Before they turned to cookie cutter stadium rock, RHCP cared about the Power of Equality.

I recently wrote a piece for Change.Org about something I’ve been thinking about a lot since I got back from South Africa: the disappearance of equity and redistribution from the vocabulary of development work. Up till about twenty years ago or so, it was a common practice in development work to talk about ‘social and economic equalization’ as an aim in its own right. This normally took the form of deciding on a manner in which redistribution of wealth could be made: through taxation and selective expenditure, through active redistribution of resources, such as land, through subsidization and so on. Over time, this approach was removed completely from the discourse. Structural Adjustment was one reason for this, as it tightened purse-strings and regulated taxation structure. It began to seen as counterproductive, discouraging private sector enterprise. There were many reasons for this decline, many of them sound.

However, the concept of redressing imbalances in society didn’t disappear from development discourse. It simply mutated to a new kind of approach, described as ‘pro-poor’ expenditure. The idea behind pro-poor expenditure is essentially that Governments and donors should focus on development activities that aim most directly at the poorest sections of the population. This is less controversial than redistribution though taxation, subsidization or resource transfer, since it simply means that the portfolio of development projects is weighted in a different way.

This approach is based on a very different set of assumptions about the economy than a redistributive policy mix. By focusing expenditures on activities that are most directly related to the poor, the implicit assumption is that economic development and the improvement in the lot of the poor is best served by spending on activities directly relating to them, and allowing the industrial and commercial agriculture sectors to work on their own, unaided or with much less aid. This is new: prior development policy looked more at the prospects for developing a modern economy, one which generates wealth rapidly, in the mould of most currently developed nations, and then seeking to protect the poor from the worst inequities and exploitation that such an economic system can generate.

This is a fundamental change, one that deserves far more thought than has been given to it. Spending more directly on the poor has an obvious intuitive appeal: you’re not relying on any opaque feedback mechanisms to see support translate into gains for the poor, as you would under the historically far more common approach of pushing for overall economic strength and then redistributing through taxation. The idea is that if you spend directly on the poor, if the project is worthwhile, you will see a gain in their standards of living.

Yet, there’s a big unanswered question about this approach: what is the long-term effect of such expenditure? Does it generate a fast-growing economy which creates jobs internally? Or does it create a sort of smaller-scale, class-based aid dependency, something like the morphine drip Matt suggests aid might function as?

I suspect the latter is much more likely than the former. In the last few years, I’ve had the chance to examine the donor portfolios in a number of countries, and have seen first hand how they use their influence to put pro-poor expenditure at the centre of local budgeting processes as well. Yet, the suspicion lingers that these approaches are not sustainable, and not generating further gains: though we’ve spent the last fifteen or twenty years supporting small scale agriculture in Malawi, for example, there is little sign that these small farms are becoming bigger farms, or even moving systematically away from food insecurity in the long-term. What’s more there’s no counter-example we can give: no example of a currently developed country or even a high-flying semi-developed or middle-income country that has followed the pro-poor route.

What this means for the poor is that they are being targeted with the kind of policies that might keep them just out of poverty, but won’t afford them the opportunity to participate in a dynamic economy – the kind which is likely to drive a country from ‘developing’ to ‘developed’.

Yet the answer isn’t simply to focus all our energies on the major agricultural and industrial arms of the economy in the hope of stimulating rapid growth regardless of the impact on the poor; this is how we end up with townships as found in South Africa, favelas in Brazil and so on. The rights and conditions of the poor, the urban and rural labourers and the unemployed must be protected. If focusing our attention on projects aimed directly at enhancing their coping strategies or limited-potential livelihoods and promoting big business in extremis are both flawed, a third way is required: the poor must be supported in gaining fair access to a large-scale economy. This means getting jobs at reasonable wages, keeping jobs, ensuring that access to labour markets is equal, and that infrastructural development in response to industry links the whole country together.

The first two are crucial: almost every country in the world that has escaped from poverty has done so through job creation rather than small-scale personal or family-based economic activities. But in many developing countries, the rights of workers are poorly articulated and badly publicized, while employers use every trick in the book to avoid paying a fair wage or even using a settled labour force, preferring to pick up different workers each day to reduce the chances of their organization. The Government needs to make sure that it has robust labour legislation, but even more that people know about this – this is why supporting responsible union movements can be so valuable in developing countries. Workers are easily exploited because they have so few options. The possibility of their organization would hugely strengthen their ability to share in the spoils of industrial and agricultural development.

My hopes are not high, however. We’re talking about two things that donors really shy away from: worker’s organization and large-scale industry and agriculture, feeling that the former is too politically fraught and the latter don’t need their money or attention the way subsistence farmers do. It all again comes down to the need to have a coherent idea of what kind of development path to follow – and as I’ve said before, it seems that very few donors or countries have any such vision.