Paradoxes in Addressing Inequalities by Development Agencies: Case Study of Solomon Islands and DPR Korea

Rajarshi Sen

The priority and propensity for action with respect to inequality/social exclusion is a major focus of the upcoming Sustainable Development Goals (SDGs), and yet, in poor countries, development programming tends to focus on growth and poverty reduction first, and inequality/social exclusion mitigation later. The question is, why? This essay examines the three paradoxes of inequality and social exclusion in development programmes in complex development environments, demonstrating that theoretical commitments to mitigate these issues are insufficient if approaches do not change in practice.

Inequalities: Paradoxes in various approaches

Available knowledge and evidence on inequality mitigation is growing. For example, in international development practice, it is known that it would be important to have a coherent strategic approach to social sector interventions, with clear goals and objectives, implementation mechanisms and monitoring mechanisms. But what is paradoxical is the continuing existence of lackluster strategies (strategies that pay only lip service to equality and social inclusion, as we shall find in our case studies below) and execution record of many aid agency programmes (we’ll call this: the strategy paradox).

Next is the matter of agency, which is basically the capacity to achieve what a person values[1]. But, usually, aid agencies paradoxically do not usefully apply agency in their development programming (we’ll call this: the agency paradox). Yes, they do projects on empowerment and related buzzwords, copiously sprinkle rights terminology and popular rhetoric, and implement check-lists, etc. But the problem is that the root concept of empowerment, power, is conceived/used technocratically by aid agencies, without really addressing the political underpinnings of disempowerment and power imbalances, and without understanding culturally conceptualized notions of empowerment.

As agency is largely about how we relate to one another, to truly operationalize agency, aid agencies need to understand the political underpinnings of social cleavages, and how people behave in social life, understand how people understand poverty and how they understand empowerment. This demands a critical anthropological, psychological, cultural and economic analysis. It means aid agencies should move beyond institutions (to which also, I might add, they have been late converts) and take account of patterns of human cognition, imperfect rationality, and so on. But aid agencies, paradoxically, rarely take behavioral economics explicitly into account in their programming (we’ll call this: the behavioral paradox).

Aid agencies: Paradoxes in country engagement and internal management

While poverty reduction remains the paramount goal, system-level coherence between goals, objectives, policies, institutions and implementation mechanisms are all equally important[2]. It is expected that aid agencies will be able to strengthen the drivers that improve equality and diminish those drivers that worsen inequality in the countries in which they work. However, available literature tells us that all too often, projects do not add up to support a coherent strategy, or in some cases, ‘even if an overarching strategy existed, many projects appear to be “strategy resistant”. This amounted to a “strategic deficit”…. it is often the case that the whole (the strategic impact of all interventions) is less than a sum of the various interventions’[3].

In this regard, it would be important to recognize that development/aid agencies’ country development strategies are often ‘second-best’ products. The terms of in-country engagement of any aid agency is a product of the prevailing political-economy, and is usually set by an agreement between the aid agency and the host government. This agreement is the result of mutual negotiation between the two entities—the aid agency and the host government—that in turn negotiate with their respective interest groups (i.e., their ‘principals’). Domestic special interest groups pressure the host government. Donors pressure the aid agencies. There is heterogeneity of interests and information asymmetry on both sides. The respective incentives structures are often not closely aligned. There is tug-of-war between ‘ownership’ and ‘conditionality’[4]. What results—the strategy—is an alignment of the two positions, for sure, but is also a compromise.

Aid agency representatives/managers in their downstream activities cannot be expected to compensate for the lack of strategic clarity, if their principals—the donors—cannot or do not know how to seek for it during their strategy setting with recipient governments. Paradoxically, this (strategic ambiguity) is what happens (we’ll call this: the principal-agent paradox).

