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Published on Saturday, April 05, 2014, updated Saturday, April 05, 2014
Easterly's book on aid and autocracy
My review of William Easterly's book The Tyranny of Experts for The Times:
Matt Ridley
Imagine, writes the economist William Easterly, that in 2010 more than 20,000 farmers in rural Ohio had been forced from their land by soldiers, their cows slaughtered, their harvest torched and one of their sons killed — all to make way for a British forestry project, financed and promoted by the World Bank. Imagine that when the story broke, the World Bank promised an investigation that never happened.
That is, says Easterly, what occurred in Mubende District in Uganda. It exemplifies all that is wrong with development in Easterly’s view. It is too top-down, too crony with despots, too remotely technocratic and too indifferent to the political and economic freedom of local people. It is run by a tyranny of experts.
This book is not an attack on aid from rich to poor. It is an attack on the unthinking philosophy that guides so much of that aid from poor taxpayers in rich countries to rich leaders in poor countries, via outsiders with supposed expertise. Easterly is a distinguished economist and he insists there is another way, a path not taken, in development economics, based on liberation and the encouragement of spontaneous development through exchange. Most development economists do not even know they are taking the technocratic, planning route, just as most fish do not know they swim in a sea.
Easterly traces the history of this mistake back to the first half of the 20th century, when semi-colonial Western powers in China, in order to preserve their interests, used big charitable donations to support an autocratic regime under Sun Yat-sen and then Chiang Kai-shek, who got the message that development was the card to play in justifying despotism.
In the 1930s, the British had to scramble to find a new excuse for their colonies — whose occupation had always been justified on grounds of racial superiority, an argument looking threadbare as the depression and Nazism made pith-helmeted district commissioners seem less god-like. A retired colonial office civil servant named Lord Hailey came up with a technocratic justification instead — that we were guiding the development of India and Africa. He called for “a far greater measure of both initiative and control on the part of the central government”.
During the Second World War Hailey got the Americans to go along with this, by suggesting a similar line used to uphold southern segregation — economic betterment would come first; political liberation could wait. The Cold War meant a new justification for the same policy in Latin America: use aid to prop up dictators.
The consequence was that it was assumed that the newly liberated Third World was best ruled by autocrats. “The masses of the people take their cue from those who are in authority over them,” said the United Nations Primer for Development in 1951. Nanny state knew best. Top-down development by LSE graduates was not just the best way; it was the only way. And it was frequently disastrous.
To this day, the head of the World Bank tours China, praising its “leadership” and “steady implementation with a determined will”, as atrocities abound. Tony Blair’s African Government Initiative believes in “strengthening the government’s capacity to deliver programs” in its poster-boy of Ethiopia, a country whose ruler uses aid to crush opposition and grab land through “villagisation”. Nobody seems to mind.
Easterly believes history undermines the argument that dictatorship, even of a benevolent kind, is necessary for economic development. The story of the West’s rise, the roaring of the east Asian tigers and of China’s sudden growth surge are actually cases of spontaneous order, unplanned innovation and liberation from top-down rule, not central planning.
For instance, Deng Xiaoping gets the kudos for China’s miracle when all he did was recognise after the fact a spontaneous rebellion against the continuing failure of collective farms. And Lee Kuan Yew of Singapore was sensible enough not to prevent (and then to take the credit for) an organic improvement in a city state exposed to world trade and populated by mercantile Fujian Chinese.
The decades-old view that conscious policy design offers the best hope for ending poverty, is just another a form of creationism, embodying the fallacy of intelligent design – that because something is ordered and intricate, it must have been ordained by an intelligent mind. In fact, as Adam Smith and Friedrich Hayek (and Charles Darwin) realised, no expert can ever know enough to rival the information that emerges from the spontaneous interactions of many people.
Technocrats also tend to have a “Blank Slate” view that the history of a country does not matter much; have traditionally neglected trade; and have often ignored regional or individual trends in favour of national ones. Easterly describes the success of the Mourides from Senegal as a rebuke to the experts. Go up to an African street retailer in New York, Paris, Madrid or Milan and ask him where he comes from. The chances are he is a Mouride, a merchant embedded in a supportive web of credit, trust and remittances that this religious brotherhood maintains — a bit like Jews in medieval Europe. The Mourides were practising microfinance for decades before the development industry discovered it. But partly because they don’t fit inside a country, conventional development economics misses such folk.
“It was an unhappy accident,” writes Easterly, “that development thinking stressed development at the unit of the nation and was scornful of trade at the moment of independence of many new nation states.”
Easterly is a fluent writer and a good economic historian, at home describing the differences between Friedrich Hayek (a proponent of bottom-up development) and Gunnar Myrdal (top-down), as he is recounting the history of one particular block in New York city, which he has studied as a case history of spontaneous development. This group of houses on Greene Street was once a freed-slave small-holding, then part of a larger farm, then a brothel, then a garment factory, then an artist’s studio and is now full of posh apartments and an Apple store.
The book’s weakness is that having set up a strong historical and theoretical argument against technocracy and for bottom-up development, Easterly does not then follow through with some examples of how the latter might work in practice. Nor does he tackle the question of whether at least some parts of the modern aid industry, especially among NGOs and charities, might be getting rather better at helping in bottom-up ways. It would have been good to see a manifesto for how Easterly would run the World Bank or for that matter the Gates Foundation.
