Andy Sumner and Charles Kenny (disclosure – Andy and Charles are friends of mine, and I need to write up my review of Charles’ book Getting Better . . . in a nutshell, you should buy it) have a post on the Guardian’s Poverty Matters Blog addressing the two most recent challenges to the idea of the “poverty trap”: Ghana and Zambia’s recent elevations to middle-income status (per capita GNIs of between $1,006 and $3,975) by the World Bank.
Quick background for those less versed in development terminology: GNI (Gross National Income) is the value of all goods and services produced in a country, as well as all overseas investments and remittances (money sent home from abroad). Per capita GNI divides this huge number by the population to get a sense of the per-person income of the country (there is a loose assumption that the value of goods and services will be paid in the form of wages). So, loosely speaking, a per capita GNI of $1006 is roughly equivalent to $2.75/day. Obviously $2.75 buys a lot more in rural Africa than it does basically anywhere inside the US, but this is still a pretty low bar at which to start “Middle Income.”
I do not want to engage an argument about where Middle Income should start in this post – Andy and Charles take this up near the end of their post, and nicely lay out the issues. The important point that they are making, though, is that the idea that there are a lot of countries out there mired in situations that make an escape from food insecurity, material deprivation, absence of basic healthcare, and lack of opportunity (situations often called “poverty traps”) is being challenged by the ever-expanding pool of countries that seem to be increasing economic productivity rapidly and significantly. The whole point of a “poverty trap”, as popularized by Paul Collier’s book on The Bottom Billion and Jeffrey Sach’s various writings, is that it cannot be escaped without substantial outside aid interventions (a la Sachs) or may not be escapable at all. Well, Ghana certainly has received a lot of aid, but its massive growth is not the product of a new “big push”, a massive infusion of aid across sectors to get the country up into this new income category. Turns out the poorest people in the world might not need us to come riding to their rescue, at least not in the manner that Sachs envisions in his Millennium Villages Project.
That said, I’ve told Andy that I am deeply concerned about fragility – that is, I am thrilled to see things changing in places like Ghana, but how robust are those changes? At least in Ghana, a lot of the shift has been driven by the service sector, as opposed to recent oil finds (though these will undoubtedly swell the GNI figure in years to come) – this suggests a broader base to change in Ghana than, say, Equatorial Guinea . . . where GNI growth is all about oil, which is controlled by the country’s . . . problematic . . . leader (just read the Wikipedia post). But even in Ghana, things like climate change could present significant future challenges. The loss of the minor rainy season, for example, could have huge impacts on staple crop production and food security in the country, which in turn could hurt the workforce, exacerbate class/ethnic/rural-urban tensions, and generally hurt social cohesion in what is today a rather robust democracy. Yes, things have gotten better in Ghana . . . but this is no time to assume, a la Rostow, that a largely irreversible takeoff to economic growth has occurred. Aid and development are important and still needed in an increasingly middle-income world, but a different aid and development that supports existing indigenous efforts and consolidates development gains.
Tag: Jeffrey Sachs
Poverty reduction and development: it's not either/or
A piece on the Guardian‘s Poverty Matters Blog today sets up one of the oddest, and most pointless, dichotomies I’ve seen in a discussion of development. To summarize, the post by Rick Rowden argues that a focus on aid effectiveness and poverty reduction
perpetuates a bloated aid industry that doles out millions of dollars each year to legions of contractors and NGOs to carry out projects in dozens of poor countries.
What it does not do, apparently, is work toward any definition of development
In recent decades, earlier notions of development economics have been replaced with meeting the MDGs. But poverty reduction is not development. We seem to have suffered collective amnesia about the history of development, which used to be widely understood as industrialisation – in which poor countries undergo a transformative process out of primary agriculture and extractive industries into manufacturing and services industries with higher value-added over time.