Development workers often become heavily invested—professionally, personally, psychologically—in their projects. While successful development managers are to be commended for trying to be creative in a restrictive world, whether they are doing more harm than good in the long run for personal reasons or from personal and professional insecurities is and should be a legitimate concern/question. Paradoxically, too few aid agencies focus on this aspect of their personnel (we’ll call this: the insecurity paradox). If the structure of incentives facing aid managers and the internal culture of aid organizations are not geared towards encouraging new, relevant learning, if aid managers and workers do not feel safe in raising questions, questioning assumptions, challenging the prevailing discourse, there is the very real risk that the status quo will continue to be reproduced.

Country Engagement Analysis: DPR Korea and Solomon Islands

DPR Korea has a socialist, centrally planned, command economy. For a very brief overview, we start with the loss of the socialist markets and the natural disasters in the 1990s. This meant significant economic deterioration and hardships; per capita income fell by 50 per cent, life expectancy declined and the infant mortality rate increased. All sectors of the national economy, such as energy, food security, transport, industrial production, etc., stagnated or regressed. From 1995 to 2005, DPR Korea required external humanitarian assistance, including large quantities of food aid. The GDP gradually increased from USD10.608 billion in 2000 to USD16.36 billion in 2007. However, GDP growth remained weak. Insufficient food production is a chronic situation due to severe winters, lack of sufficient arable land due to mountainous terrain; there is also deficiency of investments in the agricultural sector and policies to incentivize farmers are insufficient. Deforestation, pollution, reduction of water resources and watershed degradation remain key environment issues. There is increasing frequency of floods and droughts[5]. It is often uncertain who is poor and who is not in the context of DPR Korea, given the tightly circumscribed information and rules of engagement aid agencies have to follow in that country.

International aid agencies working in DPR Korea have to operate in a tightly circumscribed environment, in a socialist-command economic system, and often complain (mostly informally) that they are not allowed by the government to conduct the kind of in-depth analyses needed for more ambitious programming; and the donors stymie many attempts at increased scope and scale of activities (is this a version of the ‘principal-agent paradox’ noted above…?). This is where the lessons from conditionality negotiations come in.

The relevant country aid strategies betray deficiency of conceptual clarity. The strategies are largely devoid of any clear and rigorous macroeconomic or political-economic view; there is very little indication of the tradeoffs inherent in development decisions—i.e., why one project or programme was chosen and not another; why one area for intervention is chosen and not another. (None of the DPR Korea aid agency documents mentions anything about transitions or even about tradeoffs; and there is no identifiable strategy to determine which project to invest in and which not. A version of the ‘strategy paradox’ noted above…?)

Official documents[6] show that with respect to social development, the current areas of intervention of aid agencies working in DPR Korea are in health, education, and WASH (water, sanitation and hygiene). While interventions in the above sectors might somehow lead to social equality and empowerment, due to the political economy specific to DPR Korea, the causal line will obviously be too tenuous, and there is significant doubt that piecemeal approaches will ever achieve anything substantial, based on international development experience. Yes, the project documents obligatorily have a spattering of words and phrases like equality, targeted at the poorest community-level, etc., (possibly in a rendition of the ‘agency paradox’ noted above…?).

Even so-called independent evaluations of aid agency projects are known to exhibit “positive bias”[7]; field visits are often not transparent, and thus only yield a partial picture of the prevailing conditions. Expectedly, then, aid agency social sector interventions remain unimaginative and their results lackluster.

Aid agencies in DPR Korea are already known to impose their own form of conditionality. Named the “no access-no aid” principle (literally, DPR Korea authorities are reluctant to grant aid agency and their resident expatriate workers physical access to areas and populations for which/whom they request aid from agencies), aid agencies use this for trust-building and negotiations with national counterparts for improved access to affected populations. In response, the government sometimes makes access dependent on the financial scope of the engagement (to maximize the amount of aid money available, they employ a reverse principle, known in Pyongyang circles as, “no aid-no access”!). The DPR Korea government imposes other conditions: for many aid agencies, independent project monitoring is not allowed and all monitoring is required through ministries and/or national counterparts. Then there is the “7-day notification rule”—under which every project visit has to be requested from and approved by the government with a minimum seven days’ notice[8]. Although many such conditions vary and are relaxed from time to time, on the whole the operating environment facing aid agencies in DPR Korea remain challenging.

