Development with Dignity

Front matter

RETHINKING DEVELOPMENT

39GF1LNOY

Self-determination, Localization, and the End to Poverty

Contents

About the authors ix Foreword xi Preface XV Acknowledgments xvii Introduction: why dignity matters 1 1 Dignity 17 2 Dignity and innovation 41 3 Dignity and enterprise 50 4 Dignity and democracy 66 5 Indignity of autocracy 78 6 Indignity of development aid 96 7 Dignity and institutions 108 viii Contents

Appendix Index

169 177

Foreword

Deirdre N. McCloskey

You need this lucid and eloquent book. Read it, right away. No time to waste. You need it especially urgently if you still believe, as many do nowadays, that the road to national enrichment is top-down stimulus spending, industrial planning, foreign aid, and the World Bank.

From wide and deep experience in poor countries, and wide and deep reading in politics and philosophy, Matt Warner and Tom G. Palmer know what they’re talking about. Their talk is their title, taken from the anguished declaration by the mother of Mohamed Bouazizi, the Tunisian street vendor who in 2011 poured gasoline on himself and lit the fire to protest the undignified extortions of him by the police. She declared, as humans do, “Dignity before bread.”

Not that bread is to be disdained. A woman with bread in her belly has at least that much out of the way and can turn to higher things, such as educating herself and clothing her kids and praying to her god. Still, humans over and over choose dignity over even bread. They scrimp for their children, they go over the top at the Somme, they risk their lives to protest the indignities imposed by tyrants. Dignity, Warner and Palmer observe, is much praised but little studied. They study here not the right-wing dignity of rank or the left-wing anti-dignity of charity, but the liberal dignity of human agency, “the modern conception of dignity [which] has made possible rapid innovation.’ And it makes possible more than innovation in bread. It makes for the dignity of the human spirit.

Applying such a concept to economic development is a large advance over the rightish and leftish polices of dependency, which reduce people to serfs and children. Instead, give Chinese citizens the minimal dignity of letting them start a business or move to Shanghai (yet do not give them a vote), and income per head commences growing at 10 percent per year. Give the same dignity, imperfectly, to Indian citizens (yet with a dignifying vote), and the result is only a little less enriching and more dignified.

xii Foreword

One dignity is that right to vote. As southern Blacks in the United States could have told you in the 1960s, dignity is the main point—not the dubious proposition that voting always leads to good decisions. But another dignity is the right to work and buy and sell as you wish, voting with your pesos or rupees. In both cases you have the right to say “No,” to vote for the other candidate or work at the other factory. In the late nineteenth century, a naïve European asked a free man in the Powder River country of Montana and Wyoming, “Who is your master?” The man replied, “He ain’t been born yet.” He had permission and therefore dignity, the right to say “No.”

The liberalism of Warner and Palmer could be called “adultism.” The other policies—of a statist right or a statist left or for that matter a statist middle—all treat adults as bad children or sad children. Poor things, poor things, they re waiting to be fed. On the contrary, adults are to be accorded the dignity of “the equal presumption of liberty and citizen-based democratic political principles.”

It is an equality of permission, note. It’s not the impossible goal of equality of outcome or opportunity that thoroughgoing socialism promises—yet does not deliver. In the very nature of such goals, it can’t. After all, people differ gloriously in height, intelligence, imagination, beauty, the ability to hit a major league fast ball. Full equality would require chopping off the tall poppies. Never mind an alleged equality to be achieved of dollar income—if I am not as beautiful or creative as you, full equality has not been attained. Let us pour acid on your face or drive nails into your head. Then you and I will be equal. You see the problem.

But liberal permission, against traditional or statist hierarchies— the police leaning on Bouazizi for a daily bribe—is a promise we can keep. Permitting people to own and exchange their gifts for mutual advantage is the way of adultism. It’s all Bouazizi wanted, to support his family, and to have the dignity of being a little businessman. And it’s what the state denied him. States do it regularly, saying “No” to a Cuban who wants to raise and sell chickens privately, or saying “No” to a poor African American who wants to braid hair for a living. In an adult liberalism the right to say “No,” as the tenth item in the US Bill of Rights puts it, is “reserved to the people.”

People in poor countries experience deep indignities, which is why, our authors show, they remain poor. It has been repeatedly shown since 1776 that the ending of poverty comes from new ideas from dignified adults, not from state-led protectionism or internal improvements or New Deals from the bottom of the deck.The central peculiarity of the modern world is the slow demise of hierarchy in the face of the liberal—an adult idea of letting people, the sporting British say, “have a go.” End slavery.

