Smith challenged the mercantilist orthodoxy of his time, the belief that nations grow rich by hoarding gold and restricting imports. Instead, he argued that prosperity arises from productive labour, specialisation, and voluntary exchange. His famous pin factory illustrated how the division of labour multiplies productivity and wealth. Nearly 250 years later, his observations remain remarkably relevant.
Smith was not advocating an anarchic free-for-all. Contrary to the caricature often presented by critics, he saw a vital role for the state: to uphold justice, enforce contracts, protect property rights, and provide public goods. What he warned against was something different: the concentration of economic privilege and the meddling of governments captured by special interests.
In modern language, Smith was not preaching laissez-faire dogma. He was describing what we would now call regulated capitalism within a framework of liberal democracy.
The empirical record since then is rather difficult to ignore. Countries that broadly follow these principles, secure property rights, open markets, competition, and the rule of law, have become prosperous. Those that suppressed markets and concentrated economic power in the state did not.
The simple arithmetic of economic growth explains why.
As The Economist recently reminded its readers, economic progress begins with the mathematics of compounding. An economy growing at 1 per cent per year will barely double over two generations. One growing at 7 per cent will expand roughly thirtyfold.
The contrast between South Korea and Ghana illustrates the point rather starkly. In 1960, the two countries had roughly similar levels of income per person. Today, South Koreans browse luxury shops and sip cappuccinos in fashionable cafés, while the average Ghanaian survives on roughly four dollars a day.
Many factors may explain this divergence, but one is hard to miss. South Korea gradually embraced export-oriented markets, competition, and industrial entrepreneurship. Ghana, like many developing countries, particularly in Africa at the time, experimented with state planning, protected monopolies, and heavy economic controls.
The outcomes speak for themselves.
This raises uncomfortable questions for the development community. Over the past sixty years, Africa has received vast quantities of aid, advice, and technical assistance from well-intentioned international agencies. Yet for decades, many economies remained trapped in systems that discouraged entrepreneurship, protected state monopolies, and weakened incentives for productive investment.
It would be unfair to blame development agencies alone for this. But it is equally difficult to argue that the international development establishment consistently championed the kind of decentralised market dynamism that Smith described.
Meanwhile, the ideological debate has quietly moved on.
Very few political movements today seriously propose abolishing capitalism. Not even communist parties governing China or Vietnam attempt that experiment anymore. Even far-left political parties in the West have largely abandoned such ambitions. Capitalism, it seems, survives its critics with remarkable resilience.
This does not mean markets solve everything, or that governments are unnecessary. The most successful societies combine markets with strong institutions, economic freedom with the rule of law, and capitalism with democratic accountability.
But one awkward fact remains. Most critics of capitalism also depend on it. Every salary paid in international organisations, every development programme financed by taxpayers, and every pension collected by retired UN staff ultimately originates in wealth created by capitalism. In other words, even capitalism's critics tend to live rather comfortably from the system they distrust.
As Robert Lucas, Nobel Prize Winner in Economics, has observed, "once one begins thinking seriously about economic growth, it becomes hard to think about anything else." Perhaps that is why the debate about capitalism continues. The evidence accumulates faster than the willingness of some people to change their minds.
Smith was not advocating an anarchic free-for-all. Contrary to the caricature often presented by critics, he saw a vital role for the state: to uphold justice, enforce contracts, protect property rights, and provide public goods. What he warned against was something different: the concentration of economic privilege and the meddling of governments captured by special interests.
In modern language, Smith was not preaching laissez-faire dogma. He was describing what we would now call regulated capitalism within a framework of liberal democracy.
The empirical record since then is rather difficult to ignore. Countries that broadly follow these principles, secure property rights, open markets, competition, and the rule of law, have become prosperous. Those that suppressed markets and concentrated economic power in the state did not.
The simple arithmetic of economic growth explains why.
As The Economist recently reminded its readers, economic progress begins with the mathematics of compounding. An economy growing at 1 per cent per year will barely double over two generations. One growing at 7 per cent will expand roughly thirtyfold.
The contrast between South Korea and Ghana illustrates the point rather starkly. In 1960, the two countries had roughly similar levels of income per person. Today, South Koreans browse luxury shops and sip cappuccinos in fashionable cafés, while the average Ghanaian survives on roughly four dollars a day.
