Monday, April 14, 2008

Bird's Eye View of Poverty and Development (History, Successes, Failures, and the Future)

This is a video covering the subjects mentioned in the title. It is the Michael Woolcock video I had previously sent out on the William and Mary impacthumanity listserv.

Below are the notes I took while I watched the video. I hope this clears up any confusion, and allows you to make your way through the swamp of development literature. While this is by no means a comprehensive introduction to development, I believe it to be a great (and correct) start to looking at these issues. Enjoy!

Global poverty is not a problem that can be addressed immediately and without humility. Many great minds have attempted to tackle the problem, and have not solved the problem. However, humility is not meant to be a ceiling for uncreative, un-striving thought.—

Every place in the world has a local culture, therefore, while there are common strategies globally, these must respect and merge with contextual circumstance.—

1. what is all this divergence?
2. what is poverty?
3. how important is growth in addressing poverty?
4. what can we learn from success stories? (South Korea, Botswana…)

1. Global Disparities: pretty recent phenomenon in human history.
2. National Level Poverty: it is not a permanent condition (Korea, Japan, Botswana, etc…have had upward national mobility). Also downward mobility (Argentina)
3. Good Governance helps development. (Africa)
4. Location Matters: Geography is not destiny, but bad locales can influence development.
5. Poverty: Poverty is not simply low income or unfair suffering. However, it is, according to Ray Offenheiser, Janis Pearlman, a lack of opportunity and socio/economic/political agency. The poor must be seen as economic agents, not simply recipients.
6. Economic Growth and Poverty Alleviation: Usually a strong correlation between average GDP per capita and GDP per capita of lowest quintile of population. However, correlation is not causation…?
7. Inequality and Distribution: presents hurdle to growth. Better distribution, access to services, education, etc…Davesh Kapoor.
8. Borders: Pritchard. Labor mobility is essential as well. Freer movement of the poor.
9. Development assistance (foreign aid): not traditionally the big driver of development.
What can google people do to make a constructive effort to alleviating poverty?? The point of the video-

Michael Woolcock of the Brooks World Poverty Institute (BWPI) of Manchester (chaired by Joseph Stiglitz) discusses the comparative advantage of google to approaching poverty alleviation.
Though Manchester is the origin of global industrialization, it still contains many poor people.
Woolcock wants to approach the issue from an interdisciplinary angle, and bridge the north-south gap.

Slide 1: Development’s Greatest Hits (DGH): Top 10 interventions that ‘really work’: (Tina Rosenburg)
1. Universal vaccination (prevention)
2. Community Health (cure)
3. Property Rights (Hernando de Soto!) “Nobody washes a rental car”
4. Microfinance
5. Conditional Cash Transfers (Latin America--paying mothers to keep their kids in school)
6. Rural Roads (making accessible routes between rural areas and markets all times during all seasons)
7. Girls’ Education
8. Green Revolution (India—Getting basic seeds, tech, etc…to rural farmers) (Need a GR for Africa) (First step to industrializing is strong investment in agricultural productivity)
9. Basic Information Technology
10. [Economic growth, migration]

Slide 2: How do we know DGH ‘works’?
Because, in most cases, rigorous evaluation says it does…
And because these types of projects lend themselves to such an evaluation
Because a charismatic figure has been a persuasive advocate (e.g., Yunus, de Soto)
Great, BUT…
These ‘successes’ are small islands in a large sea of mediocrity and failure
A good Development theory must account for both
Even so…
Slide 3: Shouldn’t we just replicate and expand DGH?
After all,
Problems are urgent
Time is short
Resources are finite
Voters, politicians are skeptical (even hostile)
Just doing DGH effectively is hard enough
Why waste money ‘reinventing the wheel’?
Maybe…but maybe not…

