It’s a fact, but not yet a commonplace, that the last twenty five years have seen events as epochal as any since the Great Depression and World War II — most notably, the collapse of the century-long experiment with government monopolies known as communism, and the beginning of a worldwide experiment with market principles.
Just as the basic financial institutions of the Cold War were created in the 1940s — the Marshall Plan, the International Monetary Fund, the World Bank, the General Agreement on Tariffs and Trade, the United Nations and its various agencies, the Bank for International Settlements — so new institutions can be expected to emerge from the latest round of globalization.
The wave of concern for Africa is an outgrowth of these developments, emblematic of a new and widespread preference for equity and inclusion. So is the preoccupation with the integration of Arab and Islamic cultures — and with the threat of terror. So is anxiety over global warming.
The poles of opinion among serious people can be seen in various exchanges among economists over the last few years — between Stanley Fischer and Joseph Stiglitz about the policies of the IMF, between Jeffrey Sachs and William Easterly about the record of the World Bank. These positions correspond, very roughly, to “top down” vs. “bottom up.”
With respect to development, for instance, Sachs wants the existing institutions, the UN and the World Bank in particular, to bend to aggressive new interventions against “poverty traps,” in Africa especially.
Easterly argues that such “Big Plans” have generally failed in the past. He advocates programs that, he says, would motivate specific actors to take small steps, one at a time, testing at each stage to see whether poor people actually were gaining before motivating the next small step – a “piecemeal” approach, he calls it.
In a vigorous exchange in The Washington Post last spring, Easterly wrote that, “The simple dreams at the top run afoul of insufficient knowledge of the complex realities at the bottom.” Countered Sachs, “Easterly has a trained incapacity – seeing every development problem as a problem of corruption, rather than an issue as well of soils, disease and isolation. Both governance and geography play a role.”
A revealing glimpse behind the scenes of these debates can be found in Helping People Help Themselves: From the World Bank to an Alternative Philosophy of Development Assistance, by David Ellerman.
As an extended meditation on a page from John Dewey, Ellerman’s book gives a better idea of where antipoverty programs of all sorts are headed than any other book I know — in the direction of a more solid realistic foundation in human psychology.
Dewey wrote, “The best kind of help to others, whenever possible, is indirect, and consists in such modifications in the conditions of life, of the general level of subsistence, as enables them independently to help themselves.”
From this insight, Ellerman elaborates two cautions and threes injunctions.
Don’t override self-help capacity with social engineering. Don’t undercut it with benevolent aid. Instead, start from where the doers are. See the world through their eyes. Respect their autonomy.
These arguments he amply illustrates with case studies, war stories and running commentary from eight saints of autonomy-respecting assistance whom Ellerman has singled out: community organizer Saul Alinsky, educator Paulo Freire, management consultant Douglas McGregor, therapist Carl Rogers, philosopher Soren Kierkegaard, technologist E.F. Schumacher and economist Albert Hirschman.
Indeed, it is the legendary Hirschman, 90 years old and still working at the Institute for Advanced Study in Princeton, N.J., who provides the preface to the book, recommending the “long confrontation between man and a situation” (in the phrase of Albert Camus) as the appropriate strategy for most development issues, as opposed to the more familiar “rage to conclude” (“la rage de vouloir conclure“) described by the novelist Flaubert.
Ellerman affords a pretty good glimpse behind the scenes in Washington as well. He is one of those who have been thoroughly shaken up by events. The early 1980s found him teaching mathematical economics in the morning and methods of organizing worker-owned cooperatives in the afternoons in a sleepy town square near Boston.
By the late-1980s, he was doing investment banking in Slovenia, applying the same co-op principles in order to surface workers’ de facto rights to ownership of previously state-owned ownership. By the early 1990s, he was working at the World Bank, and in 1997 he became an idea man to chief economist Joe Stiglitz. Helping People Help Themselves is partly a history of their struggles together as Stigliz sought to be the bank’s “rebel within.”
Today, Ellerman teaches at the University of California at Riverside, and summers with his Croatian wife (“who taught me a thing or two about autonomy-respecting assistance”) on the Adriatic coast.
It is true that, from its earliest days, World Bank projects often have been conspicuously grandiose. In keeping with the principles of architectural design in the age of John von Neumann, it was as if the bank were the counterpart of the newly invented computers, gigantic calculating machines which filled whole rooms, and from which an answer to one question or another emerged periodically printed on little slips of paper.
And just as fast and powerful little computers have surpassed the clunky old Big Iron computers of the 1960s, so commercial banks have learned to serve many of the markets for which the World Bank was established, in the expectation that only a government enterprise would lend.
“It does not seem to me that one needs eight thousand-plus elite development workers headquartered two blocks from the White House to provide the sort of genuine development assistance that is so badly needed,” writes Ellerman. “Perhaps that was not obvious fifty years ago, but it is obvious now.”
What he recommends instead is a radical decentralization of the bank — distribute its functions to a network of local agencies that would include not just regional development banks — such as the European Bank for Reconstruction and Development that was created in the 1990s to help finance the transition of East Europeans nations to market economies — but foundations, think-tanks, university institutes and other non-governmental organizations as well.
By itself, however, the growth of alternative institutions doesn’t make the case for “zeroing out” out the bank. The world had grown rich and far more complex in those fifty years. We may not need the World Bank, but we have it, and nobody is likely to make it go away — at least not any time soon. So why not put Paul Wolfowitz and Jeffrey Sachs in charge, as president and critic-in-chief?
Each is a visionary; each is also a highly practical man. Why not see if some of those Big Plans can’t be scaled down a little and made to work? Why not try some of that decentralization? The same reasoning applies to the UN, of course — but nominee John Bolton is no Paul Wolfowitz.
And those emergent organizations? The ones that will turn out to be key facilitators of growth for the next fifty years?
One, almost certainly, will turn out to be the Gates Foundation, which, often in partnership with the UN’s World Health Organization, is pursuing a strategy in funding research in health care for the less-developed nations that seems likely to succeed.
Another, an outgrowth of the Montreal Protocol on CFCs, is the Intergovernmental Panel on Climate Change, the forum established by the UN’s World Meteorological Organization, in which measures to cope with global warming (and combat it) will be developed.
But the global initiative for which the need is most acute has to do with education — and probably higher education at that. After health measures, there can be nothing more important than developing lots of human capital in the world poorest places. That means reversing the flow of highly educated professionals from Africa to the rich nations of the West.
It means bringing many more bright young African students to Western and Asian universities, while creating circumstances in their home countries that make them prefer to return home to build their careers. It is a tall order, but as India has decisively demonstrated, it is not an impossible one.