The Development Trap

How Thinking Big Fails the Poor

Adam D. Kiš

• Publisher: Routledge
• Year: 2018
• ISBN:
  9781351273787
• Edition: 1
• Topic: Social Sciences
• Subtopic: Global Development Studies
• Index: Social Sciences

A wave of optimism is sweeping through the international aid and development industry, championed by leaders such as Jeffrey Sachs and Jim Yong Kim, who believe that poverty eradication could be within our grasp. Yet in stark opposition come those who believe that all international development intervention is hegemonic, paternalistic, and neocolonialist and must be done away with. In this book, the author argues for a middle ground. Poverty is an entrenched, intractable problem that will never be entirely eradicated. However, if we reorientate our objectives in line with realistic goals that improve the way that poverty is confronted on a smaller scale, we can still continue the fight for meaningful change.

Using rigorous scholarship illustrated with vivid storytelling and personal anecdotes from fighting against poverty in the field, The Development Trap argues that we need to make progress against poverty on the micro, rather than the macro scale. Instead of shooting for a single overarching end of poverty, our goals must be modest and reachable.

PART 1

The case against poverty eradication

1

The development delusion

Meet John. John has no regular source of income. He scavenges for food every day in garbage dumps. At night, he sleeps on a bedroll spread over gravel and garbage in underground caves which provide shelter from the harsh elements outside. He is an outcast from society; whenever he ventures out of his cave, he risks having things thrown at him. At times, he must fend off wild animals in order to protect the little that he has. John has been living this way for twenty years.

John does not live in war-torn Afghanistan. He is not a Syrian refugee. John is not even a resident of Calcutta’s infamous slums. John lives in New York City. His food scavenging takes place in restaurant dumpsters. His ‘cave’ is the elaborate tunnel system under New York. The wild animals he occasionally battles with are raccoons (Kaplan 2009).

John is unfortunately not an anomaly. News reports and books document the lives of thousands of ‘mole people’ (as they are called in New York) or ‘tunnel people’ in American cities as diverse as Las Vegas and Kansas City (Toth 1995; Daily Mail Reporter 2013; Daily Mail Reporter 2010). Some of these underground residents do have minimal employment, but are unable to afford housing aboveground. Others are unemployed and have adjusted to this way of life for the long term. Some are mentally challenged, others are war veterans suffering from post-traumatic stress disorder, but many are just average citizens who are simply unable to find a job in hard economic times.

The phenomenon of homelessness and joblessness – once a rarity in the United States – extends beyond the tunnels of major cities. A CBS news report documented families living in cars, while catching odd jobs to pay for gasoline and food (Pelley 2012). And a tent city has sprung up in New Jersey like a big permanent campsite, housing otherwise homeless residents with nowhere to turn (2013).

The United States is by no means the only developed country struggling with unemployment and homelessness. As the world economy has tanked in recent years, unemployment figures across the European Union have hit staggering highs, as well. Unemployment in the eurozone reached 12.1 percent in March 2013 (Reuters 2013a); this average masks the astronomically high figures of individual eurozone countries, such as Spain, whose unemployment rate sat at 27.16 percent by the end of April 2013 (and 57 percent for youth) (Reuters 2013b). These high unemployment figures coupled with austerity measures in an attempt to bring the economy under control have led to rioting across the eurozone from France to Greece, and from Spain to Turkey, as the unemployed demanded a resolution to the crisis (Reuters 2013b; Reuters 2013c). Many Portuguese have taken another approach to their country’s high unemployment rates: emigrating to their former colonies. Some 100,000 Portuguese now live in Angola, snapping up jobs in an economy that is growing between 8 to 10 percent per year, as compared to Portugal’s economic contraction of 3 percent in 2012 (Smith 2012).

