Using Aid to Prevent Conflict
Horizontal inequalities and aid policy
Aid can be a powerful instrument for helping to
prevent conflict. One key way it can do this is by contributing to a fair
distribution of resources across different groups in society. But today, this
issue is largely ignored in aid policy. This briefing explains why inequalities
between groups, or ‘horizontal inequalities’, need to be addressed in aid
policy, and sets out how this can be done.
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orizontal inequalities (HIs) are inequalities between
religious, ethnic or cultural groups. Such inequalities may occur in economic,
social or political dimensions, or all three. When large, and especially when
consistent across dimensions, horizontal inequalities make conflict more
likely.
Aid accounts
for a very large proportion of government expenditure in poor countries.
Potentially, therefore, aid donors have the power to make a major contribution
to the development of an inclusive society by reducing horizontal inequalities.
Yet at present
these issues are often ignored in aid policy, and the result is that aid
sometimes serves to accentuate HIs.
Aid addressed to the reduction of HIs is in line with the Human Rights
approach to development as well as the objective of eliminating social exclusion.
Aid policy can
contribute to reducing horizontal inequalities by:
n Including the issue of group equity in all policy discussions with
government.
n Including
horizontal inequalities in the agenda of Poverty Reduction Strategy Papers
(PRSPs).
n Promoting a
more equal distribution of resources across groups in all public expenditure
reviews.
n Using sums
spent directly by agencies on social and economic projects which reach deprived
groups and deprived regions.
n Reviewing
macro-economic policies to consider their implications for horizontal
inequalities.
n Increasing the
allocation of aid to ethnically heterogeneous societies to help counter HIs.
n Supporting the
collection of data on group inequalities and monitoring their evolution.
What are
horizontal inequalities?
Horizontal inequalities are inequalities between culturally
defined groups, e.g. ethnic, religious, racial or caste-base groups. They
encompass economic, social and political dimensions:
n Economic HIs include inequalities
in asset ownership, employment and other economic opportunities, leading to
inequalities in incomes.
n Social HIs include inequality in access to services,
such as education, health and housing, associated with inequalities in health
and educational outcomes.
n Political HIs consist in inequalities in the group
distribution of political opportunities and power, including control over the
presidency, the cabinet, the army, the police, and regional and local
governments.
How to design aid
policy to reduce horizontal inequalities
Aid is a powerful tool for reducing HIs. It accounts
for a very high proportion of total government expenditure in poor countries
generally, the countries most vulnerable to conflict. For example in Cambodia,
aid exceeds total government revenue excluding grants and in Ghana it accounts
for nearly 80%. And, of course, the influence of aid donors goes beyond their
own expenditure to their role in developing country governments’ policies more
generally, through discussions on macro-economic policy, public sector reviews,
sectoral plans and via the PRSPs.
Donors are beginning to accept the
need to include policies to reduce inequalities and exclusion in
conflict-sensitive development (DFID 2007). Once correcting HIs is accepted as
an important objective of aid policy, there are many ways that aid donors could
contribute towards achieving this.
First, donors should monitor what is
happening to HIs in the country. In some countries, there are good data and policies,
but in many more information is not collected systematically on this issue. Aid
donors should support collection of social and economic data on group lines, by
including questions about group identity in censuses and household surveys in a
sensitive way. Imaginative use of
existing data can give a good guide to the situation – in particular, regional
data can often be used as a proxy for ethnic data.
Secondly, aid donors
should include considerations of HI in all aid instruments, including
PRSPs, public expenditure reviews (PERs), Poverty Reduction Budget Support (PRBSs),
Sector Wide Programmes (SWAPs) and macro-policy design.
Correcting HIs can involve a wide
range of policies, many of which are affected by aid instruments, especially
where aid donors have broad discussions of policy with national
decision-makers. A first priority is to sensitize such decision-makers to the
need to consider HIs in policy-making. NGOs should also be aware of these
issues. Appropriate policies to reduce HIs differ according to context, but
relevant policies include:
n investment,
credit and extension policies to help offset regional imbalances;
n education and
health policies aimed at ensuring ethnic/religious and regional balance in
access;
n
policies that
promote skills and training of disadvantaged groups;
n policies to
outlaw discrimination including fair employment legislation;
n policies to help disadvantaged
groups realize their legal rights, e.g. via legal aid;
n policies
towards rights to land and natural resources to ensure balance in access and
benefits;
n policies
towards achieving equality in cultural recognition;
n policies to
regulate the media to ensure equal access;
n policies
towards civil society to encourage group interactions; and
n consideration
of affirmative action policies where other approaches do not contribute enough
to reducing inequalities.
This is a long list. In practice,
early assessment of the country situation will reveal where the priorities are.
