Development as Anarchism?

Continuing through the fantastic Hobsbawm book I’m currently reading, I was struck by the similarities between a current debate in development and one that Hobsbawm wrote about in the 1960s.

William Easterly conceives the battleground in development policy as a fight between ‘planners’ and ‘searchers’. He scorns the planners as blind men drawing and then following maps for terrain that can not be known. Searchers, on the other hand, are where hope lies. Without grand plans, they try; they fail. They try again. They fail better. Eventually they succeed. And eventually one of these successes lights a fuse for larger development, or all of these successes build upon each other until the economy is fully formed.

Easterly’s enemies are those who believe that the economy and economic development path can be planned. Ha-Joon Chang is one, believing that industrial policy is a central component of development success. Yet Easterly is definitely fair in maligning all planners, including those who ‘plan for markets’ by dismantling all vestiges of the pre-existing economy and its controls and letting the market do it’s magic.

This argument is oddly reminiscent of an older intellectual approach in a very different context. Anarchism historically sought to bring down Governments through constant, random, revolutionary acts. At least one, they felt, would eventually prove to be the spark of revolution. This approach contrasted with, for example, revolutionary socialists, for whom planned revolution was required to effect a change in the way the state was structured.

It’s not such a bizarre comparison to make – anarchism ran aground because its approach equated the failure of many planned revolutions to materialize with the bankruptcy of the planning approach, instead believing that random acts have a better chance of success. What this analysis failed to recognize was that these plans depended on the confluence of certain social, economic and political conditions. When they did not obtain, the plans would not come to fruition, or would fail when attempted. What this denotes is not the fundamental uselessness of the plan, but the reality that all plans must depend also on external factors. In other words, the conditions were not right for this plan to succeed; or this plan was not right for these conditions, but it was not the case that planning as an approach was inherently unsuccessful.

Anarchism attempted to remove the tyranny of circumstance. When an opportunity to act arose, it was taken. Very occasionally this led to massive social unrest, but most often it fizzled out because the opportunities were not built upon, precisely because concerted efforts require some level of planning. This is not to deny the importance of the ‘searchers’, those who act upon circumstance and build successes. They are central to success. It is simply to point out that their impact is maximized when set within a structure designed to do so.

In development, success is likely to be contingent on a wide array of conditions: is the government actively malignant, helpful or not such a strong influence one way or another? What are the natural resources available? Are there terms-of-trade trends that will influence macroeconomic conditions? What is the level of development in domestic capitalism? And so on and so on.

That plans often fail isn’t necessarily surprising. We need to consider all of these questions before we decide on either a plan that suits the circumstances or on an approach to change the circumstances till we can apply a reasonable plan. That this is difficult and will often fail should not be taken to mean something that it doesn’t. Trying to build on success as and when it is found is by no means more likely to succeed. In fact, in the knowledge that so much needs to change and so many efforts need to be coordinated, it rather seems that it is a more difficult approach, less likely to succeed; albeit one that is also less likely to fail outright simply because it doesn’t set for itself clear criteria by which it can be judged.

Skepticism of the grand plans is important. We need it to remind us that we must constantly prune our planning instincts and constantly assess conditions and plans that seek to exploit them. Yet planning itself should not rejected – the problems we deal with are too many and too interlinked to address without the coherence it can bring.

Development in dangerous places?

The Boston Review hosts a discussion (hat tip MR) on Collier’s latest ideas regarding foreign-led security interventions in the bottom billion. Part of the discussion are Nancy Birdsall, Edward Miguel, and, of course, Bill Easterly, who seems particularly vitriolic today. The whole thing is worth reading:

Link here.

UPDATE: Bill Easterly strikes again.

Have We Been Here Before?

Like many people working in development, I’ve been affected by a strain of aid angst in the last few years, and have blogged about this in a previous incarnation.

Aid’s internal crisis is gathering steam: Dambisa Moyo is the centre of a great deal of attention; Bill Easterly has been mud-wrestling with Jeffrey Sachs; and in relative sotto, others such as Yash Tandon have been more virulent in their criticisms, with deeper flaws in their analysis. The problems in Moyo’s Dead Aid analysis have been autopsied sufficiently, but the central premise retains power: aid has had significant unintended consequences, and has achieved relatively little against most macro-indicators of development, especially in Africa.

Historically, aid is a relatively recent phenomenon. In fact, if we acknowledge the profound structural, motivational and political differences between the goals and methods of the Marshall Plan and other efforts of economic generation and regeneration that have followed wars, aid in its current form is still in its infancy as a component of historical processes of development. As a result, some of the most interesting writing on the process of development assumes no aid at all.  One such example (here greatly abridged and simplified) is particularly instructive. Indeed, it gives us a strong sense of what the alternatives to aid are, given that it barely considers it to be a possibility.

In 1954, Michal Kalecki wrote a paper entitled ‘The Problem of Financing Economic Development’. Kalecki was a Marxist, which may put off some readers, but this is incidental to many of the insights he raises in his analysis. Put simply, his central concern is how the rapid increase in investment required to generate and sustain an increase in the productive capacity of an economy can be financed without causing undue pressure on inflation or real wages, and without causing other unintended social or economic consequences. He does this through a model of the economy which examines the production of consumption goods and investment goods, through the investment, consumption, savings, taxes and trading behaviour of capitalists, workers and small proprietors. It’s this approach that demonstrates his Marxism; however, his concern with macroeconomic stability in the face of stimuli to demand and supply reflects a very modern sensibility.

The central challenge in an economy that does not receive international capital flows (aid, loans or direct investment) is that to develop, the economy must demonstrate an increase in productivity and production of mass industrial consumption goods (i.e. through investment) as well as in agriculture, near-simultaneously. Failing this, one or more of several problems may occur, chief among which are the dangers of inflationary spirals, under-utilised capacity, locally concentrated unemployment and restrained effective demand.

Continue reading

Poverty Safari

Keep a safe distance

Keep a safe distance

Through Aid Watch I stumbled upon this excellent article in the Huffington post by Senegalese businesswoman Magatte Wade. She tackles the implicit condescension in ventures like Jeffrey Sach’s Millennium Village project, slyly comparing it to “polite” racism she experienced in France. The main subject of her wrath is a cultural enrichment tour group organised by New Dawn Associates, a group of academics who take foreigners on guided tours around the Millennium Village. Wade fishes out some slightly perturbing recommendations made in the NDA brochure, including:

Please do not give anything to the villagers – no sweets, cookies, empty water bottles, pens or even money.

and

Please do not eat or drink in public. Many people in the Bugesera District are still suffering from malnutrition, and the public consumption of food or drinks is against the culture of the area.

Firstly, as Easterly points out: if this is one of the holy Millenium Villages, why are people still starving? Secondly, do these statements sound familiar? (Please do not feed the animals). The whole venture smacks deeply of a new, dasterdly form of poverty porn: the poverty safari! You too, from the safety of your 4×4, can get to experience the overwhelming poverty of the Rwandan people, only to escape back to your hotel in the evening.

Easterly is unsurprisingly outraged. This sounds like another case of good intentions gone awry. However, is this truly a case of a bunch of Western academics viewing Africans as cardboard cutouts? An actual visit to the NDA website reveals that most of the staff and the entire top management are actually African. Does this lend this venture any more cred? I really don’t know.

The Wade article from which all this sprung is quite a good read and can be found here.

UPDATE: Hmm, the NDA website seems to have inverted since I first looked at it. The top staff are now all white foreigners. The head is Dr. Michael Grosspietsch, who has responded to Bill Easterly here.