06 March 2008

Rethinking Development – opening post, by Nicolas Pons-Vignon

There is something reassuring in the knowledge that, despite the growing homogenization of the world, and the enthusiasm or despair it generates, new forms of art, of individuality cum resistance are emerging. Mondovino , the brilliant documentary on the world of wine by Jonathan Nossiter, not only praises but epitomises this critical dynamism – it feels unique, but promises more subtle, respectful yet uncompromising works. And yes, this inspiring way of looking at the world requires an acute political awareness – whether one is talking about wine or about anything else. In the face of a phenomenon which many of the forthcoming contributors to this new blog will certainly discuss in insightful, often disagreeing terms – namely globalization, neither blind optimism nor hopeless pessimism can be good guides. As John Sender wrote in 1999, in an article which questioned the prevalent “Afro-pessimism”, “Thinking about development in Africa requires holding at least two sets of ideas in one's head at the same time. It is not sufficient to stress the ubiquity of failure, malnutrition, disease, predatory states and war, or to become overwhelmed by revulsion in the face of the misery still experienced by so many Africans. In addition, it must also be recognized that some important aspects of the lives of millions of ordinary people have been transformed over the last five decades. It is on the basis of a clear perception of the complexity and unevenness of all these processes, as well as a critical analysis of the consequences of economic policies in the past, that politically realistic development strategies can be formulated.” The last sentence of this quote could, in my view, provide a good motto – or mission statement, to borrow from the colourful vocabulary of ex-MBA students – for the Rethinking Development blog. A number of economists, of all ages and origins, have agreed to contribute regular editorials; they come from different perspectives, but are all critical of mainstream neoclassical economics and of its political corollary – neoliberalism. Far from being a fad, constructive opposition to the academic dominance of neoclassical economics (in economics as well as in other social sciences) and to the political influence of neoliberalism, is highly needed and soundly inspiring. It is also, in our case, guided by the desire to provide credible policy alternatives. While the mainstream is remarkably uninterested in debating with its critics, and while this attitude is only possible because mainstream economics is actually dominant, we must not forget that it is far from having taken over every mind. In fact, the quality of the opposition can induce some enthusiasm, as soon as one can glance at its diversity and its geographical spread. Such a feeling of inspiring strength and potential surely overwhelmed me when I attended the African Programme on Rethinking Development Economics (APORDE, the African brainchild of CAPORDE) in May 2007 and the Annual Conference on Development and Change (ACDC) last December. Even if many battles remain national or regional, few can be won alone – and Ben Fine was quite right when he told me that the reason why many Marxists prefer arguing with each other, rather than engaging with what they all agree to be nonsense, is that people tend only to fight battles they think they can win. It is a fact that heterodox economists have to behave in an inclusive way if they hope to influence debates and policy. Yielding to the temptation of factionalism is a left-wing disease which was harmful in a past where capitalism could seem doomed; nowadays it is as good as a capitulation, so powerful has capitalism become, in all parts of the world and in so many parts of our lives. Capitalism has certainly been very positive in many of its effects – in Europe, America, Asia, and even in Africa, as Sender argues in his article. It has allowed more people to live, rather than die as infants, and has enabled a diffusion of well-being enhancing technology. Not all technology developed under capitalism has arguably enhanced well-being, and technological diffusion has certainly been remarkably uneven. But, as Robert Parker, the über-wine critic, says of the impact of his “naïve American” approach to the wine industry, it has brought about a form of democracy. New wine drinkers (the upper end of the new, growing world middle-class) want to enjoy their wine now and do not care about the elitist, “old world”, notions of patience and terroir. Yet, as another character in the film notes, Parker is promoting wines that can be (and are often) made in California and Bordeaux, or anywhere else – though increasingly by Californians and Bordelais. This encapsulates the very ambiguous nature of capitalist ideology – it certainly knows how to appeal to the new generation produced by capitalism – but it is levelling the playing field in a certain way, in the interest of those who are forging this ideology. And who are devoting large amounts of money, effort and talent (ever wondered why the cleverest people in business work as