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1. Addressing the Challenges of Digital Lending for Credit Markets and Financial Systems in Low- and Middle-Income Countries

Author:
Christoph Sommer
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
The demand for digital financial services has risen significantly over recent years. The COVID-19 pandemic has accelerated this trend and since the focus has shifted towards economic recovery, digital lending has become central. Digital credit products exploit traditional and alternative financial and non-financial data to provide access to finance for households and micro, small and medium enterprises (MSMEs). While it makes lending more inclusive for underserved or unserved households and firms, its increasing influence also brings forth challenges that need to be addressed by policy-makers and regulators in order to guarantee well-functioning credit markets and broader financial systems that foster sustainable economic development. A central concern is the adverse effect of digital lending on the stability and integrity of credit markets (and potentially the wider financial systems). The rise in non-performing loans, even before the COVID-19 crisis, has been associated with an increase in digital credits. New players with little experience enter the market and exploit regulatory arbitrage, but often these players have no (or only a partial) obligation to report to respective systems for sharing credit information or to supervisory bodies, which introduces severe vulnerabilities. In addition, the low entry threshold of digital financial products, due to their convenience and simplicity for customers, provides fertile ground for exploitative financialisation. Underserved households and MSMEs with limited financial literacy may be lured into taking up unsuitable and unaffordable digital credits, leading to over-indebtedness and bankruptcy. The last challenge arises from significantly shorter loan maturities in MSME lending if current forms of digital lending are scaled up. This is problematic, as firms need loans with longer maturities to realise productivity-enhancing medium- and long-term investments, many of which include complementary investments in labour, thereby contributing to an improvement in job quality.
Topic:
Development, Finance, COVID-19, Lending, Digital Finance, and Loans
Political Geography:
Global Focus

2. Towards Sustainable Ocean Governance: A Call for Blue Climate Action in International Development

Author:
Ina Lehmann, Michael Siebert, Nicola Hanke, Maximilian Högl, and Anna-Katharina Hornidge
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
The ocean is vital for life on earth and yet it is under serious threat from climate change and resource overexploitation. Environmental change in the ocean significantly undermines human livelihoods, especially in the developing and least developed countries where people are particularly vulnerable to climate change-related losses and damages. This Briefing Paper outlines challenges that people, development cooperation and policy face and suggests ways forward for sustainable ocean governance through sustainable resource use, comprehensive risk management and enhanced climate action. Life in the ocean is threatened in various ways by human activities. Climate change, as one severe consequence, leads to ocean warming and ocean acidification putting complex ecosystems and their sensitive species in danger. Such climatic impacts are exacerbated by pollution, especially plastic, and the overharvesting of many marine species. As a result of the confluence of these developments, many local coastal communities lose their livelihoods. At the same time, climate change increasingly threatens coasts through sea level rise, salinisation and growing frequencies of extreme weather events, such as floods and storms. This puts the 2.6 billion people living at or near the coasts at high risk; low-altitude small islands are expected to become uninhabitable within the next decades if current global warming trajectories continue. Furthermore, the ocean contributes to climate change mitigation because marine ecosystems absorb CO2. In response to these challenges, there is a need for sustained awareness raising on the importance of the ocean for development as well as for the need of enhanced international cooperation for joint action. Conscious politics, substantial action and financial resources are needed at multiple levels of governance, from empowering local stakeholders to developing locally sound solutions to political guidance through national and international policy-making processes. From a development policy angle, this Briefing Paper specifically suggests that current climate and biodiversity policy processes pay enhanced attention to the ocean under climate change, pollution and overexploitation stress.
Topic:
Climate Change, Development, Governance, and Oceans and Seas
Political Geography:
Global Focus

3. Protecting Democracy: The Relevance of International Democracy Promotion for Term Limits

Author:
Julia Leininger and Daniel Nowack
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
The question of whether and how democracy can be promoted and protected through international support has recently gained relevance. On the one hand, the withdrawal of NATO troops from Afghanistan has reignited a public debate on the limits of democracy promotion. On the other hand, the need for international democracy protection is growing due to an increase in autocratisation trends worldwide. DIE research shows that it is possible to effectively support and protect democracy. In this context, both the protection of central democratic institutions, such as term limits for rulers, and the promotion of democratic forces that pro-actively resist attempts at auto¬cratisation are central. Since 2010, autocratisation trends have been characterised by the fact that they often slowly erode achieved democratisation successes and consolidate autocracies. The circumvention and abolition of presidential term limits by incumbent presidents are part of the typical “autocratisation toolbox”. Term extensions limit democratic control and expand presidential powers. Democracy promotion and protection play a relevant role in preserving presidential term limits, and thus in protecting democracy. They contribute towards improving the “duration” and “survival chances” of presidential term limits. The more international democracy promotion is provided, the lower the risk that term limits will be circumvented. For example, a DIE analysis found that a moderately high democracy promotion mean of $2.50 per capita over four years on average halves the risk of presidential term limits being circumvented.
Topic:
NATO, Development, Diplomacy, Democracy, and Autocracy
Political Geography:
Global Focus

