Human Security -

in an Increasingly Fragile World

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Human Seturity in an Increasingly Fragile World

O 2005 The International Bank for Reconstruction and Development

The World Bank

18 18 H Street, NW

Washington, DC 20433 USA Internet: www.worldbank.orglsustainabledevelopment

Ernail: essdksl@worldbank.org

All rights reserved.

Any findings, interpretations, and conclusions expressed here belong to the individual

quoted and d o not necessarily reflecr the views of the Executive Directors of the World

Bank or the governments they represent.

Cover photo by Curt Carnernark

antents rJ F o r e w o r d

of A c r o n y m s

Human S e c u r i t y in an I n c r e a s i n g l y Fragile World 5 Risk and Vulnerability 9

Economic Risks and Uncertainties 10 Ecological Risks and Uncertainties 15 Sociopditical Risks and Uncertainties 20

) Keeping Pace with Changes 29 Emerging from Our Silos 29 Equipping Ourselves with Better Analytical Tools 33 Building the Capacity for Democracy among States and Citizens 37

Moving Forward 45 45

for Viable Institutions 46 49

51 and Learning for Sustainable Development:

54

Phoro by Scorr Wallace

Forewor Reducing economic, ec risks for people, especially

\lulnerable groups, can mean the difference between life and death. At ESSD

Week FY05, we were able to bring together renowned thinkers and practitioners from the World Bank and other institutions to discuss this urgent topic. The theme of the Week, "Human Security in an Increasingly Fragile World," attracted an unprecedented number of participants.

ESSD Week has been a central learning event, bringing staff and partners

together to exchange knowledge, engage in dialogue and debate, and learn from peers, subject specialists, and leading practitioners in the field of Sustainable Development. 11is year, the sessions included a rich agenda of learning, knowledge sharing, discourse, and dialoguearound complex and interrelated topics. Participants

from inside and outside the World Bank acknowledged the relevance of our agenda and substance of the work led by ESSD, yet challenged 11s to do even better.

By better aligning global issues management with country dialogue and

lending, ESSD represents what I believe the future of World Bank should look like-an integrated community working together in a highly decentralized, corporate structure. This can be successful only by strengthening cooperation between the field and at headquarters. ESSD Week improves collaboration and communication across departments and units. It helps us network within ESSD and Bank-wide for ideas and experiences. It provides access to cost-effective training and facilitates learning about good practice. It helps us access global

Icnowledge and enables us to share and learn from the experience. I thank all participants of the ESSD Week for making these connections possible.

I extend my warmest thanks to our guest speakers and panelists, and to those who came to share their experience and perspective from the trenches. ?he insights, ideas, and research findings presented, some of which are also included in this report, can and should inform the Bank's evolving approach to sustainable development.

An event so large in scale and scope and so smoothly implemented does not

happen by chance. I thank the numerous people who made ESSD Week 2005 possible. Special recognition must go to Najma Siddiqi, the Knowledge and

Learning Coordinator for ESSD, working with Odin K. Knudsen, then-Senior Advisor ESDVP. Angie Wahi, Yvonne, Fiadjoe, Mojgan Sami, Kristyn Ebro,

and Talat Shah also contributed greatly to the success of this event. 'There are of

course many others who made this event possible, who have been recognized within the different departments and units. Ms. Siddiqi also conceived of and managed the writing and production of this report with a small team of staff and

consultants, and has ensured that other important documents from ESSD Week 2005 are available online. ESSD's ongoing work for responsible growth and sustainable development is enhanced by this Knowledge Sharing and Learning

team's thoughtful contribution to our shared need for improved knowledge and learning.

I hope that you will find this report useful. Ic is meant to act as a reminder

and a reference to our work during ESSD Week, and should facilitate our efforts

to pursue the theme of Human Security as we move forward in our quest to

meet the challenges of poverty and inequity in a fast changing world.

Ian Johnson Vice President, Sustainable Development

World Bank

List of AFR

ARD

CAS

CGIAR

CPLA

DECRG

DPL

EAP

EC A

ENV

ENVCF

FSDQC

ESDVP

ESSD

GDPRD

HQ IFPRI

ILO

LAC

MDGs

MNA

N G O

OECD

OED

PREM

PRMED

PRMPR

PRMTR

PRSP

SAR

SDV

W T O

Africa Regton of the World Bank

Agriculture and Rural Development Department, ESSD

Country Assistance Strategy

Consultative Group on Inrernational Agricultural Research

Country Policy and Institurional Assessment

Development Economiw Research Group of the World Bank

Development Policy Lending

Easr Asia & Pacific Region of the World Bank

Europe & Central Asia Region of the World Bank

Environment Deparrment, ESSD

Environment Department, Carbon Finance

ESSD, Quality Assurance and Compliance Unir

ESSD, Office of the Vice President

Environmentally and Socially Sustainable Development Network

Global Donor Platform for Rural Development

World Bank Headquarters, Washington, D C

International Food Policy Research lnstituce

Inrernational Labour Organization

Latin America & Caribbean Region of the World Bank

Millennium Developmenr Goals

Middle Easr & North Africa Region of the World Bank

Nongovernmental organization

Organisation for Economic Co-operation and Development

Operations Evaluation Department

Poverty Reducrion & Economic Management Network

PREM, Economic Policy and Debt Deparrment

PREM, Poverty Reduction Group

PREM, Inrernational Trade Department

Poverty Reduction Srrategy Paper

South Asia Region of the World Bank

Social Development Department, ESSD

World Trade Organization

"Uncertainty abounds," said Ian Johnson, Vice President and Head of Network, ESSD, in his welcoming remarks to participants at ESSD Week 2005. Mr.

Johnson urged participants to let the theme of this year's conference, "Human Security in an Increasingly Fragile World," help them "to look at ... the

development paradigm through a new lens, or at least a lens we don't always use-a lens of uncertainty and risk." Given the reality of our uncertainty, Mr. Johnson said,

we must ask ourselves the questions: Do we pay enough attention

to coping mechanisms for vulnerability and certainty that go well beyond social safety nets [and] really look at how we cope with the range and plethora of uncertainties? D o we have the full array of financial and nonfinancial tools at our disposal to deal with risk and uncertainty in an increasingly fragile world? And how well do we assess and how well do we evaluate risk and uncertainty?

Presenters and participants at ESSD Week 2005 carried the dialogue forward with their stimulating responses.

ESSD Week is an annual event organized by the ESSD Network, which comprises the Agriculture and Rural Development, Environment, and Social Development families. Staff from the three families determine each year's theme according to strategic priorities identified through interaction with staff and clients, feedback from the previous year's event, and general trends within the World Bank and the development field. The event allows ESSD staff to meet across sectors and regions to exchange information, share thoughts and

experiences, engage in dialogue and debate, access new knowledge and skills, and learn from colleagues and partners throughout the world.

Over time, ESSD Week has grown from a three-day to a ten-day event, comprising a mix of keynote speeches, panel discussions, dialogues, regional and ESSD family meetings, an Atrium Fair for informal knowledge exchange, a week of structured learning events, and time to catch up with colleagues at informal gatherings. This year, ESSD hosted presenkers and discussants from academia, development institutions, civil society, partner governments, and others who brought candid, fresh perspectives to the work of the World Bank. As outgoing

President James D. Wolfensohn said,

I think this meeting is a fantastic evolution of the ESSD program, which did not exist ten years ago, and which now . . . has expanded to two weeks of real substantive discussions from the broad, general issues to the particular items that are of interest, and then to the regional issues. In particular, to have the time to have all of our colleagues from the field offices come here and exchange views, for me, is really the essence of the strength of our institution because it gives an opportunity for you to exchange views on different subjects from different parts of the world . . . So to have you all here addressing the questions of peace, security, and poverty from your various vantage points is, of course, at the very core ofwhat our institution stands for.

During the first two days of ESSD Week, participants delved into cross- sectoral themes, with dialogue stimulated by guest speakers. These were

followed by Family Days, two days of sessions organized by each family and held simultaneously. The final day of ESSD Week offered an array of training courses. The next week was Learning Week, which consisted of two Regional Days and three days of learning and [raining on special topics.

