What is on the global development agenda—and why Lant Pritchett Kennedy Center, BYU June 16, 2005
Download ReportTranscript What is on the global development agenda—and why Lant Pritchett Kennedy Center, BYU June 16, 2005
What is on the global development agenda—and why Lant Pritchett Kennedy Center, BYU June 16, 2005 Outline of the presentation • What is the “development” agenda? • What it takes to be on the agenda • Four issues, three debated, one off… – – – – poverty or MDGs versus growth Big Push versus selectivity “community” versus market or state Labor mobility versus goods/capital The global development agenda is about addressing the gaps between rich and poor countries Poorest 10th in USA Richest 90th in Rural India Child mortality of the richest 20% of Indians is 9 times the OECD average OECD average=6 The Development Agenda is a public policy and international issue • Not a “charity” issue--don’t confuse rich country “poverty” as an individual pathology with “poverty” as a systemic economic and social pathology • Intrinsically political and politicized—public policy is politics Successful agenda items need to reconcile three distinct elements Technically correct Politically Supportable Administratively Feasible To remain on the global development Agenda issues must have all three elements Development agenda can change with “lessons” or fundamentals • Technically correct—proposed actions be seen to work and responsive to lessons of experience [Tanzania story] • Administratively feasible—desired outcomes must be responsive to actions that organizations can undertake • Politically supportable—the “development” agenda requires a confluence of rich and middle/low income countries First debate: “Economic Growth solves all ills” vs. contenders: Poverty, Millennium Development Goals, Inequality • “Poverty” focuses either on “absolute” or “relative”—but only on income growth for the bottom X percent, not aggregate. • MDGs are a collection of targets in poverty, education, health, hunger, environment, gender. • “Inequality” focuses on the “quality” of growth and the level and changes in inequality within countries Weakness of the “reform” agenda--even though the (near) worst country had better policies than the best in the 1980s—growth did not accelerate in Latin America Chile with best policy in 1985 10th percentile country in 1999 Growth in the region was as low in 2001 and mid-1980s The transition was deep, long, and variable Great depression in USA Attacking the “reform for growth” development agenda • One can doubt its “technical correctness”—backlash from over promising • One can doubt its “feasibility”—can agencies really help promote reform? • One can doubt its “supportability”— backlash in LAC, FSU, and Africa and loss of confidence/mixed emotions Appeal of the contenders… • Can’t beat something with nothing • Apparent attractiveness: – The range of interventions to promote these seem clearer than accelerating growth (TC) – The interventions appear more directly under control (e.g. schooling, health) (AF) – More rich country “warm glow” (PF) • But not “we have had too much growth with too little progress”—in fact the opposite But “poverty” and “inequality” need to be kept in a global context—by the USA standard of poverty everyone in poor Gap between USA poor and India “rich” Gap between India “rich” and “poor” Second Debate: “Big Push” versus “selectivity” • Assessing Aid (World Bank, Dollar and Pritchett) argued that aid could only be effective in a sufficiently high quality environment (not perfect) • Reinforce success (selectivity) rather than throw good money after bad (defensive lending) or buy promises (conditionality) • Intellectual foundation behind: – No appeal for massive more aid – Millennium Challenge Account—largest increase in US foreign assistance in decades – World Bank’s approach to HIPC (selective debt relief) “Big push” counter-attack • UN (with Jeff Sachs as cheerleader) argues for massive increases in aid (doubling current volumes) • Why? – No empirical evidence at all (not TC) – Administrative feasibility—the agencies resist the selectivity story – Selectivity is unpopular with those countries selected out (and their patrons) Debate about the location of the “weak links” in the chain from action to outcome—not about who emotes the most • Filmer, Hammer and Pritchett show that the advocates claim interventions can avert a child death for $10 to $100 • The aggregate evidence suggests $100,000 to infinity [Hammer story] • Why? – Advocates just wrong about efficacy – Money spent creates no effective supply – Effective supply displaces existing efforts Jh Bih ar ar kh an d O U r tta iss a r U tta an r P cha l ra de s A h s M R sam ad aj hy as a tha P n C rad hh e at sh is W A est gar nd h hr Ben a Pr gal a