4. Priorities for a Development-Friendly EU Carbon Border Adjustment Mechanism (CBAM)

Author:
Clara Brandi
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
The European Commission unveiled the Carbon Border Adjustment Mechanism (CBAM) in July 2021 as part of its “Fit for 55” climate-policy package. The European Commission had announced this trade-policy instrument under the Green Deal in 2019 as a means of implementing more ambitious climate-policy goals without energy-intensive sectors transferring their emissions abroad (carbon leakage). The CBAM proposal envisages imposing a levy on imports in certain energy-intensive European sectors that is proportional to the carbon content of the goods concerned. The proposal complements the EU’s existing Emissions Trading System by requiring importers of goods purchased from especially energy-intensive sectors (steel, cement, electricity, fertiliser and aluminium) abroad to purchase carbon certificates based on emissions data from abroad. CBAM is primarily designed to promote an ambitious climate policy for the EU. However, the EU’s current proposal creates the impression that it is mainly about improving domestic competitiveness at the expense of climate-policy effectiveness and development prospects. The draft legislation must now be fleshed out in detail by the EU member states and the European Parliament. In addition to addressing climate-policy effectiveness and compatibility with WTO legislation, account must also be taken of the impact on European trading partners, and, in particular, poor developing countries. Many developing countries are expected to face additional export costs as a result of the CBAM. The EU should carefully evaluate the associated disadvantages for developing countries and work towards achieving a development-friendly design of the mechanism. Corresponding improvements should be made to the CBAM in the EU’s legislative process going forward: • The EU must ensure that the border adjustments do not have a detrimental impact on poor countries. Least developed countries (LDCs) should be exempted from the CBAM. • The EU should provide targeted support to the developing countries affected by the mechanism, for instance, by building their capacity for implementing the CBAM and for reducing carbon emissions in the sectors concerned. • The EU should assist low- and middle-income partner countries with the decarbonisation of their manu¬facturing industries. • The EU should also recycle revenue from the CBAM by deploying it primarily for climate-policy purposes abroad. • The affected countries should be involved to a greater extent in future through consultations and diplomatic dialogue in the process for further develop¬ing the mechanism.
Topic:
Climate Change, Development, Treaties and Agreements, European Union, and Carbon Emissions
Political Geography:
Europe

5. Export Curbs on Essential Goods in the Wake of COVID-19 and the Least Developed Countries: Permanent Scarring from a Temporary Outburst

Author:
Simon Evenett
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
Anything that jeopardises progress towards the Sustainable Development Goals – such as a global pandemic and how governments react to it – is thus a major source of concern, in particular for least developed countries (LDCs). The first half of 2020 witnessed governments imposing dozens of export curbs on essential medical goods and foods that the LDCs, among other nations, depend upon. Although some of those curbs have subsequently been removed, there is a substantial risk of a permanent reduction in essential goods supplied to LDC markets, as current multilateral trade disciplines on export controls do not specifically require a return to the pre-pandemic status quo. Let us not forget that the G20 trade and investment ministers declared on 3 November 2020 that “any emergency trade measures designed to tackle COVID-19, including export restrictions on vital medical supplies and equipment and other essential goods and services, if deemed necessary, are targeted, proportionate, transparent, temporary, reflect our interest in protecting the most vulnerable, do not create unnecessary barriers to trade or disruption to global supply chains, and are consistent with WTO rules” (G20, 2020). Evidence on resort to export restrictions suggests, however, that G20 fealty to this pledge was uneven. The purpose of this Briefing Paper is to outline the key policy developments implicating the trade in essential goods during the first nine months of the COVID-19 pandemic before drawing out the implications for development policy and trade policy cooperation. These lessons need to be taken on board quickly if the mistakes made in 2020 are not to be repeated in 2021, when policymakers and the private sector around the world face the imperative of the equitable and efficient global distribution of COVID-19 vaccines. Recent export controls on such vaccines suggest important lessons from last year have not been taken on board universally. The key findings and policy recommendations are: • Permanent disruption to trade routes in medical goods and medicines cannot be ruled out as a result of temporary export curbs. • Revisit the World Trade Organization (WTO) rules that allow export curbs during emergencies. • LDCs should increase their buying power by joining together to buy medical goods and medicines from a diversified set of production locations. • Such buying power would be multiplied if LDCs joined forces with leading development agencies and the multilateral development banks. Stockpiling in advance of any future pandemic offers no cast-iron guarantee, as no-one can know for sure what medical goods will be in high demand.
Topic:
Development, International Cooperation, Sustainable Development Goals, Trade, and COVID-19
Political Geography:
Global Focus