First, this is an absurdly reductionist definition of development. If Rowden wants to talk down to his readers about the history of development, he’d do well to note that his particular take fell out of currency in the late 1960s because IT DIDN’T WORK. There is a reason modernization/big push theories fell out of favor (unless you are Jeff Sachs, and then you are forever reviving the corpse of the big push at the community level via the MVP. Then again, Sachs doesn’t seem to read development history, either). In short, the borrowing required for industrial ramp-ups almost never paid off with enough revenue to pay off the loans. To understand why this happened is to understand the country-specific interplay of three key factors. First, there were (and still are) structural issues in world trade that locked much of the developing world out of key markets. Second, these policies failed because markets were dominated by large corporate entities operating with very small margins because of their huge economies of scale, basically undercutting any new competitors on price because they had the advantage of a huge head start provided by colonialism. Third, massive corruption within countries drained the productive capital out of these loans, dooming the projects there were meant to fund. Countries had to address either two or three of these factors, in varying ratios, at different times. Modernization theories pushing industrialization had little to offer in addressing them. This is why we eventually saw the rise of an attention to institutions and governance in development – not just at the level of the state, but also in markets and broader trade arenas. It is also why so many countries in the Global South found themselves saddled with crushing debt at the end of the last century – many of those debts were the original loans and continued accumulation of interest tied to these failed policies.
The other issue is that industrialization requires resources (to make products) and consumption (to sell them). At a time when our demand on the natural environment is already beginning to overshoot its capacity to serve our needs, asking countries to take on even more unsustainable activities is an absurdity that will end in failure. There is nothing sustainable in this pathway – and if you look at the post, you will see that the entire argument is framed in an unlimited world, where the only constraint on development is growth:
If countries are unable to use the industrial policies they will need to transform their domestic industries, diversify their economies and build up their own tax bases over time, how will they ever get off the foreign aid bandwagon? Here the “poverty reduction” discourse is misleading; it neglects to ask how countries are supposed develop without industrialising.
Well, that isn’t totally true unless you take a very, very narrow reading of the poverty reduction discourse. A lot of us are working in this space to imagine alternatives. Indeed, there are community level projects that, while not elevating people to the standards of living seen in the Global North, have created sustainable, substantive changes in the quality of residents’ lives. The examples are out there if people want to look.
Beyond all of this, though, is the larger issue – Rowden clearly has no idea what he is talking about when it comes to development when he dichotomizes poverty reduction and development. Even if we saw economic growth as the be-all, end-all of development, there is a lot of work out there arguing that endemic poverty is a huge drag on economic growth and therefore has to be addressed as part of a growth package (see the OECD Observer here). So even in a fairly reductionist view of development, you need poverty reduction . . . and I don’t know anyone who believes that growth adequately addresses poverty. Not even at USAID. Really.
So poverty reduction and development are not an either/or proposition, from any reasonable perspective on development. Rowden’s piece would have been interesting . . . in 1960. I have no idea what the point was in publishing it today.
Challenging development dogma
On his blog Shanta Devarajan, the World Bank Chief Economist for Africa, has a post discussing the debate about the performance and results of the Millennium Villages Project (MVP). The debate, which takes shape principally in papers by Matt Clemens and Gabriel Demombynes of Center for Global Development and Paul Pronyk, John McArthur, Prabhjot Singh, and Jeffrey Sachs of the Millennium Villages Project, questions how the MVP is capturing the impacts of its interventions in the Millennium Villages. As Devarajan notes, the paper by Clemens and Demombynes rightly notes that the MVP’s claims about its performance are not really that clearly framed in evidence, which makes it hard to tell how much of the changes in the villages can be attributed to their work, and how much is change driven by other factors. Clemens and Demombynes are NOT arguing that the MVP has had no impact, but that there are ways to rigorously evaluate that impact – and when impact is rigorously evaluated, it turns out that the impact of MVP interventions is not quite as large as the project would like to claim.
This is not all that shocking, really – it happens all the time, and it is NOT evidence of malfeasance on the part of the MVP. It just has to do with a simple debate about how to rigorously capture results of development projects. But this simple debate will, I think, have long-term ramifications for the MVP. As Devarajan points out:
In short, Clemens and Demombynes have undertaken the first evaluation of the MVP. They have shown that the MVP has delivered sizeable improvements on some important development indicators in many of the villages, albeit with effects that are smaller than those described in the Harvests of Development paper. Of course, neither study answers the question of whether these gains are sustainable, or whether they could have been obtained at lower cost. These should be the subject of the next evaluation.
