Submission to DFID Consultation on International Development: Alec van Gelder

22 March 2006

White Paper Team
DFID
1 Palace Street
London SW1E 5HE

To The Panel:

Please permit me to submit some observations for your public consultation on the future of international development.

My comments address your Questions 4, on how best donors and developing countries can increase and improve access to basic services, such as health and education, in poor countries. A longer paper is attached that gives added empirical evidence and support to my response.

Yours faithfully,

Alec van Gelder
Research Fellow
International Policy Network, London

4. How best can donors and developing countries increase access to basic services, such as health and education, in poor countries?

Prosperity is, in itself, the best provider of health and education: becoming prosperous may be helped by health and education but they are not in themselves guarantors of prosperity. The removal of barriers to prosperity will, as it happens, also remove barriers to access to health and education at the same time—and it is, indeed, a question of removing barriers rather than inventing new ideas.

Those barriers include tariffs and taxes (e.g. on medicines, books, computers and mobile ‘phones, not to mention food); state interference, ineptitude and corruption; bureaucratic and regulatory obstacles to setting up businesses or registering medicines; state monopolies that guarantee everything and deliver little, while excluding other providers (whether it be water, telephones, health or education).

Any policy based on the notion that the state must be the provider of health and education is doomed to follow the pattern of failure seen in all developing countries and many developed countries too. Policies that allow people to provide these things for each other will tap into every human’s desire for health and education, stimulating access while stimulating economic activity too: the success of private “slum schools” in Africa, India and China is moving testimony to that.

Many donors and aid recipients claim that the wide discrepancy in information and communication technology (ICT) between the wealthy and the poor is a major stumbling block to increased development. ICTs are also intricately involved in the provision and delivery of many basic services, including health and education. Because of this so-called “digital divide”, many call for ICTs to form a major part of development assistance. But the paucity of ICTs is a symptom, not a cause.

Indeed, the march of ICTs suffers from those same regulatory barriers and state interference. Some examples include debilitating taxes and tariffs levied on ICTs that are proven to raise standards of living, such as mobile phones. Furthermore, the infrastructure that supports these ICTs is also frequently the target of capricious government regulations, used to entrench political power and personal benefit by keeping out the private providers who could bring prices down and improve quality. All of these egregious acts of government intervention serve to restrict the opportunities for entrepreneurs and to keep ICTs out of reach of the poor, let alone the reach of services such as health or education.

These barriers are clearly not just an impediment to the deployment of ICTs, they are symptomatic of a far greater problem of underdevelopment. Without stringent conditions attached to foreign aid, ensuring appropriate legal, commercial and political reforms, development assistance based on ICTs, medicines or any other gift will not alter the self-serving nature of political systems that undermine economic freedoms and development.
Those stringent conditions aim at allowing people to develop new ideas that are tailored to the interests and needs of their potential users and then disseminated through markets. This self-sustaining process must be underpinned by strong property rights and open markets that are defined by the transparent, systematic and equal rule of law: this is how wealth and services, such as health and education, are created.

Without these necessary preconditions of development in place, access to essential services, to prosperity and to freedom will remain inadequate.

Any development assistance that seeks to improve access to these essential services and promote sustainable development must ensure that these economic freedoms are developed where they do not exist and protected where they do.

Enclosed: “The dirigiste divide, how governments obstruct development and access to ICTs” Alec van Gelder, International Policy Network, London.