1. Planning for Sustainable Development VCC/CGSD Extractive Industries and Sustainable Development Executive Training Program June 16, 2014 Prof. gordonmccord Center on Globalization and Sustainable Development gm2101@columbia.edu

2. Today’s Plan 9:00am – 11:00am: Using a Differential Diagnosis to Inform Sustainable Economic Policy 11:00am – 11:15am: Coffee Break 11:15am – 1:00pm: Designing and implementing a public investment program

3. Suggested Further Reading

4. Why a Differential Diagnosis • Like the human body, society is a complex system • Interconnected subsystems • Implies that many things can go wrong • More importantly, possibility of cascading failures • Problems require a differential diagnosis • One symptom can have multiple causes • Not every fever requires budget cuts • Need to identify underlying cause • Checklist starting with most likely causes • Context and setting is important • Monitoring and evaluation crucial

5. Basic Idea of a Differential Diagnosis • Audience • Ministries of Development, Planning, Education, Public Works, Health, Finance • Questions to Answer • What is holding back sustained reduction in poverty? • Which national programs work? Which don’t? • What is missing? • Specificity • Empirically-based analysis • What are the typologies of poverty in the country?

6. Typology of Poverty • Who are the poor? Where are they? • Urban or rural? Widespread or pockets? • Geographic isolation? • Social exclusion? • Access to services in education, health, transportation? • Endogenous cultural barriers? • Labor force participation • Fertility behavior • Sources of income? • Targeting of existing national programs • Missing national programs • Role of NGOs, development partners, private sector?

7. Differential Diagnosis Checklist(see Jeffrey Sachs’ End of Poverty Chapter 3)

8. Where are the Poor? Rates vs. Counts

9. Targeting is enormously important for policy direction… how do Jordan’s poverty pockets match the poverty rate & count maps?

11. Where is the Infrastructure?

13. Differential Diagnosis for Jordan • What are the primary risk factors for poverty? • What do the data say? • DHS & HEIS household surveys • Unemployed women (1.34x) • > 5 children (RR: 4.25x) • < secondary education (4.82x) • Non-Jordanian (1.82x) • Amman (0.49x) • Mafraq (1.54x) • Rural?

14. Differential Diagnosis Checklist

15. Differential Diagnosis Checklist

16. Differential Diagnosis Checklist

17. Differential Diagnosis Checklist

18. But Governance Doesn’t Explain Everything…

19. On Governance Failures • Corruption can be frustrating, but is it a cause or a symptom of poverty? • Petty corruption (e.g. traffic police) • Corruption that hinders private sector growth • Permits, ports, customs • Remember good management costs money, so good governance might be a chicken-and-egg problem • Include in your differential diagnosis only governance failures that are truly pernicious, as opposed to symptoms of poverty

20. Differential Diagnosis Checklist

24. Differential Diagnosis Checklist

25. Synergy of Integrated Interventions Agriculture Water Economic Growth Poverty Reduction Health Gender Equity Education

26. Core Interventions Agriculture and Environment (staple yields, diversification, commercialization, landscape management) Primary Health System (CHWs, clinical care, receiving hospital, safe childbirth, integrated management of childhood disease, home-based malaria control, control of NTDs, HIV, TB, etc.) Education (access, school meals, de-worming, hygiene, curriculum) Infrastructure (water and sanitation, roads, connectivity, electricity, cook stoves, other) Business Development Gender empowerment

27. Empirical Regularities in Development • Review some theory on poverty traps • Millennium Development Goals • Making International Development System Coherent

29. Diffusion of Industrial Revolution

32. Structural Features within Countries Conclusion: both geography and institutions affect distribution of poverty, across and within countries

33. Basic Mechanics of Capital Accumulation

34. Poverty Trap

35. The Role of ODA in Breaking the Poverty Trap

36. Private & Public Investments in Capital Private sector requires all these forms of capital, which requires public investment!

42. Inter-Sectorial Problems & Solutions

44. Synergy of Integrated Interventions Agriculture Water Economic Growth Poverty Reduction Health Gender Equity Education

45. Break!

46. Implementing Goal-Oriented Development • Motivation • Poverty traps require capital and technological push • (where governance is adequate!) • Agreed-upon international financing framework • Measure indicators and trend at baseline • Identify “on-track” and “off-track” indicators • Conduct needs assessment and costing • Households • Model increased domestic resource mobilization • Foreign assistance • Calculate foreign assistance gap • Is it within means/obligations of donors? • Monterrey Consensus (2002)

48. Graphically…

49. Needs Assessments