I do not, however, think that this debate is quite as minor as Devarajan makes it sound – and he is clearly trying to downplay the conflict here. Put simply, the last last two sentences in the quote above are, I think, what has the MVP concerned – because the real question about MVP impacts is not in the here and now, but in the future. While I have been highly critical of the MVP in the past, I am not at all surprised to hear that their interventions have had some measurable impact on life in these villages. The project arrived in these villages with piles of money, equipment and technical expertise, and went to work. Hell, they could have simply dumped the money (the MVP is estimated to cost about $150 per person per year) into the villages and you would have seen significant movement in many target areas of the MVP. I don’t think that anyone doubts that the project has had a measurable impact on life in all of the Millennium Villages.
Instead, the whole point here is to figure out if what has been done is sustainable – that is the measure of performance here. Anyone can move the needle in a community temporarily – hell, the history of aid (and development) is littered with such projects. The hard part is moving the needle in a permanent way, or doing so in a manner that creates the processes by which lasting change can occur. As I have argued elsewhere (and much earlier that in this debate), and as appears to be playing out on the ground now, the MVP was never conceptually framed in a way that would bring about such lasting changes. Clemens and Demombynes’ work is important because it provides an external critique of the MVP’s claims about its own performance – and it is terrifying to at least some in the MVP, as external evaluations are going to empirically demonstrate that the MVP is not, and never was, a sustainable model for rural development.
While I would not suggest that Clemens and Demombynes’ approach to evaluation is perfect (indeed, they make no such claim), I think it is important because it is trying to move past assumptions to evidence. This is a central call of my book – the MVP is exhibit A of a project founded on deeply problematic assumptions about how development and globalization work, and framed and implemented in a manner where data collection and evaluation cannot really question those assumptions . . . thus missing what is actually happening (or not happening) on the ground. This might also explain the somewhat non-responsive response to Clemens and Demombynes in the Pronyk et al article – the MVP team is having difficulty dealing with suggestions that their assumptions about how things work are not supported by evidence from their own project, and instead of addressing those assumptions, are trying to undermine the critique at all costs. This is not a productive way forward, this is dogma. Development is many things, but if it is to be successful by any definition, it cannot be dogmatic.
“Madam President, millions of dollars have been spent on the Millennium Village Project but we have seen nothing concrete done for our people,”
Well, there’s nothing like continued empirical evidence for the arguments I have been making about Jeff Sachs’ Millennium Villages Project (MVP), and thanks to a Tweet from Michael Clemens, I’ve now got more. Clemens is one of the authors of a report that is very critical of the MVP, and that report was good enough to find and cite my work on this topic – but how he dug up this story from a Liberian newspaper, I will never know:
“The project is a new approach to fighting poverty in post-conflict Liberia, but residents in the District have complained that they had seen no evidence of the project getting off the ground. In a brief statement to the President, Deputy Speaker Tokpah J. Mulbah indicated that the project, which seeks to improve the socio-economic and infrastructural development of the District lacked the residents’ involvement and that there was not tangible impact being felt by the villagers. He added that the people of that District were discontent about the way the project is being implemented in their village.”
But the brutal sentence is the one by Deputy Speaker Tokpah J. Mulbah that titles this post: “‘Madam President, millions of dollars have been spent on the Millennium Village Project but we have seen nothing concrete done for our people,’ he said.”
Clemens’ report is here. My article is here.
Easterly says what most of us are thinking . . .
Bill Easterly is one of the better public intellectuals in the area of development – I enjoy his writing, and I think that his work since leaving the World Bank has become more and more valuable as it takes on an ever-more critical edge. I take him to task for some of his earlier work in my book, and I think that he does not quite question the workings of globalization and development to the extent necessary to really start to get at what is happening in the world, but by and large I think he is a tremendously valuable asset for the development community.
My belief in his value just went up tenfold, however, with his op-ed comparing the celebrity activism of Lennon to that of Bono. While I take his points about Lennon’s activism, I suspect that Easterly overstates the case for Lennon’s importance as an activist a bit – it is hard to change the system from completely outside, as there is often no way to engage with people constructively – all you get is parallel conversations. But Easterly’s criticism of Bono is dead on:
While Bono calls global poverty a moral wrong, he does not identify the wrongdoers. Instead, he buys into technocratic illusions about the issue without paying attention to who has power and who lacks it, who oppresses and who is oppressed. He runs with the crowd that believes ending poverty is a matter of technical expertise – doing things such as expanding food yields with nitrogen-fixing leguminous plants or solar-powered drip irrigation.