spin doctor?) to convince us that what is good for them is good for everyone. It is up to us to contest the battlefield for ideas and to draw interest in and support for progressive alternatives which would benefit the majority rather than sharpen inequality. In her remarkable new book, Escape from Empire. The Developing World’s Journey Through Heaven and Hell, Alice Amsden suggests that American influence on developing countries was rather positive – by imperial standards – until the 1970s, when the US allowed (and sometimes supported) non-communist developing countries to do it their way, i.e. to choose and pursue their own economic policies. This behaviour was motivated by the belief that success over Soviet Russia required a spill over of the benefits of capitalist development. Then, because inter alia of the trauma of the Vietnam debacle, Americans reverted to an older, rigid form of laissez-faire: do it our way. Needless to say, the impact of the free-market ideology in the developing world has been horrific, destroying recently-formed state apparatuses, slowing investment and precluding the emergence of large, domestic capitalist firms. Foreign investment predictably failed to generate the growth in output and employment that could have lifted out of poverty those countries whose economy was still fragile at the time of Empire shift. Amsden acknowledges that her distinction between the two American empires may not be an entirely accurate characterization – but she rightly stresses that the shrinking of space for experimentation and free thinking about the most appropriate strategies dealt a severe blow to the development dynamic of the post-war era in many countries. There is no doubt that we are facing a strong, adapting and influential opposition; the staged demise of the “Washington Consensus” in the 1990s is a sign of this strength. The refining of the dominant paradigm thanks to the crucial contribution of New Institutional Economics, which allowed for the selective inclusion of some of the more shallow criticism of the Old Consensus, has been remarkably cosmetic when one looks at the real world. Contributors to this blog will surely touch on this, as well as engage theoretically with the flaws of the Post-Washington Consensus. The latter is the same wine, except that it is matured in new-oak barrels which give it a palatable taste at first. A taste so palatable in fact that it has appealed to populist critics of neoliberalism, who have concluded numerous alliances with its new avatar in the name of big, ill-defined words – think fair-trade, MDGs, or even democracy. In a 2005 paper, Mushtaq Khan shows how crude the thinking behind the “democracy is good for development” argument is; he then brilliantly demonstrates that a political economy approach can provide a robust basis for a realistic (vs. populist) development policy. Far from offering an alternative, the neopopulists have been incorporated into the mainstream – and we will make sure we engage them as well, for pipedreams are the worst form of drunkenness the poor can experience. Thanks to the articles that will flesh it out in the future, I hope this blog will come to be regarded as a reliable source of imaginative, critical and relevant analyses of development issues. That it will help inspire and connect those who feel that something is wrong with the current status quo with those who research, think of and fight for credible, progressive alternatives. To borrow one last line from probably the most endearing character in Mondovino, Hubert de Montille, who highlights the humility and scepticism which have always guided the freethinkers (libre-penseurs): “My son is more mainstream; he likes order. I like order, but I like disorder, too. Why not?” Cheers!

Nicolas Pons-Vignon is a senior researcher at the Corporate Strategy and Industrial Development (CSID) research programme at Wits University, South Africa. He was a doctoral researcher at the French Institute of South Africa (IFAS) until December 2007; in his PhD research, he analyses the impact of the outsourcing of forestry operations in South Africa, focusing on the link between corporate restructuring and rural poverty. He holds an MA in Public Administration from Sciences-Po (Paris) and an MSc in Development Studies from the School of Oriental and African Studies (London). Nicolas is the initiator and course director of the African Programme on Rethinking Development Economics. He worked as a consultant at the Paris-based OECD Development centre, where he researched violent conflicts in developing countries. Prior to this he was a project officer in London, Paris and Rabat for PlaNet Finance, an NGO which supports micro finance institutions.nicopv@gmail.com

References Alice Amsden (2007), Escape from Empire. The Developing World's Journey through Heaven and Hell, MIT Press Mushtaq Khan (2005), “Markets, States and Democracy: Patron-Client Networks and the Case for Democracy in Developing Countries”, Democratization Vol. 12, No. 5 John Sender (1999), “Africa's Economic Performance: Limitations of the Current Consensus”, The Journal of Economic Perspectives, Vol. 13, No. 3