Published on Saturday, April 05, 2014, updated Saturday, April 05, 2014
Easterly's book on aid and autocracy
My review of William Easterly's book The Tyranny of Experts for The Times:
Matt Ridley
Imagine, writes the economist William Easterly, that in 2010 more than 20,000 farmers in rural Ohio had been forced from their land by soldiers, their cows slaughtered, their harvest torched and one of their sons killed — all to make way for a British forestry project, financed and promoted by the World Bank. Imagine that when the story broke, the World Bank promised an investigation that never happened.
That is, says Easterly, what occurred in Mubende District in Uganda. It exemplifies all that is wrong with development in Easterly’s view. It is too top-down, too crony with despots, too remotely technocratic and too indifferent to the political and economic freedom of local people. It is run by a tyranny of experts.
This book is not an attack on aid from rich to poor. It is an attack on the unthinking philosophy that guides so much of that aid from poor taxpayers in rich countries to rich leaders in poor countries, via outsiders with supposed expertise. Easterly is a distinguished economist and he insists there is another way, a path not taken, in development economics, based on liberation and the encouragement of spontaneous development through exchange. Most development economists do not even know they are taking the technocratic, planning route, just as most fish do not know they swim in a sea.
Easterly traces the history of this mistake back to the first half of the 20th century, when semi-colonial Western powers in China, in order to preserve their interests, used big charitable donations to support an autocratic regime under Sun Yat-sen and then Chiang Kai-shek, who got the message that development was the card to play in justifying despotism.
In the 1930s, the British had to scramble to find a new excuse for their colonies — whose occupation had always been justified on grounds of racial superiority, an argument looking threadbare as the depression and Nazism made pith-helmeted district commissioners seem less god-like. A retired colonial office civil servant named Lord Hailey came up with a technocratic justification instead — that we were guiding the development of India and Africa. He called for “a far greater measure of both initiative and control on the part of the central government”.
During the Second World War Hailey got the Americans to go along with this, by suggesting a similar line used to uphold southern segregation — economic betterment would come first; political liberation could wait. The Cold War meant a new justification for the same policy in Latin America: use aid to prop up dictators.
The consequence was that it was assumed that the newly liberated Third World was best ruled by autocrats. “The masses of the people take their cue from those who are in authority over them,” said the United Nations Primer for Development in 1951. Nanny state knew best. Top-down development by LSE graduates was not just the best way; it was the only way. And it was frequently disastrous.
To this day, the head of the World Bank tours China, praising its “leadership” and “steady implementation with a determined will”, as atrocities abound. Tony Blair’s African Government Initiative believes in “strengthening the government’s capacity to deliver programs” in its poster-boy of Ethiopia, a country whose ruler uses aid to crush opposition and grab land through “villagisation”. Nobody seems to mind.
Easterly believes history undermines the argument that dictatorship, even of a benevolent kind, is necessary for economic development. The story of the West’s rise, the roaring of the east Asian tigers and of China’s sudden growth surge are actually cases of spontaneous order, unplanned innovation and liberation from top-down rule, not central planning.
For instance, Deng Xiaoping gets the kudos for China’s miracle when all he did was recognise after the fact a spontaneous rebellion against the continuing failure of collective farms. And Lee Kuan Yew of Singapore was sensible enough not to prevent (and then to take the credit for) an organic improvement in a city state exposed to world trade and populated by mercantile Fujian Chinese.
The decades-old view that conscious policy design offers the best hope for ending poverty, is just another a form of creationism, embodying the fallacy of intelligent design – that because something is ordered and intricate, it must have been ordained by an intelligent mind. In fact, as Adam Smith and Friedrich Hayek (and Charles Darwin) realised, no expert can ever know enough to rival the information that emerges from the spontaneous interactions of many people.
Technocrats also tend to have a “Blank Slate” view that the history of a country does not matter much; have traditionally neglected trade; and have often ignored regional or individual trends in favour of national ones. Easterly describes the success of the Mourides from Senegal as a rebuke to the experts. Go up to an African street retailer in New York, Paris, Madrid or Milan and ask him where he comes from. The chances are he is a Mouride, a merchant embedded in a supportive web of credit, trust and remittances that this religious brotherhood maintains — a bit like Jews in medieval Europe. The Mourides were practising microfinance for decades before the development industry discovered it. But partly because they don’t fit inside a country, conventional development economics misses such folk.
“It was an unhappy accident,” writes Easterly, “that development thinking stressed development at the unit of the nation and was scornful of trade at the moment of independence of many new nation states.”
Easterly is a fluent writer and a good economic historian, at home describing the differences between Friedrich Hayek (a proponent of bottom-up development) and Gunnar Myrdal (top-down), as he is recounting the history of one particular block in New York city, which he has studied as a case history of spontaneous development. This group of houses on Greene Street was once a freed-slave small-holding, then part of a larger farm, then a brothel, then a garment factory, then an artist’s studio and is now full of posh apartments and an Apple store.
The book’s weakness is that having set up a strong historical and theoretical argument against technocracy and for bottom-up development, Easterly does not then follow through with some examples of how the latter might work in practice. Nor does he tackle the question of whether at least some parts of the modern aid industry, especially among NGOs and charities, might be getting rather better at helping in bottom-up ways. It would have been good to see a manifesto for how Easterly would run the World Bank or for that matter the Gates Foundation.
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