World Bank country offices value ESSD Week as an opportunity for the professional development of staff, leading to improved results on the ground. 'The number of country office staff attending ESSD Week continues to grow. This year, the event attracted 1,180 participants: 480 staff from HQand 200 from country offices, 230 staff and their guests as "walk-in" participants in different sessions, an additional 200 guests from partner organizations, and 70 external

speakers, who brought a range of expertise and perspectives to the discussions. Further evidence of the value of the event is seen in an increasing demand

for access to presentation materials, background papers, notes, and proceedings. Many of these materials are found on the World Bank Intranet (see http:// essdweek).

While many sessions focused on specific issues relating to social policy, land reform, trade, and climate change, most began from the shared understanding that the poor in all parts of the world are put in an increasingly vulnerable position as they have few formal or reliable ways to face challenges brought about by volatile economic, ecological, and sociopolitical conditions around them. Presenters were invited to have a dialogue with participants about specific and contextual issues, and many sessions explored the validity of the Bank's development paradigm, the applicability of approaches adopted, the effects of conflict on effective and sustainable development programs, and the urgent need for strong public participation and strong governing institutions.

ESSD Week 2005 fostered countless simultaneous, dynamic, and spontaneous exchanges that took place at formal and informal sessions, including panel discussions, lunch dialogues, and learning sessions. The discursive nature of these meetings and the ideas they inspired-which crossed the artificial lines that formally separate the concerns of each ESSD family-cannot be fully captured in a linear narrative, such as this report. No doubt some of the most exciting and valuable interactions of ESSD Week 2005 are known only to the individuals who shared them. Nevertheless, in the pages that follow we try to convey some of the points and proposals-both shared and vigorously debated-that emerged from the rich discussions held.

Photo bY habir IDardaI

Risk and Vulnerability, 'Throughout ESSD Week 2005, presenters d Eicipants explored various facets of the risks and vulnerabilities faced by the poor. Frequently, speakers and participants alike reminded each other that development challenges do not remain in neat categories and cannot be approached as if they do. In the opening plenary, Ian Johnson challenged participants to think outside of their particular area of expertise and contemplate the "impressive" dimensions of risk as both inter-temporal and spatial. 'They are inter-temporal, he explained, "in the sense that they are short term, medium term, and long term." Risks are also spatial in that "they clearly operate at the household level, and risk and uncertainty is a tremendous issue throughout poor households, [at] the local, national, regional, and, of course, at the global level as we think of climate change and other ecological risks."

Mr. Johnson named three categories of "forcing factors" of risk and uncertainty: economic, ecological, sociopolitical. The factors are themselves inextricably interwoven. 'The risk of volatile commodity prices, Mr. Johnson noted, is

clearly at the heart of agricultural policy and agricultural thinking. Farmers are at their worst when they're facing tremendous uncertainty on the volatility of commodity prices. Ecological, climate change, weather change, deforestation, floods: the heart of our thinking in environmental policy and environmental management, risk and uncertainty is very much a part of environmental policy. And of course sociopolitical-local and national conflict in particular-is at the very root of the social policy agenda . . . Issues of accountability, transparency, inclusion, [and] participation are at heart about risk minimization for social conflict.

In the following sections, these three forcing factors are a framework used to synthesize ESSD Week discussions. Economic and environmental risks are natural topics of discussion and debate for development practitioners. As seen in more detail below, this year's participants confirmed that some of the biggest challenges affecting development efforts are those presented by sociopolitical risks and uncertainties, which, in addition to having ignition points of their own, are also easily set off by other forcing factors.

Economic Risks and Uncertainties Economic growth is obviously a factor in poverty reduction, but the correlation is not direct. In the session "How Important is Agriculture and Rural Development for Pro-Poor Growth?" Louise J. Cord, Lead Economist PRMPR, discussed findings from a 14-country study on the intersection of poverty, growth, and inequality. Ms. Cord said that "growth doesn't tell the whole story-in some countries there was similar growth, but very different rates in poverty reduction." She explained that the term "pro-poor" growth itself refers to a poverty-reduction strategy that seeks to "accelerate the rate of poverty reduction through economic growth," as opposed to focusing on other issues, such as increasing income equality. She continued:

We also knew or we felt we h e w in the late 1990s and early 21st century that there was no real relationship-despite fifty years of studying this-between growth and inequality; that in about half [of] the growth spells inequality would rise, and in about the other half inequality would fall. And overall, despite many theories in one direction or the other, no one had seen an empirical relationship between growth and inequality.

The interesting fact about economic growth, she said, is that "the poor did not benefit ... They benefited from growth, but they didn't benefit one-for-one from growth." She found that for a 1 percent increase in average income, poor people's income increase by only 0.7 percent.

Assets are another important factor in poor people's economic security. In the session "Land Tenure Security and the Millennium Development Goals," speakers agreed that land tenure security is crucial to reaching the MDGs. Jolyne Sanjak, Millennium Challenge Corporation Director for Property Rights

" B e poor benefitedfiom growth, but they didnt benefit one-for-onefiom growth."

--Lourre/ Cord

and Land Policy, said that tenure security and property rights relate to at least four MDGs: eradicate extreme poverry and hunger, promote gender equality and empower women, ensure environmental stability, and develop a global partnership for development.

Eduardo Moreno, Chief of the Global Urban Observatory, remarked that

the "geography of poverty" is moving from rural to urban areas. This shift will challenge the capacity of basic service delivery and adequate housing, and if needs remain unmet, social turmoil may result.

As the spatial dimension of poverty changes, practitioners are likely to see

increasing struggle among themselves over policy priorities, funding, and the like. Urban versus rural priorities is just one arena where the struggle will be played out. For example, while Mr. Moreno emphasized the growing numbers of poor people in urban areas, in a concurrent session, "How Important is Agriculture and Rural Development for Pro-Poor Growth?" Guillermo Perry, Chief Economist LAC, stated that already "there is a lot of evidence that there tends to be an urban bias in the provision of most public goods" to the detriment of rural areas. He said,

Education expenditures per person are much higher in the urban sector than in the rural sector. You would expect the contrary. The same for health. I mean, investment in roads tends to be for urban roads or roads that connect cities instead of rural roads; the same for electrification levels; the same for water supply, and SO on.

In the session "Focus on Africa," John McIntire, Sector Director AFR, noted that

many African governments overspend on urban people and urban goods for political reasons. Regrettably, some donors do the same thing, yet without the political excuse for doing

so. This biased spending results in transfers of income from rural to urban people and robs rural people of investments in human capital, notably in health and education, and in infrastructure such as roads, water, sanitation, modern energy, and telecommunications. This biased spending also encourages rural to urban migration beyond what would occur through a market process; it deprives agriculture of labor; and, because in many cases migration is selective for wealthier or more productive people, it can in some cases widen the productivity gap between rural and urban areas.

Crosscutting issues relating to economic risk and uncertainty offered an important opportunity for speakers and discussants from across disciplines to challenge one another and ask pointed questions to participants. For instance, following a panel presentation on "Trade and Globalization: Maximizing Opportunities and Reducing Vulnerability," which focused largely on the importance ofgenerating economic growth, an audience member who identified herself as an environmentalist acknowledged that the presentation left her a bit "at a loss." She explained,

After listening to all this, I understand that basically what we're saying is that if countries have more access to trade, they'll get more money and they can invest in infrastructure and other things that will lead them to reach the MDGs. But there's also the one goal in the MDGs, which is environmental sustainability, and I don't see how what was presented is going to contribute

to that.

Presenter Carlos Braga, Senior Advisor PRMTR, replied, "Of course, there is a tension between trade expansion and environment ... The point, however, is that there are better policies for you to deal with this issue than the trade instrument. Trade instruments are not the best mechanism to deal with environmental distortions."

Despite the current and likely increased turmoil in poor countries and among practitioners resulting from issues concerning economic uncertainties, Mr. Moreno pointed out that we do not yet have the data we need to

properly manage economic uncertainty. He said that we do not have accurate methodologies to estimate the number of urban poor. Governments, for example, are not obligated to report on land tenure in their PRSPs or in MDG plans. There are currently no baseline data on secure tenure, so it is impossible to measure progress.

At the same time, Mr. Moreno acknowledged that there are proxy indicators that currently measure "deprivation"; that is, lack of access to water, sanitation, and the like. Data are only now just beginning to be collected on gender disparity issues in land tenure security. Lacking baseline and other data, it is difficult to Imow how to mitigate risks. For instance, discussants noted that practitioners currently assume that land ownership is the best means of security, but this has not been empirically demonstrated and should be examined more carefully.

