Politics: gaining new insights or ignoring them?
Do we need new analyses or new policies? There has never been a shortage of new theories, nor of efforts to translate these into new policies, though – partly because of analytical disputes – not always coherently. However, there was also no shortage of calculated ignorance either.
Early development theories based on the assumption that economic growth was not only a necessary precondition for poverty eradication, but also a sufficient one and that this growth would trickle down, found a counterpart in theories on the dualistic character of societies and economies in development. Moreover, there are various limits to growth. We also learned that growth itself can lead to impoverishment through exploitation and the cultivation of dependence.
Consequently, in the 1970s, policies to strengthen the economic growth and self-reliance of
developing countries were complemented by policies to fulfil the basic human needs of the poor in
these countries. These were short-lived. New insights into the significance of domestic
macroeconomic policies affecting the conditions for growth – strong and open markets, free entrepreneurship and competition, stable financial and monetary relations – together with the world economic recession at the turn of the decade, gave free rein to adjustment policies. It was believed that these should precede development policies, including the reduction of poverty. Adjustment policies implied cuts in public expenditure to meet basic human needs, for instance health and education, and also withdrawal from programmes in the areas of food, agriculture and rural development. It resulted in a disinvestment in the capacities of a society to provide a floor to poverty. After a while safety nets were introduced to avoid a worsening of poverty due to adjustment itself, but these only functioned as stop-gap measures. And while originally adjustment-cum-safety nets had been seen as transitional, soon a new mantra was introduced as a structural pre-condition for development: good governance. The Washington consensus about good governance made adjustment a lasting feature of development, which was bound to result in a stagnation of poverty reduction.
The reason was political. The Washington consensus was aiming at stability and high growth, accepting increases in inequality, assuming that the positive effects of the former would outweigh the negative consequences of the latter. To decide on the optimum pattern of adjustment was a specific aspect of the general political task to find the optimum combination of growth, inequality and poverty reduction. This is the most difficult task facing political leaders, in all countries and at all times. Even if increased inequality and higher poverty are meant to be only transitory, in order to enhance the capacity to grow and thus the future potential to redistribute and to redress poverty, the institutional consequences of the Washington consensus imply a political bias towards a permanent postponement of poverty reduction.
That is the reason why so-called pro-poor growth policies never had a chance on any reasonable scale.9 Not because it is difficult to determine a theoretical optimum: these optima will differ in time and between countries, because of the specific social and economic structures, their institutional capacities, their starting position and their resource endowment. But a choice can be made, depending on the political priorities attached to people’s basic needs. Pro-poor growth policies did not get of the ground because of different opinions on these priorities. Those who have the power to decide that now the time has come to give priority to poverty reduction and redistribution will always be tempted to further postpone that decision and to further prioritise growth, under the pretext that this will increase the potential even further. And so on and so on. The political class that has the power to decide does not have an interest in changing priorities. On the contrary…..
So, I agree with de Gaay Fortman: ‘to discuss growth and poverty, while missing out on (re)distribution does not seem to be very meaningful.’ [De Gaay Fortman, 2003, 152] Stressing distribution as crucial implies the recognition that poverty is basically a political concept rather than a pure economic or, in the de Gaay Fortman’s terminology, a ‘productivist’ concept.10 [De Gaay Fortman, 2002, 2003] That requires a deliberate choice: to give a voice to the poor and to enhance people’s participation in policy-making. But it goes further than that. Seeing poverty as a political category implies a readiness to endorse empowerment of the poor, to redistribute before growth, to ensure a fair allocation of entitlements and actual command of the poor over resources. All this is easier said than done, because behind it lies the question of power.
In the 1990s the formulation of the rights approach to development contributed to the understanding that unequal power distributions can be counteracted with the help of law and institutions, based on a growing international consensus on basic values. At UNCED Heads of State and Government embedded the right to development in the Rio Declaration as one of the Principles underlying international policy-making aimed at sustainable development in the new century. In the Netherlands, Bas de Gaay Fortman, Hans Opschoor and Nico Schrijver, all linked to ISS, helped a lot to further develop the various rights concepts. [De Gaay Fortman, 2002, 2003] [Opschoor, 2002, 2003] [Schrijver, 2001, 2003] By the end of the decade, the rights approach to poverty had become a guideline in authoritative international documents.11
So, further analysis of poverty as a phenomenon, the processes involved and the underlying forces and mechanisms, has deepened our insights. These have found their way into new and better policies to combat poverty. But not all lessons that could have been learned have been put into practice. More and stronger safety nets have been built, more sophisticated adjustment policies construed, and more emphasis laid on governance, institutions and capacity building. But the most important lesson was not put into practice: start with the distribution of assets and make it more equal. Efforts were made, but these remained an exception, at local level only.12 At global level, there was no effort whatsoever.