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| (graph based on rounded figures, for illustration purposes only) |
Many factors may explain this divergence, but one is hard to miss. South Korea gradually embraced export-oriented markets, competition, and industrial entrepreneurship. Ghana, like many developing countries, particularly in Africa at the time, experimented with state planning, protected monopolies, and heavy economic controls.
The outcomes speak for themselves.
This raises uncomfortable questions for the development community. Over the past sixty years, Africa has received vast quantities of aid, advice, and technical assistance from well-intentioned international agencies. Yet for decades, many economies remained trapped in systems that discouraged entrepreneurship, protected state monopolies, and weakened incentives for productive investment.
It would be unfair to blame development agencies alone for this. But it is equally difficult to argue that the international development establishment consistently championed the kind of decentralised market dynamism that Smith described.
Meanwhile, the ideological debate has quietly moved on.
Very few political movements today seriously propose abolishing capitalism. Not even communist parties governing China or Vietnam attempt that experiment anymore. Even far-left political parties in the West have largely abandoned such ambitions. Capitalism, it seems, survives its critics with remarkable resilience.
This does not mean markets solve everything, or that governments are unnecessary. The most successful societies combine markets with strong institutions, economic freedom with the rule of law, and capitalism with democratic accountability.
But one awkward fact remains. Most critics of capitalism also depend on it. Every salary paid in international organisations, every development programme financed by taxpayers, and every pension collected by retired UN staff ultimately originates in wealth created by capitalism. In other words, even capitalism's critics tend to live rather comfortably from the system they distrust.
As Robert Lucas, Nobel Prize Winner in Economics, has observed, "once one begins thinking seriously about economic growth, it becomes hard to think about anything else." Perhaps that is why the debate about capitalism continues. The evidence accumulates faster than the willingness of some people to change their minds.
What makes this essay both interesting and slightly uncomfortable is how obvious the central point appears in retrospect.
ReplyDeleteAt the 250th anniversary of Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations, the mechanism he described still seems oddly underappreciated in parts of the development world: the arithmetic of compounding economic growth.
The mathematics is not complicated. An economy growing at 1% annually barely doubles over two generations. One growing at 7% expands roughly thirtyfold. Once that logic is internalised, the divergence between countries such as South Korea and Ghana becomes far less mysterious.
What is striking is not that Smith understood this in 1776, but that institutions devoted to development often seemed slow to place economic growth at the centre of their thinking.
Even in leading social-science institutions such as the London School of Economics and Political Science, which has trained a large share of development professionals, the arithmetic of growth was not always treated as the decisive variable it clearly is.
During many years working with UNICEF, I struggle to recall a single senior discussion in which sustained economic growth was treated as the central determinant of long-term human welfare. Yet without growth, the resources required for education, health systems, infrastructure and social protection simply do not materialise.
It is striking that at the London School of Economics, wealth creation was gradually treated as a lesser concern than its redistribution. LSE, and academia at large, has skewed leftward over many decades is not a feeling; it is reflected in the shift of curriculum. As the 20th century progressed, the classical liberal economic tradition, represented by Ricardo and Stuart Mill, which once defined the LSE, was gradually sidelined by a focus on social engineering. LSE moved from asking "How do we create an environment where a billion people can trade their way out of poverty?" to asking "How can bureaucracies manage the symptoms of poverty?" This created a generation of development professionals who viewed the state as the primary actor and the market as a chaotic force that needed taming. The tragedy of the UNICEF mindset you mentioned is that it mistakes outcomes for engines. Health and Education are the dividends of a productive economy. Economic freedom is what pays those dividends. Institutions focused on social protection in countries that had not yet produced anything to protect. The reason this conversation feels uncomfortable is that it suggests much of the aid industry has been counterproductive. If you ignore Adam Smith’s lessons on property rights and competition, aid and technical assistance just become a way to subsidise inefficient state monopolies. The LSE and its peers didn't just "play down" growth; they treated the very mechanics of capitalism, competition, profit, and creative destruction with a high degree of academic suspicion.