Set against this backdrop, it is curious to hear the ongoing and intensified rhetoric about defeating poverty emanating from the leaders of the international aid and development industry. If the so-called ‘developed countries’ haven’t eliminated poverty within their own borders, how do they propose to do so elsewhere? Not that defeating poverty isn’t a noble goal. But it comes across as slightly ironic when many of those who are espousing the total eradication of global poverty are based in countries that are themselves staggering under an economic contraction rivaling the Great Depression (Tankersly 2013). These days, one can hear campaign slogans aiming at ‘Ending Poverty in Our Generation’ (Save the Children 2012) and ‘End Poverty 2015’ (United Nations Millennium Campaign 2015) (for the record, 2015 ended, but poverty did not); the second ‘United Nations Decade for the Eradication of Poverty’ has been declared by the General Assembly (US-based) after the first one ended and the General Assembly admitted that “the progress made in reducing poverty world-wide has been uneven” (UNDSPD nd); books such as The End of Poverty (by US author Jeffrey Sachs) have flown off the shelves in the past decade; and organizations aiming to ‘Make Poverty History’ (UK) and ‘End Poverty Now’ (Canada) have attracted public attention. In recent years, the World Bank’s Jim Yong Kim has set a “global target to end poverty”, and so confident is he of success that he has called it an “expiration date” for extreme poverty, to be achieved within one generation (Smith 2013).

Even if it weren’t for the irony of economically-shrinking regions such as the European Union (−0.3 percent GDP growth in 2012) and Denmark (−0.4 percent) maintaining active development programs in economically-expanding countries such as Niger (14.5 percent) and Sierra Leone (21.3 percent) (all figures, CIA World Factbook nd), would the complete eradication of worldwide poverty be a reachable goal? Or is it misplaced pie-in-the-sky hopefulness? It would be romantic to believe that we’re on the upward path, and that a world free from poverty and injustice is just around the corner, awaiting bright-eyed discovery with a boost from the developed nations and their aid machinery. But it’s unfortunately not that simple.

Let’s take the eradication of hunger – one of the principal components of poverty – as an example. The United Nations World Food Programme tells us that the world currently produces more than enough food annually to feed every human being on the planet (WFP nd). So why does chronic hunger persist? Shouldn’t we just be able to distribute food equitably so that nobody starves to death anymore? How hard would it really be to simply send all of our surplus food ‘over there’ and be done with the problem? It’s a deceptively simple suggestion, and one that I have mulled over since my childhood when my mother ominously intoned, “You can’t get up from the table until you finish your green beans. Think of all the starving children in Ethiopia!”

What would it take to equitably redistribute our existing food supplies, such that my rejected green beans would reach Ethiopia at the moment of need? Presuming that my mother hadn’t bought more than our household would consume, the story of surplus green beans begins with the farmer. If he is unable to sell his surplus, it will spoil, so let’s suppose that he has already made enough profit this year to cover his costs and to reinvest in next year’s crop. He’s feeling awfully charitable towards starving children in Ethiopia so he decides to donate it toward reducing world hunger. But now what? Even if he’s feeling charitable and is willing to give away his green beans at no cost, the trucking company that will carry his crop to port may not feel equally charitable. The shipping company that loads his crop onto seagoing vessels may not be in a position for charity, even if they feel like it, because they may not yet have covered their own operating costs for this year. Is the fuel company willing to donate free gas to the shipping company? Is the ship’s crew willing to forgo pay for one roundtrip journey in order that this shipment be truly cost-free, inevitably depriving their own families of bread to put on the table? What about the logistics crews at the port of destination? Should they be expected to work without pay when they, too, may be living at the very edge of their means and may be unable to make a charitable donation of their services? How about transport and distribution in the receiving country? Would we be creating more poverty by expecting truckers and relief workers to distribute the green beans without pay? How will they cover their costs, never mind make a profit? And let’s just suppose, for example, that a rich-country government or an aid organization steps in (as is often the case) and says, “We’ll cover all of these overhead costs because feeding the hungry is such an important goal”. Do the difficulties end there? Absolutely not! What about local farmers on the beneficiary end who are still able to produce a crop? Will they be put out of business by a sudden flood of commodities into the market, leading to a price drop and rendering local production unprofitable? And can we guarantee that our food shipment has reached the right people at the right time, rather than getting held up by bureaucratic red tape or stolen by armed bandits?