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Liberate women, immigrants, gays. Letting people have a go has turned out to make for the first sustained economic growth in history, a Great Enrichment per person by a gob-smacking 3,000 percent. Yes, three thousand percent, 1776 to the present. Vaccines instead of bleeding. Airplanes instead of wagons. Dignity instead of subordination to the ancient hierarchies of lord, husband, and state functionary.

The Enrichment continues, and will if the life-enhancing policies of Warner and Palmer triumph, against the magical promise of the man on the white horse or the woman at the development office. The end and the purpose is dignity, but the means are also dignity. Put dignity first and the rest follows. So it has, 1776 to 2022.

The World Bank’s current formula of “Add institutions and stir” does not work. (Nor did its earlier formula of “Add foreign aid and stir.”) You can install a splendid tube-well in a Pakistani village, but if you don’t get buy-in from the villagers so that they own the institution, as Warner and Palmer put it, the well becomes merely a decrepit monument. Warner and Palmer argue instead that “mere offices and laws do not suffice.” “The rule of law ... rests on ethics.” “Institutions may be [or at least may seem to be] the machinery by which commitment problems are solved, but such machinery only works as well as the norms of those who operate it.”

The institutions, that is, are consequences, not causes. They are, as Warner and Palmer note, “built by participatory public life”: owning the tube-well, having the experience of the New England town hall, being able to buy and sell and vote and walk the streets without being rousted by the police. Alexis de Tocqueville said so concerning the non-slave states of the United States that he saw in 1831 and said it again ternary years later about his own habitually statist country in The Ancien Regime and the French Revolution. In 1835 he wrote,

Looking at the turn given to the human spirit in England by political life; seeing the Englishman ... inspired by the sense that he can do anything ... I am in no hurry to inquire whether nature has scooped out ports for him, or given him coal or iron.

That’s right, and the real source of institutional success—the Englishman accorded liberty and dignity.

“What you feel is dignity,’ write Warner and Palmer about economic liberty. “You have become an owner, which means you are recognized as a bearer of rights and responsibilities.” Earlier political philosophers such as Jefferson were correct in asserting that only people of property should be full citizens. What they misunderstood, though, is that in the world of the Great Enrichment, with the elimination of slavery, every person on xiv Foreword the planet is a property owner because each person has, as Locke wrote, “a property in his own person,” and, I would add, in her own person.

Crucially, Warner and Palmer make a powerful case that dignity is universal—not only, as non-European tyrants claim in extenuation of their assaults on human dignity, “Western.” Democratic dignity should come first, cause and consequence, means and end. The notion, for example, that there is a “Chinese Model” in which undignified tyranny leads to better results than democratic liberalism is mistaken. China grew after 1978 by granting dignified permission to entrepreneurs, which is what had happened in the eighteenth century in Britain. It was not the centralization of Mao, which Xi Jinping is now busy reimposing, but exactly laissez-faire that did the trick. And will.

You are a generous, fair-minded, well-disposed person, I have no doubt. You wish the wretched of the earth to be raised up. Know, actually, that recently they have, not by the World Bank but by liberty and its dignity. In 1960, four out of the five billion people on the planet subsisted on a wretched $2 a day. Now the average world income has risen in the same prices to $45 a day. One billion out of the present seven billion languish still back at $2. Though a great improvement, the remnant is disgraceful.

I know you want to end the disgrace and bring the whole world to full human dignity. What then to do?

First, stop listening to the statists. Second, listen to Warner and Palmer.

Preface

Tom G. Palmer and Matt Warner

In our work with various think tanks, we have long observed a tradition of deferring to local priorities and vision. In part, that has been motivated by the importance we place on think tank independence, which is indispensable for credibility. Our commitment to independence has also influenced a global grant-making strategy that prizes diversity of funding among potential grantees. Even more importantly, though, we believe that local knowledge is critical for determining and navigating social change, particularly institutional change, throughout the communities we hope to see thrive. A couple of years ago, we started to take note of broader discussions among the economic development and international aid communities around the idea of “localization” as a key strategy for correcting power imbalances and for reforming an aid tradition that has come under scrutiny for underperformance, among other serious shortcomings.

That motivated us to become more engaged in those discussions. We hoped to learn as much as we could from the many organizations and experts who, in one way or another, are helping all of us take the challenge of localization seriously as we wrestle with its implications for development practice. At the same time, our own experiences over recent decades have taught us some practical lessons about pursuing localization effectively.

Last year, when so many of our obligations, travel and otherwise, were disrupted by the COVID-19 pandemic, we decided that we should devote some time to organizing what we had learned to date in the context of the generally encouraging, if not fully realized, efforts to “decolonize development.” This book is the result. It sits at the intersection of development practice, economics, sociology, anthropology, and moral and political theory, all of which help to develop a unifying theme that we believe epitomizes localization in its most fundamental form: the dignity of the individual. Accordingly, we address very topical questions of xvi Preface economic development and of institutional and legal systems and we compare competing democratic and autocratic models of development.

