Tuesday, June 15, 2010

Development Contradictions

All debates are plagued by some messy thinking here and there. But "development" debates, I've noticed, tend to have particularly murky thinking. I think this is rooted partly in the political and racial overtones and partly in the complexity of the issues (they tend to be multi-dsiciplinary). I've complied a list of my top six example of doublethink in development.

1. Some people are against farm subsidies because they lower food prices worldwide--Haiti was flooded with cheap "Miami rice," West Africans complain about cotton subsidies, etc.
But when food prices spiked in 2008 everyone was in outrage. We need to increase supply to ensure low enough prices for the urban poor. So which is it--are high prices good or low prices good? (There is a nuanced position here but I didn't hear anyone taking up that complexity.)

2. A lot of people are for a "human dignity"-based approach. We should listen to what people need and make the technologies they want. The patronizing attitude that we know what they need is wrong.

Then I hear this classic D-lab story: someone built a latrine with locks and the ownered ended up using it as a shed. This is explained as an example of a failed project. But wasn't the result good? The owner chose what they needed (a shed, not a latrine). There is also the malarial net version: they give out nets, people use them to fish, Easterly says this was a waste. But shouldn't some people say "well look they needed a fishing net more than a malarial net?" (There is again a nuanced position here that acknowledges on some issues, esp. health, we know best and should be patronizing.)

3. Some people love this idea of making everything a business. Sure, Nike pays low wages but it's not exploitation, it's the only way to develop. Micro-finance institutions charge usurous interest rates but it's better than the moneylenders.

But then when poor people contract with Millennium Villages to make money giving tours to American tourists in Rwanda, it's a bad thing. It's an affront to human dignity and exploitation. What?

4. Some people think we need to sell things, otherwise people won't understand the value of them. And in any event if you charge a price you ensure the people who need the limited resource are most likely to get it. Plus, it's bad to give things away because it promotes a culture of dependency.

But one tour of India let tourists donate goats to one village they toured. The "problem" was that they contracted with the only guy who could speak English in the village and he just took the goats and sold them. It was, of course, an outrage. It was fostering corruption in the village.
But doesn't it follow the principles we like--allocating the few goats efficiently, promoting a business, making sure people put the goats to use?

5. Daimbisa Moyo wants to end aid. But then says she only means development aid. Humanitiarian aid for health project is necessary and NGOs are ok in her book. But she dislikes PEPFAR. What gives? Is she for AIDS treatment or not? I have no clue after reading the whole debate and her book. You'd think the most influential book in development in several years could be clear on a basic point like that.

5.1 Moyo, like many others, notes that donations can be bad because they put Africans out of work. If we just donate bed nets then it will put the Africans who could have gone to work making the nets out of business. This simple story is not so obviously wrong. But it should be to economists like Moyo. It goes by the name broken window fallacy. I agree that a more complicate story, which emphasizes one of: the value of learning by doing, increasing returns to scale, and positive production spillovers. But people need to note those things if they're important, and explain which ones.

6. The biggest contradiction in development is between the constant exhorting that our goal is to help them help themselves and the reality that we don't. Paul Farmer makes this point--although people want to pretend they are in a position of equality with the people they help they are not. Your health care is better. You can go home. If you live in the community you'll never be treated as an equal, if you're not black. Some people try to become equals by living in the communities for extended periods of time. But how much can that help? Most people argue that the people are smart and are doing what they can for themselves. If you become one of them then you have nothing to do that they haven't tried. Also, the more context specific the project the less likely it is to scale.

If people really believed the goal was to help them develop themselves they'd spend their time on anti-corruption measures (these are complicated), lobbying to reform trade deals, including cutting farm subsidies, and raising funds for NGOs that employ local people to do the work. We'd also lobby for immigration to let more Africans come here, get skills, send remittances, and eventually go back with their human capital and be leaders, entrepreneurs etc. But I don't see a lot of people working on any of the above.

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