Economic Geographies

A friend recently asked me for a list of interesting books on development, and I thought I’d share the results here.  I read almost randomly in the field when I was still trying to narrow my initial broad interest in development down into something of which a career could be made, and the books below generally struck me as the most interesting, accessible, and generally well-supported introductions to their respective subject areas that I came across.  (I haven’t read some of these in years, but in retrospect I think they’d all stand up decently to a reader with greater existing knowledge of development.)  In roughly descending order of intellectual impact upon me:

1. Development as Freedom, by Amartya Sen, is one of the best books I’ve read on the general concept of “development.”  It addresses a number of common critiques, and creates a strong philosophical framework to support the argument that “development” is still necessary.
2. Portfolios of the Poor is my favorite book of 2009 – an incredibly thoroughly-researched look into what poor people do with their money.  I don’t remember learning more from a single book, well, probably ever.
3. Understanding Poverty is a great introduction to a huge range of issues in development, from food security to education to microfinance.  It’s written by a group of leading development economists, often from a behavioral perspective, and the thought contained here is both wide-ranging and rigorous.
4. This is a bit quirky compared to the other recommendations, but I very much liked Expectations of Modernity, an ethnography of Zambian copper miners in the ’70s and ’80s.  The description probably sounds boring, but it’s actually a great critique of the idea that people from the developing world who act in “Western” styles are blindly mimicking the West, instead of consciously bringing elements of Western culture into their lives in ways that reflect their own social & economic interests.  It basically lays out a strong case for relativistic understandings of culture, which I find hugely important for any development worker, without framing it with that potentially off-putting phrase.
5. The Bottom Billion has held up better in retrospect than its two better-known contemporaries, The End of Poverty and The White Man’s Burden, at least in my recollection.  In a foreshadowing of my current interests, I liked its focus on research methodology in macroeconomics (i.e. where all that data underlying cross-country regressions comes from), and its quantitative look at the connections between war, governance and poverty.  (Edit: David Roodman points out his own and Easterly’s critiques of Collier for data mining in Wars, Guns and Votes, and believes that they’re applicable to The Bottom Billion as well.  I’d suggest enjoying the intellectual curiosity of Collier’s research, but taking his statistical results with a grain of salt.)
6. I can’t offer too much on the subject of public health, but I did greatly enjoy The Wisdom of Whores, which is an engaging book about health systems responses to HIV from the ’80s onwards, told by an irreverent epidemiologist with whom I would very much like to have a drink one day.  It’s also a great critical look at where public health data comes from, how it’s used, and to some degree why governments and international organizations choose the health priorities that they do.
7. Making Globalization Work is something I recalled as insightful on the topics of global financial institutions, markets and trade at the time I read it.
8. I’ve been trying to find a good overview of the World Bank that I read for a geography class a few years ago, and while I’m not sure that I’ve identified it, The World Bank: From Reconstruction to Development to Equity looks like it covers similar subject matter. I found tracing the Bank’s historical evolution quite interesting, as it also captures the variety of Western thought on “development” that’s occurred over the past 50 years, and explains quite a lot as well about current bilateral and multilateral aid regimes.

Tell me, dear readers, what else would you recommend for the interested lay reader?

One of the fun parts of doing the job hunt/grad school application thing is that it gives you a structured opportunity to articulate what you’d like to see the development community doing, and how you’d like to participate in it.  After straining out all the things that will actually be going into personal statements, everything that’s left is being added to my only moderately unrealistic economic development wishlist:

• I want to see more economic development practitioners talking to economic historians. There’s a strong share of immediacy in much dialogue on international economic development – the demand to stop dithering and end poverty now.  I think this is a moderately useful moral statement, and a nearly useless policy formulation for engendering broad & sustainable increases in the incomes of the poor.  Frankly, it promotes a strain of analysis that approaches successful, present-day Western economic policies as if they developed in a vacuum, and often gives short shrift to the historical quirks, accidents, and forethought that went into their development – the messy, long-term process of actualizing beneficial policy.  I’d love to see more practitioners drawing from research into historical processes of economic development (such as De Soto’s work on the Homestead Act in the US), and much less poorly-considered application of Western present-day policies to non-Western situations.  (Another great example is Roodman’s work on microfinance in Europe & the US as long ago as 1800.  Which brings me to my next point…)
• I want to discourse on innovation balanced with discourse on not reinventing the wheel. I’m obviously not anti-innovation.  People are doing some great thinking on how the constraints of poverty both necessitate and facilitate innovation.  But I’ve also come to realize that, if you’re a smart & dedicated person and have an innovative idea, there’s a significant chance that at least one other smart & dedicated person has had a similar idea.  At this point in your promotion of said innovative idea, you (generally) could A) seek out other people working on it and collaborate, B) learn about the shortcomings of the other idea and compete with an improved product, or C) independently develop & fund multiple small duplicative non-competing projects based on the same idea.  I don’t mean to pick on stove projects uniquely – I think they’re tackling an important issue, and they were the first example that came to mind rather than the most egregious.  But I do wonder how much of the time & how many of the resources spent on social enterprise product development (or program development more broadly) is genuinely productive, and how much goes to needlessly reinventing the wheel instead of learning from existing examples.  (See also Easterly’s critique of learning in aid programs since 1938.)
• I want to see less programmatic emphasis on solving every problem simultaneously, and more on sequential implementation in increasing order of difficulty. You could equally rephrase this as, “it’s not always wise to do the hardest thing first.”  There’s a lot of value in starting with a feasible goal, learning by doing, and expanding into implementation of more complex or wide-ranging programs later – and it’s much more likely to be successful.

I’d love to know, dear readers: what’s on your wishlists?

I’ve seen some interestingly conflicting reports lately on the impacts of microfinance upon education.  Someone directed me to one which showed that microcredit clients were more likely to pull their children out of school to do the domestic work which parents gave up in order to run their microcredit-supported businesses, but I’ve also seen another which found that the children of microcredit clients were actually more likely to be in school, as their parents could more easily pay their school fees.  I can think of several different ways in which these elements of small businesses, children’s labor, and schooling could interact:

• Maybe the parents who pulled their children out of school to cope with successful businesses worked far from their homes and didn’t have the time to handle both business and domestic work, while successful clients whose children stayed in school worked closer to home and were more easily able to balance the two.
• Perhaps there’s some sort of U-shaped curve of parental income (as supported by microcredit) and the likelihood of children’s schooling.  Parents who are suddenly busier with work than previously, but are still too poor to afford to hire domestic help, may be the ones more likely to pull their children out of school – the low point of the U.  Parents whose businesses are quite successful, on the other hand, might better be able to pay for both domestic help and school fees.
• This is probably also correlated with whether parents were successfully able to repay their loans.  There must be some exogenous shocks to parental earnings that affect both their ability to repay their loans and their financial capacity to send their kids to school – drought, for instance.  So one might find microcredit clients pulling their kids out of school for reasons unrelated to their loans.

On an unrelated note, I came across a sentence I totally loved whilst rereading Understanding Poverty recently – “these essays presage what we feel is an important new trend in the economics of poverty: a willingness to take the social and psychological environment of the poor seriously.”  This is probably the most fruitful interaction possible between qualitative and quantitative disciplines in the study of development – a genuine respect for the psychosocial lives of the poor.

A bit of a rant, so feel free to find the egress if that’s not what you’re here for. But: beyond the standard stereotypes (either “savage tribal wars” or “happy villagers living in harmony with nature”), there are several slightly more complex cliches about Africa that make me want to grind my teeth. In fact, one could create a taxonomy of the African Cliche (genus Africanus) as follows:

• Africanus stereotypicus: The most common type of cliche, the Africanus stereotypicus typicus feeds off of broad generalizations of African history. It is characterized by its Manichean coloring, varying between the black of moral depravity and ancient ethnic hatreds, and the snowy white of peaceful farmers who live “as nature intended.”  Other subspecies include the Africanus stereotypicus puerilis, known for its grating proclamations that Africans are too childlike to make decisions about their own lives, and the Africanus stereotypicus type-419, which exhibits severe distrust of Africans in the belief that they are all corrupt, dishonest, and/or Nigerian scam artists.