An exercise like this is more than just mental gymnastics. It starts to uncover some of the very real difficulties in feeding the world – even if there is enough raw material to go around. And what holds true for hunger also holds true for other hot-button development issues: infrastructure, education, healthcare … Will we have accomplished anything if we have lobbied governments and healthcare providers into delivering free health services to the developing world to the point that there is not enough profit to pay employees and their families are forced to go hungry? Wouldn’t we have just created more hunger? Traded development in one corner of the world for underdevelopment in another?

The truth is that development is messy business. It is complex and still quite unpredictable, despite decades of research into what has brought about the existing cases of economic success. One can no more predict the “expiration date” of poverty than one can predict the date in which a currently-active volcano will go dormant, or exactly where, when, and with what intensity a hurricane will strike – despite reams of data and evidence compiled by top scientists in the fields of volcanology and meteorology. Development, like the weather, is researchable, and important principles can be and have been uncovered over the years. But that doesn’t necessarily translate into predictive power with the levels of accuracy implied by such statements as those bandied about by leaders within the international development industry these days.

In order to assess the current surge in optimism within the development industry regarding the ability to end poverty, we would do well to conduct a short review of where the industry came from, and how it has evolved over the years. There is no need to conduct an extensive review of the history of the field, as that has been amply covered many times over by others. But a review with an eye toward optimism is revealing.

Some 70 years ago, post-WWII Europe lay in shambles, and a plan was drafted to reconstruct that battered continent and restore it to its former glory. The plan was to be entirely funded by the United States of America. After four years of implementation of the Marshall Plan (as it came to be called), all participating European countries posted significantly higher economic output than they had before the war began. Even before it ended, the remarkable success of the Marshall Plan gave birth to visions of spreading that success to other dark corners of the globe. A new era of foreign aid and development was launched, one which envisioned dropping infrastructure and industrialization programs down from heaven intact (see Moffat 1950 for an excellent example). If it worked in postwar Europe, the logic went, then how can it not work everywhere else? Optimism was brimming that the war on poverty was actually winnable. President Harry Truman of the United States, during his 1949 inauguration speech, observed:

More than half the people of the world are living in conditions approaching misery. Their food is inadequate. They are victims of disease. Their economic life is primitive and stagnant. Their poverty is a handicap and a threat both to them and to more prosperous areas. For the first time in history, humanity possesses the knowledge and skill to relieve the suffering of these people. … Greater production is the key to prosperity and peace. And the key to greater production is a wider and more vigorous application of modern scientific and technical knowledge. …we hope to help create the conditions that will lead eventually to personal freedom and happiness for all mankind. … With God’s help, the future of mankind will be assured in a world of justice, harmony, and peace (Truman 1949).

Decades have passed since those early optimistic assessments, yet poverty has proven to be a more resilient problem than was first estimated. Unforeseen challenges have cropped up, and innovative solutions have been devised to attempt to address them. Take the Green Revolution, for example (see Pingali 2012 and Fitzgerald-Moore and Parai 1996 for excellent treatises upon the Green Revolution). In response to impending famine in several parts of the world, developing country governments invited foreign experts and technologies to help them ward off disaster. Crops were cross-bred to produce strains giving high yields under difficult circumstances (drought, pestilence, etc.); aggressive new methods of farming were imported; technologies to boost crop yields that were already being employed in developed country settings were adapted to developing contexts. And for a time, the Green Revolution appeared to be a panacea for world hunger. Production did indeed increase, sometimes threefold or more. Crops became resistant to ills that had plagued previous generations of seeds. And the capacity of developing countries to feed themselves far outstripped population growth, upsetting previous estimations of the tipping point between population growth and famine. Disaster averted: the world was back on track to resume the inexorable march toward prosperity for all.