6. Focussing European Cooperation with the Middle East and North Africa on Social Contracts

Author:
Mark Furness and Markus Loewe
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
2021 is proving to be a key year for cooperation between Europe and its neighbours in the Middle East and North Africa (MENA) region. As the European Union (EU) launches its new multiannual budget, the COVID-19 pandemic has demanded a rethink of the political, economic and social priorities that the EU and its member states should pursue with MENA countries. Europe’s potential for positive influence on state–society relations in MENA countries has yet to be realised. The latest European Neighbourhood Policy (ENP) South Communication, published in February 2021, promises a “new agenda” for cooperation with MENA countries. It does not, however, address conflicts between its own objectives, especially between liberal–democratic political and economic reforms, accountable government and respect for human rights on the one hand, and restrictive trade practices, migration management and security cooperation on the other. Furthermore, there is little bilateral policy coordination among EU member states. Focussing cooperation on social contracts would help overcome such conflicts, which are inherent in cooperation targeting short- to medium-term goals, such as migration management, resilience and private investment. In authoritarian contexts, these measures tend to strengthen the state at the expense of society, and thereby increase prospects for conflict, rather than the stability they promise. The social contract perspective is long-term. Social contracts rely on the state’s delivery of the “3 Ps”: protection (of citizens), provision (of economic and social services) and participation (in decision-making). The social contract provides an analytical tool and a set of organising principles for joint EU and member state priorities and activities. The social contract lens shows how the 3 Ps work together as a framework for social cohesion, peaceful relations and political stability. In practical terms, its use would help improve the effectiveness, coherence and coordination of EU and member state cooperation with MENA countries. Some EU member states prefer to focus on trade and economic cooperation, some on political reform and human rights, and others on migration management. If all take a more long-term perspective, they will realise that sustainable social contracts in MENA countries are good for all of their aims. All European actions should support reforms in MENA countries that aim to make social contracts more acceptable to the contracting parties – governments and social groups. Ideally, such reforms result from negotiations of social contracts between parties on equal terms. In practice, how¬ever, the negotiation power of social groups is often limited – one reason why Europe should ensure that its programmes strengthen societies at least as much as governments. This paper discusses four key cooperation areas which are potential drivers of change for social contracts: • Conflict resolution, peacebuilding and reconstruction; • Post-COVID-19 recovery: health and social protection; • Participation at local, regional and national levels; and • Mutually beneficial migration and mobility. The EU and its member states, by working together on the 3 Ps in these four areas, can influence positive change in the MENA region.
Topic:
Conflict Resolution, Migration, Regional Cooperation, European Union, COVID-19, and Peacebuilding
Political Geography:
Europe, Middle East, and North Africa

