Wednesday, 19 May 2010

Easterly's too weak

When economists say they don't know much, I'm always sympathetic. But when they say we will never know anything, that's going too far.

William Easterly presented an idea at the LSE tonight: "We don't know how to solve global poverty - and that's a good thing" (thanks to Andrea James for alerting me to this).

Part of his logic is impeccable. He argues that democracy, freedom and self-determination are normative goods - and thus, even if we could solve development problems by imposing top-down, autocratic solutions, we should not. Later, he shows some tentative evidence that authoritarianism doesn't even provide economic benefits - at least there's no convincing evidence for it, and there's some to suggest the opposite.

So far so good - it's nice to have an argument against the position that countries need (at least temporarily) an autocratic system to kick-start economic growth. The four examples that are often used to support this argument - Singapore, Taiwan, South Korea and China - do not provide clear evidence at all, according to Easterly.

But he jumps too far from here to a dangerous conclusion. Because autocracy does not work, he says, this means there are no universal solutions in development. We can only rely on local, patchwork approaches.

I don't see how this follows. It's likely that there are still some universal principles - for example clear property rights, free primary education, certain kinds of infrastructure, or openness to foreign investment (or indeed the reverse) - which work everywhere. And while it's fair to say we should not impose these principles from the top, this doesn't mean we shouldn't argue for them, provide evidence and try to persuade people to adopt them.

Just as there are universal discoveries in physics or biology - and indeed economic laws like supply and demand - which still seem to work even with no legal authority to enforce them, there may well be principles of growth and development which we can discover and recommend that poor countries adopt. If we can make a discovery in one place that will help people in another, it would be a dereliction of duty for us not to do so.

The right answer is a blend. Any farmer knows that their strategy must be governed by local conditions - the flatness of the ground, the local weather, the indigenous animals and insects will all influence their choice of crop and how, where and when they plant it. But they can still take advantage of scientific discoveries - about fertilisers, temperature or crop rotation - which are made on the other side of the world and apply everywhere. Development is just the same. A mix of local and global discoveries will work.

It's great that development economists recognise that paternalistic attitudes don't work. But we mustn't use this as an excuse to walk away from the responsibility we all share as humans to make the world a better place.

Update: Easterly comments here on Dani Rodrik's argument: "democracy, globalization, the nation state: pick any two". Not sure that Rodrik is suggesting democracy and development are not compatible, but maybe I'll get a copy of the book when it's out.

6 comments:

Min said...

Leigh Caldwell:"But he jumps too far from here to a dangerous conclusion. Because autocracy does not work, he says, this means there are no universal solutions in development. We can only rely on local, patchwork approaches."

Did he make a leap, or did he already believe that there are no universal solutions? From the point of view of the philosophy of science, you can make a good argument that a great deal of knowledge in the social sciences is contextual. IMO, that is so because of meaning. Much of human experience and behavior depends upon meaning, and meaning depends upon culture. For instance, property rights seem to be a human universal. But the meaning of property and the meaning of rights differs greatly between cultures. For an outside "expert" to come in and assume that his understanding of property rights is the only one, or the only correct one, and that the institutions that have grown up around property rights in his culture should be adopted by the people he is trying to help is not just paternalistic, it is bad science.

Leigh Caldwell: "It's likely that there are still some universal principles - for example clear property rights".

Easterly works in Africa, right? I do not know much about African cultures, but from what I hear sharing is more widespread than it is in Western cultures. I guess that makes property rights less clear than it is for us. But sharing is a human universal, too. Can we say that our mix of property rights and sharing is better than theirs? Or consider the view of property of some Native American cultures. Imagine a Kwakiutl economist advising us that our idea that "Defaults, insolvency and bankruptcy are key components of a market economy based on property rights" (James Tobin) is flawed, and that if we want to destroy property the Potlatch ceremony is a far superior way.

Leigh Caldwell: "free primary education,"

I wonder if there are not some cultural assumptions in that phrase. (I don't mean to pick on you, Leigh.) Every culture gives its children free education. An Indian (from India) scholar told a group of us, "God must want children to be educated. He gave each of them two teachers, their parents." Free public education means that strangers teach children in schools run by the state or perhaps by outside organizations. Whatever good they may have done, the Indian Schools of New Mexico had an avowed purpose to destroy native culture. They outlawed speaking anything but English. In northern New Mexico in the 1970s there were efforts to revive the Tewa language by teaching it to school children, but the only native speakers were over 60.

I do not believe that this kind of cultural imperialism is what you had in mind, but "free primary education" is not obviously an unalloyed good.

Well, I have gone on too long. I originally planned to make some comments about science. Let me just say that perhaps Easterly is taking a more empirical approach than usual for economists. ;)

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Leigh Caldwell said...

Hi Min

Thank you for your comment.

I agree that Easterly already believes there are no "big" solutions. I think he's used this argument to try to bolster that belief, but (in my opinion) wrongly. Your argument about meaning and culture - a more fundamental philosophical point - makes a much better case than his.

Two further points: property rights and free primary education were intended as examples of potential universals, rather than a firm assertion that those are definitely the right principles. Again your philosophical point stands - we mustn't make simplistic extrapolations from our culture to others.

However, on practical grounds I would still defend the idea of broadly applicable principles. Naturally there are differences between cultures, and these may mean that nothing is literally universal. But in practice I think we will find that there are certain kinds of institutions and structures which are nearly always associated with economic development.

Compare with this idea: I suspect that if we were to go to any other planet and find an intelligent, developed society we would discover that they have invented an integer counting system, the wheel, money and electrical transmission. I readily admit that I'd have a hard time fully proving this assertion, but I think it would be possible to demonstrate a high likelihood that such developments would occur. Clearly these things lie outside of the realm of provable, indisputable facts - but often what is disputable in theory is still, essentially, true in practice.

Min said...

Thanks, Leigh. Interesting reply. :) I do think that there are a number of human universals, which Easterly probably applies without thinking. ;)

Leigh Caldwell: "I suspect that if we were to go to any other planet and find an intelligent, developed society we would discover that they have invented an integer counting system, the wheel, money and electrical transmission."

When I read that my first thought was the Incas. Then I recalled the time when, as a youth, I met W. H. Auden. One thing he said was that he would like to reincarnated as an Anglican Bishop in the 19th century. I expect that he would have been happy without any of the things you mentioned. ;)

PunditusMaximus said...

Having read Easterly's book, I feel like he's a person with a lot of experience, but not much passion left for anything but taking things down.

Leigh Caldwell said...

If W.H.Auden really thought a 19th century bishop would have been happy without integers, wheels or money, I'll read his poetry more cautiously in future :)