Economic Paper

2310-1385 (online)
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This series examines current economic issues from a Commonwealth perspective. The titles in the series are technical papers of topical interest to specialists concerned with trade, micro and macroeconomics, development economics and related subjects.

Managing Resources for Development

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John Vereker
01 Jan 2002
9781848598058 (PDF)

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In all Commonwealth countries, the public are demanding higher quality, more reliable and more costeffective delivery of basic public services such as health and education. These demands call on finance ministries to increase the resources channelled into priority sectors, as defined by national frameworks and poverty reduction strategies. This in turn requires effective budgetary systems, improved public financial management and good management of donor resources. Managing Resources for Development incorporates the sharing of best practice in the vital area of improving the delivery and monitoring of resources in the public sector. It is based on a paper presented by Sir John Vereker for the Technical theme for the Senior Finance Officials’ Meeting at the Commonwealth Finance Ministers’ Meeting held in London in September 2002. This book is of great interest to public policy practitioners in the allocation and management of resources.

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  • Executive Summary

    The purpose of this paper is to encourage discussion of the role of both rich and poor countries in managing resources – human, natural, institutional and financial – so as to promote sustainable development and eliminate global poverty.

  • Introduction

    There is nothing inevitable about global poverty. Just as individuals make choices, so do governments and international institutions. Most of those choices are about the management of the resources available.

  • Non-Financial Resources

    This paper is largely about financial resources. But discussion of effective resource management should not be confined to finance. Nonfinancial resources – human, natural and institutional – also have to be managed optimally for the promotion of sustainable development.

  • Non-Concessionary Financial Resources

    For most developing countries, aid flows are a low proportion of the financial resources available to governments, and managing financial resources is a much bigger issue than management of aid flows. Aggregate annual aid flows of $55 billion are only some 3.5 per cent of total annual investment in developing countries of nearly $1.5 trillion, of which all but $0.2 trillion is generated from domestic savings. Total aid as a percentage of Gross National Income fell sharply in the period 1990–2000 and is now only about 1 per cent of the GNI of poor countries, less than 5 per cent even in relatively aiddependent Africa, and well under 5 per cent in more than half of the developing member countries of the Commonwealth.

  • The Millennium Development Goals

    Most Commonwealth countries declare a commitment to the elimination of poverty and to government as beneficial for the people rather than predatory upon them. This commitment is central, for instance, to the New Partnership for African Development (NEPAD) which was endorsed by the G8 countries at the Kananaskis summit meeting in June 2002. But turning this commitment into reality requires an effective architecture of national priority setting; increasingly, best practice is seen as basing this on the quantified targets set out in the Millennium Development Goals adopted by the UN at the Millennium Assembly.

  • Development Assistance

    Four decades of experience since the end of the colonial era have taught us a good deal about what works and what does not in managing concessional resources from richer countries. There is now good empirical evidence for, and a growing consensus around.

  • Conclusions

    There is no template for successful development, no golden bullet for the attack on poverty, no philosopher's stone that will turn dross into gold. There are recurrent themes – the focus on what poor people actually want, the importance of robust institutions and reliable infrastructure, macroeconomic stability, accountable governance – but only a holistic approach can drive a process as complex as sustainable, pro-poor development.

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