Successful stimulus ... chaotic finances for lower government entities

Dear Colleagues

The community is where people live ... and where people need to have economic opportunity ... and in the main, this is jobs. There are several reasons for having a job including: (1) paying the bills (2) getting ready for the future and (3) having some fun. The first priority ... paying the bills ... starts off with the essentials of living, food, shelter, clothing. Other matter can be put off. The stimulus was a strategy to head off a disastrous period of unemployment. It has worked.

But in the United States at the beginning of 2010 the unemployment rates are still obscenely high. In the view of this writer, they would have been very much worse if the Obama administration had not been quite aggressive with a stimulus package in February 2009. Sadly, the system of pushing stimulus resources from the Federal Treasury into a job in the community where people live is far from efficient ... there is a level of "stickiness" that takes some understanding. For people seeking jobs, the system seems to be dysfunctional, and I have likened the system to be somewhat like pushing on a piece of string ... at the end ... nothing of significance. Part of this is graft ... part is the complexities of the system, and little of no transparency or effective accountability

Some of this is explained by the multi-layer government system ... with a Federal Government with the power to tax and to spend and to print money ... and lower levels of government, many with a legal requirement to balance the budget with large responsibilities and little tax base to fund what must be done. The whole of the government structure of the USA is financially out of control, and the crisis of the banking and finance sector with the sub-prime mortgages and the housing bust and then the imploding derivatives fiasco may well get repeated with the state and local government sector ... and then another level of crisis with jobs.

Communities ... and all levels of government below the Federal Government, have a crisis on their hands ... yet the daily flood of economic metrics do not make this clear. Decisions are being made very day that make matters worse at these levels below the Federal Government mainly forced by laws that do damage rather than do protection. If the "balance sheet" of all the entities involved in these lower levels of government were on the record and available for analysis, it would be seen how much the political and economic leaders of the society have gutted the country ... while reporting profits and collecting bonuses. It is a financial scandal that could have worse implications than the financial implosion of 2007/2008.

I would be interested to know what contingency plans are in place. My guess is that rather little has been done yet to address this area of concern. I hope I am wrong.

Peter Burgess

Community Up

Dear Colleagues

The more one reads the newspapers and watches TV, the more it becomes clear that a community up approach to society's problems is needed rather than the domineering top down approach that seems to function almost exclusively by furthering more and more a destructive concentration of economic power.

There have been problems with concentration of economic power since the early days of the industrial revolution, and it can be argued that the problem was recognized throughout all of human history. But the science of how to maximize top performance has been perfected in business schools and popularised with initiatives such as EVA analysis (Economic Value Adding) to maximize stockholder value.

But "at what cost?" was never asked in a formal manner ... because externalities are ignored in corporate accountancy.

This is the justification for Tr-Ac-Net's development of a Community Impact Accountancy (CIA) system. In this system the rigor of accountancy remains, but the principles are not limited to the corporate organizational entity but applied to the community at large. The goal is for the community to have economic added value ... and for organizations involved to facilitating this to be profitable and sustainable.

With this CIA framework it now becomes possible for "community up" to work and be subject to a system of accountancy that facilitates its funding and its accountability.

Sincerely

Peter Burgess

What is needed for Community Centric development to succeed?

Dear Colleagues

There are enough examples of community centric development succeeding ... but success is by no means universal.

What are the key issues that differentiate success from failure? What are the patterns that will alert to future performance?

Natural potential
Some communities have all the natural resources needed to have success ... good agricultural land, good weather conditions, etc. Some do not. The underlying future potential is determined to some extent by what is scientifically possible. Maybe the community has timber, or mining potential ... natural resources that can generate socio-economic value.

Human potential
People potential is as important as natural resource potential. The power of people to make a difference is very, very important ... yet not well understood. People energy should produce valuable outcomes, but often does not because, as Dr. Yunus and others have said, there are systemic constraints that make sustainable progress impossible.

Systemic constraints
Systemic constraints are probably the biggest of the root causes of failed socio-economic progress. These constraints take many forms including a range of macro-economic issues that government has failed to address, organizational issues that don't get addressed, corruption at local, national and international levels, crime that is both local, national and international and both organized and ad-hoc, historic rivalries that get worse and not better over time, lack of knowledge about what is possible, issues of culture that constrain modernization and improved productivity, and so on.

Misguided assistance
The role of assistance ought to be positive, but this is not always the case. Assistance needs to be sensitive to local situations, but usually is not, and the assistance is all too often worse that the problem because it diverts scarce resources to secondary priorities of the community. Some assert that there has been a conspriracy to implement ineffective development ... and I would agree that development performance has been poor, but I think mainly it was well intentioned though extremely misinformed.