DeleteThomas, the claim that the LSE (and academia more broadly) has drifted from classical liberal economics toward more interventionist models of development certainly has some merit. But your account arguably simplifies a more complex intellectual evolution.
DeleteMany development economists influenced by those shifts still debate the role of markets, institutions and incentives. Within academia, there remain strong voices arguing for market-based approaches alongside critiques of bureaucratic development models.
Your critique of aid and social protection reflects an important ideological current, but it may understate the diversity of views that still exist within the field.
There may well still be debates within academia over development models; however, the one favouring redistribution has won hands down for decades.
DeleteI should have added that I am not against aid and social protection per se. However, I have for decades had problems with the way aid was practised and social protection systems were designed.
DeleteIn terms of semantics neither capitalism nor communism are attractive to me; however, the term 'free enterprise' seems a better word.
ReplyDeleteIn history the laissez-faire form of capitalism as practiced by the East India Company certainly gave it a bad name; and, that may be one reason development theorists shied away from it.
Governments must provide regulation, security and strive to prevent oppression (i.e. allow freedom to compete and operate natural monopolies as public utilities).
As to Ghana, they got off to a bad start at independence when Kwame Nkrumah said: "Seek ye first the kingdom of politics and all things shall be added onto you."
This was the gospel of 'state capture'; and, subsequently, the looting/milking of the state resources. Unfortunately other Africa politicians adopted Nkrumah's motto.
I never worked in Korea; however, those who did, have mentioned to me the exceptionally strong desire of Koreans to learn and to work hard to improve.
What one might consider and label as corruption is, in too many countries, just considered as an overhead, a tax or even the oil in the engine of business.
Among UN staff there were many from former colonial powers who seemed to feel guilty about their county's past; and, bent over to apologetically appease the local authorities.
In some cases, this resulted in not being willing to call things by the right name.
UNDP missed the boat early on when they tried to adopt each and every country's priorities, as set forth by local planning commission, as UNDP's priorities.
If followed too slavishly, this would deprive a UN agency of its own priorities regardless of it own reason to exist. In contrast, UNICEF stands out in its ability to assist both sides even in civil wars.
Furthermore, most central planning has been 'top-down'; and, the underlying assumptions have very often proved to be erroneous.
John, I broadly agree with much of what you say. The term “free enterprise” does capture what Adam Smith had in mind more accurately than the caricature often associated with the word “capitalism.” Smith himself was not defending the kind of mercantile monopolies represented by the East India Company. In fact, he criticised them fiercely.
DeleteYour point about Nkrumah is also important. The early post-independence belief that political power alone could deliver prosperity led many countries toward state control rather than institutional development. South Korea chose a different path, and the divergence in outcomes has been remarkable.
I also recognise your point about corruption becoming normalised as a kind of “operating cost” in some systems. That, too, is ultimately an institutional problem. Without the rule of law and competition, the incentives drift in that direction.
The Soviet Union gave Nkrumah Lenin's Peace Prize. They must have considered him a good communist.
ReplyDeleteWhat is striking in this discussion is how little the most distressing facts are allowed to disturb the development industry’s self‑confidence. After sixty years of massive aid flows, the uncomfortable truth is that the African countries receiving the most assistance are further behind the rest of the world than they were at independence. In several cases, they are worse off than they were under colonial administration.
ReplyDeleteIt is not mysterious - aid cannot substitute for the institutional foundations of prosperity: property rights, rule of law, open markets, and accountable government. Where these are absent, aid entrenches the very systems that hold countries back. It props up political elites, subsidises inefficient state structures, and reduces the pressure for reform.
This is not an argument for abandoning Africa. It is an argument for abandoning the comforting illusion that external money can compensate for weak institutions or misguided economic policies. The countries that have risen, South Korea, Singapore, and Mauritius, did so not because outsiders rescued them, but because they built systems that rewarded work, investment, and enterprise.
The development industry needs to rethink not only its methods, but its assumptions. At some point, the absence of progress must become a verdict in itself.
Oh my!
ReplyDeleteWhere did the 'rate of interest' come from? God?
Did capital exist before it could be owned?
Before you defined a system that could name it?
Did commodities just grow on trees?
What happened to tribalism and feudalism?