7. Municipal Development Policy in Germany: Current Status and Prospects

Author:
Christopher Wingens, Paul Marschall, and Eva Dick
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
German municipalities are getting increasingly involved in development policy work in Germany and abroad, with the nature of that involvement becoming ever more diverse. However, very little is known about the background or the type of these activities. Against this backdrop, the German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) has conducted a study of municipal development policy (MDP) in Germany. Financed by the Service Agency Communities in One World (SKEW) of Engagement Global, this research drew upon a previous study carried out by DIE in 2009 (Fröhlich & Lämmlin, 2009) with the aim of identifying the current status of and trends in development for this policy area. To this end, DIE collaborated with the German Institute for Development Evaluation (DEval) to conduct a survey of municipalities throughout Germany. In addition, semi-structured qualitative interviews were held with representatives of municipalities and relevant national and federal-state institutions. As the results show, involvement in MDP on the part of German municipalities is increasing in the context of enabling national policies and changing frameworks for international cooperation (e.g. 2030 Agenda). Large municipalities engage far more often in development policy than small municipalities. The latter often focus on low-threshold activities with fewer requirements for project management, such as the promotion of fair trade. In a number of cases, small municipalities carry out projects based on inter-municipal cooperation. MDP covers many different topics, from information and education work to diverse forms of partnerships with municipalities in the Global South. The number and variety of stakeholders involved in the municipal administration partnerships are increasing, along with the functions they carry out. Municipalities serve as implementing agents, facilitators and networkers. They are partly motivated in their international work and corresponding activities by self-interest. Their involvement, for instance, may allow them to take on international responsibility or increase their appeal as an employer to new recruits. Development policy is a shared responsibility of the German national government, federal states and municipalities. MDP is a voluntary municipal activity and is thus not practised everywhere. Human resources are often insufficient and the required knowledge is difficult to obtain. In some cases, municipalities consider the expenditure associated with the management of MDP projects to be too high. Nonetheless, municipalities make a key contribution to transnational sustainability policy through their work, most especially by enabling global objectives to be localised and/or contextualised. One of the specific benefits of MDP is its proximity to citizens and direct contact with local stakeholders in Germany and abroad. However, when measured using conventional metrics and indicators for development cooperation (such as Official Development Assistance, ODA), the municipal contribution is still insufficiently discernible. It is important to continue providing support to municipalities, with as little red tape as possible, in order to fully exploit the potential MDP has in municipalities that are already involved in this work and those which are not yet involved.
Topic:
Development, International Cooperation, Sustainability, and Municipalities
Political Geography:
Europe and Germany

8. Weather Index Insurance: Promises and Challenges of Promoting Social and Ecological Resilience to Climate Change

Author:
Lu Yu and Mariya Aleksandrova
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
Rural communities are particularly vulnerable to weather shocks and ecosystem decline. Traditionally, farmers have adapted to climate variability and extremes through various risk management strategies, either individually or cooperatively. However, climate change amplifies the frequency and intensity of extreme weather events and exacerbates environmental degradation processes. Market-based risk transfer instruments are now being developed as complements to these conventional risk management strategies to shield rural households from increasing climate risks. At present, risk transfer solutions play a central role in the global climate and development agenda. International- and regional-level initiatives such as the InsuResilience Global Partnership support vulnerable developing countries to increase their financial protection coverage through climate risk finance and insurance, including through innovative micro-level schemes such as weather index insurance. Over the last decade, index-based weather insurance has been gaining attention in the climate resilience discourse. These schemes compensate insured individuals based on a pre-defined weather index instead of individual losses, as with traditional types of insurance. Therefore, this instrument has several advantages, including greater time- and cost-effectiveness and reduced moral hazard risk. Although weather-index insurance holds great promise, there are several challenges in designing and promoting it in developing countries. First, on the demand side, there is a lack of accessibility to affordable insurance, especially for the poorest rural populations exposed to climate hazards. Second, on the supply side, insurance providers are facing an elevated risk of paying larger claims due to the increasing frequency and severity of weather extremes, while reinsurance services are often missing. Third, the ecological effects of implementing weather index microinsurance initiatives receive little attention in research and policy. Yet, protecting the environment and building ecological resilience are critical policy dimensions of climate risk management in rural regions, where the poor disproportionately depend on ecosystem goods and services for a living, as they often lack alternative livelihood strategies. Looking into the key challenges to microinsurance initiatives and drawing upon findings of a review of literature on weather index insurance and field research, this Briefing Paper derives recommendations for development cooperation, governments and insurers for an enhanced action agenda on climate risk insurance. The discussion is focused on the specific case of weather index insurance for the rural poor at the micro level. We emphasise the importance of enhancing knowledge on the potential positive and negative ecological effects of weather insurance schemes, and the need to develop a diverse set of climate risk management strategies for the poor, including social protection mechanisms.
Topic:
Climate Change, Development, Resilience, Weather, and Farmers
Political Geography:
Global Focus