Modern thinking about dignity is both central to development outcomes, as we argue, and increasingly relevant to discussions around reforming aid, as we document. We illustrate the importance of dignity throughout the book with examples of individuals whose own visions for development in their local context we hope will inspire deeper interest in and respect for the power of localization.

Ultimately, our ambition for this book is twofold. We want to shine a stronger light on local individuals and organizations whose work promises a better future for development practice. At the same time, we hope that by organizing the latest themes in development around the modern concept of human dignity, the global landscape of agencies, NGOs, academics, and think tanks focused on development might recognize the significance of this universal ideal and even find common ground in ways that transcend the ideological divides of the past. At the very least, we hope we have done justice to the many thoughtful contributions to the problems we examine and to the complexity and nuance of the local, idiosyncratic solutions we applaud.

Acknowledgments

In our line of work the value of shared learning is baked into the model. We would not feel the same level of curiosity and enthusiasm for the topics covered in this book were it not for the global network of friends who have given us so much insight into the solutions they are forging in their local communities. Specifically, interviews with Parth Shah gave us an inside look into the enterprising and dignified lives of street vendors in India. The tireless work of Aimable Manirakiza in Burundi has refuted the myth that big changes can only happen as a result of big budgets and foreign expertise. Arpita Nepal in Nepal showed us how bizarre and ill-fitting those foreign designs can be in the local context. We are also indebted to so many creative entrepreneurs for their insights and inspiration, notably including Rekha Dey, a visionary who sees big opportunities for bamboo construction, Verónica Canales, whose determination to master the knowledge of the hardware trade is matched by her passion for delivering customer satisfaction, and Papa Coriandre, who has proven that great entrepreneurial talent will show up when economies are made more inclusive. Those on the frontlines of development have so much to teach us all if we are ready to learn.

Of course, we are grateful to the many great scholars and thinkers who have helped all of us understand ourselves and the world a little better. To know one personally and to call her a friend is particularly humbling, and we wish to express our heartfelt gratitude to Deirdre McCloskey for providing the generous foreword to this book and for patiently offering crucial feedback throughout the writing process. Similarly esteemed, we are grateful to Bill Easterly whose work has been of great influence on our thinking. We are also in debt to Simeon Dyjankov, Nouh El-Harmouzi, and Peter Boettke whose reviews of early drafts provided helpful suggestions and encouragement, and to Gurcharan Das for his writings and for invaluable conversations about the role of dharma and the importance— and the difficulty—of knowing and doing the right thing, without which xviii Acknowledgments neither democracy nor markets would provide the benefits at the core of development. So many patient teachers, notable among them the late Paul Heyne and Leonard Liggio, have helped us see the importance of the individual life stories that others generally pass over.

Our colleagues at Atlas Network motivate us every day with their integrity, their intelligence, and their unrelenting commitment to see the world improve, especially for those who have been denied opportunities. Brad Lips sets the standard for authenticity and generosity; Lyall Swim, for excellence in all we do; Amanda Ashworth, for her encouragement and expert guidance through the publication process; Casey Pifer, for keeping those on the frontlines of development foremost in our minds; and all the others on the team who exemplify hard work, dedication to the cause of helping others, and good cheer. Throughout the course of the book, we highlight the importance of accountability in various forms. No one provides this better for our own work than our board chair, Debbi Gibbs, who inspires us to be better every day. This is likewise the case for our past board chairs, Linda Whetstone and Dan Grossman, both of whom we continue to count as wise mentors.

There are so many who have generously supported our work and we hope the shared learning we offer throughout this book does justice to the faith they have placed in us. In particular, we would like to thank Heather Templeton Dill and Amy Proulx at the John Templeton Foundation for inspiring us to new heights and for fueling the work of so many frontline entrepreneurs who are working to make space for opportunity and prosperity for their communities in countries all over the world. We are also deeply and forever indebted to the late Donald G. Smith, whose legacy is honored by the attentive and thoughtful leadership of Julie Smith, Richard Greenberg, John Hartsel, and Scott Barbee. Our late friend George M. Yeager also provided generous investments in poverty reduction, as well as many fruitful conversations on political economy and social and economic change. Rob Granieri, Rebecca Dunn, and Phil Harvey have also been crucial supporters, among many others, all of whom we hope recognize their role in the successes of our partners.

We would also like to thank Colin Doran for data analysis, Marcus Amine and Dara Ekanger for editing support, and, at Routledge, Helena Hurd and Matthew Shobbrook for their encouragement, patience, and guidance throughout the publication process. Last but not least we owe a big thank you to our respective spouses, Sonram and Chrissy, who may be starting a support group soon for those living with overly distracted partners.