Unfortunately, the prevailing culture in aid agencies and among the aid workers is one of risk-aversion. Workers in organizations have the psychological need to be ‘bound to power’; this leads to all kinds of problems: tendency not to interrogate prevailing powerful discourse—which leads to groupthink and other risks. To rigorously analyze the psychological dynamics operating in organizations, ethnographic/ participant-observation studies of aid agencies are called for, which should be part of future research agenda.

To test the hypothesis that such psychological dynamics operate in the aid agencies, I use a proxy indicator: the contractual status of aid workers. It makes intuitive sense that contractual status (i.e., whether permanent contract holder or temporary contract holder) of individuals working in aid agencies is an indicator of their source of career security and thus, indirectly and at least partially, of their psychological need to be ‘bound to power’. While contractual details of aid workers is confidential information, and the nature of contracts depends on funding and finances of agencies, based on field observations, a rough estimate is that less than 10 percent of development workers in DPR Korea are permanent staff (perhaps a version of the ‘insecurity paradox’ noted above…?).


Solomon Islanders comprise diverse cultures, languages, customs, and about 120 languages. The base unit of Solomon society is the village, populated by wantoks[9], bound by kastom[10]. Solomon Islands continues to face some of the most difficult development challenges: Low per capita income; low HDI; great vulnerability to natural disasters (earthquakes, tsunamis, floods); exogenous shocks and rapid socio‐economic and cultural changes. Solomon Islands has a recent history of violent social conflict.[11]

For Solomon Islands, in contrast to DPR Korea, there is not much divergence in the strategic developmental views held by the country’s government and the aid/donor community; there is broad agreement on the gradual opening of the small island economy, putting in place adequate social and environmental safeguards. But to think that because of this commonality of views the social development policies and activities would fare better is not found to bear out. Indeed, UNDP’s own think-tank identifies that, ‘The performance of SIDS (small island developing states, of which Solomon Islands is one) on poverty and vulnerability, is…much lower than would be expected for their HDI ranking. Therefore, more attention needs to be paid to the design of social policy than is presently the case’[12]. Yet, that same volume is forced to conclude, ‘…the SIDS have secured human development in the dimensions that are often missing in other countries – access to public and merit goods – but have, paradoxically, been unable to address some of the more fundamental ills of underdevelopment, namely poverty, vulnerability and inequality[13]. What’s more, UNDP’s own programme in Solomon Islands has not a single effective and directly inequality-reducing social sector project; the only place where the words ‘equitable’ and ‘inclusive’ appear in the same sentence in the UNDP country strategy is related to HIV and AIDS[14]!  (Is this a version of the ‘agency paradox’ …?)

The advent of donors has been accompanied by the promotion of neo-liberal economic approaches. Aid agency documents are replete with phrases like ‘market-based’ and emphasis on the individual over social systems. Governmental capacity building and institutional strengthening projects are the aid workers’ mantra in Solomon Islands today, supposedly in the effort to make good governance and state services reach to the common grassroots level communities. But there is no clear understanding and appreciation of the common people’s societal inter-dependencies, the subsistence culture, and how these impact people’s relationship to the state. (Is this a sign of the ‘strategy paradox’…?)

From a societal perspective, the situation in Solomon Islands may be described as strong within-group solidarity, reciprocity and egalitarian norms (i.e., wantoks, kastoms, etc.) that do not normally extend outside the group. This breeds social conflict, and from a governance perspective, at least partly accounts for the challenges of national unity, state building and weakness in the political party system in Solomon Islands. Even within a group or wantok, the ‘rotten kin’ effect might be at play, which militates against individual and collective progress and well-being[15]. Thus, cultural values seem to impact on economic development.