K de s ar na h Ta ta m ka M il N ah a ar du as ht G ra uj a H rat ar ya n Pu a nj ab On average public sector doctors in India are not present during facility operating hours roughly half the time… 80 70 60 50 40 Official Duty 30 20 10 0 Leave No reason Third Debate: “Community” versus state or market The project level aspects of aid were founded on an “engineering” approach (Woolcock and Pritchett 2004) – People have needs – Needs can be met by “stuff” (clinics, roads, toilets, schools) – “Stuff” is best produced in a technologically low cost (and hence uniform) manner – “If you build it they will come”—since one is meeting “needs” then “demand” or “willingness to pay” are irrelevant – The nation-state is the agent/agency best equipped to build the stuff to meet the needs Backlash from the “needs” model from left and right • Left backlash: James Scott “Seeing like a state”—the state is incapable of providing differentiated responses at the local level—move to “community” responsibility • Right backlash: the state has taken on too much relative to capability—move to “market” responsibility Micro-credit, for example • “Directed credit” through public sector banks was all the rage in 1970s and into 1980s—massive set asides for “rural” projects, “small scale” etc. • Failure of this led to either: – Privatization of financial sector – Group based micro-credit (or both) “Community driven development” for another example • Traditional development projects fail (perhaps weak governance) • Replaced by channeling resources directly to “communities” – Small scale infrastructure – Social services – Economic projects Diagnosis of weakness in services is poor “accountability” Key debate: Can it “scale up” to be part of a development agenda? • Grameen Bank total outstanding loans were on the order of 200 million dollars… • “Community” projects facing same O&M problems… • The service delivery agencies remain the real action—until they are controlled the “community” action remains at the margins…. Historically “collective action” solutions have been a response to weakness and been brought into mainstream as part of “modernization” Central compact Local Public goods voice Collective action compact Private goods Client Provider client power Fourth debate: Why not labor mobility? • Post WWII experience is not globalization— – it is disintegration with a proliferation of sovereigns – Modest liberalization of good markets – Modest liberalization of capital markets – Some (not much) cross-border coordination via international agencies (UN, WB, IMF) Integrated countries have large differences in population growth across regions, the world has small differences but large differences in growth… Blue=County Declined; Percentage Decline greater than 100 Purple=County Declined; Percentage Decline between 50 and 100 Red=County Declined; Percentage Decline less than 50 Divide Renville Bottineau Burke Rolette Cavalier Pembina Towner Williams Mountrail Walsh McHenry Ward Pierce Ramsey Benson Grand Forks Nelson McKenzie McLean Sheridan Eddy Wells Dunn Foster Mercer Billings Griggs Steele Traill Oliver Golden Valley Kidder Burleigh Stutsman Stark Cass Barnes Morton Slope Hettinger Logan Grant Ransom La Moure Emmons Bowman Adams McIntosh Sioux Campbell Corson Richland Dickey Sargent McPherson Marshall Harding Brown Perkins Walworth Edmunds Roberts Day Dewey Grant Potter Faulk Butte Spink Codington Ziebach Clark Sully Hyde Hughes Stanley Haakon Beadle Pennington Buffalo Jones Custer Jerauld Jackson Sanborn Brookings Miner Aurora Brule Lake Moody Hanson Davison Mellette Minnehaha McCook Douglas Tripp Bennett Kingsbury Lyman Shannon Fall River Deuel Hamlin Hand Meade Lawrence Hutchinson Todd Gregory Turner Charles Mix Osceola Lyon Lincoln Bon Homme Worth Winnebago P alo A lto Howard Mitchell Cerro Gordo Hancock Floyd Holt Franklin Wright P ocahontas B utler Dixon Ida Woodbury Dakota S ac Hardin Hamilton Webster Calhoun B lack Hawk Grundy Pierce Grant Hooker Thomas Blaine Loup Garfield Arthur McPherson Logan Valley Greeley Keith Sherman Platte Howard Lincoln Perkins Dawson Dubuque Jones Jackson Linn Tama S tory Marshall Clinton Cedar Harrison S helby A udobon Guthrie Dallas P oweshiek Jasper P olk Iowa Johnson S cott Muscatine Dodge Colfax Buffalo Cass A dair Madison Warren K eokuk Mahaska Marion Washington Louisa Merrick Hall P ottawattamie Washington Nance Cheyenne Deuel B oone Greene Boone Custer Kimball Carroll Burt Cuming Garden Banner Crawford Monona Madison Stanton Wheeler Morrill Thurston Delaware B uchanan B enton Wayne Antelope Clayton B remer Humboldt B uena V ista Cherokee Cedar Rock Scotts Bluff A llamakee Chickasaw Fayette P lymouth Knox Brown Box Butte Clay Boyd Cherry Sheridan E mmet Winneshiek OÕB rien UnionS ioux Clay Keya Paha Dawes Sioux Dickinson K