What Now?

"What now? Let me tell you what now. I'mma call a couple of hard, pipe-hitting development economists ..."

In an e-mail exchange, Matt and I agreed that there haven’t been any really interesting and engaging development debates recently: this has been one reason (among many) for our recent relative silence. It’s worth looking at this calming of the intellectual waters around development a little further. There are a couple of interesting points about the way in which the debates have died down.

The first point to notice is that the debates have not died down because any kind of consensus has been reached. Bill Easterly and Jeffrey Sachs are not running down the beach hand in hand, singing about sunshine and Millennium Villages; nor is Dambisa Moyo finding support from, well, anyone. Debates have died down precisely because the prime movers in them have been so intellectually intransigent. Sachs has refused to address in any systematic way the myriad issues with his ‘big push writ small’ model; and Easterly continues to maintain a largely false dichotomy between planners and searchers; likewise, Dambisa Moyo (and her more considered fellow aid critics) did not precipitate a retrenchment of aid policy – though the pre-existing value for money and ‘beyond aid’ agendas became better defined and became more prominent.

This is worrying. For our thinking to progress, we generally need either a process of intellectual creative destruction – whereby new ideas replace old ones they render obsolete – or a process of refinement and ‘bargaining’ between different ideological camps to generate a more nuanced approach to development theory. Right now neither of these seems to be happening. The main intellectual debates about how development should proceed have been deadlocked (with the exception of a few of the more thoughtful writers), and while the critiques of whether aid or non-aid methods of development assistance should be used has progressed, this is really about the means of implementing policy visions rather than the visions themselves.

This has caused three problems that I can see. Firstly, there’s a lack of coherence in current development policy; some policies based on a libertarian ‘searchers’ agenda (unconditional cash transfers to individuals for example) are pursued and assessed on a micro-level basis, coexisting alongside interventionist social-level policies, potentially compromising both broad approaches. This is not to say the correct approach would not incorporate elements of both, but that this should be by design and not because two camps are pushing their own agenda irrespective of the bigger picture.

Secondly, the failure of the different development agendas to find a common ground or even to respond effectively to each other has led to stasis in the generation of new ideas. The big thinkers and big ideas are so far apart from each other, and so fundamentally opposed, it seems that they are not being forced to reassess their own positions. This manifests in a shortage of new ‘big question’ thinking about development. This might not be such a bad thing – big question thinking hasn’t provided any unambiguous solutions and there might not be any grand theory of development, but the constant search for them has been strengthening our understanding, despite the imperfections of each one.

The third problem with the current development discourse that I see is that for the first time in my memory, the issue dominating the field is not a theory or an idea, but a research method: randomized evaluation. There has been some excellent writing about RCTs (the Development Impact blog is easily the best thing to happen to the blogosphere in the last year or two), but it is curious that more debates spring up about how well they can provide generalizable conclusions than about the kinds of intervention they are assessing. It’s symptomatic of an ever-increasing dominance of a micro-approach to development interventions, which has many benefits, but does not contribute enormously to discussion of the optimal array of interventions and sequencing issues. It is also ill-suited to assessment of macroeconomic issues and policies.

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On Entrepreneurs, Capitalism and History

I wrote an article in the most recent issue of the UNIDO magazine, Making It, about the role of entrepreneurs in the development of low-income countries. Entrepreneurship is a difficult issue to approach from a head-on perspective, because it’s very difficult to put a finger on what one can actually do to help entrepreneurs – their raison d’etre is to respond to opportunities, rather than to function within a wider framework of a Government plan. This tends to lead a lot of writers to the standard liberal response of ‘provide an enabling environment’, and to avoid crowding them out, which is essentially the thrust of most of Bill Easterly’s work on his Planners vs. Searchers dichotomy, though I’m not much of a fan of this distinction.

