We need a new development paradigm?

In the 20th century, increased production was a fairly successful response to absolute poverty, which had been the lot of most of the human race for most of history. But in the 21st century, that path has come to a dead end, as the planet reaches its resource limits. A more equal distribution of wealth needs to return to the centre of development theory.

That is Jonathan Glennie writing in The Guardian. To which I can only say: What the?

First, the economic expansion we’ve witnessed in the developing world in the last 20 years is unprecedented in human history–many multiples of the growth rates of the UK and US at the heights of their industrial revolutions.

The growth in output and income that comes from resource extraction is quite small. Much of the growth comes from improved organization, technology, and knowledge–better and more efficient combination of resources. One reason that growth has been so explosive in much of the world is because this technology and knowledge diffuses. More slowly in some places than others, but inexorably it moves.

This growth has been the biggest driver of falling global inequality in the past ten or twenty years. China has risen fast, and a large number (maybe a majority) of African countries have experienced high and steady growth for a decade. Go to Uganda or Vietnam. You can smell growth.

The countries left behind are left behind for many reasons, but most of all because of disordered politics, conflict, and the absence of anything resembling a social contract and stable government. But should they stabilize themselves (much as Ugandans and Vietnamese did in the 1980s) these nations would enjoy no better path than the one presently carrying Uganda and Vietnam ahead. And I am confident that will happen.

Physical resources could stay fixed right now and, while growth would be hampered, onward it would climb as we advance in organization and invention and combination.

I do not mean to diminish inequality of growth, and the emergence of divergence. Growth is not unsullied by inequity. But does that require a stronger system of social support within the existing economics, or must we stop the paradigm at its height of success?

7 thoughts on “We need a new development paradigm?

  1. There are two driving forces behind the current paradigm:

    1. Private companies bringing new technology, management practices, ways of working, professional networks and know-how, have pushed productivity through the roof.

    2. People in countries where growth is taking / has taken off, have surely and steadily been establishing and asserting their political and economic rights, and political systems have evolved to improve the way that people ensure they get what they want from society and from life to a larger degree. And that means more urban living, better job prospects, etc., etc.

    The role of the ‘aid industry’ in all this? Not huge. The future role of the aid industry if we don’t change the paradigm? I would have thought explanations for Glennie’s take would start there?

    Ok, a little hyperbolic / pessimistic. But still, I think there’s at least some truth to it.

  2. Hear hear.
    Environmentalists persist in misunderstanding growth – they think the economy is a physical thing (see this for the best [worst] example of this: http://www.youtube.com/watch?v=bqz3R1NpXzM)

    One comment, probably this is a slip, but you say:

    “But should they stabilize themselves (much as Ugandans and Vietnamese did in the 1980s) these nations would enjoy no better path than the one presently carrying Uganda and Vietnam ahead”

    I would say they would enjoy a better path than Uganda and Vietnam. The more left behind a country is, compared to its neighbours, the fast will be its progress because of the diffusion you mention. Burma’s growth will be faster than Vietnam’s was.

  3. I am by no means an expert in this area so I had some questions with regard to Jonathan Glennie’s piece. I understand you were targeting your criticism on his comment with regard to resource extraction and his concern for our planet’s resource limits. Despite the fact that this was the centerpiece of his argument in calling for a different and new development theory, do you think the current development model is sufficient for combating global inequality?

    If so, in what ways are we becoming a more developed world in the face of the 2008 mortgage crisis’ pending impact on Europe, rising food inflation and heightened oil prices?

    If not, what other development models should we be looking at?

    I am genuinely interested in your thoughts and I am hoping I can learn more from your perspective.

  4. I think the limited resources/equitable distribution argument is a lot more persuasive when stated in terms of CO2 emissions, rather than physical inputs. Assuming CO2 output from rich countries is already a good deal more than the planet can handle, and that poor countries will unavoidably (and are rightly entitled to) increase their CO2 emissions as their economies grow, then there may need to a cut rich world consumption levels in order to avoid environmental disaster, at least until technological innovation really does come up with clean coal and switchgrass biodiesel.

  5. Thanks for your comments Chris. You don’t need to emphasise how well some poor countries are doing. That is my point. Such progress is under jeopardy because the earth’s key resources will be in shorter and shorter supply.

    There will need to be a better distribution of the world’s resources if poor countries are to continue the fight against extreme poverty, let alone approximate the standard of living of rich countries.

    Yes growth should increasingly be founded on more efficient use of resources – on that we agree.

    Jonathan

  6. Jonathan

    I think we agree on many things, including a need to push policy towards equitable growth, but I still think the resource issue is second or third order from a growth and distribution perspective.

    Many of the poorest countries in the world have far fewer known resources than the rich countries. That is not because things under the ground are unequally distributed. Africa does not have fewer mineral deposits than the UK. Rather, the things under the ground are unequally discovered. That will change in the coming decades, providing a potential source of growth and riches. I would like to see African leaders focused on ways to enrich their people rather than themselves, or foreigners. Abundance not scarcity may be the biggest challenge this century.

    Fundamentally, however, resources contribute little to long term growth rates, and falling supplies (if and when that day comes) will likely have little impact on growth rates across countries. Quantitatively they play too small a role in growth to really matter.

  7. Chris-

    Yes, development discourse and its paradigm needs to shift. And to answer your question, “But does that require a stronger system of social support within the existing economics, or must we stop the paradigm at its height of success?”…social develoment must be in parallel of economic development, e.g, region (see ter Haar & Ellis).