• Africanus journalisticus: Cliches of the the journalisticus group are most often found lurking in the mediocre Africa coverage of otherwise well-respected news publications.  The Africanus journalisticus natura is frequently sighted in Madagascar, where international coverage of recent coup attempts uniformly begins with glowing descriptions of the country’s vibrant plant and animal life, in the belief that they must suck readers in with images of lush vegetation before seguing into actual African politics.  The Africanus journalisticus spillover, on the other hand, is more often found in Congo and Somalia, where articles on the real suffering of millions of human beings justify the space they take up in Western newspapers either by A) referring to the current conflict as the spillover of a more interesting conflict (e.g. the Rwandese genocide), or B) explaining that the conflict is important because it could create terrorist threats that might spill over into the readers’ comfortable lives.  A final subspecies, the Africanus journalisticus darfurensis, has seen a dramatic fall in its numbers after the population explosion of 2003-2004.  However, the darfurensis still retains its unique ability to reduce the interwoven political, economic, environmental, and social roots of the genocide in Darfur into a simple morality tale of evil Arabs and innocent Africans.

• Africanus occidentalis: This cliche is at home in a broad variety of habitats, be it among development practitioners or wide-eyed teenagers visiting Africa for the first time.  It can be distinguished by its prominent belief that concerted Western action can solve all of Africa’s problems.  The Africanus occidentalis studentia lives a peaceful life in the dorm rooms of university students, who often react to its presence by talking at length about the spiritual connection and cultural vitality that they experienced while visiting one country in a very large continent for two weeks last summer.  (The tragedy of receiving a university education whilst children in Africa are dying is an alternate topic, although this should not be confused with actual discussions of Rawlsian justice.)  The Africanus occidentalis interventionis, on the other hand, prefers to settle among career development workers who really should know better.  These include advocates of poorly thought-out boycotts that don’t address the roots of the labor issue in question, World Bank officials who support oil pipelines in Chad, and bloggers who duly repeat that the West must pay more attention to Africa’s suffering, as though the Western gaze has always been the missing ingredient for African development.

• Africanus impecunius: The Africanus impecunius is a specialized breed, whose natural habitats include NGO websites, blogs written by economics professors, and the Twitter streams of thousands of people with a passing interest in African poverty.  Many subspecies in the impecunius group appear outwardly similar, but the practiced African Cliche-ist can easily spot their differences.  For instance, the Africanus impecunius donatio is usually spotted at fundraisers in major Western cities, wooing potential donors with pictures of malnourished African children and practicing its “you have the power to save a life” call.  The donatio’s primary competitor is the Africanus impecunius entrepreneurius.  The entrepreneurius prefers a stealth attack, often sneaking up behind the donatio at conferences and beating it over the head with large sets of panel data on import substitution policies.  (Meanwhile, the Africanus impecunius polisci avoids these territorial clashes in favor of migrating from think tank to think tank, seeking a credible way to actually implement all of its theoretical insights about the importance of good governance.)

Ok, taxonomic rant finished.  (Although I guess the entrepreneurius and the polisci are more stock characters than cliches.)  The common thread among many of these tropes is my impatience with people who don’t make an effort to move past their Western points of reference when studying/discussing/visiting/speaking with/working with Africans.  And I am saying “Africans” and not “Africa” very intentionally.  There’s a large lexical difference between thinking of a place primarily in terms of the people who live there, and thinking of it almost as an anthropomorphized piece of suffering land.  Consider sentences like, “Africa is unlikely to achieve the MDGs,” or “Africa suffers disproportionately from AIDS.”  They don’t make any sense unless one interpolates some people in there to do the suffering, but this type of statement – endowing the continent as a whole with sentience and linguistically skipping over the people who actually live there – is usually taken at face value.