ossuth Yankton Mills Saunders York Seward Fillmore Saline Hamilton Douglas Butler Polk Montgomery A dams Union Clarke Lucas Monroe Wapello Jefferson Henry Des Moines Sarpy Cass Fremont P age Taylor Ringgold Decatur Wayne A ppanoose Davis V an B uren Lee Lancaster Chase Hayes Dundy Hitchcock Frontier Gosper Phelps Kearney Otoe Adams Clay Harlan Franklin Webster Nuckolls Thayer W orth A tchison Johnson Nemaha Furnas Red Willow Rawlins Decatur Norton Phillips Smith Rooks Osborne Republic Jewell Washington S ullivan Daviess De K alb Linn Leavenworth Jefferson Lincoln Gove Logan Wallace Trego Ellis Wabaunsee Greeley Scott Wichita Lane Rush Ness McPherson Rice Marion Finney Cole Miami B enton Harvey Stafford Edwards Woodson Greenwood Allen V ernon Grant Morton Stevens Ford Bourbon Wilson Barber Comanche Crawford Montgomery Labette Texas Woods Harper Beaver Grant Alfalfa Nowata Cape Girardeau W ayne Christian S cott Carter Douglas S toddard B arry McDonald Ottawa B ollinger S hannon S tone Kay Reynolds Texas Lawrence Newton Cimarron W ebster W right Cherokee P erry Madison Greene Chautauqua S te. 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Bradley Columbia B o w ie F ra n klin D e n to n Lincoln Cleveland Miller D e lta T h ro ckm o rto n Jackson Madison Morgan W inston Marion R e d R ive r F a n n in H a ske ll S to n e w a ll Hempstead Lam ar G ra yso n C o o ke T e rry Y o a ku m Lawrence Lee Itawamba Pontotoc T allahatchie Dallas Desha C la y H o ckle y C o ch ra n Limestone Colbert Franklin Lafayette Yalobusha Clark Sevier Bryan Lauderdale T ishomingo Prentiss Union Panola Coahoma Quitman Arkansas Jefferson Pike Howard Marshall Love Grant Alcorn T ippah T ate T unica Phillips Hot Spring Jefferson W ich ita Lee Monroe Garland Montgomery Atoka Benton De Soto Marshall Lonoke Prairie Pulaski Polk Pushmataha Carter W ilb a rg e r Foard Perry Saline Cotton Cottle Motley Yell Woodruff St. Francis Le Flore Coal Murray Mississippi Crittenden White Faulkner Scott Latimer Pontotoc Garvin Stephens Tillman H a rd e m a n Sebastian Cross Conway Logan Pittsburg McClain Comanche Jackson C h ild re ss Hughes Pottawatomie Kiowa Harmon C a stro Haskell Seminole Grady C o llin g sw o rth Poinsett Jackson Pope Cleveland Caddo R a n d a ll Craighead Independence Cleburne Franklin MacIntosh D e a f S m ith Greene Searcy Muskogee Okmulgee Canadian Washita Beckham Lawrence Madison Washington Adair Lincoln W h e e le r Sharp Izard Wagoner Creek Logan Custer Oklahoma G ra y Marion Tulsa Payne Dewey H e m p h ill R o b e rts C a rso n ClayDunklin Randolph Baxter Boone Roger Mills P o tte r O ld h a m Fulton Carroll Benton Ellis Jefferson Terrebonne Plaquemines Jackson Baldwin Geneva Houston Is the Sahel really so much nicer than Kansas? There are regions of the USA the size of Sahelian countries whose population has declined by more than 25% since 1930 The population of regions of the USA is one third as high as it would have been without outward migration. Niger has 10 million people. Why is this graph facetious? Gains as % of world GDP 120 100 80 60 40 20 0 All remaining goods liberalization 3% increase in host country labor force Full Liberalization of labor markets Is “foreign assistance” a sideshow? Table 3.6: There is widespread expression of support for “economic aid” and “effort for poverty”…in the same countries were immigration is opposed. Fraction “in favor” of aid Fraction saying “too little” effort for poverty in less developed countries Fraction “let anyone come” W. Germany 83.0 65.2 13.8 Spain 85.1 64.9 14.6 USA 55.5 62.4 5.1 Japan 90.4 42.8 4.2 Australia 74.7 63.5 4.6 Norway 81.6 51.6 4.9 Sweden 83.9 51.6 8.4 Source: World Values Survey, third wave (1995-1997). Column I, “Some people favor, and others are against, having this country provide economic aid to poorer countries. Are you personally…” options are “very much for” “for to some extent” “somewhat against” very much against” and reported is either “very much” or “to some extent” for. Column II, “In some economically less developed countries, many people are living in poverty. Do you think that what the other countries of the world are doing to help them is about right, too much or too little?” and reported is “too little.” Column III “How about people from other countries coming here to work? Which of the following do you think the government should do?” reported is “Let anyone come who wants to.” Conclusion: Personal reflections • Personal obligation to charity—just do it. • Students—get skills, of all kinds, as compassion alone doesn’t help [India and the “donors”] • Charity alone will make no dent in the aggregate global poverty—national and international policies matter for development • Even for the poorest spiritual, personal, salvation is more important than material well-being