9. The External Dimensions of the European Green Deal: The Case for an Integrated Approach

Author:
Svea Koch and Niels Keijzer
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
The European Green Deal conveys the EU’s ambition to adjust and “green” its economic growth trajectory and become climate-neutral by 2050, as part of its contribution to the Paris Agreement and the Sustainable Development Goals. While being ambitiously pursued within the Union’s own borders, the Green Deal also has strong external ramifications, as the EU leaves a tremendous ecological footprint in other parts of the world. The EU has referred to this “external dimension” of the Green Deal without further defining it, and appears to primarily understand it as a reflection of the internal strategies and as a call for the EU’s partner countries to follow a sustainable recovery trajectory similar to its own. A number of proposed EU domestic strategies (e.g. biodiversity, blue economy or farm-to-fork) contain chapters on global aspects, yet the EU seems to follow a predominantly sectoral logic to implementing the external dimension of the Green Deal. This approach has certain shortcomings. For one, it creates uncertainty for partner countries on how to adapt to the EU’s new rules, regulations and standards, and the extent of EU support for adjusting to this. It also creates a vacuum for member state engagement by means of their economy, finance, climate and foreign policies. Last but not least, it lacks clear governance mechanisms to address potentially conflicting policy objectives and to strive for greater coherence of domestic and external EU policies. Ultimately, the EU needs to define the different external dimensions of the Green Deal and promote an integrated approach. Whereas this applies universally to all partner countries of the EU, we focus in particular on developing countries in this paper. We consider these dimensions to be (1) promoting the Green Deal in bilateral and regional cooperation, (2) ensuring coherence and addressing negative spillovers, both in trade and domestic policies and (3) the EU’s global leadership in multilateral fora. Combining those three dimensions and governing them across EU institutions and member states allows for the external response to become an integral part of the EU Green Deal. Such an integrated approach allows the EU to claim leadership vis-à-vis other global powers, make credible commitments in multilateral fora for successful “green diplomacy”, and use its market and regulatory power to transform itself and others. In its bilateral relationships, the EU needs to strike a “deal” in the true sense of the word: together formulating and “owning” cooperation agendas that are clear in terms of what is in it for the EU’s partners and how the EU will cushion the potential negative adjustment costs of partners. Overall, the EU needs to avoid a “projectisation” of the external dimension of the Green Deal and clarify how the different Commission services and member states aim to work together to deliver the Green Deal, including through its various external policy areas, of which development is just one.
Topic:
Climate Change, Development, European Union, Economic Growth, and Green Deal
Political Geography:
Europe

10. Implications of COVID-19 for Conflict in Africa

Author:
Charlotte Fiedler, Karina Mross, and Yonas Adeto
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
How has the COVID-19 pandemic affected armed conflict and political violence within countries? Focusing on Africa, a continent with a particularly high number of ongoing conflicts, this policy brief analyses the immediate and long-term implications of the pandemic on conflict and reflects on its implications for international peacebuilding efforts. In the short term, conflict patterns on the continent are marked more by a continuation of previous trends than by a strong direct impact of COVID-19. Regarding armed confrontations, there was a rise in conflict intensity in some countries and one new war erupted in the Tigray region of Ethiopia in November 2020. As to lower-scale political violence, especially in the beginning of the pandemic, many states used excessive state violence against civilians when enforcing Corona measures. Perhaps more important than the immediate effect of the pandemic, the consequences of the pandemic are very likely to accelerate violent conflict in the medium to long term. This is firstly because the pandemic exacerbates structural weaknesses, including the sharpening of societal divisions, severe disruptions in the education sector and deteriorating socio-economic circumstances. Secondly, the pandemic has curtailed actors and institutions that might be able to reduce the risk of violent escalation. Trust in the state and security institutions has suffered in many countries due to dissatis-faction with the handling of the pandemic. Moreover, demo¬cratic processes are hampered by the postponement of elections and increasing levels of government repression. At the same time, international peace support is negatively affected by social distancing and further threatened by looming cuts of commitments in official development assistance. Bringing together both the short-term and longer-term effects of the pandemic on conflict clearly shows the risk that the pandemic poses to peace in Africa. It is therefore vital for the international community to: 1. Stay engaged and stay alert. If the international community continues to focus on handling the domestic consequences of the pandemic rather than international challenges, conflict will further increase in intensity and spread geographically. COVID-19 has already led to a reduction in international peace support, including peacebuilding initiatives and mediation. However, these instruments are vital to foster peace and prevent emerging and renewed conflict. 2. Invest in conflict prevention. The adverse effects of COVID-19 on economic, social and political structures can, and very likely will, provide the breeding ground for larger-scale conflicts, both in least developed countries (LDCs) and middle-income countries. Thus, conflict prevention must be taken seriously, including the strengthening of open and participatory (democratic) processes that enable societies to deal with societal conflicts peacefully. 3. Pay special attention to post-conflict countries. Many African countries have experienced large-scale civil wars in their history and continue to be LDCs struggling with societal tensions. The risk of renewed conflict in these places is particularly high.
Topic:
Development, Conflict, COVID-19, and Peacebuilding
Political Geography:
Africa

