Friday 28 January 2011

The Fruits of Blogging

I apologize in advance but this will be a bit of a disjointed post, I have a number of ideas roaming around in my head but they refuse to coalesce so I will leave that work for the reader.

1) A lovely quote from Small is Beautiful where Schumacher gives an interesting perspective on why aid is failing,
"In other words, we tend to think of development, not in terms of evolution, but in terms of creation.
Our scientists incessantly tell us with the utmost assurance that everything around us has evolved by small mutations sieved out through natural selection. Even the Almighty is not credited with having been able to create anything complex. Every complexity, we are told, is the result of evolution. Yet our development planners seem to think that they can do better than the Almighty, that they can create the most complex things at one through by a process called planning, letting Athene spring, not out out of the head of Zeus, but out of nothingness, fully armed, resplendent and viable."
Schumacher goes on to discuss about how the foundations of western society grew out of western education, organisation and discipline. These are all paradigms that do not "jump, [they are] gradual process[s] of great subtlety."

2) This term I am taking a course called "Management of Innovative Technology" which is mainly concerned with formalizing the inventive process and milking as much as you can out of your employees founded on the grow and expand economic model. I skipped ahead in the notes and found a section about technology in third world with some very interesting reports.
First of all a 2006 (the same year as Easterly's White Man's Burden) paper called "Funding Self-Sustaining Development: The Role of Aid, Foreign-Direct Investment and Government in Economic Success". Most of our readers probably will not have the incentive to read it so I will quote part of the abstract.
FDI [Foreign-Direct Investment], at best, has no effect on economic growth and actually slows the rate of human development in less-developed countries. We find no evidence that the degree of democratic respon-siveness in government conditions the effectiveness of either aid or FDI, although we do find that democracy independently increases human development in all but the most developed countries. Our results demonstrate that FDI and aid are not, and cannot be, substitutes in the development of the world’s poorer countries. Nor even can they be thought of as complements—certainly not at mid to low levels of development. In the end, poor countries need democracy and aid, not FDI.
Very interesting! Note that they do not critique aid as much as foreign investment but they do touch upon the fact that investment in the developing world is often presented as a higher, more sustainable and responsible level of aid. (The USA loves this approach.)

3) Reading up on Schumacher on Wikipedia led me to the Sustainable Development Portal. I'm surprised that I did not come across it sooner and that none of our readers took the time to tell me about it!

4) I was quite encouraged to find the Human Development Reports put out by the United Nations. It acknowledges that development cannot be solely measured with economic terms - something Schumacher would agree with entirely. Here's their heartwarming introduction...


Some housekeeping before I take my leave. Last week Jordan broke our record for most responses to a post (though many of them were offline) - please leave your comments on each post! They can be as short as, "You're wrong." or "Duh - you're just figuring that out now."
On the more constructive side, Jordan and I are very much enjoying Small is Beautiful but after we are finished with this book we will not have any specific topics to examine. Our request is that you, our readers, leave some comments about ideas that we've covered here or you've read about elsewhere that you would like to see covered a bit more.

Stay tuned next week for the heart of Small is Beautiful!

Kurtis (from Waterloo)

5 comments:

  1. Kurt, great post. I liked the different parts and thought they fit together.

    The paper you cite concludes: "In the end, poor countries need
    democracy and aid, not FDI." What I read into the discussion in this paper is that if a country is doing well already (ie, it has a functioning democracy and human development and capacity are at a particular level) then both aid and FDI might well benefit the country. The problem is countries with poor or no democracy and low levels of human capacity. For these countries, neither ODA, nor FDI will help.

    This idea was reflected in a paper I read about the participatory aspect of the World Bank's Poverty Reduction Strategy Paper's process - a process by which governments of poor seek the participation of ordinary people in forming priorities for governmental policy. The author concluded that only in countries that didn't actually need a PRSP did participation even come close to working. In poor countries with repressive governments, low levels of infrastructure and literacy, participation programs were not very effective.

    Jordan

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  2. I'll respond to your request for responses...
    I can understand and appreciate that, at the very least it shows interest and appreciation for your post.

    I found the "Funding Self-Sustaining Development: The Role of Aid, Foreign-Direct Investment and Government in Economic Success" quote interesting if only because it gave further proof against "enough money will solve any problem".

    Could you clarify this sentence though?:

    > Note that they do not critique aid as
    > much as foreign investment but they
    > do touch upon the fact that
    > investment in the developing world is
    > often presented as a higher, more
    > sustainable and responsible level of
    > aid. (The USA loves this approach.)

    Ok. I think my confusion comes from your response to something not quoted? Also you're saying that the USA loves using Foreign investment instead of foreign aid? Or are you saying that the USA loves using the methods argued for in the quote?

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  3. This comment has been removed by the author.

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  4. It's been a while but just to clarify, according to the article, the US diverts aid money into investment money on the premise that investment money treats the recipient more equally (is less patronizing). As I recall, what is not said is that the nature of investment money is that it has a substantial return for the investor, ie, it's not so noble as it might sound.
    Thanks so much for commenting!

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  5. Yeah, that answered my question. Thanks.

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