Not to mention minor systems such as socialism and pastoralism?
Times Change... All things must pass.
Try walking along Broadway in your Natural State these days!
Mahesh, you are right to remind us that economic life did not begin with interest rates, capital markets, or even clearly defined property rights. Human societies have taken many forms, including tribal, feudal, and pastoral, each with its own logic and constraints. That is precisely the point.
DeleteWhat Adam Smith did was not to claim that capital “fell from the sky,” but to observe that once individuals are allowed to exchange, specialise, and retain the fruits of their effort, certain patterns emerge with remarkable consistency. Surpluses appear. Those surpluses are saved or reinvested. Over time, what we call “capital” takes shape, not by decree, but as a consequence of human behaviour under conditions of relative freedom.
Interest rates are not acts of God, but neither are they arbitrary inventions. They reflect time preference, risk, and the opportunity cost of using resources in one way rather than another. These are not ideological constructs; they arise where people make choices.
You are also right that commodities do not “grow on trees”. They are produced. And production, beyond the most basic subsistence level, depends on organisation, incentives, and increasingly, capital accumulation.
The historical systems you mention, feudalism, tribalism, and so on, were not alternatives that delivered sustained, broad-based prosperity. They were, in most cases, systems of hierarchy and constraint, where economic life was bound by status and coercion.
What distinguishes what we now call capitalism, or as we seem to prefer, “free enterprise”, is not that it was invented at a particular moment, but that it gradually removed those constraints. It allowed strangers to trade, individuals to invest, and ideas to scale.
"Arithmetic” matters. Once reinvestment and compounding take hold, the difference between systems becomes dramatic over time.
So yes, times change, and systems evolve. But not all systems are equal in their ability to generate sustained improvements in living standards.
The question is not if capitalism had a beginning in history. The question is whether any alternative system has yet demonstrated a comparable capacity to lift large populations out of poverty over the long run.
So far, the empirical record is rather one-sided.
There is something uncomfortable about discovering, after a long career in development, that Adam Smith may still have more to teach us than the frameworks we spent decades developing.
ReplyDeleteSmith’s central insight was not ideological. It was observational. When individuals are allowed to specialise, exchange, and retain the fruits of their effort, economies grow. And when economies grow, the resources required for health, education, and social protection begin to materialise.
This is not a controversial proposition. It is, in fact, embarrassingly obvious. Yet within the UN development system, it was not treated as the organising principle it should have been.
Development unfolds across many fronts at once, from health and education to economic growth and environmental protection. Economic growth underpins progress in all these areas.
ReplyDeleteDevelopment aid should be understood as an investment in a country’s future. Like any investment, it is most effective where the prospects for success are strongest. Where governments are firmly committed to economic growth, the rule of law, accountability, and good governance, aid can be a catalyst for long-term development. In poorly governed states, by contrast, it is often reduced to short-term charity, yielding little lasting benefit and, in some cases, weakening governments’ accountability to their own citizens.
The formula commonly used by UNICEF and the United Nations for allocating aid budgets is charitable driven; it distributes the money indiscriminately to countries, regardless of how serious their governments are about economic growth and good governance. In fact, those with the worst governance receive the most money.
Detlef, your summary of what we have been saying about development aid over the past several years is quite accurate.
DeleteAid may work where the fundamentals are already in place: governments committed to growth, a high degree of accountability, corruption under control and a willingness to let economic activity breathe. In those settings, aid could work well. But on the other hand, would it be needed?
Where those conditions are absent, aid tends to drift. It becomes, as you suggest, closer to short-term relief than long-term development, and not infrequently weakens the very accountability it is meant to support.
What is perhaps more curious is that this is not a particularly new insight. It sits comfortably alongside what Adam Smith observed centuries ago: that incentives, institutions, and the freedom to exchange are not peripheral to development; they are central.
And yet, as a system, we have often behaved as if these conditions were secondary, even to the allocation formula itself.
So yes, your formulation captures the essence of the issue. The lingering question is why it took us so long and why it hasn't been acted on yet.
The last question is intriguing. Were we cowed by ideological bullies with little knowledge of development?