Bono becomes a problem not through any fault of his own, really, but because he becomes a mouthpiece for people like Jeff Sachs (I have plenty to say about him, but look here, here and in the peer-reviewed literature here) who really seem unable to think about power relations, history and political economy when considering development. Asserting that poverty is the result of a lack of development asserts a problem and a solution all at once, without ever really addressing a cause. Further, as I tell my students, there is no such thing as a purely technical, apolitical development intervention – even putting in a well will have variable impacts across a community, creating winners and losers. The technical is not the hard part in development – if it was, we’d have accomplished a hell of a lot more than we have up to this point.
I also must admit that I really appreciated Easterly turning his guns on the other celebrity activists:
Bono is not the only well-intentioned celebrity wonk of our age – the impulse is ubiquitous. Angelina Jolie, for instance, is a member of the Council on Foreign Relations (seriously) in addition to serving as a U.N. goodwill ambassador. Ben Affleck has become an expert on the war in Congo. George Clooney has Sudan covered, while Leonardo DiCaprio hobnobs with Russian President Vladimir Putin and other leaders at a summit to protect tigers; both actors have written opinion essays on those subjects in these pages, further solidifying their expert bona fides.
But why should we pay attention to Bono’s or Jolie’s expertise on Africa, any more than we would ask them for guidance on the proper monetary policy for the Federal Reserve?
Why indeed? I sure as hell don’t plan to lecture Clooney or DiCaprio on acting. Affleck, well . . .
But I must take issue with Easterly a tiny bit here – yes, Bono is the frontman, but shouldn’t our frustration be directed at those who fill his and others’ heads with the belief that we can fix it all, with just a little more money (I’m looking at you, Dr. Sachs)? I have no doubt that Bono, Clooney and all the rest have the best of intentions, and work hard to inform themselves rather than run around blind, but in the end they are manipulated by people with greater experience and what appears to be greater expertise to further agendas that these celebrities do not understand – Bono is backing Sachs’ push for more aid (which is in conflict with Easterly’s and others’ view that we need to focus on institutions, political systems and corruption). Clooney is supporting a group that has one idea of how to address issues in Sudan, but may not have the best or the only ideas because they tend to deal in moral absolutes (like supporting an ICC warrant for Kony, which derailed peace talks in Northern Uganda/Southern Sudan/Congo/CAR). We need to make sure we dig past the celebs to those who feed them these ideas, and address the problem at it source . . .
Saving Chilean miners, saving development
Well, they pulled all 33 miners out of the hole. This is an absolutely staggering feat – first, finding the miners nearly a half mile underground in the first place, and then drilling a precision shaft all the way down to them that was straight enough to accommodate a rescue capsule – which then worked flawlessly 33 times. It never got old watching the miners come out of the ground. And certainly the Chileans have a lot to be proud of these days.
AP Photo/Jose Manuel de la Maza, Chilean presidential press office
But this whole experience has caused me to think again about development and our persistent inability to get things done in a consistent manner for the world’s poorest people. This rescue was, in many ways, everything that modern development is not. The Chileans never asked about the cost – in fact, nobody knows what this cost, besides a hell of a lot. The government didn’t parse options and try to pick the most cost-effective rescue – they ran three plans at once, to see which would work best. It was expensive, but saved time and probably saved some lives. In short, the Chilean government didn’t even try to assess the value of a human life here – by any economic measure, they’ve probably spent a lot more saving these men than the miners will ever earn or spend in the Chilean economy, so the rescue was an economic loser all along – the government decided that saving these men was necessary at any cost, that the value of their lives was not calculable.
When I see that attitude, with this amazing result, I am appalled by the piles of monitoring and evaluation red tape that development organizations must wade through to justify their activities – was that the lowest bid? The most cost-effective intervention? All of that accounting misses the point – there is no such thing as a good intervention that leaves people behind in the name of efficiency or cost-effectiveness. Human lives cannot, and should not, be valued that way.