11. EU-China Engagement in Humanitarian Aid: Different Approaches, Shared Interests?

Author:
Ina Friesen and Leon Janauschek
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
Protracted crises and frequent natural disasters have generated an unprecedented number of people in need of humanitarian assistance. The international community faces a great challenge in supporting these populations, as the gap between needs and available funding is growing. To close this resource gap, the European Union (EU) aims to step up its engagement with emerging donors, particularly China, to increase their level of funding. Although China has previously been reluctant to engage in the international humanitarian system, its response to the COVID-19 pandemic indicates a change in attitude. Over the past year, China has delivered hundreds of tonnes of personal protective equipment (PPE) to over 150 countries and dispatched medical teams abroad. It has also donated $100 million to the World Health Organization (WHO) and the United Nations (UN) and pledged to establish a global humanitarian response depot and hub in China in cooperation with the UN. Amidst increasing geopolitical tensions between China and the EU, China’s growing humanitarian engagement opens an opportunity for the EU to engage with China in the humanitarian sector. However, rather than framing China’s increased engagement in solely financial terms, the EU should develop a long-term strategy as to how to engage with China on humanitarian matters. A dialogue that takes both parties’ different approaches towards humanitarian aid into account and searches for common ground could open the door towards possible cooperation. This would not only help in narrowing the funding gap but carry the potential for greater coordination and consequently more effective assistance provision. China conceptualises humanitarian aid as a subcategory of development aid and provides the majority of its assistance bilaterally. Beijing’s state-centric approach to humanitarian assistance means in practice that it engages mostly in the aftermath of natural disasters rather than conflict settings. The EU, on the other hand, has a separate humanitarian aid policy that guides the allocation of funds and provides its humanitarian assistance through non-governmental organisations (NGOs), UN agencies and the International Committee of the Red Cross (ICRC). This Briefing Paper maps out the characteristics of Chinese humanitarian aid and outlines two areas on which the EU’s tentative steps towards a dialogue with China could focus. • Food security sector: Food insecurity is a key component in existing humanitarian needs, only exacerbated by the COVID-19 pandemic. Food assistance and nutrition are already a key area of engagement for the EU and China. The EU should advocate for China to scale up its contributions to global food security through the World Food Programme (WFP), with whom China has a good working relationship. This could be combined with a political dialogue on how to foster cooperation on food security assistance. • Anticipatory humanitarian aid: Disaster risk reduction, preparedness and response play an increasingly important role in global humanitarian aid. China has built up its most significant expertise in response to natural disasters. Enhancement of disaster risk reduction is one of the strategic priorities of the Directorate-General for European Civil Protection and Humanitarian Aid Operations (DG ECHO) for 2020–2024. In light of both parties’ interest in anticipatory humanitarian aid, knowledge exchange in this area has the potential to open the door for future cooperation.
Topic:
International Relations, Humanitarian Aid, European Union, Food Security, and Engagement
Political Geography:
China, Europe, and Asia

12. The Preserving Effect of Social Protection on Social Cohesion in Times of the COVID-19 Pandemic

Author:
Christoph Strupat
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
This paper examines empirically whether social protection in the form of adapted social assistance programmes are affecting social cohesion during the COVID-19 pandemic. Using unique primary data from nationally representative, in-person surveys from Kenya allows for the exploration of the effect of social protection on attributes of social cohesion (trust, cooperation and identity). The analysis employs a difference-in-differences approach that compares households with and without social assistance coverage before and after the first wave of the pandemic. The findings suggest that social assistance can have a positive effect on attributes of social cohesion, but only in regions that faced larger restrictions due to lockdown policies. Turning to the analysis without focusing on lockdown regions, social assistance does not affect attributes of social cohesion. Overall, the results suggest that only under specific circumstances existing national social assistance programmes and their adaptation in times of large covariate shocks, such as the COVID-19 pandemic, can be beneficial for social cohesion.
Topic:
Social Cohesion, COVID-19, Trust, and Cooperation
Political Geography:
Kenya and Africa