Slide 4: DGH revisited
Most of these projects…
Began as local experiments
Not initially successful; only became so over time
Initial costs heavily subsidized (esp. microfinance)
Still have high variance (work great in some places, and not in other places)
Have core standardized (context invariant) components, which…
facilitates ‘gold standard’ (randomized) evaluation
enables high returns to diligent-but-low-skill field staff
still rely heavily on local intermediaries (the meat in the sandwich, between “The project” and “The community”)
Don’t automatically make people “not poor”

Slide 5: More fundamental concerns
Focus should be on finding solutions to prevailing problems, not re-working problems to fit the solutions we happen to have
Big danger: Have hammer, see nails
Huge bureaucratic imperatives to do just this
You’re a star-a bona fide development expert-if you can provide a universal ‘tool kit’ based on global development
Deep, pervasive, ‘binding constraint’ poverty problems may or may not map onto a known project or policy instrument
Inflation does, but what about ethnic violence
What if it’s not even clear what ‘the problem’ is? The essence of many problems do not have, ex ante, known solutions.

Slide 6: Solutions when pushing for the solution is itself the problem
Consistent failure in even mainstream interventions (e.g., health, irrigation) often a product of ignoring:
1. Local Knowledge (‘metis’-Jim Scott)
2. Core aspects of provision entailing decisions that are
i.e., require lots of ‘professional’ choice, hard judgement calls
and Transaction intensive
i.e., require numerous face-to-face interactions (e.g. teacher-student, doctor-patient, therapist-client, school lunches)
Consider HIV/AIDS…

Slide 7: What if there is no knowable solution?
What if the core problem doesn’t have a known or knowable (ex ante) ‘policy’/project solution?
ethnic grievances
rampant injustice
high corruption
religious strife
qualitatively different understandings of how the world works (“clash of ontologies”)
e.g. ‘science’ versus ‘witchcraft’ to explain illness

Slide 8: A basic typology of decision-making
Transaction Intensive?
Example of Low: Algorithms (“Better Machines” e.g., cells phones, ATMs…person plus money equals withdrawal)
Example of High: Policies (technocratic) (the power of policy makers, Ben Bernanke and the Fed, the stew over numbers and problems, and then divine a solution which then affects the market noticeably…this type of decision-making is not necessarily applicable to non-macroeconomic, policy issues)

Discretionary? (across)

Transaction Intensive? (down) Low High
Low Algorithms
“Better Machines”
e.g. ATMs, cell phones Policies
“10 smart people”
e.g., Interest rates
High Programs
“10,000 faithful functionaries”
e.g., Vaccines Practices
“100 teams”

Slide 9: What to do? 21st Century Development (21CD)
1.Deploy the ‘wisdom of crowds’
Development marketplace
Delimit technocrats; harness local knowledge; empower entrepreneurs
2. Recognize that big and small is beautiful
Kecamatan Development Project (Indonesia)
Scale+context specificity+conflict management (airing grievances)=the holy grail of development (taking place with Kecamatan)
3. Promote “social will be everywhere” (Google) Decentralizing decision-making, and putting them into the hands of more affected people
Participatory budgeting (Brazil),
PETS (Uganda)
Enhancing relationships of accountability
Reducing information asymmetries
4. See development as ‘good struggles’
Cambodia Arbitration Council
Establishing forums for more equitable contests
Focus on institutional ‘functions’ more than ‘form’
Slide 10: DGH 2.0
Short term
DGH 2.0
Refine, adapt, expand access, lower costs
Worthy and noble, but…

Medium term
Upgrade to 21CD
Develop new ‘learning to learn’ technologies
Getting there…

Slide 11: Implications, challenges for Google
Long Term
Chang the whole operating system!

Sponsor ‘New Bretton Woods’ conferences
Mountain View consensus?
Build broad constituencies for change
Educate, mobilize, coordinate
Need entirely new complementary architecture for managing aid, trade, labor, migration, finance, and dispute resolution
i.e. how we conceive and respond to problems (especially of production, interaction, exchange, and difference)
Development is not some simple Manhattan Project, or even a Marshall Plan
History can’t be “engineered”

love, Devin.

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