ReplyDeleteThe question of why this has taken so long to recognise is perhaps less about ideology than about institutional culture. Over time, large parts of the development system became comfortable with frameworks that prioritise allocation and intention over outcomes. Moral urgency, bureaucratic caution, and shifting intellectual fashions may have crowded out a more grounded focus on how development actually occurs. This suggests a drift away from the empirical core of the problem: that growth, institutions, and incentives are not optional components of development. They are foundational. The challenge now is to recover that clarity.
DeleteWhat continues to worry me as a current staffer at CO level is that economic growth is invisible as a concept for how children's lives are to be improved. It's just not on the radar. We continue to speak as if the only thing that will help is our programmes.
ReplyDeleteIt is genuinely encouraging to hear this perspective from a country office. That alone suggests the conversation is beginning to reconnect with reality.
DeleteYou might consider testing the waters by putting a simple question on the agenda of your next CO meeting: how, exactly, do our programmes relate to the country’s broader economic trajectory? Not as a challenge, but as a point of curiosity.
Even a modest shift, linking what we do to how economies grow, how jobs are created, and how households actually escape poverty, could open up a much-needed new line of thinking.
After all, if children’s lives are to improve sustainably, they must grow up in economies that are themselves growing. Bringing that perspective into the room would already be a meaningful step forward.
Last week’s issue of The Economist carried an article on the Green Party of England and Wales. Their stated priority on economic growth appears to be simple: stop pursuing it. They also lament the sacrifices made “at the altar of the growth fetish.”
ReplyDeleteIf this is the economic thinking circulating within a party represented in the Parliament of the United Kingdom, and one that has even managed to win a recent by-election, it may be optimistic, perhaps wildly so, to imagine that the development community will suddenly rediscover the rather old-fashioned insights of Adam Smith.
After all, Smith merely suggested that when people are allowed to produce, trade, and keep some reward for their effort, economies tend to grow. Apparently, that idea now risks being dismissed as an embarrassing relic of the eighteenth century.
Thomas, the relationship between growth, redistribution, and social outcomes is more complicated than you suggest.
ReplyDeleteThe Nordic countries are a useful example. They combine market economies and sustained growth with high levels of redistribution. The result is both a high standard of living and low inequality. In other words, growth and redistribution have coexisted rather comfortably.
At the other end of the spectrum, Sri Lanka offers another interesting case. It remains a relatively poor country, yet its social indicators—under-five mortality, infant mortality, maternal mortality, and literacy—have long been significantly better than those of many richer countries. This suggests that public policy choices and social investments play an important role in shaping outcomes.
None of this contradicts the importance of growth, but it may indicate that the path from growth to human development is more complex than you imply. Institutions, social policy, and the way resources are distributed matter. The real question may be how growth, governance, and social policy interact to produce better lives for children.
Thank you, Anonymous. Your comment, even if cherry-picking in data covering less than 1% of the world's population, probably sums things up quite neatly.
DeleteThomas, cherry-picking is probably a temptation on all sides of this discussion, including yours. Development debates have a long tradition of selecting the examples that best illustrate one’s preferred conclusion. But that aside, the central point about Adam Smith was observational. What is puzzling is that within the UN development system, as you have suggested, this insight did not function as an organising principle. Growth was treated as someone else’s business, while social outcomes were assumed to be the result of redistribution.
DeleteWhen leaving the home of Adam Smith to work for UNICEF in East Africa… in 1976 I was faced with a world that seemed to trade on things that were deemed precious to them. Sometimes bountiful in one country they would be exported to another who deemed it valuable only because they did not have it. This desire/curiosity to ‘better’ one selves was usually carried out by young people, exposed to new ideas. At that time gold was held precious to trade but so was knowledge. Nowadays, knowledge is no longer the precious commodity it once was … everyone now has access to it on a phone. This fact has changed the world in a way that Smith could not have imagined. The world is now more full of Smiths than at any other time in history. If we accommodate this fact we can find new ways to exchange defend what is most precious. My guess is that the young are doing this already.
ReplyDeleteGeorge, that is a lovely reflection, particularly the image of young people carrying ideas and curiosity across borders. In many ways, the world you describe has indeed expanded. Knowledge travels faster and far more widely than Adam Smith could ever have imagined.