Or take Structural Adjustment as another example. Developing nations that had borrowed heavily from commercial banks and other sources in the past and yet had little development to show for it (due to corruption, mismanagement, war, economic contraction, or a host of other reasons) were at an impasse, having already borrowed large sums of money, yet not having established the economically-productive outputs that were supposed to pay off the debts incurred. In some cases, corrupt and autocratic dictators had borrowed heavily from the World Bank and IMF in their country’s name and then recklessly mismanaged the funds instead of investing them in development that would ultimately pay for itself, walking away from the problem when judgment day arrived. New, potentially-responsible governments were left holding the bag, and many simply defaulted on their loans. Structural Adjustment was billed as a second chance for those countries, a new loan to pay off old loans, as it were. But to make it harder for indebted countries to default again, the World Bank and IMF imposed a set of criteria for the new loans that was more stringent than before. These criteria included requiring the cutting of government expenditures (especially to what were seen as nonessential social services), balancing the national budget, privatization, and removing state subsidies, among others. As a result, it was expected that these austerity measures would return nations to solvency and get them back on track with the inexorable march toward prosperity for all.

These solutions, and others like them, have not been without fault, however. The large-scale industrial farming that typified the Green Revolution put some small farmers out of business. Chemicals used in boosting crop yields took an environmental toll. Genetic homogenization of new crop strains potentially opened them up to less disease resistance down the road. And corruption and poor distribution systems caused the Green Revolution to not even penetrate to the heart of some states desperately in need of assistance. It had been a positive step forward, but not a panacea, and certainly not without the introduction of new challenges and complexities to the problem of feeding the world.

Structural Adjustment faced even more challenges. Cuts in social services brought about by austerity policies hurt the education and healthcare sectors of participating governments (Loewenson 1993; Carnoy 1995; Reimers 1994), resulting in an overall reduction in health and education of the population. Structural Adjustment reforms have been blamed for decreasing agricultural production in sub-Saharan Africa (Due and Gladwin 1991). And the ultimate effectiveness of Structural Adjustment itself and its associated austerity policies in helping impoverished governments to get rid of debt and stimulate economic growth has been called into question by numerous scholars (Ojo 2001; Dollar and Svensson 2000; Herndon et al. 2013).

And despite various setbacks and counteroffensives, poverty still remains, holding tenaciously on, far past initial estimations of its eradication. Incontrovertible gains have been made, but after some 70 years of intensive development assistance, the challenge of poverty remains enormous. If anything has been demonstrated throughout the years, it is that international development is not simple, and defeating poverty is not straightforward. Dropping intact systems that worked elsewhere into new contexts doesn’t always produce the results that were foreseen. Confounding circumstances get in the way, and sometimes even reverse prior development gains.

What impact has all of this had on development optimism? Hardly any, it would seem. For through the ups and downs of the international development industry, belief that poverty is defeatable has remained high. “The world is very different now,” remarked President John F. Kennedy in his inaugural address, some twelve years after Truman’s. “For man holds in his mortal hands the power to abolish all forms of human poverty …” (Kennedy 1961). More recently, Kofi Annan stated that “poverty is a denial of human rights. For the first time in history, in this age of unprecedented wealth and technical prowess, we have the power to save humanity from this shameful scourge” (Annan 2002). And even more recently, Nelson Mandela offered that “Like slavery and apartheid, poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings” (Mandela 2005). And Jeffrey Sachs has written that “We can realistically envision a world without extreme poverty by the year 2025 because technological progress enables us to meet basic human needs on a global scale and to achieve a margin above basic needs unprecedented in history” (2005, 347). Erik Solheim, chair of the Development Assistance Committee for the Organization for Economic Cooperation and Development, declared that “We are the first generation in history with ability to eradicate extreme poverty from the planet … Now we basically know what it takes and we have all the re...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of illustrations
• Preface
• Acknowledgements
• PART 1: The case against poverty eradication
• PART 2: The case for continued engagement in fighting poverty
• Index