Second, this rescue was innovative and risk-taking. They ran three plans at once. Nobody had ever done any of them at this sort of depth. There were huge risks of failure. And they plowed forward anyway – two of them did not work out, but the third (actually, plan B) saved 33 lives. There are so many of us in development who carry around the desire to try innovative things, to risk failure, learn and try again . . . but the culture of development with its budgeting and monitoring chokes off these sorts of efforts for interventions that produce easily measured results. When we take risks and fail, the accountants take the money away. So we go for easy, safe results, even when those results have little meaning for the people at the receiving end of the intervention. What does it mean to say that this year we trained 25 judges in country X? Have we really improved the judicial system, or the standard of living for those subject to it? That number does nothing to help us understand if what we are doing matters at all . . . but we keep working on this sort of project because it is a measurable outcome that is of relatively low risk.
Contrary to what Jeffrey Sachs (see my impolitic rant here) keeps preaching, we DO NOT know what works in development. If we did, there would be a hell of a lot less suffering in the world today. We do know, however, what produces measurable results that look good, and we keep pounding away at that sort of work because we can rejustify our budgets each year. Development is pathetically risk-averse, from the top down, and those that would take risks cannot find the funding or support to do so.
Chile just pulled 33 men out of a hole in the ground a half-mile deep. They did it with help from mining and drilling experts from more than a dozen countries and with advice from NASA specialists on living in isolated conditions (if there were any doubt of the value of a human spaceflight program, here is yet another spinoff value that we have gained. NASA’s unique expertise in this area surely contributed to the safe recovery of many of these men). This was an international partnership to try to do the impossible, making it up as they went along. And they did it.
Surely we can reimagine development in the same way, and with the same spirit. But with much more urgency. There are a lot more than 33 people down this hole.
We're not all that powerful, really . . . and Jeff Sachs, please shut up. Please.
I somehow missed this NY Times article on our impending failure to reach the Millennium Development Goals (MDGs). Hey, it was my first week at work. In any case, a few thoughts on a topic that should be getting more discussion.
As I’ve told my classes time and again, the MDGs are the sort of thing that everyone can embrace. The NYTimes gets it right:
For all the bitter debates pitting nations against one another, there is conspicuously little disagreement over the United Nations goal of eliminating dire poverty. Virtually none of the countries that signed onto the endeavor in 2000 faults the idea of eradicating hunger, educating children, improving maternal health or combating disease. It would be like opposing mother’s milk.
Ah, but saying you want to eliminate suffering, and actually doing it, are two different things. And at the end of the day, we have two big problems. First, we live in a finite world where some of us consume so much that it creates real challenges for the rest to get to comfort, if not affluence. Put another way, if we want everyone to live at an average American standard, we need to come up with between 2-3 Earths worth of resources (see posts here and here). So, there is no way to achieve the MDGs without making hard choices . . . which leads to my second point: the rich countries do not feel an impetus to make these hard choices. At least for now, poverty/hunger/suffering are things that happen to large numbers of people somewhere else (we conveniently forget our own poverty belts, like Appalachia and the inner cities) for the average policymaker – we’ll just build really high walls to keep all “those people” out. Big kudos to Esther Duflo for pointing this out:
“If we miss the goals, who is going to punish us?” asked Esther Duflo, a development expert at M.I.T. “Nobody is going to come from Mars and say, ‘You didn’t reach the goals, so we will invade’ — there is no onus.”
But while this open assertion of the problem was necessary, I think Duflo is wrong about the fact nobody is going to punish us . . . well, perhaps not literally wrong. However, you can only limit the opportunities of the global poor for so long before we start seeing things like ecological collapse in agricultural systems, or the destruction of the rainforests, as the poor are forced into choices they would rather not make. No wall is high enough to guard against a changing climate or a disrupted global economy. We’re playing Russian Roulette, only adding shells to the chamber each time we miss easy goals like the MDGs, or fail to act on the changing climate. No, the aliens may not come to get us . . . there’s no need. They can just wait until we get ourselves.
Oh, and the Times felt the need to quote Jeff Sachs. Again. And he was wrong. Again. Jeff Sachs, for God’s sake shut your piehole. Really. You are a supremely arrogant man who has wasted his considerable intelligence by not listening to anyone, not reading any economic or development history, and not really learning any of the economic geography you profess to be furthering. Your brilliant idea for development, the Millennium Village Project, is a failure – I called that one four years ago – and yet you will not shut up. Will reality ever intrude for you? For the press? You are the D-list reality star of development . . . every time we try to look away, you perform the intellectual equivalent of taking off your top and running around, only we’ve seen this show before and nobody cares or wants to see it again. Put on your shirt and go read something by someone other than yourself, then come talk to us.