The aid/donor mainstream programmes operating in Solomon Islands fail to understand and hence leverage the subsistence ethic of the Solomon Islanders and instead try to supplant with their own neoliberal approaches. Programme implementation suffers from well-known inadequacies of planning, execution and monitoring and evaluation, and do not demonstrate any evidence of having effectively (i.e., of the kind that might seriously respond to local social/cultural conditions) taken matters of agency and behavioral economics into account (the ‘agency paradox’…?). As a result of these lapses, it is possible that the drivers of inequalities are at best not even impacted or at worst actually worsened in Solomon Islands. Aid agencies that are in a position to raise these issues do not seem to do so, as the people working for those agencies do not have the incentive to do so (a version of the ‘insecurity paradox’…?).


In both countries studied, DPR Korea and Solomon Islands, development approaches and strategies do not appear to usefully leverage or positively take into account basic and extant political, cultural and value systems. Instead, these agencies deterministically apply different value systems from an external perspective. Combined with this lapse are the noted paradoxes in operational approaches: the lack of a robust inequality targeted development strategy in each country; the failure to take insights from behavioral economics into account in developmental activities; the inattention to human agency and power dynamics; compromises from negotiations between aid agency and host country agreements; job insecurities faced by aid agency workers, which lead to reproduction of status quo conditions. Cumulatively, these factors act as driver against the inequality/social exclusion reducing principles that aid agencies espouse.

[1] Hicks, D. A. (2004). Inequalities, Agency, and Well-being: Conceptual Linkages and Measurement Challenges in Development. UNU-WIDER Research Paper No. 2004/31, p 6.

[2] Lockhart, C. (2004). From aid effectiveness to development effectiveness: Strategy and policy coherence in fragile states. Background paper for the Senior Level Forum on Development Effectiveness in Fragile States, Overseas Development Institute, p 7.

[3] Lockhart, C. (2004). From aid effectiveness to development effectiveness: Strategy and policy coherence in fragile states. Background paper for the Senior Level Forum on Development Effectiveness in Fragile States, Overseas Development Institute, p 3.

[4] For a good overview of conditionality in development lending, see Paloni, A. and Zanardi, M. (2005). Development Policy Lending, Conditionality and Ownership: A Political Economy Model. Centre for Research in Economic Development and International Trade, University of Nottingham.

[5] UN Strategic Framework, 2011-15.

[6] UNSF, 2011-15; Swiss Agency for Development Cooperation North Korea Medium-Term Programme, 2012-14.

[7] See, for instance, Michaelowa, K. and Borrmann, A. (2006). Evaluation Bias and Incentive Structures in Bi- and Multilateral Aid Agencies. Review of Development Economics, 10(2), 313–329.

[8] 4.3 Operational context and boundary conditions for bilateral cooperation, Swiss Agency for Development Cooperation North Korea Medium-Term Programme, 2012-14, p 12.

[9] Wantok, derivative of “one talk” or those who speak the same language, is a term used to express patterns of relationships and networks that link people in families and regional localities. See, Nanau, G. L. (2011). The Wantok System as a Socio-economic and Political Network in Melanesia. The Journal of Multicultural Society, 2(1), p 31-55.

[10] Kastom in Solomon pidgin language is a term derived of the English word “custom”, and refers to practices, including indigenous leadership norms in a specific locality and wantok group. Ibid., p 32.

[11] In the period 1998‐2003, in the so-called tensions, major governmental institutions were rendered inoperable

and violence led to the largest internal displacement of an estimated 20,000 people.

[12] Perch, L. and Roy, R. (2010). Social Policy in the post crisis context of Small Island Developing States: A Synthesis. International Policy Centre for Inclusive Growth, UNDP.

[13] Ibid., p 36-7 (emphasis added).

[14] Solomon Islands Country Programme Action Plan, 2008-2012, UNDP.

[15] The ‘rotten kin’ effect is when social pressures to assist kin, and the sanctions against those who violate sharing norms, are strong enough, that they reduce incentives to make profitable investments and drive savings into investment avenues that are less observable to family members, even at the cost of lower returns. See, Jakiela, P. and Ozier, O. (2012). Does Africa Need a Rotten Kin Theorem? Experimental Evidence from Village Economies. Policy Research Working Paper, World Bank Development Research Group.

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