My argument is that focusing on entrepreneurship is misguided, because there’s little shortage of it, and it’s been around for a very long time. Rather, we need to think much more carefully about the systems that allow entrepreneurs the ability to move from being small businessmen to the cornerstone of an economy. What distinguishes Richard Branson or Alan Sugar from the guy selling sea shells outside my local bar in Zanzibar isn’t their basic approach to opportunity, it’s the structures in place that amplify that approach. Referencing Bayly’s Birth of the Modern World (yet again) and De Soto’s Mystery of Capital (for the umpteenth time), I argue that there are specific economic, legal and political realms in which improvements must be made, and interventions undertaken if entrepreneurship is to achieve the same kind of effects in Africa, for example, as it has in America.

These are more than simply refining a market system, but move into the realms of redefining a legal system and property structure to change the incentives and capacities of different economic actors, and in effect, move an economy into modern capitalism, rather than the kind of market-based mixed economy that actually prevails in most of the third world.

I don’t see much evidence of this kind of approach in practical development work, unfortunately, though I’d be very happy to be alerted to examples of this.

On the Weakness of States

Did you ever see the original hulk TV show? They basically dusted Lou Ferrigno with green powder and asked him to growl. He was still more convincing that Edward Norton.

Weak or Strong?

It was not the case that old states were uniformly ‘weak,’ more that they husbanded their moral and physical authority for specific tasks… Where complex bundles of royal privileges and powers had come into existence, there was often a tendency for them to be broken up, becoming part of the patrimony of some other prince or noble. Kings and emperors often found it lucrative and convenient to ‘farm out’ their rights to the highest bidder…

In China… initially the emperors had been content to cede their power in one area in order to strengthen it elsewhere. In the longer run, however, the decay of these imperial functions gravely compromised the regime’s legitimacy. Recent work on the West African Asante [one of the great pre-colonial African kingdoms] has also shown that this aspiring centralized power was severely limited by local feudatories and lineage groups….

So Government in all of these great states was often something of a trick of the light. State power was powerful and purposive in defined areas, though constant vigilance was needed to stop it seeping away to magnates and local communities. Elsewhere it was patchy and contingent. Over large areas it was deliberately not exercised at all…In the monsoon areas of Asia where great kings vaunted their magnificence, warfare and tax gathering regularly came to a halt when the roads annually became impassable. The state could only deploy a small number of officials or exercise royal justice in particular cases. Everywhere, therefore, the panoply of state and imperial power rested in the longer term on the co-option and honouring of local elites or self-governing local communities.

Every time I open The Birth of the Modern World, I read a passage in which Chris Bayly exposes the complexity of historical reality and dangers of simplification. In this example, he looks at the period leading up to around 1800, in which states were beginning to take modern form. In examining the phenomenon of weak or strong states, Bayly emphasises that states are not static over space, time or function. As such, naming a state ‘weak’ or ‘strong’ may simply cloud the real story, that states choose to exercise power in some areas and not others, not always in the best long-term interest of the state itself and often simply in response to basic opportunity or aims that owe more to symbolic rather than rational ends. The Great Russian Empire existed primarily on paper, for example, with large swathes of land ungoverned – almost a textbook example of a ‘weak’ state. Yet when the state was called upon to exert its authority, it always found the means to, at least until 1917.

We talk a lot about weak states now, and even of ‘failed’ states. These are not new ideas nor new phenomena. When we think about modern failed states, we need to bear in mind that for most there are functions in which they are strong and there are areas in which they govern effectively; it’s from these that strategy on how to incorporate the rest of the nominally governed area must be generated. This may involve subjugation or devolution or both – states are about the exercise of moral and physical authority, which is not always pleasant to witness or be subject to. The process by which a patchily strong state becomes a uniformly strong state is rarely without severe conflict.

In the extreme cases, where ‘states’ govern a few square miles and little else, we are in uncharted territory. Historically, these have never succeeded, and gave way to successor states or anarchy. Our attempts to forestall this may be futile or we may find a way to build a new moral and physical authority to reinforce the state. Given that outside interference almost always involves an abdication of moral authority in the eyes of an insular or jingoistic public, it’s may be that only force can support these.