Anyway, I mention the perils of not questioning Western frames of reference not because I believe Western capitalist culture is evil, but because it’s at the least misguided and at the most dangerous to view everything in the world through the lenses of one’s own national affiliation.  Misguided is assuming that Western actions are the only important actions in the world, as though non-Western political leaders or private individuals can’t impact a situation as well.  (C.f. the movement for American companies to boycott Congolese minerals, which I guarantee will accomplish nothing besides making a bunch of Chinese manufacturers happy about their increased access to the mines.)  Dangerous is failing to move beyond assumptions in situations where one’s actions actually may have a large impact – and where one is working in the midst of great power disparities to boot.  (C.f. the assumption that structural adjustment would provide sufficient trickle-down benefits for the poor to counterbalance the loss of government-funded social services in the short run.)  The fact that cross-cultural work is difficult doesn’t mean it shouldn’t be done. But cross-cultural work in the face of extremely uneven power relations demands that one actually take the time to thoroughly learn the environment in which and the demands of the people with whom one will be working, instead of resting on cliches.

I think I missed an important point in my last musings on microfinance – that ex-post savings does actually make sense if the loan is given for investment rather than consumption. So the salient factor in assessing the potential of microloans to help or harm their recipients is also connected to their intentions for the use of the loan, as well as their existing income level. Silly thing of me to miss.

But this does come back to the broader point currently being raised by many people, about the apparent contradiction between views of the poor as necessarily innovative, and the fact that most people, rich or poor, aren’t good at being individual entrepreneurs.  I do wonder if the “poor as inherent innovators” view doesn’t suffer from some confirmation bias.  There certainly are many memorable examples of entrepreneurship born from poverty, but, as in the developed world, it seems that there’s a subset of people who are actually responsible for innovation.  The demands of living in poverty do include hard work and often creativity, but while those characteristics are also necessary for market-based entrepreneurs, they’re not by themselves sufficient.  Even investment-oriented microloans can turn into consumption-oriented ones, in practice, if their recipients don’t have adequate business strategies and market knowledge for their use.  Perhaps it’s not quite as bad at the level of larger microfinance banks with better data-gathering operations, but at the level of the small organizations at which I’ve worked, there seems to be a lot of fuzziness around the use of loans and their ultimate impacts.  I worry that this is one of the situations where a lack of data may actually end up harming people who really can’t afford to be harmed, in improperly distributing loans.

From Sen’s perspective of freedom, I suppose the ultimate question of entrepreneurship is whether self-determined employment (but perhaps a lower wage) or higher-waged corporate employment (but less career self-determination) is more conducive to personal freedom, in the end.  For the majority of people, I’m guessing it will be the latter, once you average the benefits of a higher wage over all the categories that it affects.

I always thought the whole fuss over microcredit as the panacea of development, back in 2005, was a bit silly – there’s never a silver bullet for something as complex as economic development. It’s remarkable how much some people want to believe in such cure-all interventions anyway. We as a species are pretty clever, but we’re not very wise, nor are we particularly good at thinking in terms of complex systems and interactions over distance or between multiple parties. But I digress.

Sometimes I also think that people who wish to design economic empowerment programs for the poor have a poor track record of picking historical or cross-cultural examples to learn from. So many programs are erroneously predicated on fundamentally Western beliefs about social structures – say, the persistent thought in community development programs a few years that a local mayor or group of elders could accurately represent the rest of the people in a village, which seems to draw on traditions of democratic representation in local government that exist in the West, but don’t always hold true in developing countries. (Of course it does in some places, but there are plenty of counterfactual examples as well.) And yet, when it came to microfinance, so many providers seem to have made exactly the opposite mistake, and ignored the fact that in Western systems of credit, some people are outright judged too “vulnerable” (i.e. uncreditworthy) to take out a loan, for fear that they won’t be able to repay. I certainly understand that it’s hard to judge someone’s creditworthiness in a low-income situation, and microfinance does indeed benefit many people who may have been unfairly excluded from traditional credit on the basis of their existing poverty. But that’s the point: just because microfinance is “for the poor,” doesn’t mean that it’s for everyone who’s poor.