13. Revenue Collection and Social Policies: Their Underestimated Contribution to Social Cohesion

Author:
Francesco Burchi, Christoph Strupat, and Armin von Schiller
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
Social cohesion is an important precondition for peaceful and economically successful societies. The question of how societies hold together and which policies enhance social cohesion has become a relevant topic on both national and international agendas. This Briefing Paper stresses the contribution of revenue collection and social policies, and in particular the interlinkages between the two. It is evident that revenue mobilisation and social policies are intrinsically intertwined. It is impossible to think carefully about either independently of the other. In particular, revenue is needed to finance more ambitious social policies and allow countries to reach goals, such as those included in the 2030 Agenda for Sustainable Development. Similarly, better social policies can increase the acceptance of higher taxes and fees. Furthermore, and often underestimated, a better understanding of the interlinkages between revenue generation and social policies can provide a significant contribution to strengthening social cohesion – in particular, concerning state–citizen relationships. In order to shed light on these interlinkages, it is useful to have a closer look at the concept of the “fiscal contract”, which is based on the core idea that governments exchange public services for revenue. Fiscal contracts can be characterised along two dimensions: (i) level of endorsement, that is, the number of actors and groups that at least accept, and ideally proactively support, the fiscal contract, and (ii) level of involvement, that is, the share of the population that is involved as taxpayer, as beneficiary of social policies or both. In many developing countries, either because of incapacity or biased state action towards elite groups, the level of involvement is rather low. Given the common perception that policies are unjust and inefficient, in many developing countries the level of endorsement is also low. It is precisely in these contexts that interventions on either side of the public budget are crucial and can have a significant societal effect beyond the fiscal realm. We argue that development programmes need to be especially aware of the potential impacts (negative and positive) that work on revenue collection and social policies can have on the fiscal contract and beyond, and we call on donors and policy-makers alike to recognise these areas as relevant for social cohesion. We specifically identify three key mechanisms connecting social policies and revenue collection through which policy-makers could strengthen the fiscal contract and, thereby, enhance social cohesion: 1. Increasing the effectiveness and/or coverage of public social policies. These interventions could improve the perceptions that people – and not only the direct beneficiaries – have of the state, raising their willingness to pay taxes and, with that, improving revenues. 2. Broadening the tax base. This is likely to generate new revenue that can finance new policies, but more importantly it will increase the level of involvement, which will have other effects, such as increasing government responsiveness and accountability in the use of public resources. 3. Enhancing transparency. This can stimulate public debate and affect people’s perceptions of the fiscal system. In order to obtain this result, government campaigns aimed at diffusing information about the main features of policies realised are particularly useful, as are interventions to improve the monitoring and evaluation system.
Topic:
Development, Finance, Economic Growth, Tax Systems, Transparency, and Social Cohesion
Political Geography:
Germany and Global Focus

14. The Behavioural Lens: Taking a Behavioural Vantage Point to Improve the Success of Development Programmes

Author:
Lennart C. Kaplan, Sascha Kuhn, and Jana Kuhnt
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
Successful programmes and policies require supportive behaviour from their targeted populations. Understanding what drives human reactions is crucial for the design and implementation of development programmes. Research has shown that people are not rational agents and that providing them with financial or material incentives is often not enough to foster long-term behavioural change. For this reason, the consideration of behavioural aspects that influence an individual’s actions, including the local context, has moved into the focus of development programmes. Disregarding these factors endangers the success of programmes. The World Bank brought this point forward forcefully with its 2015 World Development Report, “Mind, Society and Behavior”, herewith supporting the focus on behavioural insights within development policies. While agencies may intuitively consider behavioural aspects during programme design and implementation, a systematic approach would improve programme effectiveness at a relatively small financial cost. For this reason, we present a framework – the Theory of Planned Behaviour (TPB) (Ajzen, 1991) – that aids practitioners and researchers alike in considering important determinants of human behaviour during the design and implementation of development programmes The TPB suggests considering important determinants of human behaviour, such as the individual’s attitude towards the intervention (influenced by previous knowledge, information or learning); subjective norms (influenced by important people, such as family members or superiors); and the individual’s sense of behavioural control (influenced by a subjective assessment of barriers and enablers). The theory should be used early on in the programme design to perform a structured assessment of behavioural aspects in the appropriate context. Components of the TPB can often be addressed through cost-effective, easy changes to existing programmes. Simple guiding questions (see Box 1) can help integrate the theory into the programme design. An iterative and inclusive process, particularly in exchange with the targeted population and other stakeholders, increases success.
Topic:
Development, Norms, and Behavior
Political Geography:
Germany and Global Focus