Need for learning ... need for information
Community socio-economic performance can be improved, but there is a need for learning, and for learning, there is a need for information. Much of the information that is needed is easily compiled at the community level ... but there is nowhere where this information can be styored and easily accessed. This is one of the goals of Tr-Ac-Net ... to create an easily accessible database of information that is relevant to the community. This should be every community, not just the ones that, by chance, an international NGO has chosen to support ... and this needs to be some two million communities and not some dozen or so, or even a few hundreds or even a few thousands. And if so many ... then there needs to be a systemic way of organizing the data and making the data useful for planning, allocation of resources and oversight. This is one of the things that modern social benefit accountancy has to be able to do ... and it can.

Local governance and local organizations
Good local governance and good local organizations are essential for success ... and these are far more common than is generally assumed. Outsiders usually don't know much about either, and the prevailaing systems of information are not much help. This component of information about communities must be strengthened so as to be a central part of any dialog about development and the allocation and use of resources for community development. These governance and organizational entities do not need to be big ... but big enough to have some relevance in the community and at the scale of the work. A self-help group (SHG) of women organizing micro-credit may well be enough as a start ... and far better than many of the better known NGOs that have rather little local community knowledge.

Local infrastructure
Infrastructure makes a difference ... but critical infrastructure need not always be built and maintained using external funding and external initiatives. What is wrong with doing most of the work with local effort and local resources. Of course, some items may be needed from outside ... like cement, perhaps, or mechanical items like pumps or generators ... but local initiatives are the key to having good local infrastructure.

Health
Yes ... of importance ... but prevention is better than cure. What can the community do so that most disease is prevented? Better water, better sanitation, better living conditions, etc. ... and if there is illness, better care and medication so that the illness is cured and its spread is limited.

Education
Education is important for children, but it is probably even more important for adults. Children need education to help them to understand what is possible, and with that to be able to make a contribution to society. But as adults that contribution can be improved year after year by continuing to learn, and especially to make the basics of learning more and more applicable in the local society. Though there is more education going on today than at any time in the past ... the value of his education is only a small proportion of what it could be if education we optimized for its relevance to society's needs.

Culture and sport
Life is about having fun ... and culture and sport are key part of this. Nothing wrong with different cultures, and healthy competition in the sporting arena ... but as a component of having a life that is fund and worth living.

Spiritual life ... religion
For many ... perhaps most people ... there is a spiritual component to life, and people do have religious beliefs that are important to them. To the extent that this is an enrichment of life, and gives meaning to life, and informs the ethical character of society there is a lot of good. Where is becomes a cause that justifies conflict and constraining the quality of life of others ... not at all good.

Because there are many components to successful community centric sustainable development ... there is a history of cutting corners and simplification. Neither helps to get a good outcome. Tr-Ac-Net is trying to create tools that will help to make it possible to optimise resource use in a complex situation.

What is missing from the above list? What needs extra emphasis?

What is wrong? What is right?

Sincerely

Peter Burgess

The Community and Social Benefit Accountancy

Dear Colleagues

I was recently asked what is Community Centric Sustainable Development (CCSD) by an Internet network friend. He was concerned that these are fashionable words, with perhaps little meaning. This was my response.

Dear Friend (name supressed)

Good question.

As you are well aware "Community Centric" has become fashionable, together with a lot of other phrases like "Bottom of the Pyramid" ... and ideas like microcredit, social business, corporate social reponsibility, sustainability ... and so on.

I watched a community in West Africa get transformed by a small FAO project years ago ... a small amount of money that created value that was "priceless". I tried to write this up under the theme "The dynamic of development" in the late 1980s, and though the essay, went nowhere, the idea has stayed with me. I saw other variants around the world in Africa, Latin America, South and Central Asia ... and then a few years back now, an Indian colleague reminded me that it was only a community centric approach to development that would ever be sustainable ... development starts with the community, and the actors are located in concentric circles around the community center.

But he went on that talking about community centric is not enough ... there has to be understanding and commitment to the community ... something that only comes over time and with the building of trust.

My contribution to modern community centric sustainable development (CCSD) with Tr-Ac-Net is the development of a framework for social benefit accountancy that builds on regular GAAP accounting but does not stop at the limits of the entity but reaches out into society at large ... or perhaps, better put, it is public accounting that helps provide data that helps to hold the GAAP accounting organization accountable for its performance from a societal perspective.

The community is central to this framework ... because it is the community that either benefits or is damaged by profit oriented investment, trade and operations.

This is a big subject ... but I hope you get a flavor of where this is going.

All the best, and thanks

Peter Burgess

This does not tell the whole story, but I hope it opens the door to dialog.

What seems to becoming clear is that there is a lot of discussion about what things are called. I would argue that there is a huge need to have data about what things are ... and when there are data about what things are, then it becomes quite clear what they can be called. A wolf is a wolf, even when it is in sheep's clothing.

Sincerely

Peter Burgess
(Also in the Tr-Ac-Net on Social Benefit Accountancy blog)

Communicating with the Community

Dear Colleagues

Community Centric Sustainable Development (CCSD) is easier said than done ... and having real communication capability is one of the key elements needed to make CCSD successful.

