Editors Comment: In mid-December of 2005, the World Bank hosted a gathering of academics, policy analysts, policy makers and development practitioners at Arusha, Tanzania on the theme of New Frontiers of Social Policy. The meeting reviewed progress on commitments made at the 1995 World Summit for Social Development (WSSD). The Arusha meeting proposed a number of new frontiers for social policy: First the transformation of subjects and beneficiaries into citizens”, recognizing their rights and strengthening their capacity to claim these rights, including through alliances between the poor and other segments of society. The second new frontier of social policy was identified as fostering an enabling, accessible, responsive and accountable state, with institutional mechanisms that offer redress against power inequities. The third new frontier was identified as strengthening the capacity of states to mobilize revenue from their citizens, with enabling international support, diminishing reliance on external aid. The meeting called for greater emphasis on equity outcomes in social policy. Chan Chee Khoon, Professor of Health and Social Policy at Universiti Sains Malaysia comments on these meeting outcomes. An extended version of this paper has been accepted for publication in Global Social Policy and will be published by SAGE Publications in Global Social Policy 6(3) December 2006 - © SAGE Publications 2006. This shorter version has been produced for the EQUINET newsletter with permission from the author and Sage Publications


Notwithstanding the language and imagery of pioneering intellectual endeavor, my first (Anglophone) reaction to the Arusha statement was, déjà vu again? Just as Jeffrey Sachs and the WHO Commission on Macroeconomics and Health recycled human capital theory, so are we now revisiting Dudley Seers (The Meaning of Development), redistribution-with-growth, basic (human) needs, and other 1960s vintage wisdom recast in 21st century guise? What precisely is novel in the statement?

Novelty aside, three important points are noteworthy in the Arusha statement:

Firstly, it prominently endorsed a rights perspective, going beyond human needs. A rights perspective, it should be noted, can be accommodated or co-opted within a market-oriented approach. So for instance, Tony Blair and New Labor can declare that the de facto right-to-health of UK citizens is still intact even as German medical teams are brought in to attend to NHS patient backlogs, NHS patients are sent to France or India for treatment, NHS support services are outsourced to Kaiser Permanente, etc. In effect, this transforms the debate over state versus market, into a comparative assessment of the performance efficiencies of service providers, whether public, private, voluntary, for-profit, or some hybrid of these. Oddly, these debates often seem oblivious to parallel trends in fiscal reforms and the declining fiscal capacity of states, which the Arusha statement attempts to address through domestic mobilization of revenues.

Secondly, the Arusha statement endorsed a more embedded analysis of institutions, states, and other actors, in order to elucidate the success and failures of international development approaches to poverty reduction.

This is appropriate, indeed overdue. Going beyond states, it should also be extended to international organizations including the Bretton Woods institutions (BWIs). For instance, the World Bank has itself been subject to forces pushing for privatization (divesting its development lending role to private capital markets), much in the way that welfarist states are urged to selectively offload their more profitable (or commercially viable) social services to the private sector.

Challenged by the 2000 Meltzer Commission recommendations to cease lending to ‘credit worthy’ middle-income countries’(i.e. to stop competing with private lenders), the World Bank seems to have re-positioned itself as an even more influential promoter of the interests of private capital, even as it tries to harmonize this with “poverty reduction” (trickle down theory, a rising tide lifts all boats, what’s next? a sideways lurch towards horizontal equity?). We see, for instance, expanded roles for the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) within the World Bank Group, with IFC and MIGA commitments to private sector borrowers rising from 3.3% of World Bank loans in 1980 to 25% in 2000. The World Bank Private Sector Development Strategy, 2002, (para. 87) emphasized the lead role of the Bank in insuring and catalyzing private investment in ‘more risky environments’ and in supporting ‘the development of cross-border private investment’ , crowding in (sic) ‘private investment rather than crowding it out’.

David de Ferranti, who retired in 2005 as World Bank vice-president for the Latin America and Caribbean department, found it necessary to reiterate that “much of what the World Bank actually does directly helps to improve the climate for private investment: implementing trade reforms and removing restrictive regulations on foreign direct investment; expanding private provision of utilities and infrastructure; strengthening essential legal and judicial infrastructure for private markets; freeing business from harmful and superfluous regulations” (cited in de Ferranti 2006. The World Bank and the Middle Income Countries, in Rescuing the World Bank ed. Nancy Birdsall Wash. DC,: Center for Global Development).

Thirdly, the Arusha statement quite rightly cautions against a targeted approach as an undiscriminating policy response to demonstrable social inequities in development. Thandika Mkandawire, UNRISD director, has recently authored an insightful review of universalism versus selectivity through targeting in social policy and development practice (Targeting and Universalism in Poverty Reduction. UNRISD Programme Paper Number 23. Geneva: 2005). He examines the circumstances and the forces behind the shift from universalism toward selectivity in social policy discourses addressing poverty in the developing countries. He then reviews the lessons learnt from such policy approaches and related practices: the administrative difficulties and transactional costs of targeting in the poor countries, the political economy bases of policy choices and program preferences, and the contingent and sometimes unpredictable effects of policy choices on individual incentive. In particular, he pays special attention to the cost-effectiveness argument which the advocates of selectivity deploy as a major consideration in its favour.

One aspect he does not dwell upon though is that targeting as a policy choice is eminently compatible with the concerns of influential sectors, including entrepreneurs and investors, seeking profitable opportunities in service sectors which thus far have been the domain of the public sector. The modern welfarist state acts importantly as a risk pooler in coping with uncertainty, whether arising from social, natural, or created environments. Publicly provided (or publicly financed) social services often entail cross-subsidies and risk pooling (in effect, an implicit social contract rooted in solidarity) to ensure a more equitable access to essential services than would be the case with purely market-driven production and distributional systems. With the devolution of social services to private enterprise, entrepreneurs in search of investment prospects would be primarily interested in the “market-capable” segments of society (if the state demurs from extending this effective demand, through public financing, to those without the disposable incomes).

Not surprisingly, as the flipside of privatization, voluntarism has emerged as a popular slogan, in rhetoric if not in substance, along with an ascendant neo-liberalism (George Bush Sr’s thousand points of lights, Mahathir’s caring society as counterpoint to Malaysia, Inc., etc). Social capital and civic society likewise are appealing to the World Bank as private capital proceeds to undermine a sense of community worldwide.

Seen in that light, targeting is also the persuasive face and generic template for the privatization of essential social services, persuasive because it draws upon considerable intuitive appeal. The intuitive appeal is not without reason, and targeting can in fact achieve quite positive results under certain favorable circumstances, e.g. when targeting is used to direct and to fine-tune extra benefits to low-income groups within the context of what are fundamentally universalist policies (targeting within universalism). As distinct from this however, targeting versus universalism has remained as the preferred policy axis for much of the international development establishment, prompting Thandika Mkandawire to observe that “one remarkable feature of the debate on universalism and targeting is the disjuncture between an unrelenting argumentation for targeting, and a stubborn slew of empirical evidence suggesting that targeting is not effective in addressing issues of poverty (as broadly understood)”.

Please send feedback or queries on the issues raised in this briefing to the EQUINET secretariat, email admin@equinetafrica.org. Further information and publication on EQUINET work on public health policy is available at the EQUINET website at www.equinetafrica.org.