Sharing the same panel as Mr. Moreno, Jude Wallace, Senior Research Fellow, University of Melbourne, said, "The vital thing about land is that it works best and is most secure if you've got high levels of trust between governments and citizens."

Land administration and markets in the -. -- . developing world are informal, and to help establish land tenure, Dr. Wallace

argued for the gradual formalization of markets. Despite the importance of developing and measuring land tenure vis-A-vis the MDGs, Dr. Wallace said,

Alot of the questions that we have about security oftenure and how to build it I actually believe are the wrong questions ... it would be much better to test the viability of the land system. Don't ask how many titles. Don't ask how many transactions. Don't ask how much land was surveyed. Just go along and ask the farmer's third son if the land will be recorded in the names of all five brothers when his dad dies, and he's going to tell you no.

In the session on "Trade and Globalization," Viluam Nehru, Director PRMED, spoke about the economic impact of various shocks (defined as sudden events outside the control of government that have a significant impact on a country's economy). He said,

Low-income economies find it very difficult to anticipate and react to shocks. They don't have easy access to finance, and as a result, the shocks chat they face from the international economy wend their way through the [domestic] economy. But it takes four years before the full impact of a shock occurs, on average, and up to 17 years before the impact eventually gets dissipated just for any [single] shock.

If you take climatic disasters, in the first year of the shock, the impact is, on average, something like 1.3 percent of GDP, but over 10 years, it's up to 4.4 percent of GDl? Now, climatic shocks occur on average in low-income countries about once every four and a half years. But if you take climatic and geological shocks incidentally, it occurs on average once every two and half years for every low-income country. 'That's a very high frequency.

Mr. Nehru also pointed to an important tool that is currently missing:

There's no taxonomy on what sort of shocks these countries face and how large they are relative to each other. Are commodity shocks more important than geological shocks or climatic shocks? Or, for example, shocks that come about as the result of wars in neighboring economies, or shocks that may come about as the result of aid suddenly being withdrawn because some creditor has decided to change its priority? And how does one distinguish amongst all of these? We simply don't have a taxonomy. We've tried to do a lot ofwork on this, but, alas, we've come up empty handed in terms of figuring out what are the relative importance of these different sorts of shocks.

"It takesfour years before the full impact of a shock occurs, and up to 17yeav-s before the impact

eventually gets dissipatedfor any single shock." - Vikram Nehm

Ecological Risks and Uncertainties The numerous threats to peace and prosperity that accompany an increasingly degraded environment were regularly discussed throughout ESSD Week.

"Most of you understand lack of access," said Robert T. Watson, ESSD Chief Scientist and Senior Advisor, in a session on "Climate Change: The Need for Adaptation." He provided some figures:

One point six billion people have no electricity; 2.4 have continued to use traditional biomass indoors, leading to millions ofdeaths per year ofchildren and women. We expect that energy, prime energy, the demand for it will increase by a factor of three to five in the next 50 years, and we've got to recognize that we're going to have to invest something on the order of $120 billion per year to meet the need just for access to electricity alone. And what we also realize is the private sector has failed to take up the challenge, and, therefore, organizations such as the World Bank are going to be critical to helping developing countries meet this energy need.

Mr. Watson emphasized that with certain environmental issues, especially global warming, time is of the essence:

Climate change is not simply an environmencal issue. It's a development issue. It threatens environmental sustainability. It threatens poverty alleviation, the livelihoods of the poor, human health, and national and regional security.

Mr. Watson detailed the significant risk of conflict associated with effects of global warming:

With a one meter sea level rise, tens of millions of people will be displaced in low-lying delta areas . . . [and there will be] significant inundation of small island states . . . Food shortages in many parts of the tropics and subtropics. Water shortages in the same areas. Loss of natural resources. Increasing incidence of disease. Increase in severe weather events. All the ingredients to destabilize populations that already are precarious.

Clearly, poor people and poor countries have the greatest risk of threat from climate change. They lack the physical, financial, and human resources to adapt, and many of these areas are greatly affected by climate change, and much of their economy is in climate-sensitive sectors, such as agriculture and forestry.

"Climate change is a d w e l o p m t issue, and it? a development issue right now."

-[an Roy Noble

Ian Roy Noble, Senior Climate Change Specialist ENVCF, added that in

the 1990s done approximately 2 billion people-most of them in developing countries-confronted a climate-related disaster, such as the loss of home or livelihood. Extrapolating for this decade, some 3.5 to 4 billion people will be affected by disasters associated with climate. "Climate change is a development

issue," Mr. Noble said, "and it's a development issue right now." In "How Human Health Depends on Nature," Dr. Eric Chivian,

Director of Harvard Medical School's Center for Health and the Global Environment, described a general "failure to understand that our lives depend on the health of the natural world." Environmental losses in fact have many negative ramifications for human well-being. Noting that one- eighth of the world's plants are endangered, and others are now extinct because of degradation, loss of habitat, and global warming, Dr. Chivian noted that

more than half of the most frequently prescribed drugs in the U.S. are derived from or are patterned after compounds derived from natural resources, and 80 percent of people in developing countries still rely on traditional medicines, which come largely from plants.

Dr. Chivian called for "an investment in scientific efforts, as well as

monetary efforts on a similar scale to the one spent on national security, for that is what we are dealing with here, our collective security."

In the question and answer session following the presentation, Robert Watson asked Dr. Chivian if he had been able to convince other physicians to take up the cause. Dr. Chivian replied,

The effort has been made, but the result has been a bit frustrating because the medical community has been distracted by many other issues at the moment. The biggest challenge is that to create an impact, major behavior changes need to be made, and many people are not willing to make them.

In the panel discussion "Appreciating the Real World Issues of Risk and Vulnerability," Ishaac Diwan, Country Director for Ethiopia and Sudan,

described on-the-ground risks of state failure and societal breakdown, especially in the face of scarcity and environmental volatility:

In Sudan.. . vulnerability to the weather has led to major in- vestments in irrigation initially, and then later.. . [in] developing oil as a major resource.. . With very rapid urbanization, [there is] a grab for land by the sta[e, exacerbating inequalities and leading to a breakdown of traditional farmers' pastoralist methods of coping and of dealing with shrinking resources.. . You have rapid commercialization of agriculture, some irrigation, rapid urbanization, but at the cost of major social conflicts, at the cost of the marginalization of the periphery, at the cost of a north- south civil war for very long, and recent violence, terribleviolence in Darfur, possibly weaknesses in other parts of the country that feel excluded and. . . do not receive their fair share of the wealth of the nation.

In the session on "Rural Development and Pro-Poor Growth," Guillermo Perry described other vulnerabilities of the rural poor, explaining that public funds allocated for rural growth are usually given as subsidies to certain sectors and certain farming groups, usually owners of medium and large farms, who have the ability to engage with the institutions giving subsidies.

Monty Jones, Executive Secretary of the Forum for Agricultural Research in Africa, mentioned problems among rhe rural populations on that continent.

PhambyQur-T'DO

"To create an impm, mjor behavior changes herd to be made, a d many peopk a n not willing to make tbm. "

-Eric Chivran

He described extremely low-tech, subsistence farmers whose livelihoods are highly vulnerable to climate change, environmental degradation, and the lack of functioning markets where farmers could sell their goods.

The challenges facing small farmers were the focus of the panel "Small

Holders in Coordinated Supply Chain," in which Joachim Voss, Member, Executive Committee, CGIAR, argued that despite formidable challenges that could exclude smallholders from participating in coordinated supply chains, they can develop the slulls to participate in and benefit from these systems. Coordinated supply chains can help improve the quality, safety, grading, and packaging of agricultural products, which benefit both the private sector and the farmer. However, there are several types of formal arrangements that can be made to meet the needs ofvarious products on local, regional, and international markets, and farmers need to participate in the development of these supply chains to ensure the systems stay win-win. The private sector is leading the way on coordinated supply chains, so farmers must build the capacity to organize, troubleshoot, and govern if they are to be strong partners in these institutions. "If left to market forces, the big producers will tend to win; if provided support to be well organized, with access to appropriate information, capital, and technology, small producers can compete," Mr. Voss said.

Joseph I? Saba, Country Director MNA, said,

We know from our experience.. . that the neglect of institutions to attend to the environment ultimately leads to-in fact, we can see it in Iran-a stall in sustainable development in the sense that the resources no longer are capable of meeting the challenges.