Good communication requires trust ... and trust must be earned. Building trust takes time.

Outsiders need to listen more than they talk ... and they need to learn from listening.

And learning should get reflected in how outsiders become engaged with community programs.

For its part, a community needs to communicate in an honest manner. Nothing is going to be gained from telling outsiders what they want to hear, when this does not reflect reality. It may be a polite and nice thing to do ... but it confuses and will usually get the wrong result.

Many thematic initiatives of the international relief and development community reflect priorities defined in Washington, London, Paris and the other bases for bilateral and multilateral organizations. These priorities may or may not be congruent with the priorities of any particular community ... and the results will never be optimized in these circumstances.

Communication can be enhanced when there is a way for important data to be put "on the record" and the progress tracked using these data. A community centric system of social benefit accountancy can provide this framework, and its use can provide valuable feedback to donors so that they see how appropriate assistance generates substantial social value ... while inappropriate assistance is merely a value destruction exercise.

It should also be observed that easy communications are not always the best communications ... it takes time and it takes experience to be able to find all the people who should be involved with communication. In some cases the community may be very open ... in other places communication is much more quiet and more private.

But communication is critical.

Sincerely

Peter Burgess

What holds communities back?

Dear Colleagues

What is it that holds communities back? People like Dr. Muhammad Yunus argue that the reason that communities remain in poverty is not because the people are not working hard, but because the economic environment is an incomplete system that gives them no opportunity.

My own experience has been that communities can make rapid progress when the conditions are right ... and usually this means that some modest amount of external resources is deployed in a way that removes a critical constraint.

The sad thing is that these critical constraints are very hard to address using the development paradigm favored by the donors such as the World Bank, USAID and others.

Community centric development holds good promise ... but most organizations do not have the Yunus mindset, and do not see people in the community as one of the biggest assets on the planet, but rather the constraint.

With much better understanding of the dynamic of the community, it should be possible to be of much greater help, and facilitate development progress at much less cost than any alternative approach.

My favorite UN funded project with an FAO Fisheries Community Project in Shenge, Sierra Leone. Rather small resources in the project were able to make a huge difference in the quality of life in the village.

This is something of the driver of the Millennium Villages Project (MVP) except that it would appear that the MVP initiative is driven more by a research agenda than a development agenda, and I don't see any way that the MVP can be economically replicated. Maybe I am wrong ... but it seems that much of what is being discovered is already quite well known, but never applied. Maybe the research question should be why well known knowledge is rarely used to the best possible effect in development situations ... is it perhaps the "silo" effect where people are very expert in their own area, but know little of anything else.

Community development requires many different dimensions of knowledge and understanding ... why ... why is it so difficult to make progess?

Sincerely

Peter Burgess

Data about communities are needed

Dear Colleagues

Data about communities is needed. There is all sorts of data about companies that are quoted on the stock exchange, about sporting teams and their players, about countries, about commodity markets, about the weather ... but hardly any data about communities.

Yet it is the community that has the most impact on our life ... community is where we live. The saying that all politics is local may be true, but life is also local.

I was guided to the idea that community was important fairly early in my development career when I realised that some communities were significantly richer than others ... why, and the answer was clearly that the communities had different situations. In another learning situation, the discussion was about a radio program to advise farmers on good practice for their farms, and it was pointed out by local people that what worked on one side of the valley did not work on the other side of the valley ... there was a lot of detailed geography that needed to be taken into consideration.

The idea that policy level decisions made in a capital city are going to make a big difference in any specific community needs to be challenged ... there are many other factors that need to be taken into consideration, not least of which is whether funds disbursed in one place will actually arrive in the community, and if not, why not. But even discounting this, there are few policies that can be designed effectively unless there is a recognition that a community is not an average of the country, but specific and perhaps quite different from the average.

In the specific case of malaria ... different communities have different experiences. Much can be done at the community level to reduce the impact of malaria on the community ... starting off with the level of awareness about mosquitoes and malaria and taking some steps to reduce malaria transmission (but more on this under malaria).

With data about communities it becomes very much easier to understand what development initiatives are working and what activities are merely wasting resources. In a community, results can be seen, and then measured and performance metrics created. What is important about these metrics is that they directly relate to the impact on people ... which is what development ought to be about. This, of course, contrasts with typical development sector monitoring and evaluation that usually has a project focus, or an organization focus, and usually only indirectly addresses the community and people impact.

Tr-Ac-Net has been developing performance metrics that have a community centric perspective. It turns out that some of the ideas are very similar to those that have evolved over many years within the Grameen Bank in Bangladesh and in other Grameen related initiatives in other parts of the world.

Getting data about communities would have been a very difficult task just five years ago ... but with modern technology it should be very much simpler. The challenge is no more the technology, but getting people to understand its potential value in helping to achieve optimal development progress.

Sincerely

Peter Burgess