For example, in Ghana, where there are large horizontal inequalities, it is
apparent that the major problem is the economic development of the North and
its integration into the Southern economy. This means infrastructure investment
is a priority and assistance in generating productive opportunities in the
North.
HIs need to be introduced in PRSPs. Reviews of existing PRSPs show that ethnic or
religious distributional issues are rarely reported upon, though this is
beginning to change in conflict-prone areas. While gender equity is considered
in the majority of cases, a review showed that ethnic minorities were mentioned
in only a quarter of the cases examined. Cases in which ethnic minorities were not mentioned included heterogeneous countries at risk of
conflict, such as Azerbaijan, Benin, Burkina Faso, Chad, Guyana, Malawi, Mali,
Mauritania, Mozambique, Niger, Rwanda, Tanzania and Uganda (Stewart and Wang
2006). Group equity considerations should also enter into the decisions as to
who to include in the participatory exercises.
As noted by Booth and Curran ‘the participation of minorities or
indigenous peoples is either often overlooked or simply regarded as impractical
due to their marginalization’ (Booth and Curran 2005:11).
HIs need to be
included in any donor involvement in PERs and in discussions of PRBSs. This requires
an assessment of the distribution of the benefits of public expenditure by group.
Given data problems, this can often be approximated by regional data. The
equity of group distribution of government expenditure can then be introduced
as an explicit consideration along with the normal efficiency and
poverty-reduction criteria.
SWAPs also
require an assessment of the group equity of programmes, with
requirements for improvement when large inequalities occur.
Macro-reform
programmes have strong implications for distribution. Programmes
generally favor tradables over non-tradables which can have serious
implications for group distribution, sometimes so much so that they more than
offset any public sector policies designed to correct such inequities. This is
the case in Ghana, where the North is benefiting from deliberate attempts to increase
social sector investment, but this is more than offset by economic developments
favoring the rest of the country, so that North-South inequalities in incomes
and poverty are increasing. Less than 1% of foreign direct investment goes to
the North. The group distribution of macro-policies needs to be assessed and
taken into account in the design of policies.
Finally, HIs need to be considered in country allocation of aid. Countries with heterogonous populations need more aid than homogeneous ones, because of the need to
consider equity in resource allocation. Moreover, heterogeneous countries have
been shown to have lower growth rates than homogeneous ones. Yet, at present,
aid allocation favors homogeneous countries.
In the longer run, the objective of
reducing HIs is compatible with other aid objectives, such as promoting growth
and reducing poverty:
n It will
assist growth, by tapping the potential of the deprived groups.
n Improved
political stability will assist both growth and poverty reduction.
n It will
contribute to poverty reduction goals by helping reach the most deprived, often
difficult to reach with normal poverty reduction programmes.
A Human Rights approach
A Human Rights approach to aid and development offers
a helpful general approach from the perspective of reducing HIs, while being
grounded in natural law and international agreements. In particular, respect
for minorities, policies to outlaw discrimination, and assistance for the
greater empowerment of weak groups are all central to such an approach, while
contributing to reduced group inequalities.
How aid
can worsen horizontal inequalities
Aid is intended to promote growth and poverty
reduction. It is frequently blind to issues of HIs. The impact of aid,
consequently, can be to worsen horizontal inequalities where these do not form
an explicit consideration in aid policy:
n Some programmes designed to favor particular groups
contribute to widening inequalities. Transmigration programmes in Indonesia,
supported by the World Bank and other donors, privileged Javanese and marginalized
some local groups, worsening land and income distribution across groups.
n Structural adjustment programmes are blind to these
issues and can exacerbate horizontal inequalities where more privileged groups
are in the favored tradable sectors and worse-off groups are concentrated in
the subsistence and non-tradable sectors. In Mozambique, the gainers are the
producers of cashews, cotton and sugar, mainly located in the Centre and South,
and the losers the much poorer groups in the North.
n Projects and programmes to reduce poverty are often focused
on the areas that are easiest to reach – those around the capital city – and
remote areas tend to be neglected, worsening horizontal inequalities. This is
the case in Bolivia, Peru and Guatemala.
n Processes of
implementation often lead to a bias in the benefits of aid distribution, as
particular groups control resource flows. A study of a capacity-building
programme for Kenyan civil servants found that, in practice, it was biased by
senior officials in favor of their own ethnic group (Cohen 1995).
n Especially where class and ethnicity overlap, the channeling
of aid through privileged, educated intermediaries can unwittingly compound
prevailing discriminatory attitudes and practices.
n The current country distribution of aid favors
ethnically homogeneous countries over heterogeneous ones, partly because large
countries (which have greater heterogeneity) tend to receive lower aid flows
per capita.
