The Realistic World of Palliative Development

 

         

 

 

 

 

 

 

 

 

People have unrealistically high expectations about what economic development is supposed to look like. They also have unrealistically high expectations about what successful government policy is supposed to do for development.

   

Most academics, and for that matter most people, are interested in transformative development. Readers want to know about dramatic successes: rapid changes from poor to rich or in some cases, movement from the periphery to the core. It is reasonable to ask what allows countries to make such extraordinary transitions. The English Industrial Revolution, Japan’s rise to core status, the rapid industrialization of South Korea, Taiwan and Singapore, or more recently, China’s rise to become an important world economic power.

    

This is like only valuing a baseball player if he is Babe Ruth and breaks home run records every season. A pro ball player can make a reasonable contribution to his team and to win rates without having to hit a home run at every at bat. A .278 batter who draws a lot of walks and singles will create a lot of runs by the end of the season.

    

The focus needs to be less on transformative development and more on palliative development. Palliative development is a simple concern with reducing poverty and raising standards of living. Creating a world beating export sector is nice but is not essential. Catapulting a country from the periphery of the world system to the core is nice but not essential. Raising thousands of people out of poverty. That is essential – even if the country is not a champion exporter and the country has not compressed the entire economic growth process into a tidy forty years.

    

How do states reduce poverty in the third world and raise overall standards of living? If one is worried about palliative development, rather than transformative development, then it is important to be concerned about the economic benefits of growth being widespread. Creating a fantastic industrial sector that makes a small number of executives at the top rich and a small number of workers in two or three factories rich will not necessarily reduce poverty. A more modest sector that employs thousands and thousands of people and raises the income of its managers and workers just a bit will have a greater overall effect on poverty.

    

An industry that obtains global competitiveness by maintaining strict wage control, using sweatshop labor and crushing labor organization will have less of an effect on reducing poverty than will an industry that pays its workers well and has them purchase and consume goods in the local economy. Workers who are well paid support local business and provide economic growth through the multiplier effect.

    

Palliative development is important – because not all third world governments have the capacity to become developmentalist states. The literature on successful economic development holds up the great developmentalist states of East Asia: Japan, Korea, Taiwan and China as the beau ideal of successful development. Korea in the 1960’s and 1970’s had the fastest rate of GDP growth that had ever been observed in economic history. China has the fastest rate of growth in economic history. East Asia really DID have transformative development. These nations have been absolute world beaters. But not every nation in Sub-Saharan Africa, Latin America, the Middle East or the rest of Asia can “Japan-ify” itself and have economic development as spectacular as that of the great economies of East Asia.

    

Japan was favored by never having been the colony of a foreign power. The other East Asian countries had the benefit of being colonized by Japan. Japan was a far kinder colonialist than were the European powers. They set up better educational systems, and better government bureaucracies. When the East Asian powers became independent, they had better government structures to work with than did say, post-colonial Africa.

    

The East Asian nations were relatively highly educated. Levels of literacy in eighteenth century Japan were as high as those observed in eighteenth century France. They were relatively egalitarian and had relatively light burdens of excessive estate size (latifundism). They had low fertility and suffered less from population bomb problems.  In the 1950’s, the non-Chinese economies often received significant support from the United States – because these nations were meant to be counter-examples to the Soviet Union, Communist China and North Korea.

    

The rest of the world was not so lucky. Colonial regimes left political structures that were inefficient and founded on ethnic rivalries. Education rates were low. Fertility rates were high. The United States was more concerned about making opportunities for American companies in these nations, than in seeing the local economies prosper. All of these negatively impacted growth.

    

Governments that live in the rest of the world will never have East Asian development rates. What are these non-East-Asian governments supposed to do? Is there nothing that a government minister can do to raise standards of living in Kenya? Is there anything an elected politician can do in Uruguay that would make good on his promises to help create jobs in his nation’s slums?

   

Palliative development explicitly speaks to this question. It asks how third world governments can raise employment and income in their countries now, to reduce overall levels of poverty. It does not assume a perfect institutional base for growth. Governments can be financially constrained in their options. The technical capacity of public organs may be weak. Corruption or clientelism may be present. The human capital stock of the population may be less than ideal. World economic conditions may be recessionary. In an imperfect world, with substantial obstacles for growth, what can poor countries – with limited resources and limited bureaucratic capacity – do to make a difference in improving poor people’s lives?

    

Palliative development focuses not on dramatic coups that produce world class industries out of nothing. It focuses on the unglamorous business of routine government administration that – in its own invisible way – has an impact on human development. The focus here is on the smaller, normal, routine actions of states. These programs can contribute to national rates of economic growth, even if those accomplishments are much less heralded. Explaining economic growth by only looking at dramatically successful government interventions is much like explaining successful soccer by only looking at highlight films of goals being scored. A fully adequate view of what states do to produce economic development needs to consider the economic “defenders and midfielders”, the everyday business of routine public programs that produce wealth for the economy and jobs for poverty populations. Defenders and midfielders make an important contribution – even if they do so while working in obscurity.

         

National economic development programs are bundles of policies, rather than a single policy. How likely is it that everything that Taiwan did contributed spectacularly to economic growth? How likely is it that there is nothing a Sub-Saharan African government has ever done that has improved on its rate of economic growth? If one insists that an industrial policy is only effective if it moves a country from the periphery to the core in twenty years, and one only looks at the most rapid developers hoping to find such a magic bullet, one will naturally be pessimistic about state policies in countries with slower rates of economic growth. However, it is bad macrosociology to conflate Mexico with Zaire just because neither one of them is Singapore. Small gains accumulate into real growth, and theorists of development need to include such smaller gains into their models. Practitioners need to spend more time figuring out just what policies actually do produce such small gains, so they can provide constructive advice to governments trying to create humanistic programs for growth.

For More Information

For a discussion of the Great East Asian Developmentalist States, see Alice Amsden’s Rise of the Rest: Challenges to the West from Late Industrializing Economies. Alternatively, you could look at the edited collection by Meredith Woo Cumings The Developmental State

For a “the world is going to come to an end if you don’t exactly replicate the East Asian formula, see Vivek Chibber’s slam on Indian development: State Building and Late Industrialization in India. He is a devastating writer. After you read this, you will be amazed that India hasn’t completely fallen apart.

For a discussion of how well the Japanese prepared their former colonies, see the work of Matthew Lange. He spends most of his time slamming British Colonialism. A 2009 article in Comparative Politics “Developmental Crises: A Comparative-Historical Analysis of State Building in Colonial Botswana and Malaysia.” lays out his thinking on the Japanese case fairly clearly.

For a longer discussion of palliative development, see my own book. Samuel Cohn. Employment and Development Under Globalization: State and Economy in Brazil.