NoraLustigUNDPWorksh opPresentationAug15th

Achieving the Millennium Development Goals: A Framework for Action : 

Achieving the Millennium Development Goals: A Framework for Action Nora Lustig Director - Poverty Group/UNDP “Appraising practical approaches to the methodologies and macroeconomic modeling for MDGS” Workshop UNDP, New York - August 15th, 2006

Resolution adopted by the General Assembly-2005 World Summit Outcome: 

Resolution adopted by the General Assembly-2005 World Summit Outcome “To adopt, by 2006, and implement comprehensive national development strategies to achieve the internationally agreed development goals and objectives, including the Millennium Development Goals”

Millennium Development Goals: 

Millennium Development Goals Eradicate Poverty & Hunger Achieve Universal Primary Education Promote Gender Equality Reduce Child Mortality Improve Maternal Health Combat HIV AIDS, Malaria & other diseases Ensure Environmental Sustainability Global Development Partnership

MDGs are a “mixed bag” : 

MDGs are a “mixed bag” Some qualitative, some quantitative Some focus on inputs, some on outcomes Some have targets, some don’t Developing and rich countries have roles Most focus on national averages, not minimum standards for groups or regions Some targets are defined relative to inadequate starting points Some goals still need to be mapped into indicators that can be monitored

MDG-based National Development Strategy: Principles : 

MDG-based National Development Strategy: Principles Adopt pro-MDG action programs: do not rely on “trickle down” (economic growth). Adopt pro-MDG policies that are pro-growth in the long run. Ensure consistency between macro and growth policies, and pro-MDG policies. Set minimum standards for key groups or regions: don’t rely on national averages. Earmark funds for pro-MDG policies in annual federal, state and municipal budgets and protect them from budget cuts.

MDG-based National Development Strategy: Principles : 

MDG-based National Development Strategy: Principles Adopt pro-MDG action programs: do not rely on “trickle down” from economic growth.

Slide7: 

To reduce poverty, should countries and international organizations focus on boosting per capita income and productivity? or should they focus on actions to improve conditions for the poor? Growth vs. MDGs

Growth and MDGs: A Two-way Causality: 

Growth and MDGs: A Two-way Causality Growth Human development and poverty reduction Human development and poverty reduction Growth  MDGs are an end in themselves but also a means to achieving high quality, sustainable growth

Figure 1: Growth and Poverty Reduction in the 1980s and 1990s: 

Figure 1: Growth and Poverty Reduction in the 1980s and 1990s Source: World Development Report 2000/2001: Attacking Poverty. World Bank, Washington, D.C. Note: The data, drawn from Chen and Ravallion (2000), span 65 developing countries in the 1980s and 1990s.

From Growth to Human Development and Poverty Reduction: 

 Economic growth reduces poverty, but inequality and changes in inequality create a large variance in outcomes… From Growth to Human Development and Poverty Reduction

MDG-based National Development Strategy: Principles : 

MDG-based National Development Strategy: Principles 2. Adopt pro-MDG policies that are pro-growth in the long run.

From Human Development and Poverty Reduction to Economic Growth: 

From Human Development and Poverty Reduction to Economic Growth Example: Investing in health can increase growth A third of UK’s growth between 1860-1960 is explained by improved food and nutrition (Fogel, 1991,1992,1994). Positive correlation between growth and health using life expectancy at birth (Barro, 1996). Using a time series of over a century, health innovations had a greater impact on growth than other innovations (Arora, 2001). Regions with high prevalence of malaria have lower economic growth (Gallup & Sachs, 2000). Nutrition has a significant effect on economic growth (Arcand, 2001).

MDGs and Economic Growth: 

MDGs and Economic Growth Short-term Poverty trap Win-win Trade-offs or small effect long-run g g growth MDGs are an end in themselves MDGs are an end and a means to higher growth Example: Primary education must reach threshold to pay off Example: Investments in education and health may reduce other public investment Example: In the long-run health and education investment boost growth MDG

MDG-based National Development Strategy: Principles : 

MDG-based National Development Strategy: Principles 3. Ensure consistency between macro and growth policies, and pro-MDG policies.

Inconsistencies Between Pro-growth & Macroeconomic Stability and the MDGs: 

Inconsistencies Between Pro-growth & Macroeconomic Stability and the MDGs Examples: Trade liberalization or privatization might hurt the poor Fiscal austerity might cut down pro-poor programs

MDG-based National Development Strategy: Principles : 

MDG-based National Development Strategy: Principles 4. Set minimum standards for key groups or regions: don’t rely only on national averages.

Setting minimum standardsto the MDG’s: 

Example: Child and infant mortality in Mexico Progress in national average is above the rate required to achieve Mexico’s MDG But, in some municipalities infant mortality is 66 per thousand live births, similar to rates in the Sudan Setting minimum standards to the MDG’s

Practical Strategies : 

Practical Strategies 1. Define national priorities 2. Identify binding constraints and assess trade-offs 3. Choose policy interventions 4. Estimate cost of interventions 5. Allocate the financing requirements considering macro trade-offs 6. Evaluate results

Current Approaches: 

Current Approaches

Practical Strategies:Appraising Current Approaches : 

Practical Strategies: Appraising Current Approaches

Practical Strategies: An IDEA (Integrating Diagnostics, Evaluation and Action) for achieving the Millennium Development Goals: 

Practical Strategies: An IDEA (Integrating Diagnostics, Evaluation and Action) for achieving the Millennium Development Goals Country-driven process

Slide22: 

Supply-side constraints Demand-side constraints Credit constraints Norms or low aspirations Dangerous environment - : - Lack of teachers or classrooms High absenteeism - Example of IDEA approach: Low education levels Private returns low Poor attendance: even if teachers and classrooms available No adequate school nearby: schools/teachers not available; parents complain about school quality Problem Symptoms Potential causes of symptoms Policy inter-ventions Policy Evidence-based analysis of policy interventions Assess needs for new infrastructure and staff Conditional Cash Transfers (with nutrition, health and education components) Build schools and hire teachers Review salaries Parent’s empowerment

Slide23: 

- : - - Low education example of IDEA approach (cont.) Expected results of intervention Macroeco-nomic and growth implications Evaluation and feedback Impact on nutrition health, school attendance and income poverty Impact on intra-household bargaining power CGE’s to assess trade-offs between growth and MDGs Domestic resource mobilization and crowding-out effects, macro stability, exchange rate and interest rates External resources and macroeconomic stability, debt-sustainability and competitiveness - Randomized trials or “on-the-fly” evaluation of each policy intervention– update and adjust policy mix

Policy Example: Conditional Cash Transfers: 

Policy Example: Conditional Cash Transfers A C B With condition Schooling/Health care More of other goods Other goods A: Without Transfer B: Cash Transfer C: Conditional Cash Transfer Without condition

IDEA:Menu of Specific Services  Poverty Reduction Practice: 

IDEA: Menu of Specific Services Poverty Reduction Practice

IDEA:Menu of Specific Services  Poverty Reduction Practice (Ctd): 

IDEA: Menu of Specific Services Poverty Reduction Practice (Ctd) 3. Costing the interventions needs assessment methodology. 4. Assessment of macroeconomic and microeconomic trade-offs CGE’s macroeconomic models 5. Good practices in impact evaluation: randomized trials matching method