Professor Robert Picciotto of King's College, UK, reiterated that threats to

security are interconnected with other types of insecurity that make livelihoods unsustainable in poor countries. Professor Picciotto said that rapid agricultural gowth helps raise income and employment, thereby reducing the social frustration that leads to violence. Rural education, land tenure, natural resource management, cooperative development, and out-grower schemes can all spur rural development. Rural areas also need global support, such as trade reform and advances in science and technology. According to Professor Picciotto, about 30 countries won the war against poverty and hunger through agricultural growth.

Stefano Pagiola, Senior Environmental Economist ENV, discussed the Millennium Ecosystem Assessment, a report produced by 1,300 scientists from around the world. Mr. Pagiola urged a more rational approach to environmental assets:

If we could assess and evaluate all the various services ecosystems provide, it's quite likely that we would find that maintaining them as they are, or even perhaps restoring them as they were, would be much more valuable to human well-being than converting them to other uses.. . The point which we want to make here is that you want to make those decisions knowing what the real costs are and knowing what the real benefits are. Right now we do not really include that assessment when we make these decisions about whether we should cut down a forest to make more agricultural land, we don't include all these other benefits, and that pretty much guarantees that we're converting way more than we should be.

Sociopolitical Risks and Uncertainties Societal and state deterioration and the challenges they present to development were prominent themes in many sessions. The issues were raised immediately by Ismail Serageldin, Director of the Bibilotheca Alexandria, in his keynote address at the opening plenary. "Human security today is going to be affected by social breakdowns and state failures far more than by conventional development failures," he predicted. "Even where there's no total breakdown, the culture wars are eating at the heart of each society." Real reformers are in conflict with defenders of the status quo, he said, "so we have enormous tensions there." Dr. Serageldin presented a stimulating slide show (which cannot be reproduced here) illustrating aspects of these cultural skirmishes, which he described as the struggle between modernity (propelled by technology and globalization) and tradition (which helps to form the bonds of comfort and cohesion within a community).

In a lunchtime roundtable on "Culture and Social Development," Dr. Arjun Appadurai, Provost and Senior Vice-President ofAcademic AfFairs at New School University, New York, described the tension between past and future in a different manner. The fields of anthropology and economics, he argued, have "created a false division of labor, with anthropology being basically about the

past, [about] culture as past, as tradition . . . and economics as the science of the future: wants, needs, calculations, desires, etcetera. And this, I argue . .. is not a good division of labor."

Instead of leaving development to the economists and culture to the anthropologist, Dr. Appadurai insisted the two are inseparable:

The relationship of culture and development is indivisible. It is not additive, it is not optional, i t is not occasional, it is primary.. . Ideas of what would be the good life-ideas which everybody has-are themselves culturally formed to some degree . . . and ideas of the good life affect directly in any region, any community, any society, ideas about what is changeable, curable, or improvable. And that is development.

In addition to highlighting the notion that culture and development are indivisible, Dr. Appadurai also suggested that there is a "fundamental contradiction" between the vertical national structure of governance and the "horizontal dispersion of markets, loyalties [sometimes called sovereignties], and identities." The "basic and growing tension" of this contradiction is of "immense consequence to the work of institutions like the Bank because the actual operations work, the loaning work, is absolutely inseparable from the nation-state structure, yet development processes of many kinds are profoundly horizontal, cross-national, and so on in their nature." According to Dr. Appadurai, the globalization of the nation-state structure is creating a "new tectonics of sovereignty." The nation-state, he asserts, "is not the only game in town as far as sovereignty is concerned."

At the same time, he said, there is a growing occurrence of people such as migrants, refugees, guest workers, those who have "weak citizenship"; that is, they do not possess full political rights in the country in which they reside. Dr. Appadurai asked his listeners to consider their own case, that they may be citizens of one country who live for years in another. They cast their votes in their native land but do not have full rights in the country in which they reside. He urged the Bank to take this "complicated culture of politics" into consideration and to not simply work within an architecture that may not be relevant to the needs and conditions on the ground.

Despite the centrality of culture to development efforts, an issue raised

by several presenters, "conflict is a relatively new concern ... in the field of development," noted University of Michigan Professor of Political Science, Ashutosh Varshney, in a forum on social policy. "Until recently, those who worked on conflict did not work on development, and those who specialized in development did not have any familiarity with the research on conflict." This point was illustrated in a different session by Georgetown University's Dr. Marc W. Chernick, who said,

The World Bank has been involved in Colombia since 1948, that is, almost throughout the duration of the conflict. But if you look at the country reports from 1948 to 1997, the World Bank never once mentioned violence; they simply looked at GDP and social indicators and poverty and didn't look at the issue of violence.

Development in conflict-affected areas is already a serious challenge for many practitioners. ESSD Week hosted several sessions in which issues relating to conflict were discussed. Discussing one example of conflict in Africa, Paul A. Francis, Senior Social Scientist AFR, said, "It's a very scattered conflict, which is hard to understand. It's the situation that sometimes seems to be a war of all against all. It's community against community; oil company against community; security forces against community; elders against youth, etcetera, etcetera. It is a highly complex set of interlocking conflicts."

According to Dr. Varshney, the development community has been forced to pay attention to conflict because there has been a tremendous rise in recent years in the incidents of civil conflict. Poor people are disproportionately affected by conflict. Dr. Varshney reported that according to the OECD, "twenty of the thirty poorest countries in the world are in a state of armed conflict or in conflict." Development practitioners must understand the nature of these conflicts if they expect to do any good in the field. Dr. Chernick cited a World Bank study asserting rhat 70 percent of the population living in conflict affected areas is living in poverty.

'Yt sometimes seems to be a war of all against all. " -Paul A. Francis

Dr. Pervez Tahir, Chief Economist for the Government of Pakistan's Planning Commission, reminded the audience that society, as influenced by multiple factors, is the context for development:

Now, development takes place in society, That goes without saying. Cross-national, regional, localized, global trends also influence society. This is the only context for development. In this sense, social development is development of all the people, all the time. Any exclusion reflects inequity and less than full participation. Neither economic nor human development can become sustainable in such an environment.

An often overlooked demographic is youth. Dr. Tarik Yousef, Assistant Professor of Economics at Georgetown University Center for Contemporary Arab Studies, said that in the Middle East, "forces of demography have been wreaking havoc.. . with the social welfare system.. . demography has been undermining the set of existing expectations, practices, and public policies." Youths in the Middle East are highly educated, and have high expectations, and they are "especially more interconnected with the outside world."

Dr. Yousef said,

These three combinations of characteristics, large cohorts of youth, educated and tech minded ... ought to be viewed as an asset, ought to be viewed as a forceful social economic transformation, and as a positive impact, a factor for even globalization through neighborhood effects.. . and yet, the discourse, the policy dialogue in the last ten to fifteen years in the region-and I would argue until today-within the Bank and outside the Bank, remains that this youth cohort is a

problem.. . If conflict is a possibility, even a remote possibility, we all want

to avoid it. What needs to happen for these societies to rescue themselves? To rescue theoldsocial contract? What is required . . . I would humbly submit, is a new set of expectations.

Throughout ESSD Week, presenters, discussants, and audience members noted that poor people's vulnerability to risks and uncertainties is compounded by corrupt, inefficient state involvement and weak or nonexistent institutions. In a session on "Environmental Institutions and Governance," presenters and participants agreed that the World Bank and governments have been reluctant to discuss the issue of governance, but the problem of governance has immediate ramifications for poor people. In the case ofgroundwater management in Yemen, for instance, previous inefficient policies in the agriculture sector brought about red problems of access to water. Moreover, mismanagement, dong with the increasing population growth, high infrastructure costs, and Jack of institutional capacity has intensified social conflicts and cultural tensions pertaining to the use of this natural resource.

Numerous other examples of inadequate governance were given throughout the conference. In a session on "Issues of Risk and Vulnerability," Shantayanan Devarajan, Chief Economist SAR, said that Sri Lanka's welfare system has been captured by the non-poor, with 50 percent of the recipients not eligible for welfare, and 50 percent of those eligible not recipients. He also pointed to India, where, although the universal health system is "enshrined in India's constitution," doctors cannot be found in clinics, forcing the sick to seek out help from unlicensed practitioners.

Why do we end up [with a] poor state-administered welfare system?. . . It is basically a political problem . . . There has been quite a lot of trade reform, trade liberalization. Sri Lanka is

basically a liberalized economy. So there are no longer rents to be earned by import controls. So now welfare programs have become the new import controls. This is where the rents are being captured, and this is the redistribution of rents for political purposes.