Indeed, it’s been shown that the benefits of microcredit tend to accrue to borrowers who live right around the $1-a-day poverty line – not to the poorest of the poor, such as those who are too sick or old to work, or who are somehow kept outside of the cash economy for other reasons. This may seem like a rather cruel paradox – that people who may be most in need of additional capital are least likely to benefit from a microfinance intervention – but instead I think it speaks to the fact that it’s unusual to use market-based solutions, such as microcredit, for social protection. Hence the kerfuffle about Bush’s social security investment accounts around the same time. This seems like a broader and more accurate analogy than any belief that local government must inherently be representative, and it’s interesting that the dialogue around microfinance as the best economic solution for the poor (as a unified body) seemed to miss the nuances of credit’s function in more developed economies.  (Of course this is also a generalization, as there are surely some microfinance institutions who take these things into account, but the number of academic accounts that I’ve seen of microfinance’s shortcomings suggest that there are plenty which don’t.)

I was struck recently by the New Times‘ “good news” that the rate of non-agricultural employment in Rwanda has doubled in the last 10 years!  That is, it’s apparently gone from 5% of the population to 10%.  There are few better illustrations of how the genocide destroyed what the country had built, I think.  Kigali is such a bubble sometimes; it’s easy to forget that there are many Rwandese people who will live out their days without ever seeing a multiple-story building or a paved road.

That said, this official stat about 10% non-ag employment/90% subsistence ag seems like at best a crude measure of people’s actual livelihood strategies.  I haven’t seen a specification of how much non-ag employment is formal or informal (or even what you’d consider to be “informal” around here), and in a similar sense, I’m sure that many rural residents participate in at least some non-ag activities as part of their income-smoothing plans.  I’d love to see a better measure of this data – to get a sense of how many people are exclusively dependent on agriculture (though perhaps with different types of income-generating activities within the sector), and how many are principally dependent on ag, with a significant amount of income still coming from other activities (carpentry, say, or teaching, or day labor on other farms…).  I also know a small subset of co-op members in Nyamata who grow most of their own food, even though they make a majority of their income from basket-weaving – I wonder how they’d be classified.

When I was researching microinsurance and maternal mortality last year, I was struck by some of the observations that other researchers felt it necessary to include in their results.  One of them was the finding that distance to a health center affects people’s access to care.  In other news, water quenches thirst!  I had to wonder if this was a relic of the general lack of forethought that must be put into procuring transport in the global North, where it’s more or less equally simple to reach a doctor one kilometer from one’s home as thirty kilometers.  I otherwise fail to see how it’s notable that people who live farther from a clinic may use it less often.

This does highlight the fact that there are fundamental issues of healthcare access that aren’t purely microeconomic in nature.  Distance is one, but the challenge of retaining skilled doctors in a low-wage environment is a second, and difficulties in obtaining and maintaining quality equipment and medication stocks (non-counterfeit medications!) are a third.  The attitudes of healthcare workers also appeared extremely important to low-income patients, who seemed understandably sensitive about their social status, and hesitant to use centers where they would be treated disrespectfully because of their poverty.

The other thing I’ve been thinking of, however, was a little-discussed (at least in the papers that I read) corollary to the observations that microinsurance increases healthcare access, and health centers are favorably inclined towards patients who can actually pay for their care. My immediate concern upon reading these statements was, if access to microinsurance is still uneven, isn’t there a real possibility that patients who are even slightly better off will crowd out those who are too poor to afford $2-a-year insurance at all? If the resource base of health centers is fixed (and it may not be – I don’t have info on that), dramatic increases in patients covered by microinsurance could very well make the poorest of the poor even more vulnerable. I wonder how you’d best be able to test that.  I imagine you’d have to look at the effects of a growing resource base (if the increased payments are used at the local level) or the improved quality of care referenced in the last post, and sort out what effects those have on the healthcare uptake rates of the poorest.  Perhaps the question actually is, does extending microinsurance to some harm the uninsured by crowding them out, or does it improve their situation by letting them get a bit of a free ride on some improvements brought about by the insurance payments?  Interesting.