The Blog

The Poverty of Poverty Reduction

I say goodbye because as well-intended as the aid industry is it willfully overlooks the basic lesson of political economy: that economies develop, institutions are built, and governance becomes more robust in poor countries through the same bargaining processes that have worked for formerly-poor countries in the past.

I write this article as a fond farewell to the aid industry. I could write about how foreign aid helps some people, but gets sold as helping most. I could write about the incompetence and arrogance shown towards those still patronisingly referred to as beneficiaries. I could write about how intentions to build other people's democracies and protect their human rights are well intended, but often bypass or subvert the pluralist processes they are nominally concerned with. I could write (and have in the past) about how the Pan-Africanist demand of Nothing for Me Without Me is ever further away, even in the age of Participatory Rural Appraisal and Stakeholder Analysis.

But ultimately I say goodbye because as well-intended as the aid industry is it willfully overlooks the basic lesson of political economy: that economies develop, institutions are built, and governance becomes more robust in poor countries through the same bargaining processes that have worked for formerly-poor countries in the past.

The aid industry (by which I mean large non-governmental organisations, often northern-based, working in close coordination with the largest donors) often seems to be playing catch-up with these processes, when not actively hindering them. External funding, especially when it comes with strings attached or is spent directly on donor priorities, only makes bargaining harder as it delays compromise building. Ultimately, it turns what is a necessarily political act into a purely technocratic one. This is more than just a criticism of aid dependency, it is getting the incentives for development wrong at precisely the stage in the political economy at which nations need to get them right.

I have written before that I was disappointed that the Zero Draft of an exciting (if over-long) proposed successor to the MDGs - the Sustainable Development Goals - starts with the words: "Poverty eradication is the greatest global challenge facing the world today and an indispensable requirement for sustainable development." I don't so much disagree with that statement (I think it is too banal and sweeping a way to put it to be taken seriously) as experience a sinking-feeling that the whole point of the SDGs - that we need to square the challenges of development with those of the environment - was undermined in its opening paragraph by the aid industry reverting to type. That is, the way the aid industry likes to communicate with the world takes a greater precedence than what many people said about the importance of reconciling development goals with environmental goals.

The standard response to the argument that poverty is too ephemeral is the rhetorical sleight-of-hand to claim that poverty is multi-dimensional and means so much more than just income. This is dishonest for three reasons. First it deliberately confuses the correlation of many things that go together with poverty - ill health, poor governance, illiteracy, gender inequality, and so on - with direct causation. Yes, poverty often goes together with these things, but these are inter-related challenges of political, social, economic and cultural development of which poverty is just one factor. People don't get sick just because they are poor. Corruption isn't only caused by poverty. Illiteracy is the result of more than not spending enough on schools. Women aren't excluded from paid work because developing economies don't need their labour. Commoditising every challenge faced in developing countries into a neat package of 'poverty' may be an efficient way for the aid industry to raise money, but it is a poor description of what those challenges actually are.

Second, if you are a worker in the industry there is already a term for what you do - development. It might seem a bit stale, and certainly not sexy enough, but if aid reduces everything to money, and if global justice is a bit pompous, why not say that you work in international development? It may be a little wonky, but development at least acknowledges the multitude of challenges faced by those living in countries that are not just materially worse off. We used to call such countries less advanced, and longer ago still backward. Development, while a bit rusty, is at least a polite way of acknowledging that these are complex and emotive issues, and not something as narrow and banal as just reducing poverty.

Third, the slogan in recent years has not been Make Poverty and Everything Else Bad History; the slogan has been Make Poverty History. This has been an effective (and admittedly useful) marketing slogan, but it has the adverse effect of obscuring the point of development, which is not just to make poor people richer, but to support the process by which people move from poverty to sufficiency. This is a process that all nations have had to go through and, it turns out, there aren't any shortcuts. The multidimensionality of development is not new, there is a corpus of knowledge, an academic discipline, and professional standards that go along with the term. This is why doctors resist calling themselves Wellbeing Practitioners, and teachers Knowledge Distributors, because they are professionals and the terms mean something. Make Poverty History made for a useful marketing slogan, but it is as descriptive as Make Bullets History would be for solving the problem of inner-city crime, or Make Defective Condoms History would be for solving teen pregnancy.

I am not against income measures, either in the SDGs or elsewhere. But the point about income measures is that they are only useful in conjunction with other measures. Costa Rica is often given as an example of a country that has deliberately prioritised its fragile ecosystem above economic growth. Bhutan is, famously, a very poor country that nevertheless tries to measure Gross National Happiness. These are not attempts to say that income doesn't matter, but are ways to juxtapose these against World Bank or IMF GDP data as part of the process of putting priorities into context.

The Zero Draft does go into greater detail on poverty than the MDGs did, expanding this from just $1.25/day. But having aspired to end poverty in all of its forms everywhere, it then goes on to define poverty in five specific ways: income, national measures of poverty (which vary enormously), social protection systems, economic access rights, resilience of the poor particularly to climate change.

These are all good aspirations (although somewhat ephemeral), but my criticism is this: why call all of these things poverty? If you want to raise people's incomes, why not call it this? Economic justice can be named as such, surely? And vulnerability (especially to something like climate change) depends on so much more than wealth. Poverty is both too sweeping, and not specific enough, to be useful. The unstated assumption running through the Draft is that everything described by the short-hand 'poverty' is tackled within the rest of the Goals. So why have a poverty Goal at all?

A new target to end absolute poverty (which I am not against) needs to do two things - be explicit that it is a target focused only on income, other targets exist for the rest; and be honest that the billion people still left in absolute poverty are qualitatively different to the billion lifted out of it in the last two decades. Those left are disproportionately female, rural, poorly governed, uneducated and at risk from conflict and environmental stress, and are less likely to be raised out of poverty than the billion lifted out by the MDGs. It is the idea of transformation that is lacking in the language of reducing poverty.

The Zero Draft accomplishes one task very well: to keep the momentum of the MDGs going. But it is failing, unfortunately, at a task that is even more critical, to reinvent development as the MDGs did before. It is an ability to change the game, to turn the impossible into the inevitable, that separates agreements such as the MDGs from the hundreds, maybe thousands, of well-intended but ultimately forgotten reports, declarations and protocols that weigh down my bookshelves and the bookshelves of many development workers. And 'poverty' is the game that needs to change.