15. The Treaty of Aachen, 2019: Opportunities to Strengthen French–German Cooperation on Sustainable Development

Author:
Laura-Theresa Krüger and Julie Vaillé
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
On 22 January 2019, France and Germany signed the Aachen Treaty. Therein, 56 years after the Elysée Treaty, re-emphasising their support for multilateralism, sustainable development and development cooperation. Despite the ambitions expressed in this document, the signing of the Treaty calls for reflection: to what extent does this type of agreement indeed lead to joint operational approaches and have a real impact on French–German cooperation? To answer this question, this Briefing Paper analyses the obstacles to a closer French–German cooperation in the field of sustainable international development. It focuses on how these commitments are put into practice at the level of political coordination and project implementation. The analysis is based on about 20 interviews with representatives of French and German ministries, development agencies and think tanks. It finds that things get most complicated at the level of political coordination. Three main obstacles are identified: slightly diverging strategic visions; an incompatibility between institutional structures concerning the degree of specialisation and the mandates of the ministries responsible for steering aid, as well as the degree to which development agencies are involved in strategic decision-making; and cultural particularities regarding communication and time management. Five recommendations are proposed: 1. Protect what has been achieved: the alignment between France and Germany at the political and project implementation levels is an asset in an international context where the focus on national interests is increasing. Such cooperation should thus continue to be supported and reinforced. 2. Channel the political momentum to the working level: in order to reinforce their coordination, the two countries could establish a solid and regular follow-up mechanism for each commitment, detailing joint actions, shared objectives and milestones. 3. Promote mutual knowledge and trust: personnel exchange between the departments, as well as deep dive sessions on the two countries’ activities and strategies would allow increased understanding of each other. 4. Share best practices: a balanced and respectful French–German collaboration could be encouraged by the sharing of practices for which one country is more advanced or better positioned than the other (such as the French interministerial coordination or the German project evaluation and monitoring procedures). 5. Act jointly or divide the work: in the run-up to each joint Franco-German action, make a deliberate and conscious decision whether the two countries have an interest to act jointly or to divide the work. This decision would allow maximisation of the impact, either by specialising or by working together.
Topic:
Development, Treaties and Agreements, and Sustainable Development Goals
Political Geography:
Europe, France, and Germany

16. Development Cooperation with Conflict-Affected MENA Countries: Refocussing on the Social Contract

Author:
Mark Furness and Annabelle Houdret
Publication Date:
01-2020
Content Type:
Policy Brief
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
State–society relations are in flux across the Middle East and North Africa (MENA), nearly a decade after the Arab uprisings. The protests and revolts that swept the region in 2011 arose from widespread rejection of the post-independence Arab social contracts. These were based on redistribution of rents from natural resources and other forms of transfers and subsidies, as “compensation” for acquiescence to political and economic authoritarianism. In several MENA countries, including Iraq, Libya, Syria and Yemen, but also in Algeria, Lebanon and Palestine, the old social contracts have been destroyed by civil conflicts and internationally sponsored wars, which in some cases predated the 2011 uprisings. Since broken social contracts are at the root of conflict in the MENA region, supporting new social contracts should be the core objective of development cooperation with the region’s most conflict-affected countries. But “post-conflict reconstruction” often ignores the fact that conflicts do not end with peace agreements, and conflict-affected societies need more than reconstructed infrastructure, institutional capacity and private sector investment if they are to avoid violence in the future. Development agencies term this kind of cooperation “resilience”: promoting political, economic, social and environmental stability, rather than risking uncontrollable, revolutionary transformation. However, resilience has often provided cover for short-term measures aimed at preserving the position of particular actors and systems. Development cooperation needs to get beyond reconstruction and resilience approaches that often fail to foster the long-term stability they promise. By focussing on the social contract, development cooperation with conflict-affected countries can provide a crucial link between peacebuilding, reconstruction and longer-term socioeconomic and political development. It can thereby contribute not only to short-term, but also to long-term, sustainable stability. Using the social contract as an analytical lens can increase understanding not only of what donors should avoid doing, but also where they should concentrate their engagement during transitions from civil war. Practical examples from challenging contexts in the MENA region suggest that donors can make positive contributions in support of new social contracts when backing (a) stakeholder dialogues, (b) governance and reforms, and (c) socioeconomic inclusion. In Libya, the socioeconomic dialogue process has brought stakeholders together to outline a new economic vision for the country. The Municipal Development Programme in Palestine focusses on improving the accountability and delivery of local institutions. The Moroccan Economic, Social and Environmental Council provides an example of a process that engages previously marginalised groups. These programmes are all examples of targeted efforts to build cooperation among the groups that make up MENA societies. They aim to broaden decision-making processes, and to increase the impact of specific measures with the ultimate objective of improving state–society relations. They could be adapted for other fragile contexts, with external support. In backing more of these kinds of activities, donors could make stronger contributions to sustainable, long-term peace- and state-building processes in conflict-affected MENA countries.
Topic:
Development, Natural Resources, Conflict, Peace, and Social Contract
Political Geography:
Iraq, Middle East, Libya, Yemen, Palestine, Algeria, North Africa, Lebanon, and Syria