Mr. Devarajan also said that because people tend to vote along ethnic lines

rather than according to overall government performance, politicians try to use

welfare systems to curry favor with particular groups. Here, too, there are conflicts among practitioners about even basic issues, such

as the relative impact oflong-term conflict and certain state bilures. In the question and answer portion of the session, a member of the audience asked Mr. Devarajan to comment upon the situation in Nepal, especially regarding "social peace, social

stability, and the whole issue of the importance of having some semblance of a social contract." Following the February 2005 coup d'etat, she noted,

We basically have a complete state of dyshnction, as far as I'm concerned. The Maoist insurgency [has] claimed 11,000 lives since 1996. Public accountability has completely shut down. In that context, Nepalese who do not live in Kathmandu, rural Nepalese, basically have no social services to speak of, whether it's provided by the state or whether it's provided by other private sources.

Mr. Devarajan saw Nepal as "a fairly mixed story," which had shown "a

surprising" decline in poverty in the past six years. He replied,

The per capita consumption of Nepalese in the last six years during the Maoist rebellion grew at 4.4 percent per year, about 40 percent, in that six-year period.

Furthermore, you can start loolung at the data a little bit more closely, and what you find is that some of it actually is related to the conflict in the sense that much of it-particularly

in western Nepal-came from remittances of young people who have migrated partly for reasons that agricultural wages were rising in India, and there were opportunities opening up in

the Middle East. But, frankly, some of it was that young men were driven out because the families feared that they would be recruited by the Maoists, and they actually ended up being able to remit to their families.

Mr. Devarajan also argued that there were indeed some social services in Nepal,

as well as a move back to more community-managed services. "Poor people are coping in this very difficult situation, and actually, the results seem to be not as

disastrous as we would expect." In a few other sessions, participants debated the scope of the state's role

in sustainable development. Can states help poor residents move to more stable livelihoods, mitigating their risk to volatilities in external and natural forces? While national governments need to develop the institutional capacity

to support residents-especially poor residents and especially during times of volatility-these institutions need to be fortified by a vibrant civil society and private seccor so that they will withstand political change.

In the opening plenary of Environment Family Days, Claudio Langone, Executive Secretary from Brazil's Ministry ofEnvironment, noted that many people do not see that the state has a role in development matters, viewing government instead as a maker of laws and regulations. But, in fact, "the government has a fundamental role [in formulating a] long-term strategy for development," he said. What's more, the state "can serve as a mediator of the tensions between the different stalteholders because those tensions exist.. . But one interest group, one

stakeholder group, cannot supersede another stakeholder group." There is a role for civil society in strengthening the state, as well. In an

SDV Family Day presentation on "Building Social Capital in Divided Societies," Barbara Nelson, Dean of UCLA School of Public Affairs, described the Concord Project's goal to establish "bridging social capital" in conflict-riddled communities. Catholic and Protestant community members-traditional enemies in Northern Ireland-have formed organizations to demand integrated and better education for their children. These organizations are not formed

by the state, but they can force changes in policy and practice, in spite of the ongoing conflict that remains in the society at large.

Some were optimistic about the trends in sustainable development. "I think we are at a very, very important moment in the life ofsocial development within the Bank, and, therefore, in the life of development itself," said Vijayendra Rao, Lead Economist DECRG, in a session on "Culture and Social Development." It is a time, he said, when "social and cultural ideas, political ideas, points of view are going to be slowly treated on par with how economists think, and economists are not going to resist because they are beginning to think this way themselves, and development will definitely be the better for it."

In short, the approach to poverty alleviation today, especially give the added dimension of widespread and growingsocialconflict, will not be adequate to address future needs if practitioners remain locked into their narrow perspectives. Dr. Serageldin remarked, "The current [development] paradigm could be labeled the triumph of pragmatism." While the current paradigm isn't wholly inadequate, Dr. Serageldin criticized current policies and practices because they cannot "break new ground or address new challenges." Dr. Serageldin said,

I think that we need a

new set of conceptual Phoro by Liar

analyses and new tools [because] the current set of analytical tools is not in sync with the discontinuities and the threshold effects that we are now witnessing in the post-911 1 world, that the problems with many of our societies are not just the presence of poverty and so on, but this real risk of breakdown.

Dr. Serageldin argued that the Brundtland Commission definition of sustainable development (development that meets the needs of the present without compromising the ability of future generations to meet their own needs) has "misled the world for far too long." The Brundtland definition

cannot be operationally translated for a family that already has two cars and threeVCRs, and yet, those rich families, whether in developing countries or in industrial countries, consume about 85 percent of the world's output. Thus, the word "needs" is not a sensible one.

Instead, Dr. Serageldin suggests we define sustainability as opportunity, "which is giving future generations as many opportunities if not more than we have had ourselves."

Photo by Curr Grncmark

Keeping Pace with Changes Development activities typically concentrate on stimul J- :onomic growth and enhancing service delivery, and the participants had much to say about concrete ways to help their projects improve the material lives of poor people. Many fine points related to the above were conveyed in sessions during ESSD Week, and also during Learning Week sessions, which were devoted to focused learning and training on specific topics.

ESSD Week 2005 was also a time for participants to step back and assess the big picture, to consider-and reconsider-the policies and philosophies that guide their work in the field. A major question voiced by many people is that the context of development has changed dramatically in the last decade, but has the Bank kept pace with these changes? While no one expressed the opinion that the Bank was out of touch, many warned that the current development paradigm and the Bank's approach are not adequate to meet present-day challenges, and they are certainly not on a sustainable course for long-term success.

The many general and specific suggestions made throughout the week can be roughly categorized to suggest the following three major courses of action: (1) we must not remain in thematic or funding silos, (2) we must equip ourselves with better analytical tools, and (3) we must build the capacity for democratic practices among client states and their residents.

Emerging from Our Silos Steen Lau Jorgensen, Sector Director SDV, said,

I think there's a 100-pound gorilla that we're not mentioning here when we talk about risk and vulnerability. And I think it partly answers the question why aren't we doing these nice operational things? I think it's our sectoral silos. I mean, safery nets are much too important to leave to the social protection. Just like

irrigation is much too important to leave to the ag[riculture] types. Just like conflict is much too important to leave to only social development types, right? O r environmental and climate change is too important to leave to environmentalists. These are hard things to do exactly because . . . these are multi-dimensional, and we are not well set up to do that.

Similarly, Dr. Serageldin believes we cannot continue to assess approaches from separate economic, ecological, and sociopolitical standpoints. "From the economic side, we want to protect man-made capital; on the environmental side, we want to protect natural capital; and when we come to the social side we want to protect human capital . . . and social capital . . ." But protecting one particular type of capital (such as man-made capital necessary to economic growth) over another type of capital (such as fresh water) leads to a seeming incommensurability, as was evident from some of the opinions voiced at ESSD Week.

An audience member asked Dr. Serageldin how this tendency might be overcome. He replied:

I've maintained that if companies did what governments do, they would be thrown in jail for fraud, which means that countries can deplete capital, deplete assets, and then count it as positive income. You're not allowed to do this in a company. [In a company], if you're selling off assets, it has to show up on your balance sheet, but because countries do not maintain proper balance sheets, they get away with a far-standing office counting zero. The moment [a tree] is chopped down, it becomes a positive contribution to GNP or GDP, so there are these flaws that need to be addressed.

Dr. Serageldin urged practitioners to keep the mix of all types of capital in balance, just as a manager of a stock portfolio has to consider several types of assets at once to maintain the health of the entire portfolio. Managing this

balance, he said, "you suddenly begin to see that the economic decision-maker is not somebody who's trying just to maximize growth." Instead, the manager has to consider the overall balance and risk factors. Approaching development this way "would change culturally the attitudes in terms of decision-malting,"

he said. Another benefit of this approach, Dr. Serageldin said, is that "it would make more explicit ... the links between natural capital, social and human capital, as well as what we tend to conceive of as produced assets or man-made capital, whether they be financial or buildings or other plants."

While the mix of each type of capital can change over time, he said, all

four types of capital-economic, environmental, human, and social-must be present. "If you maintain the per capita share of these four kinds of capital, the same or growing, you would say that you are on a sustainable path."