DeleteYet your observation also raises a question that continues to trouble me today. If knowledge, ideas, and initiative are now so widely distributed, one might expect economic dynamism to feature more prominently in how we think about improving children's lives, but it rarely does.
Within much of the development conversation, particularly inside the UN system, economic growth often remains oddly invisible. We speak at length about programmes and interventions, but far less about the underlying economic processes through which families actually escape poverty: expanding markets, rising productivity, and the creation of jobs.
In practice, children’s prospects improve most reliably when the economies around them begin to grow and generate opportunities for their parents. Programmes can help at the margins, but they don't substitute for a growing economy.
Perhaps the young people you mention are already discovering this in their own way, creating new forms of value. If so, they may end up reminding the development community of something that Adam Smith understood well: that prosperity often emerges from the energy of people themselves, rather than from the programmes designed on their behalf.
I have been written to privately saying that discussions like this make people feel uncomfortable, that I rant and repeat the same argument over and over, and that it will not change anyone’s mind, but will make everyone miserable. That may be true, but the reason the argument keeps returning is not ideological persistence. It is arithmetic.
ReplyDeleteIf one spends a career working in development, economic growth can not be ignored. An economy growing at 1% barely moves over a generation. One growing at 6% or 7% transforms the living conditions of millions of families within a few short decades. Once that simple compounding logic is understood, it becomes hard not to see it everywhere.
This is not a “far-right” political observation, unbecoming of a UNICEF worker, as some have suggested. It is the empirical evidence described by economists from Adam Smith to Robert Lucas: sustained improvements in health, education and social protection almost always follow sustained economic growth.
The uncomfortable part is that many of us spent long careers inside institutions that focused overwhelmingly on programmes while treating the underlying engine of prosperity as someone else’s problem, if it was understood as a problem at all.
That may not be a moral failure. Many colleagues worked hard and with good intentions under the institutional frameworks that existed at the time. But good intentions do not exempt a system from reflection.
Nor is it unreasonable to expect some introspection and reflection from organisations whose staff often cost taxpayers $300,000 per year. At that level, asking if our collective approach aligned with the basic mechanics of development is not an extreme demand.
If this conversation occasionally makes people uneasy, it may simply be because it touches on questions the development community has been reluctant to ask itself.
And yet the thread above suggests something encouraging: some colleagues clearly recognise the issue. That alone is more valuable than another round of mutual admiration. Typically, progress in any field begins the moment people start asking if the prevailing assumptions might have been wrong.
Many in the UN ecosystem like to imagine themselves as the intellectual and moral vanguard of humanity — permanently two steps ahead of the curve, ideally in sustainably sourced loafers and with a tote bag that says “Evidence-Based.”
ReplyDeleteSo perhaps a moment of cheerful self-reflection is in order.
A comforting article of faith holds that intellectuals lean left because they are simply smarter. This theory has the considerable advantage of being enormously flattering to the very people who most enjoy repeating it. Suspiciously flattering, one might say.
Being “an intellectual,” after all, is not quite the same as being intelligent. It is mainly the mastery of a very particular skill set: deploying semicolons with surgical precision, footnoting one’s way out of any tight spot, and pronouncing “hegemonic discourse” without dissolving into laughter. These are real talents — sadly, talents whose market value tends to peak somewhere between “adjunct lecturer” and “consultant specialising in participatory empathy workshops.”
Meanwhile, the man who runs the second-hand car lot is quietly earning enough to send three children to private school, all while selling slightly dented Hondas to people who actually need them. To the seminar-room patrician, this feels like a cosmic error. After all, the intellectual has read Marx. And Weber. And that one dense article explaining how your preference for cappuccino is a form of structural oppression. Surely such erudition ought to translate into… something. A loftier title, perhaps. A larger per diem. At minimum, a flat in a nicer arrondissement and wine that doesn’t come with a screw cap.
When the market — crude, vulgar beast that it is — declines to issue that promotion, resentment must find an explanation. Option A: the market rewards practical problem-solving over theoretical elegance. Option B (far more soothing): economic growth is tacky, profit is morally suspect, and any success unaccompanied by a peer-reviewed citation is obviously the product of exploitation, false consciousness, or both.
