“He’s not the Messiah, he’s a very naughty boy…”
This week's Ramble has a confession to make. I was ill on the weekend, but if I’m being honest, the real reason for the tardiness of this week’s nonsense is that the World Cup games start at three and continue pretty much unabated until eleven; not much time is left over for Rambling.
* * *
That’s not to say things are uneventful. I don’t think that’s possible here, but things have been a bit slower since the Budget was more or less finalised. There are still a couple of things to do, including printing and distributing a report I’ve been working on, but the main parts have all been presented to Parliament. Despite gloomy predictions that the opposition parties would team up to sabotage it, the Budget seems to have been received well; civil society, donors, opposing politicians, all seem to be broadly in agreement with what has been pledged. The catch, and you knew this was coming, was how to ensure that what we pledge is actually undertaken. Past Governments have been happy to publish a budget without any real intention of implementing it. That’s no longer the case, but this is one case where good will and honesty aren’t enough. You can’t implement a Budget that you can’t monitor, and you can’t monitor a Budget without an effective way of tracking your spending. This has been a weakness of Government in the past, and it’s something we all recognise the need to improve. Unfortunately, it’s easier said than done: a shortage of qualified accountants in the country makes things difficult.
Of course, we can ask how our development partners can legitimately demand the level of auditing they seek. It’s entirely understandable that they want to see how the money they provide is being spent; but they and their headquarters aren’t usually able to produce the same level of auditing, so how can they really expect a country with far fewer human resources to be able to? The flaw in this argument is that many of our neighbours have managed it, but nonetheless it reveals one of the basic problems in the international development system, namely that the advice given is nearly always of the ‘do as I say, not as I do’ variety. I bang on about it interminably, but if one studies the varied paths of development across the world, I doubt you’d find many that matched the dominant paradigm of development espoused by the many these days. In a nutshell, if so-called ‘Good Governance’ was good for development, as is argued, then you can put a cross next to China, South Korea, even Japan (the seeds of whose rapid post-war development were sown in the repressive ‘30s), the UK (the enclosures movement) and the US (land grabs, widespread corruption in the 19th Century and early 20th). Similarly, free trade – even those countries who claim to engage in free trade these days are just more intelligent about how they market their protectionism.
So, what am I saying? I think the primary criticism I have is not of the development organisations per se, but of the discipline of economics. I’ve spent the spare time between football matches studying both history and economics since I was about fourteen (not telling you how many years that is), and with each passing year, I become more disillusioned with what passes as the mainstream of economics. My primary concern is how economics as a discipline has evolved over the years. Both Adam Smith and Karl Marx, despite coming to completely different conclusions, went through a process that looked at the mechanisms of the economy as an interactive part of a wider society, one in which culture, demographics, history and politics occur not in a vacuum, but as parts of an integrated whole. They specified the structures of the economy as part of this, and made it clear in their original writings that they were talking about specific places, specific worlds, even if they were hypothetical sometimes. Where Marx failed, tellingly, is when he tried to create a theory that transcended the specific historical concerns of real societies, a theory of Socialism.
As economics changed over time, it became more and more specialised, with an ever-increasing interest in precision and universality. Both were manifested in a tendency to present economic theories as scientific formulae that purported to give a precise relationship between variables which would, allowing for random variation, hold everywhere. At the same time, as these theories gathered proponents, the whole business of history was removed from economics, to the extent that economic history has become a separate discipline, closer to history faculties than economics ones. Indeed, most these formulae ignored social factors altogether at first; when it became apparent that they weren’t working, especially in the developing world, where the social, political and economic are most closely intertwined, well intentioned and intelligent men like Joe Stiglitz started to look at the ‘omitted social variables’, reincorporating them. But this reincorporation gave them the form of variables in a universal relationship. This economics still works from a theoretical starting point. They are beautifully constructed theories that make brilliant sense; but that doesn’t make them true.
Stiglitz and his contemporaries have taken economics forward from where it was ten years ago, but its still far, far behind where it was one hundred years ago. If you want to replicate a well functioning economy you don’t start by looking at where it is now; you need to look at how it got to where it is now, where it started from and what it used to get there. Until we start doing that, the development policies that are so strongly espoused are based on shaky foundations.