Dr. Serageldin's approach shows that trade-offs can't be made in the same

direction indefinitely; for "if we lose [social] bonds faster than building up the economic opportunities, we will not move diagonally, we will move vertically downwards to social disaster." A fully developed new paradigm may suggest policies that yield very similar or very different results from what we see today. Regardless, the new policies would be based on a sound rationale:

If you're ma.king decisions based on the right rationale, that, I think, is more important than having the same conclusion but coming from a wrong rationale because the next time you use that rationale it could take you completely off the boards.

Discussing the complexity of social capital, he said,

I think it is true to say that our current paradigm has no explanatory power to deal with the society of cultural wars that we've been dealing with right now, at least no predictive power to do that. We can look at an economy and say to somebody, "If you keep running these deficits, you're likely to fuel inflation at a certain rate because we can trace these linkages," but we're not quite at the stage where we can say to somebody, "If you keep

"Over time, ifyou maintain the per capita share of economic, environmental human, and social capital, you would say that you are on a sustainable path. "

-Ismnil Sertrgeldin

running that deficit on the social capital account, you're going to have a major breakdown of your society and lead to a civil war," which could well be the case.

Equipping Ourselves with Better Analytical Tools Presenters and participants in many ESSD Week sessions expressed a need for more data and improved analytical and operational tools. "There's plenty of room for improvement and growth," James Warren Evans, Sector Director ENV, said, in "not only the amount and the number, but [also] the quality and the type of analytical work that we're doing."

Mr. Evans continued,

Our understanding of the issues in a country, our understanding of the institutional constraints and opportunities, our understanding ofgovernance issues and financeissues is absolutely essential for all three of these types of work that we do. As we increase our development policy lending, as we introduce the country systems, and as we work to better integrate environment into our country-level operations through the CAS, [analytical tools such as] the Country Environment Analysis and Strategic Environmental Assessment, and so on are going to be increasingly important.

The "upstream analytical work" conducted by the Bank has real-life consequences; among other things, it can be a great help to client countries as they produce better PRSPs.

Some of the sessions were focused on specific topic areas and called for tools directly applicable to these areas. For example, in the session "Climate Change: The Need for Adaptation," Stanley Wood, Senior Scientist IFPRT, highlighted the need to generate data and develop analytical frameworks to analyze the impact of climate change so that practitioners can prioritize options.

In the "Continued Crisis Situations" session, Stan Peabody, Lead Social Scientist ECA, discussed the need for "institutional analysis when disaster preparedness plans are being made and when administrative or institutional structures are being created with communications, with division of labor, institutional responsibilities, and so on."

Mr. Devarajan raised a controversial issue related to measurement:

Nobody has ever done an evaluation of the relative performance of NGOs versus government versus private providers. Now it's very difficult to do because in the middle of this crisis you don't want to say let's do a randomized control trial but, honestly, if I were really pushed, I would say that's exactly the time to do it because the lessons you can learn from that are enormously valuable for the next disaster. If we don't know it, if we don't know anything about what's the relative value of these, we are

just going to be flying by the seat of our pants every time.

Similarly, duringthe1'SocialDevelopmentImplementation/Mainstreaming" session, Makhtar Diop, Sector Director LAC, remarked that Bank analysis sometimes falls short because of a lack of standardized indicators. Country Policy and Institutional Assessment (CPIA) ratings, he said, are "based a lot on the adoption by

parliament.. . of a set of theories and laws." The existence of the right policies means a country can receive "an excellent rating on gender, while the situation of women in those countries is awful and appalling."

Mr. Diop said, "by trying to

generalize surveys on a clear set of indicators, we might try to fix that gulf." Several people raised the need for strengthening gender analysis. Steen Lau

Jorgensen said,

There is gender differentiation in the kind of risks people are exposed to-from biological risks to gender roles-defined, different risks. 'The ability to respond is very different. And in fact, some of these coping mechanisms that we'd like to say that "the poor" do are very gender biased.

Urmika Chatterjee, Senior Social Development Specialist SAR, highlighted

the need for more data on youths:

There are actually very few indicators on youth and statistics on youth and health, ~ o u t h and unemployment, and although within regions people are able to say 60 percent of the youth in my country are unemployed or I think I read in one of the presentations a third of those who have died from HIVtAIDS are 'Those are huge numbers, but if you look at the ILO's

big book on unemployment, so many of the regions are blank because that research is not there.. .

Dr. Serageldin also challenged the Bank to find through research and analysis the point at which the "lines of cleavage" begin to be counterproductive and create social unrest or even breakdown, which leads to violent conflict and strife.

Several other speakers noted the need for integrated analysis. During the session on mainstreaming social development, Jane Armitage, Country Director LAC, said that analysis has always been done in the reverse ofwhat she sees as ideal:

What we need to do . . . is to look at the country level. What are the countries' environmental policies! What's the legal framework? What are the regulations? What's the institutional capacity to identify what are potential environmental benefits and costs related to trade and infrastructure expansion and develop and enforce feasible cost-effective recommendations to mitigate negative impacts and enhance positive impacts. That is a very different way of looking at it from actually trying to say here's an investment, now let's identify the actual costs, environmental or social costs and benefits.

The discussion around better tools and approaches toward analysis brought out a basic theme: the Bank and other development agencies need to redefine their understanding of the problem, expand their horizons, move away from the "silos" ofsectoral analysis, and begin to have a more integrated approach to analysis and intervention. Mr. Jorgensen said, "We still do a country social analysis and

then a country environmental analysis and a rural development strategy for each country separately. And country directors like Ishaac [Diwan] get very upset with us because they say, 'Why don't you guys talk to each other?"'

Others cautioned that "new and improved tools are not the magic bullet. At the lunchtime roundtable on "Culture and Social Development," Scott Guggenheim, Lead Social Development Specialist EAP, responded to Dr. Appadurai's remarks with the following concepts:

There's an even bigger push to use more and more formal tools-surveys, censuses, quantified data of different kinds. And there's always been an argument-I think Clifford Geertz has put it best-on the difference between models of and models far, and you have to realize that virtually all the instruments the Bank uses have both of those dimensions to them. One is the form of representation about the world, but they also provide an argument on how we're supposed to construct the world. And if you're not aware ofjust how much bias or cultural underpinnings are built into the tools we use to approach development, then you'll fall into the trap of replicating the exact same mistakes.

The second point that I think is in your talk is something I've been quite concerned about, which is as we go into a more formalistic and larger unit kind of model, we forget a lot of the ethnographic roots that applied-development came from.

SDV Sector Manager Caroline Kende-Robb reiterated that having good tools isn't enough. Noting that the IMF promotes its tools well, though their tools are not necessarily better than the Bank's tools, she said,

We have lots of good tools; we need to improve them, but we also need to explain them better. In that respect, we have to show [that our tools] work.. . We're looking at the impact, and [can see that they] work, but we have to show [others] that they work.

Overall, there was a loud and clear call for more useful and trustworthy analytical tools.

Building the Capacity for Democracy among States and Citizens In the current climate of growing tensions and outright hostilities in many areas of the world, several speakers and participants insisted that sociocultural factors can make or break development efforts. Dr. Serageldin said,

In every society today, in my part of the world, I am locked into an iron triangle of fights, a desperate fight between the remnants of a 1960s top-down state, highly centralized, police-controlled state, a very strong Islamic current, and a much smaller but growing reformist current towards openness, globalization, democracy and so on. No two of these forces can build an alliance. They are three totally distinct forces, and we've kind of locked like in an embrace to see who's going to ultimately win the hearts and minds of the next generation. It's an important thing because these contradictions and tensions I think lead towards stifling of a lot of development efforts, and the cultural dimension is needed in the reform process.

g"!q L - 'dl

Developing the capacity of citizens and governments to promote and practice democracy will be a crucial underpinning to the success of future

development efforts. The aspiration for democracy is spreading much faster than "the skills and techniques required <o make democracy work," said Dr. Appadurai. We need to find a way "to connect the values of democracy, whatever we may agree upon them to be, with the techniques and skills required to make it work, which are very hard to acquire . . . how to write constitutions, how to frame laws, how to do public debate." The dream of democracy is now very widespread; however,

people are in a living disconnect between the wish to be part of politics-counting democracy that way-and lacking the skills to do so. Numerous contradictions will emerge which will not make it possible for classic social policy efforts such as those the Bank is engaged in to work because the environment won't support it.

