By Pranab Bardhan
For quite some time the economic development profession has gone global in a rather grandiose way. Those quick with pronouncements on global development issues get the maximum attention, rise to the top of the profession, and may even get to hobnob with international celebrities and philanthro-capitalists.
The premium has been on finding global patterns in fighting poverty – in promoting comprehensive development strategies meant for a broad range of countries, with the Washington Consensus or alternatively the so-called Beijing Consensus – and pronouncing overarching policy judgments on the hot issues of the day on a global scale, including austerity or stimulus, free trade, capital flows, global inequality, migration, intellectual property rights, the development NGO movement and the like.
The World Bank, one of the largest outfits of development professionals, is now undertaking a radical organizational overhaul, aiming at “global practices,” in a sweeping realignment of technical staff away from its traditional pools of regional or country expertise.
It is also commonly observed that international organizations now vie with one another in devising new global criteria for ranking countries –for example, the Human Development index, the Environmental Performance Index or the OECD Better Life Index for environment, the Transparency International index for corruption and governance, the Business Climate Index, the Political Risk Map, the Freedom in the World report, the Index of Economic Freedom, and so on.
Politicians take these indices seriously enough to complain if their country goes down a few notches in the latest rankings. Some countries take offense if their ranking in the corruption index worsens, and some years back the Chinese government reportedly put pressure on the World Bank not to publicize findings on pollution indicators for Chinese cities.
International groups vie with one another
These international rankings are, of course, based on whatever patchy data one can lay one’s hands on for a whole range of countries – one data generator for a reputed international organization once told me that, as the annual deadline approaches, the pressure on them to somehow fill as many cells as possible in the international data matrix in front of them is intense – blithely ignoring uneven quality and poor comparability of data across countries, and in some cases where the data are practically non-existent, the tabulators even feel compelled to extrapolate from data for other countries in the neighborhood.
This general tendency to latch quickly on to global patterns as such data may reveal a change that’s been going on for some decades in the academic development economics community. As the chief editor of its premier field journal, the Journal of Development Economics, I used to be inundated by submitted articles carrying out cross-country statistical exercises, which on the basis of easily downloadable data with single observations for each country, large or small – similar to the United Nations principle of “one country, one vote” – came to conclusions on historical and policy issues of supposedly wide generalizability. Then the fashion shifted to experimental case studies carried out in different parts of the world, evaluating impact of development interventions at the micro level, yielding general recipes for the good fight against global poverty. There are, of course, well-known limits to the validity of the generalizations based on such methods, but these do not usually deter passionate believers in the cause.
Getting short shrift?
With the advance of such “global practices” what gets short shrift is the old-fashioned in-depth study into the historical-institutional contexts of particular areas that can give insights into political, social and economic processes that do not easily lend themselves to sweeping global generalities or to the building of a policy consensus named after some global city.
The conceit of economics – over social anthropology, for example – has been its superior ability to unearth supposedly universalistic principles, either based on clever explorations of rationality, or even when humans are demonstrably irrational or weak-willed, on an understanding of the psychological patterns of systematic departures from rationality. Ambiguity, contingency, contextuality and local specificity are at a discount as they make global verdicts or one-size-fits-all policy judgments difficult. Area studies have fallen into disrepute in the social sciences in general, and especially among economists, even those with considerable local knowledge in particular countries, try very hard to avoid their identification as mere area specialists.
Take, for example, one of the longstanding, sometimes acrimonious, debates in the development profession, that relating to the efficacy of foreign aid: One group finds in massive foreign aid a way of removing misery from the lives of hundreds of millions of people in the world trapped in unfortunate geographical, disease and other circumstances, and the other group considers aid to corrupt or feckless regimes as “money down the rat hole” at worst, and a factor weakening state capacity for independent development at best.
Ignore for a moment the fact that the aid debate gets exaggerated importance in the Western media as most programs to fight poverty are funded out of a country’s own local resources. Net official development assistance was about 1 percent of total central government expenditure in India in 2011; even in Africa, in Ghana, Kenya and Morocco, the fraction was less than one-third. Taking the whole of sub-Saharan Africa, official foreign assistance was less than 20 percent of gross capital formation in 2011.
Even nations with poor governance . . .
Think instead of the possibility that even in a country with poor governance in general there are often some sectors and regions where foreign aid to improve public infrastructure or health facilities or technical assistance can and has been shown to work to a large extent, but to find those niches and opportunities one needs many more mundane and tedious area-specific studies and investigations which cannot be globally generalized.
To take another example, when environmental issues are discussed in connection with development, the talk is usually in terms of the obviously important problem of global warming; far less attention is paid to the increasingly severe problems of degradation and depletion, independent of climate change, in the local commons – the forests, fisheries, grazing lands and the traditional irrigation systems, on which the daily livelihoods of the vast numbers of the rural poor in the world depend. In order to understand the modalities and pitfalls of community-level cooperation or collective action in mitigating these problems, one has to acquire a lot more local knowledge in numerous individual cases than what the global experts have time for.
The problem has been accentuated in recent years by the leaders of the international NGO movement, where the latter sometimes bring their missionary zeal, considerable resources and preconceptions about the global generalities on capitalist development to weigh heavily on one side of a local debate over the commons – say against a dam or a mining or infrastructure project – without adequate consideration of the difficult tradeoffs often involved, arising out of the conflicting interests of different sections of the local poor in individual cases.
It may be too much to say that like politics, all development is “local,” but the time has come to point out that in the development profession, the pendulum has swung too much the other way.
Pranab Bardhan is professor of economics at the University of California at Berkeley. This article was first published on December 12 with the headline Global Experts Still Need Local Knowledge on Yale Global.