Matt Zeitlin: Impetuous Young Whippersnapper

Development economics is a weird discipline.  People have a good idea of what causes economic growth in developed economies, but have a poor understanding of what causes underdeveloped countries to become developed one. For example, few people think that what happened in East Asia in the 60s and 70s constitutes a model that other underdeveloped countries can follow. There are disagreements over what causes poverty, whether it’s bad governments, bad geography or the aftereffects of broad historical events. And yet, poverty, in terms of net social cost is by far the most important issue in the world.

Much of his doubt about development economics has lead to some, like William Easterly and Dambisa Mayo, to totally reject the aid enterprise and advocate that we basically just stop any top-down developmental aid to Africa. Others, like Jeffrey Sachs, thinks that all of Africa’s problems are due to its poverty and that this  poverty can be eliminated through better designed aid programs.

The truth lies in the middle, but in a strange way. Easterly and those in his camp are right about one thing, the record of rich country intervention in increasing the growth rate or measurable wealth or income of poor countries, especially in Africa, is very low. We’ve been giving tons of aid, and income has gone nowhere. On the other hand, we have a very good record in public health interventions. Smallpox, for example, was eliminated through a top-down effort by the World Health Organization.

This is all just a big wind up to Charles Kenney’s new book, or at least its free online introduction. Kenney makes the important argument that despite the depressing “economic” (i.e. income) news coming out of Africa, there has been good news on public health, well being and quality of life. More importantly, economists should do a better job of recognizing that improvements in public health, even if they don’t come with increased incomes or economic growth, are still very, very important:

As suggested by the global reach of improvements in the quality of life, income growth has not been a requirement for improvements in health or education or civil rights. Even most countries that have seen per capita income decline over the past thirty years have seen health, education and civil rights observance considerably improve. This is the greatest success of development. The last century has seen a dramatic (and literal) decline in the cost of living.

…The fact that income appears to be a poor proxy for overall changes in the quality of life suggests the need for a broad focus –a broad definition of development—for policymakers. Given that it is not clear exactly which policies at which times will promote growth, and the tenuous nature of the connection between income growth and quality of life, the first rule for economic policymaking should be ‘do no harm.’ The grail of economic growth does not justify the degradation of health, education or civil rights.Regarding support for improvements in the broader quality of life, policies might include aiding the spread of ideas through approaches that increase demand for good health and education. Communications programs and payments for school attendance or clinic visits have a role here. In addition, with the quality of service provision increasingly important to outcomes, reform of the institutions of health and education should also be a central concern.

Of course, Martha Nussbaum and Amartya Sen have been saying some version of this for decades, but considering how development and aid policy has had a relative revival of popularity and relevance, it’s worth remembering that it’s not all about income and growth.