From there, the slide into left-wing sympathies is less a conversion than a form of career therapy. In the imagined socialist utopia — the one that exists mainly in white papers and closing statements — the hierarchy is finally corrected. Customers are replaced by committees. Prestige trumps profit. The length of one’s bibliography becomes more important than the length of one’s quarterly sales figures. The second-hand car dealer is dispatched for gentle ideological reconditioning, while the intellectual is at last summoned to pronounce authoritatively on matters of true importance — i.e., everything.
None of this means every intellectual is left-leaning, nor that every left-leaning idea is wrong. It is merely… interesting… how often one’s political convictions align neatly with one’s professional disappointments.
As the old line (more or less) goes: philosophy begins in wonder and ends — very quietly, behind closed committee-room doors — in impeccably rationalised resentment.
Now, if someone could kindly pass the ethically sourced canapés, that would be lovely.
Very entertaining discussion. Thomas, there seems to be a lot of mutual admiration between yourself and your anonymous friend.
DeleteDetlef, if you take a moment to read the thread a bit more thoroughly, you may notice that the anonymous contributors do not, in fact, agree with me on several points, which is precisely what makes the exchange interesting.
DeleteMutual admiration is not really the defining feature of the discussion. Disagreement, however, seems to be a more appropriate definition.
That said, many readers clearly look forward to your interventions, given your well-deserved reputation for profound insight. It would therefore be genuinely interesting to hear your more substantive views on the rather important issues raised: how should our programmes relate to the broader economic trajectory of the countries in which we work? That might be a good start.
I have heard rumours of organised study tours to Cuba for those wishing to experience “Net Zero” in real time. If anyone has details, please do share. It might be the best way to explore the economics of degrowth, which is becoming so popular among Green parties in Europe.
ReplyDeleteThe Cuba comment might be mildly entertaining, but it risks turning a reasonably thoughtful discussion into a collection of ideological punchlines.
DeleteWhatever one thinks of degrowth theories, Cuba’s economic system is the outcome of a very particular political history, not a useful proxy for contemporary debates about climate policy.
It would be a pity if the conversation drifted from the more substantive question already raised above: how development programmes relate to the underlying economic forces that determine whether families actually escape poverty.
Tom, I think there’s a basic flaw in your reasoning.
ReplyDeleteYou seem to be holding UNICEF staff—including the people participating in this blog—responsible for the fact that much of Africa has not caught up with the rest of the world over the past sixty years. That strikes me as unfair.
UNICEF’s mandate has always been just one slice of the overall development pie: child health, nutrition, education, and protection. These are obviously critical issues, but they represent only one part of a much larger system. Expecting an agency with that kind of mandate to influence the broader economic trajectory of an entire continent seems unrealistic.
You also keep coming back to economic growth as the central issue. But economic growth has never been UNICEF’s mandate. That responsibility largely rests with institutions specifically designed for that purpose—organizations like the World Bank, the regional development banks, and bilateral development agencies.
Reading through this thread, I’m struck that you haven’t really engaged with that institutional division of labor. If the economic growth agenda fell short—and in many places it clearly did—the question seems to be whether those institutions failed, not necessarily UNICEF. UNICEF was never set up to run macroeconomic policy.
You may well be right that economic growth ultimately matters most for long-term improvements in children’s lives. But holding a child-focused agency responsible for delivering it seems misplaced.
Even if UNICEF is only one organisation within a larger development ecosystem, it cannot reasonably claim responsibility only for its own successes while disclaiming responsibility for the collective outcomes of the system it is part of.
DeleteDevelopment has never been a set of neatly separated mandates operating in isolation. It is a complex system of interacting institutions whose actions inevitably affect one another. If those interactions produce poor outcomes, it is not enough for each organisation to say that the relevant issue fell outside its formal mandate.
Take a simple example. If UNICEF successfully drives major gains in child survival while the institutions responsible for economic growth fail to generate jobs, productivity, and rising incomes, the result is entirely predictable: rapid population growth combined with stagnant GDP growth. In other words, persistent poverty and underdevelopment.
This pattern has occurred in many African countries over the decades. Yet it has rarely been openly discussed within the aid community, let alone UNICEF.
