers (PRSPs). Effective poverty reduction is possible only if economic development is promoted at the same time. The results of the evaluation support the course I have taken to devote greater attention to creating a business climate for the local private sector and to involve the latter in activities aimed at poverty reduction. In my view, an integrated approach in which political dialogue, AVT04/BZ

8 market access and trade, and the deployment of aid funds are combined, is indispensable, as is explicit attention to coherence between regional, national and international policy. Partnership Effective poverty reduction also requires partnership between governments, organisations and individuals from the private sector, civil society and of course the people it is intended to benefit. I consider it crucial that partners engage in a discussion about whether they have a common agenda with regard to poverty reduction and if so what it is. On that basis, clear agreements can be made, including a division of tasks and responsibilities. Although there is a trend in many partner countries towards broader participation in development plans, there is still a long way to go. It remains important to return to the original objectives and target groups on a regular basis to see if the intended results have indeed been achieved and whether they meet the needs of the people they aim to help. This means that the poor themselves must be involved, directly or indirectly, in monitoring and evaluation. Specific points for action In the coming period, analyses of poverty, political situations and good governance will be more deeply embedded in strategic multiyear planning and the existing review frameworks for the PRSPs. I would like to devote extra attention in the coming years to situations where the absence of a business climate favourable to economic development is seen as an obstacle to poverty reduction. The results of poverty analyses will be explicitly translated into programme objectives and results according to the DAC s five dimensions for poverty. This establishes a structure for monitoring and evaluating results in terms of poverty reduction. In the autumn of 2003 the findings of the IOB evaluation were incorporated in the preparations for the recently completed final evaluation of the whole DRDP programme. They have also been passed on to our Tanzanian AVT04/BZ

9 partners and other donors involved in development programmes at decentralised level and the decentralisation process in general. Previous evaluations of the DRDP led some years ago to the decision to shift the emphasis from rural development to strengthening local government and the decentralisation process. I see this as a positive development. The final evaluation of the DRDP has given a considerable boost to the dialogue between the Tanzanian government and donors on the alternatives for district development programmes and the need for active coordination between donors themselves, and between them and the Tanzanian government. The Dutch Embassy in Dar es Salaam is explicitly involved in this dialogue. Direct Dutch financial support and technical assistance for the 14 districts came to an end on 1 July In the preceding period the Dutch Embassy successfully ensured that the positive results of the DRDP in the areas of district development planning and budgetary responsibilities are to become a part of the national Local Government Reform Programme (LGRP). This programme is incorporated in the Tanzanian PRSP. In addition, the Netherlands and other donors support the setting up of a system for transferring PRSP development funds to the districts. In the coming years, the Netherlands will provide specific support through the LGRP for strengthening the capacity of NGOs, the private sector and local authorities in all 14 former DRDP districts. At national level, together with other donors, the Netherlands will engage in dialogue with the Tanzanian government on the implementatoin of the LGRP. This will establish a link between the macro and micro levels. In the context of the sector-wide approach, the Dutch Embassy in Tanzania focuses on improving the quality of and access to public services at local level in the education and healthcare (including HIV/AIDS and reproductive health) sectors. The evaluation s findings will be taken into account in the further elaboration of Dutch development policy. That includes discussions with those who make and implement policy, and with researchers active in the field of AVT04/BZ

10 development issues and development cooperation. We expect an initial debate to get off the ground in the Netherlands this autumn. Yours sincerely, Agnes van Ardenne-van der Hoeven Minister for Development Cooperation AVT04/BZ

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