* * *
This Ramble is far too long. But it’s one I’ve wanted to get out for a long time.
* * *
That’s not to say things are uneventful. I don’t think that’s possible here, but things have been a bit slower since the Budget was more or less finalised. There are still a couple of things to do, including printing and distributing a report I’ve been working on, but the main parts have all been presented to Parliament. Despite gloomy predictions that the opposition parties would team up to sabotage it, the Budget seems to have been received well; civil society, donors, opposing politicians, all seem to be broadly in agreement with what has been pledged. The catch, and you knew this was coming, was how to ensure that what we pledge is actually undertaken. Past Governments have been happy to publish a budget without any real intention of implementing it. That’s no longer the case, but this is one case where good will and honesty aren’t enough. You can’t implement a Budget that you can’t monitor, and you can’t monitor a Budget without an effective way of tracking your spending. This has been a weakness of Government in the past, and it’s something we all recognise the need to improve. Unfortunately, it’s easier said than done: a shortage of qualified accountants in the country makes things difficult.
Of course, we can ask how our development partners can legitimately demand the level of auditing they seek. It’s entirely understandable that they want to see how the money they provide is being spent; but they and their headquarters aren’t usually able to produce the same level of auditing, so how can they really expect a country with far fewer human resources to be able to? The flaw in this argument is that many of our neighbours have managed it, but nonetheless it reveals one of the basic problems in the international development system, namely that the advice given is nearly always of the ‘do as I say, not as I do’ variety. I bang on about it interminably, but if one studies the varied paths of development across the world, I doubt you’d find many that matched the dominant paradigm of development espoused by the many these days. In a nutshell, if so-called ‘Good Governance’ was good for development, as is argued, then you can put a cross next to China, South Korea, even Japan (the seeds of whose rapid post-war development were sown in the repressive ‘30s), the UK (the enclosures movement) and the US (land grabs, widespread corruption in the 19th Century and early 20th). Similarly, free trade – even those countries who claim to engage in free trade these days are just more intelligent about how they market their protectionism.
So, what am I saying? I think the primary criticism I have is not of the development organisations per se, but of the discipline of economics. I’ve spent the spare time between football matches studying both history and economics since I was about fourteen (not telling you how many years that is), and with each passing year, I become more disillusioned with what passes as the mainstream of economics. My primary concern is how economics as a discipline has evolved over the years. Both Adam Smith and Karl Marx, despite coming to completely different conclusions, went through a process that looked at the mechanisms of the economy as an interactive part of a wider society, one in which culture, demographics, history and politics occur not in a vacuum, but as parts of an integrated whole. They specified the structures of the economy as part of this, and made it clear in their original writings that they were talking about specific places, specific worlds, even if they were hypothetical sometimes. Where Marx failed, tellingly, is when he tried to create a theory that transcended the specific historical concerns of real societies, a theory of Socialism.
As economics changed over time, it became more and more specialised, with an ever-increasing interest in precision and universality. Both were manifested in a tendency to present economic theories as scientific formulae that purported to give a precise relationship between variables which would, allowing for random variation, hold everywhere. At the same time, as these theories gathered proponents, the whole business of history was removed from economics, to the extent that economic history has become a separate discipline, closer to history faculties than economics ones. Indeed, most these formulae ignored social factors altogether at first; when it became apparent that they weren’t working, especially in the developing world, where the social, political and economic are most closely intertwined, well intentioned and intelligent men like Joe Stiglitz started to look at the ‘omitted social variables’, reincorporating them. But this reincorporation gave them the form of variables in a universal relationship. This economics still works from a theoretical starting point. They are beautifully constructed theories that make brilliant sense; but that doesn’t make them true.
Stiglitz and his contemporaries have taken economics forward from where it was ten years ago, but its still far, far behind where it was one hundred years ago. If you want to replicate a well functioning economy you don’t start by looking at where it is now; you need to look at how it got to where it is now, where it started from and what it used to get there. Until we start doing that, the development policies that are so strongly espoused are based on shaky foundations.
* * *
This Ramble is far too long. But it’s one I’ve wanted to get out for a long time.
posted by the Maradona of Malawi at 7:13 PM