Part of the reason is structural. Aid agencies compete with one another for funding, visibility, and institutional expansion. That competition inevitably weakens incentives for coordination. In practice, the success of one's own organisation tends to matter more than the success of the development effort as a whole, let alone the long-term trajectory of the countries being supported.
The result is a system in which programmes can be declared successful even when the broader development outcome is clearly disappointing.
Seen from that perspective, questioning UNICEF’s degree of introspection is not misplaced. If anything, it reflects a basic reality of development work: no organisation operates in isolation, and none can reasonably ignore the wider consequences of the system it helps sustain.
Reading across these various threads on this blog, one detects an elegant symmetry.
ReplyDeleteFirst, we have the debate on equal pay, which would absorb the entire organisational budget. That, in itself, would certainly simplify programme management.
Second, we have Rob’s thoughtful recollection of the ethics discussions, reminding us that corruption in the system apparently manifests itself most vividly in the behaviour of drivers, while senior management largely inhabits a higher plane of morality.
Third, we have Tom's somewhat unfashionable attempt to raise the awkward question of whether development outcomes might, at least occasionally, have something to do with economic growth.
Thinking about it, these three themes may form a neat little model of the global aid system.
We devote considerable intellectual energy to ensuring that our own remuneration structures are substantial, fair and equitable. We demonstrate admirable vigilance in monitoring the ethical behaviour of the lower ranks. And we remain confident that, whatever happens in the wider economy, our programmes can still be declared successful.
Meanwhile, the larger development picture sometimes drifts: population grows faster than incomes, labour markets fail to expand, and economic opportunities remain stubbornly limited. But fortunately, those matters fall within someone else’s mandate.
This arrangement has many advantages. It allows each institution to focus on its own expertise and responsibilities, celebrate its own successes, and maintain a healthy sense of organisational virtue without becoming distracted by the rather messy outcomes of the aid system as a whole.
From that perspective, one could almost describe the development community as a model of institutional efficiency: we look after ourselves conscientiously, monitor minor infractions diligently, and measure programme success carefully, while leaving the questions about whether countries are actually developing and escaping poverty to others.
Thank you, A.I. At the risk of once again being accused of engaging in mutual admiration, your summary is lovely.
DeleteThat said, it may be time for actors of greater depth and longer experience to step forward. Perhaps Detlef, with the intellectual authority that comes from his association with a distinguished German think tank, might consider taking up the reins and guiding us back onto a more serious track.
After all, the central question still seems to hang in the air: how do we actually move forward?
It would be genuinely enlightening to hear how our programmes relate to the broader economic trajectory of the countries concerned, how jobs are created, how markets expand, and how families ultimately escape poverty. These are, after all, the forces that determine whether children’s lives improve sustainably.
So perhaps this would be a good moment for those with deeper institutional insight to lead the discussion in that direction. I, for one, would be very interested to hear the answer.
It seems the discussion has reached its natural conclusion.
DeleteMy sycophants have fallen silent, and the intellectual heavyweights, for reasons best known to themselves, have chosen not to deploy. Perhaps the self-reflection cut a little too close to the bone.
Still, no real harm done. Most of us did our bit, or at least what seemed reasonable at the time. And it must be said that the system, for those working within it, had many agreeable features: the lifestyle was comfortable, the salaries respectable, and the pension arrangements, rather magnificent.
In such circumstances, one naturally develops a certain appreciation for stability. Rocking the boat is rarely an attractive option when one is already sitting dry and quite comfortably in it.
The broader problems of development are immensely complex. They will not be solved in a blog thread, and certainly not by a handful of retirees. With that in mind, perhaps the wisest course might be to let the matter rest.
After all, there are only so many years left before we each disappear quietly into the sunset. It would be a pity to spend the last years tearing out the little hair that remains while debating handshakes, management shortcomings, or the faint possibility that development outcomes might occasionally depend on economic growth.
So perhaps we can close here, content in the knowledge that the programmes were implemented, the reports were written, the indicators were met, and the institutional machinery performed exactly as designed. And as for the larger question, how countries actually become prosperous enough for children to thrive, well, that remains within someone else’s mandate.