Early development theories based on the assumption that economic growth was not only a necessary precondition for poverty eradication, but also a sufficient one and that this growth would trickle down, found a counterpart in theories on the dualistic character of societies and economies in development. Moreover, there are various limits to growth. We also learned that growth itself can lead to impoverishment through exploitation and the cultivation of dependence.
Consequently, in the 1970s, policies to strengthen the economic growth and self-reliance of
developing countries were complemented by policies to fulfil the basic human needs of the poor in
these countries. These were short-lived. New insights into the significance of domestic
macroeconomic policies affecting the conditions for growth – strong and open markets, free entrepreneurship and competition, stable financial and monetary relations – together with the world economic recession at the turn of the decade, gave free rein to adjustment policies. It was believed that these should precede development policies, including the reduction of poverty. Adjustment policies implied cuts in public expenditure to meet basic human needs, for instance health and education, and also withdrawal from programmes in the areas of food, agriculture and rural development. It resulted in a disinvestment in the capacities of a society to provide a floor to poverty. After a while safety nets were introduced to avoid a worsening of poverty due to adjustment itself, but these only functioned as stop-gap measures. And while originally adjustment-cum-safety nets had been seen as transitional, soon a new mantra was introduced as a structural pre-condition for development: good governance. The Washington consensus about good governance made adjustment a lasting feature of development, which was bound to result in a stagnation of poverty reduction.
The reason was political. The Washington consensus was aiming at stability and high growth, accepting increases in inequality, assuming that the positive effects of the former would outweigh the negative consequences of the latter. To decide on the optimum pattern of adjustment was a specific aspect of the general political task to find the optimum combination of growth, inequality and poverty reduction. This is the most difficult task facing political leaders, in all countries and at all times. Even if increased inequality and higher poverty are meant to be only transitory, in order to enhance the capacity to grow and thus the future potential to redistribute and to redress poverty, the institutional consequences of the Washington consensus imply a political bias towards a permanent postponement of poverty reduction.
That is the reason why so-called pro-poor growth policies never had a chance on any reasonable scale.9 Not because it is difficult to determine a theoretical optimum: these optima will differ in time and between countries, because of the specific social and economic structures, their institutional capacities, their starting position and their resource endowment. But a choice can be made, depending on the political priorities attached to people’s basic needs. Pro-poor growth policies did not get of the ground because of different opinions on these priorities. Those who have the power to decide that now the time has come to give priority to poverty reduction and redistribution will always be tempted to further postpone that decision and to further prioritise growth, under the pretext that this will increase the potential even further. And so on and so on. The political class that has the power to decide does not have an interest in changing priorities. On the contrary…..
So, I agree with de Gaay Fortman: ‘to discuss growth and poverty, while missing out on (re)distribution does not seem to be very meaningful.’ [De Gaay Fortman, 2003, 152] Stressing distribution as crucial implies the recognition that poverty is basically a political concept rather than a pure economic or, in the de Gaay Fortman’s terminology, a ‘productivist’ concept.10 [De Gaay Fortman, 2002, 2003] That requires a deliberate choice: to give a voice to the poor and to enhance people’s participation in policy-making. But it goes further than that. Seeing poverty as a political category implies a readiness to endorse empowerment of the poor, to redistribute before growth, to ensure a fair allocation of entitlements and actual command of the poor over resources. All this is easier said than done, because behind it lies the question of power.
In the 1990s the formulation of the rights approach to development contributed to the understanding that unequal power distributions can be counteracted with the help of law and institutions, based on a growing international consensus on basic values. At UNCED Heads of State and Government embedded the right to development in the Rio Declaration as one of the Principles underlying international policy-making aimed at sustainable development in the new century. In the Netherlands, Bas de Gaay Fortman, Hans Opschoor and Nico Schrijver, all linked to ISS, helped a lot to further develop the various rights concepts. [De Gaay Fortman, 2002, 2003] [Opschoor, 2002, 2003] [Schrijver, 2001, 2003] By the end of the decade, the rights approach to poverty had become a guideline in authoritative international documents.11
So, further analysis of poverty as a phenomenon, the processes involved and the underlying forces and mechanisms, has deepened our insights. These have found their way into new and better policies to combat poverty. But not all lessons that could have been learned have been put into practice. More and stronger safety nets have been built, more sophisticated adjustment policies construed, and more emphasis laid on governance, institutions and capacity building. But the most important lesson was not put into practice: start with the distribution of assets and make it more equal. Efforts were made, but these remained an exception, at local level only.12 At global level, there was no effort whatsoever.