The link between
horizontal
inequalities
and conflict
Horizontal inequalities can be a
major source of conflict in both developed and developing countries. Group
inequalities provide powerful grievances which may be used to mobilize people
politically, especially when a socio-economically deprived group is also
without political power. The conflict in Côte d’Ivoire, the long wars in
Guatemala and Sudan and the rebellion in Nepal are all examples:
n In Côte
d’Ivoire, Northerners had two-thirds of the years of education of Southerners
in 1998/9 while their infant mortality rate was 30% higher. Political
inequalities were added to these socio-economic inequalities when the Northern
candidate was debarred from the presidential candidacy in 1995 and 2000.
Northern grievances were articulated in an anonymous document, the ‘Chartre du
Nord,’ pointing to the inequities in resource distribution. Both political and
socio-economic HIs were thus factors behind the violent rebellion which broke
out in 2002.
n In Guatemala, the indigenous
peoples have been badly treated and subject to acute deprivation from colonial
times. Even today, their literacy rate
is only 70% of that of the non-indigenous and their infant mortality rate is
56% higher. These strong inequalities, accompanied by almost complete political
exclusion, underlay the massive conflict which lasted for more than two
decades.
The commission which investigated
the conflict found that the historical root causes of the conflict related to
the ‘exclusionary, racist, authoritarian and centralist’ characteristics of the
state, economy and Guatemalan society (Comisión para el Esclarecimiento
Histórico (CEH) 1999: 81).
n In Sudan,
severe and longstanding HIs were clearly an element in the decades-long
North/South conflict and are now relevant to the Darfur situation.
The ‘North’
region, comprising about 5% of the population, has exerted a firm grip on
political power since independence. It accounted for between 60% and 89% of
ministerial appointments for most of the period from 1956 to 2000, with that
figure never falling below 47%. Gross primary enrolment in the South in 2002
was just 11.6% in 2002, compared with 82.4% in the North and 45.5% in Darfur.
The infant mortality rate is systematically higher, and literacy lower, than
the North throughout the country, with the worst situation in the South. Fiscal
transfers, far from offsetting these HIs, actually reinforce them. Development
expenditure per capita in Darfur was just 17% of the national average in
1996-2000, while no data at all were published for the South.
Regional redistribution of revenue
and expenditure is an essential aspect of any post-conflict reconstruction,
which was recognized in the 2005 peace agreement, and the issue is now one of
implementation. The need for redistribution has become more acute with the
discovery of oil resources, mainly located in the South.
n In Nepal,
sharp caste and ethnic inequalities overlap with severe regional
inequalities. Mean years of schooling
among the top Brahmin caste and the ethnic Newar were double the national
average in 1996, and their average incomes 30% and 60% higher than the national
average, respectively. In the case of the Newar, who are mostly located in and
around the Kathmandu valley, this performance largely reflects equally serious
regional inequalities. While development policies have attempted to
redistribute towards impoverished regions, key political positions remain
dominated by the top castes and the Newar ethnic group. Between them, the
Brahmin and Chhetri (the second-ranked caste) and the ethnic Newar accounted
for over 95% of recruitment into the civil service in 2001, despite
constituting only around a third of the population. Parliament is also dominated by the same
three groups – a situation which in fact worsened following democratization in
1990. n
References
Booth, D., and Z. Curran. 2005. Aid
instruments and exclusion. Report for the UK Department for
International Development. London: Overseas Development Institute.
Cohen, J. M. 1995. Ethnicity,
foreign aid and economic growth in sub-Saharan Africa: The case of Kenya.
Development Discussion Papers No. 520. Cambridge, MA: Harvard Institute for
International Development.
Comisión para el Esclarecimiento
Histórico (CEH). 1999. Guatemala, Memoria del Silencio.
Available online at: http://shr.aaas.org/guatemala/ceh/mds/spanish/toc.html.
Department for International Development
(DFID). 2007. Conflict Policy Paper.
London: HMSO.
Stewart, F., and M. Wang. 2005. Poverty reduction strategy papers within the human rights
perspective. In P. Alston and M.
Robinson, eds., Human Rights and Development. Oxford: OUP, pp 447-474.
Centre for Research on Inequality, Human Security and
Ethnicity (CRISE)
Queen Elizabeth House
University of Oxford
3 Mansfield Road
Oxford OX1 3TB, UK
Tel +44 1865 281810, Fax +44 1865 281801
This policy briefing is
based on CRISE
Working Paper 36: The
Implications of Horizontal
Inequality for Aid by Graham Brown and Frances Stewart.
Available online at:
http://www.crise.ox.ac.uk/pubs/
workingpaper36.pdf