Over at the Globalisation Institute, Alex Singleton outlines his vision of an “intellectual revolution in international development“. Naturally, he sees himself at the forefront of this revolution, but what’s it all about? Actually, there’s not much to it. Alex thinks that micro-credit schemes are just great, and believes that these and other discoveries about the importance of enterprise-based development should be used to “turn development policies upside down”, starting at the Department for International Development, which is still far too fond of nasty old “top-down” government aid.
I’m not sure if Alex realises this, but DFID seem to be quite keen on micro-credit and other enterprise-based schemes. They just don’t buy into the notion that there is an inherent contradiction between supporting both the private and public sectors. After all, the lesson of history (from Britain in the more distant past to South Korea in the 20th Century to China, India and Vietnam today) is that a strong and effective public sector goes hand in hand with a healthy private sector - clearly, they are not mutually exclusive but mutually supportive. How can you be in favour of micro-lending to African enterprises but against funding the roads they need to get their goods to markets? As Owen Barder writes in response to Alex’s post,
This top-down investment is used to vaccinate children, support scientific research into new crops, build roads, schools, wells and hospitals, reform customs, remove import tarrifs, liberalise telecomms, support teacher training, fight AIDS, tackle corruption, meet the costs of free and fair elections, provide safe drinking water - all things, in fact, that it is necessary for a society to do to enable enterprise and free markets to flourish.
Alex’s opposition to any and all ‘top-down’ policies seems to stem not from any real examination of the historical record or current practice, but from sheer ideological antipathy to the idea of government. That’s why, when Owen asks
Is there evidence that supporting NGOs and small businesses is a more effective use of aid than providing aid to governments?
I fear he is being naive. Can we be sure that the Globalisation Institute cares about the evidence on aid? After all, they have ignored the stacks of evidence pointing out that it is good for growth and human development, and their own contribution to the debate is this risibly flawed hack-job.
So the track record is not encouraging. But that said, some recent signs give cause for hope. For one thing, the Globalisation Institute has actually taken the massive step of allowing readers to comment on its posts! For another, Alex seems to have the admirable capacity to change his mind on important topics when he turns out to be completely wrong - for example, on DDT and fair trade. I look forward to the day when he realises that supporting African enterprise doesn’t mean you have to oppose ‘top-down’ investment too.
One last point. Alex says that “free marketeers have failed to influence the public debate” on development. But free-marketeers had a great deal of influence over development policy during the 1980s and 1990s, particularly when it came to the structural adjustment policies which highly indebted poor countries were required to implement. Of course, we all know how succesful that was - structural adjustment did not seem to help, and in fact many of the victimspatients actually regressed. So the reason free-marketeers (of the right-wing variety, I suppose I should stress) have failed to influence the public debate on development is that their ideas have failed.
This entry was posted on Monday, January 16th, 2006 at 11:04 PM and filed in Africa, Free-marketeers, Aid. Bookmark this entry. Follow the comments here with the RSS 2.0 feed. Apologies. Comments and trackbacks are both currently closed.
“So the reason free-marketeers (of the right-wing variety, I suppose I should stress) ”
That’s what I think it all comes down to Jim - and I think you’d do your position a great deal of honesty and effectiveness if you could distinguish between the two more consistantly.
Many of the “free-marketeers” that comment on your posts try their very hardest to stress the difference between a geniune belief in free markets, and the pseudo-capitalism that has often manifested itself at policy level.
There’s no greater critics of crony capitalism, didgy privatisation or corporatism than free-marketeers.
Posted on 17-Jan-06 at 6:27 am | PermalinkA good many of the kinds of government action Barder mentions translate, in practice, into government subsidies to the operating expenses of Western capital overseas.
“scientific research into new crops”=R&D subsidies to develop “Green Revolution” techniques particularly suited to agribusiness, and further crowd out native-owned subsistence production
“build roads” and “liberalise telecomms”=subsidize the infrastructure that Western sweatshop manufacturers need to be profitable
Posted on 18-Jan-06 at 1:03 am | PermalinkI’m with Kevin - historically aid has tended to serve Western interests, whether it’s supporting favourable regimes in the cold war or as he notes, developing infrastructure to facilitate Western corporations.
There’s surely no reason aid couldn’t be effective (we have the know-how - Sachs’ Millenium Villages Project shows aid working), if decoupled from foreign policy. The reason it hasn’t been on the whole, is because this has never been tried. DfID as Monbiot has pointed out a few times (search monbiot.com for DFID) is not an exception to this.
As for the Globalisation Institute, I hope their ideas remain in obscurity - would they like to live in a UK where teaching and health services are provided by unaccountable, non-coordinated NGOs? I don’t think so. Surely these core services need to be provided in developing countries by elected governments as they are here…
Of course, to ramble on some more in answer to the GI’s points, there’s no reason ODA has to be top-down - the Sachs approach involves large disbursements distributed at the community level, involving targeted and coordinated interventions…
If a house is on fire, you don’t pray for rain, you call a fire engine. Solving extreme poverty, which is a pressing humanitarian emergency, obliquely through facilitating free enterprise (with the expectation that funds will trickle through to communities so they will be able to afford to provide essential services) is praying for rain - it’s indirect, it’s tenuous; while targeted, non-self-interested aid can be the fire engine. Continuing to enforce one-sided free trade is throwing dry kindling into the house through the windows.
Posted on 18-Jan-06 at 12:56 pm | PermalinkHJ: whilst not speaking for the GI, I for one hope that developing countries allow private schools to educate their poor. See here:
Posted on 18-Jan-06 at 6:53 pm | Permalinkhttp://www.ncl.ac.uk/egwest/educare.html
Thanks for the comments, all.
AJE,
“There’s no greater critics of crony capitalism, dodgy privatisation or corporatism than free-marketeers.”
Some of them, yes. But plenty of other self-described ‘free-marketeers’ can seem rather unconcerned about those things. It’s the age-old problem of political labels - I suppose I use ‘free-marketeer’ as a shorthand for those who think “free trade, no aid” is a great development policy regardless of the evidence. That’s probably unfair to the kind of free-marketeer you mention, so I should probably desist. But now I need a better shorthand
Kevin,
““build roads” and “liberalise telecomms”=subsidize the infrastructure that Western sweatshop manufacturers need to be profitable”
Infrastructure which would also benefit African small businesses, surely.
Hardwin,
“Of course, to ramble on some more in answer to the GI’s points, there’s no reason ODA has to be top-down - the Sachs approach involves large disbursements distributed at the community level, involving targeted and coordinated interventions…”
What I’m saying is that there’s no reason why it HAS to be EITHER entirely top-down or bottom-up. The Sachs approach also involves larger-scale interventions driven by the government sector. I think there’s good evidence that both approaches bear fruit in the right circumstances, and I’m unconvinced by arguments that (either) one must be rejected out of hand.
AJE,
“I for one hope that developing countries allow private schools to educate their poor.”
I agree they should be allowed, but I don’t think we should expect them to educate all the poor and I don’t think we should oppose funding to expand free state education in poor countries. If there’s a healthy private sector and publicly provided education is as rotten a deal as James Tooley suggests it is, I imagine children would stay away in droves.
Posted on 19-Jan-06 at 12:24 am | Permalink