To address this need, Dr. Appadurai challenged the Bank to shift its own practices to reflect its rhetoric about empowering the poor to make a difference in their own lives. H e asked the Bank to

make an advisable and a highly desirable shift from what we may call technocratic planning to what we may call democratic planning. And, very simply, what I mean is moving away from our very deep inclination to assume that good planning rests . . . in the hand of highly qualified experts alone.

At the "International Release of the Millennium Ecosystem Assessment" session, Robert T. Watson explained that some of the worst problems found were institutional, exacerbated by a lack of capacity among citizens. Among these were:

Barriers, totally inappropriate institutional and governance arrangements, talked about often in the Bank, the issue of corruption, weak systems of regulation or accountability . . . the issue of market failures and a total misalignment and economic

incentives ... social and behavioral factors, Jack of political and economic power by the disadvantaged, underinvestment in clean technologies, insufficient knowledge or insufficient diffusion of knowledge to the people who need that, and weak human and institutional capacities.. .

In a session on "Learning From Clients," Kemal Dervis, member of the Coordination Committee of the EDPIME Republican Peoples Parry, Turkey, and former Vice President of the Bank, stressed that democratic practices had to be modeled in the international institutions that promote democracy at the national level. Mr. Dervis remarlad that the one person-one vote model is "fundamental to democracy at the national level," but many institutions that shape policy internationally do not practice this basic concept. He used the U.N. Security Council as an example, in which the U.K. has veto power, but India, with a much larger population, does not even have the right to sit on the council. Mr. Dervis remarked, "How can you reconcile the ideological victory of democracy as a source of legitimacy with the refusal of recognizing at the global level also there has to be some kind of democracy if the global economy, globalization, and global interaction are to be legitimate?"

Odin K. Knudsen, Senior Advisor ESDVP, echoed this principal in a session on "Trade and Globalization." Mr. Knudsen remarked that the WTO, the Bank, and other consensus organizations give members "at least the sense of participation," but that the larger players still hold tremendous sway, and the smaller players are disenfranchised. "The kind of deal making that's taking place now between who runs what institutions in the world doesn't give us much hope for , a governance structure which reaches out to I think the fastest growing part of the world, and the world that really needs a greater voice in deliberations," he said.

Phoro by Curt Carnemerk

"Ihc kind of dcal making that? takingplace now between who runs what institutions in the woru hesn'tgive us much

hope for a governance stnictwe which reaches out to the world that really need a greater voice in deliberations. "

- Odin K Knudsen

In a session on "Evolution in Bank Instruments and Approaches," Stephen Lintner, Senior Advisor ESDQC, said that the utilization of country systems is one approach that would enhance the interest of countries in developing their capacity,

We're in the process of changing not just in the World Bank, but in the development community, how we're going to do our work. The Paris Declaration.. . really starts to chart a path where not

tomorrow, but over time-the next three, five, seven years-we're going to move increasingly to using country systems for financial management, for procurement, for sdeguards when and where the countries have got the ability to do that. We laow from the dialogue that countries are interested. We know that in fact this is going to increase their interest in building their capacity.

John Redwood, Sector Director LAC, said:

One of the major mistakes we made over the last 30 years was focusing far too exclusively on the regulators, not looking at the consulting firms, not looking at civil society, not looking at the universities, where most of the social science expertise comes from, and not looking at the private sector. One of the things that came up in the Paris high-level forum was a scathing attack by the recipient countries on unimaginative, excessively expensive and low results-yielding technical assistance. I think one of the things we're going to see, and I think the country systems approach can reinforce this, is how we can move into a new form of technical assistance and how in fact we can have much more south-south type of cooperation.

Getting from the theoretical to the practical is another matter. Numerous specific suggestions on how to build the capacity of key stakeholders, including governments, citizens, and development support agencies emerged from across the ESSD families, as stated in the boxes below.

iscussions led by the Environ

mainstream d i a t e change adaptation into its day-to-day activities. Mainstreaming

must avoid the "projectization" of adaptation; that is, approaching adaptation via a series of

stand-alone projects. Ian Roy Noble, Advisor ENVCF, remarked:

Seventeen out of 73 US, @ur out of 35 completed PRSPs to the potential

@cts of climate change. In most cases, thati all there is, a r+rence. In the GlSs

on& eight of those 17 have some clear statements about the need to d p t . Again,

we're certainly failing in that area.

James Warren Evans, Sector Director ENV, stressed that adaptation to global warming

must become a major part of the Bank's program in order to meet client demand:

We cannot [avoid dealing) with this. We would be doing a disservice to our clients,

Discussions led by che .Social Development Family af6rrned that it was imperadvz to kc issues rffbcting paths on the dewlopment agenda Youths are the "vanguard of

economic rran&rmation." said Dr. Tvik Yousef. Based on the fact that a recent HIVIAI concert in Kenya featuring key Kenyan artists drew more than 7,000 youths, Makhtar Dio

Sector Director LAC, suggested that youths could be reached effectively through music

culture. The "messages were carried very well . . . So I think chat working around m

particularly in African contexts . . . will be a good entry point to help the younpters to

some economic aaivities," he said.

Jane Armitage, Country Direaor in the LAC, surssed that policy mandates can hinda

a program's ability to address larger issues. SpealPlng of her experiences in El Salvador, fbr

example, she remarked upon the "huge social issue'hf uneducated and unemployed youths:

And dntl n m y big W 6mun secoLpl education opportunirics and he&

deal wid tbe p m b k of m'me and violence in puch. And this is the issue &at

social people should be idntrjj.ing. I- - I

Discussions in the Agriculture and Rural Developmenr Family highlighted the need to

relieve poor countries of tbe burden of managing countless Qnor accounts through

donor harmonization prograrns that align development assistance and streamline policie~

and practices. Kevin M. Cleaver, Sector Director ARD said,

W e k put multiple requiremenh on countries that have veg vcry weak capacig

requiremenfi that our own countries could not meet. In the United States . . . we

could not have a French auditing system, an American, an English, a Russian, a

Swedirh, and a Danish. It would not work. Andyet, in Tanzania, we impose that

kind of thing, and expect it to work. A d of course, it doemk

Miriam Heidtmann, Secretariat GDPRD, added:

Harmonization anda(ignmmt is not quick or easy or cheap. We won'tsee the results

in the next year, in the next two years. It will take some timc. We will have high

transaction costs to change m i d , behaviors. m a t also takes a long time is to build

trust between donors andpartner countries andamong donors.

In sum, development practitioners face all the traditional challenges in the

areas of economic development and service delivery, but the context in which these challenges must be solved is increasingly rife with economic, ecological, and sociopolitical risks and uncertainties. In many ways, development practitioners are asked to expect the unexpected and to manage the unmanagable. Several ESSD Week participants predicted that a failure to adequately mitigate these interwoven risks will lead to societal breakdown on a large scale, which will only serve to compound the problems.

Although ESSD Week speakers and participants offered many specific,

field-based suggestions to pilot-test and implement, they also said that if such interventions are to have a lasting impact, they must be bolstered by an equal commitment to emerge from sectoral silos, equip ourselves with better analytical tools, and build the capacity for democracy among states and citizens.

"Now, one thing that stands out for me whenever we talk about culture and development is at the level of concept, I think everyone in this room agrees with it, and at the level ofpractice, nobody has been able to figure out how do you actually do anything with it." These words by Scott Guggenheim, Lead Social Development Specialist EAP, serve well as a reminder to ESSD Week 2005 participants that conferences and conclusions are valuable only to the

extent they inspire positive and productive action.

"I think this is a crucial moment," remarked Dr. Appadurai,

and the connections that as a whole group and your associated

groups who are meeting this week between social investments, global processes, and human cultural dynamics are second to none in their consequence for the big issues that face the world. I think it could be argued that this is a moment where there are some very big choices for multilateral insticucions in terms of democracy, equity, equality, transparency and so on, all of which are sadly somewhat cliched words, but I do think this is a moment where some very big bets will have to be placed. And if they are placed in certain ways I think the effects will be-whichever way they're placed, the consequences will be immense.

Big bets indeed come with big risks. Yet, given the nature of the work that must be done, and the growing context of conflict in which we must attempt to meet many of these challenges, despite the formidable rislcs and uncertainties that lie ahead, ESSD Week 200.5 seemed infused with a sense of optimism, energy, and hope. At every session, participants in- dicated that they are up to the challenge.

This genuine can- do attitude was best expressed by an ESSD Week participant, who, in response to a question from Steen Lau Jorgensen said, "What do we need to do more of? Bigger, bigger, bigger things, and not to be shy about doing bigger things."

Moving Forward "We're becoming too short-term said Ian Johnson. "We deal with long-term issues, we have medium-term frameworks, and short-term money (too often) and I think we've got to really think about how we put the issues of long-term sustainable development into country dialogue." At the close of the second day of ESSD Week, Ian Johnson asked participants to keep in mind what sustainable development is. The first element is the long-term nature of it, he said, and the second element is sustainability.

Long-Term Thinking and Sustainability "I think we're prone to incremental thinking," Mr. Johnson said. "It's the

development disease in a way, when we really should become transformationalists, and we're not." Mr. Johnson urged participants "to think through actions that are taken in the short-term and the medium-term and the way in which they do or don't undermine longer-term development. And preferably, of course, short- and medium-term actions that underpin long-term development-not ones that just don't do any harm, but ones that do good and are sustained."

When linking sustainability and long-term thinking, Mr. Johnson said, the focus becomes "less and less on just pure investments, even short-term and medium-term policies, but on the building up of long-term institutions or

at least institutions for the long-term." Mr. Johnson explained that the term "institutions" was not restricted to organizations, but also includes "the range of social-economic relations that provide frameworks [for] action."

I think the institutions are at the heart of our agenda at the local, national, regional and global level, and they're at the heart of thinking about short-term, medium-term, and long- term. In the ESSD, certainly, as I think about our work on social development, accountability, transparency, inclusiveness,

"We deal with long-term issues, we have medium-term frameworks and short-term money (too ofrm). "

-Ian Johnson

the themes that we're promoting in social development are really about new institutions, new institutional relationships . . . Ifwe're going to get serious about long-term institutions, we're going to have to get serious about understanding political economy.

Providing a Context for Viable Institutions As presenters and participants mentioned repeatedly throughout ESSD Week, preventing the erosion of social stability and finding ways to help communities and states extract themselves from conflict is crucial to development efforts. Arcado Ntgazwa, Minister of Srate for Environment, Tanzania, said,

When you have instability in a country, there is no development. And even if you have some modicum of development, it's not sustainable. So you have instability in communities where you have poverty, and then of course you have a social-economic upheaval, which is again inimical to sustainable development, and of course we all know poverty is the fertile ground for international terrorism.

While, in the words of Dr. Chernick, "The World Bank is not the United

Nations. The World Bank doesn't mediate peace," the Bank nevertheless has an important preemptive role to play in helping states and their residents develop the myriad skills and resources needed to make the dream of democracy, economic development, rule of law, accountability, security, and participation a part of their daily lives.

Peter McPherson, Co-chair and Founder of the Partnership to Cut Hunger

and Poverty in Africa, said,

I know the studies are conflicting as to whether democracy was helpful or not in the past generation, but with a new era of mass

media, international media, I think that stability will be much

harder to maintain if we don't have democracy, and I think that

also means that all the people who are interested will be better

represented.

As Ed Abington, former U.S. State Department Consul General in

Jerusalem and Political Advisor for the Palestinian National Authority said,

"Democratization is not enough." Referring to the workof the U.S. Government,

the World Bank, and other organizations with an interest in international political stability, Mr. Abington said that in his opinion, "Washington has really

got to organize itself for peacemal<ing." Democracy cannot itself protect people from economic, ecological, and

sociopolitical risks, but it can help ensure that there are safeguards for all

people, including poor people, if economic disaster strikes. Similarly, dealing with ecological threats before they become full-fledged crises can reduce societal

instability and help prevent conflict. In the session "Appreciating the Real World: IssuesofRiskandVulnerability,"

Steen Lau Jorgensen said,

I think there is increasing evidence that if you deal with these social issues-this sort of social middle or flu@ middle-we

get improved outcomes. Even OED says that. . . . It's very hard

to imagine economic efficiency without social peace. It's very

hard to imagine using lots of private investors coming in from outside or even domestic private investment if you don't have

social peace and social stability in some sense, or positive social change even better.

At the same time, he added, it can't be left entirely ~ l p to either the state

or market forces. "We are in a system where there is government failure, there is state failure, and there is informal/community failure. There is not one silver bullet that's going to solve chis."

-

It: very bard to imagine economic e5ciency without sociaZpeace. -Stern Lnu jorgpnsen

Mr. Jorgensen also highlighted the importance of taking the issues of risk and vulnerability seriously. He gave the example of Zambia, a country that followed all the advice of the Bank and the IMF, yet still has more poor people today than it did 10 years ago, because of droughts.

Well, we knew in 1971 that the patterns of weather were going to be such that what was usually considered 50-year droughts would now be 10-year events statistically. But why didn't we build [that knowledge] into those policies?. . . Isn't there a way of looking at the policies we are promoting today? Some of our standard advice may not hold when you have increased weather variability, when you have increased risk of conflict.

James Warren Evans reminded participants that "there are institutional issues and there are governance issues and there are budget issues, and we need to face up to those." He also said that tight budgets mean "we're going to have to be more clever in picking the priority areas and making sure that we do what has to be done more effectively, more efficiently, and that means we're going to have to set priorities." Having proper tools will help, Mr. Evans said,

The use of the Country Environment Analysis or whatever upstream analytical process we want to follow, to understand those issues at an early stage will enable us to really on a longer term basis, tackle these problems and deal with them more effectively, provide the assistance needed to the governments, integrate the kind of assistance that's required and the budget allocations as

required into our policy-based lending and to DPLs.

"We all know there are institutional issues and there are governance issues and there are budget

,> issues, and we need to face up to those. -James Warren Evans

"We've seen 45 years offadc, and now we want something that will be sustained for longer than a project period. "

-Keyin M. Chavm

Kevin M. Cleaver asked for a sincere commitment to any new direction

embarked upon. "Enough is enough," he said. "It's the year 2005. We've seen 45 years of fads, and now we want something that will be sustained for longer than a project period."

The Global Agenda One way to help sustain development efforts is to move issues important to ESSD to the global agenda. Peter McPherson remarked on the World Bank's ability to influence policy. "'The Bank is in the unique position, as it has often been, and there's no one else to do it, to argue how to pull together the Millennium Goals and the longer-term growth requirements."

Ian Johnson emphasized the Bank's position to bring these urgent issues to the highest levels. Building upon the phrase "problems without passports"

articulated by Bob Picciotto in an earlier session, Mr. Johnson said,

There is too small a group in the Bank, and they tend to be in ESSD here in headquarters, who are promoting and advocating the shapingof the international agenda as it relates to our issues. We're at the forefront ofglobal issues and global issues management. We need to find a way of engaging all of you in that.. . It's very clear the Bank can help mold and shape a debate and a discourse and an outcome that ultimately will be extremely beneficial, or should be beneficial to the people we serve. I think we need to get you all engaged in the problems without passports.

"We need to get you all engaged in the problems witboutpdsrportr. >>

-/an Johnson

Asian Studies,'lJniversity of Michigan

Carlos Braga, Senior Advisofit P W R

Ed Abington, f o r ~ e r U.S. State Department Consul General in Jer Politipl Advisor for the Pdestinian National Aurh&%

Eduardo ~2'enoi~hief of the Global Urban ~ b s e r v & ~ [:

Ian Roy Noble, Senior Climate Change Specialist, ENVCF

Ishaac Diwan, Country Director for Ethiopia and Sudan

James D. Wolfensohn, (outgoieg) President of the World Bank J,

James Warren Evans, Sector Director, ENV

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~c&$@&~Voss, E x e m W f 2 o ~ " , i%HE ' , - ,-.-A - - , 8 F.-L ~ o m n t i r e , Sector Direcrcp~, AFR

Peter McPhekson, Co-chair and Founder of.the Partnership t

Robert T. Watson, C 'ef Scientis bt

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Scott Guggebim, Lead Social

Shantayanan Devacajan, Chief Economist, SAR

Sharing Knowledge and Learning Appendix 2

for Sustainable Development: ESSD Week in Attion

"We must ask ourselves the questions: do we pay enough attention to

coping mechanisms for vulnerability and certainty that go well beyond

social safety nets and really look at how we cope with the range and

plethora of uncertainties? Do we have the full array of financial and

nonfinancial tools at our disposal to deal with risk and uncertainty in an

increasingly fragile world? And how well do we assess and how well do

we evaluate risk and uncertainty?"

-Ian Johnson, Vice President and Head of Network, ESSD

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