Feminist economics posts

Hierarchy of needs or synergy of goals?

In a recent article in Foreign Affairs, Marc Bellemare (1) joins the current debate on aid effectiveness, arguing for a targeted approach that focuses on basic needs and raising incomes. Other endeavors—such as gender equality, environmental sustainability, breastfeeding, cookstoves, and an independent media—are a distraction, he argues, and will, in any case, automatically follow once basic needs have been met.

Bellemare’s commentary raises interesting questions about the institutional context of development aid, the diffusion of development actors and goals, and the appropriate division of labor between the private and public sector (on types of interventions). I leave that discussion for another day.

Instead, I draw attention to the claim that “all else will naturally follow once basic needs are met.” Few would dispute the importance of basic needs as a building block of development and well-being.

And it is true that resource pressures highlight the need to prioritize targets—a task that should, however, be guided by theory and research.

What has research taught us? One lesson is that rather than follow, gender equality and environmental sustainability help to enable improvements in basic needs and income. Caren Grown (2014) (2) provides an extensive survey of the research that links gender equality to development aid effectiveness. The large body of academic research on the role of gender in stimulating growth and development also attests to the importance of focusing development aid on gender equality. (3)

Environmental sustainability is also a key ingredient to raising incomes over time and to the goal of clean water, for example. Indeed, development aid projects can simultaneously achieve multiple goals—environmental sustainability and improved incomes, for example, as Haiti’s agroforestry project in the 1980s did. Pwoje Pyebwa (Creole for “Tree Project”) focused on the cultivation of fast-growing trees that both prevented soil erosion and generated a source of income for households.

It is thus a false dichotomy to suggest that basic needs and higher incomes must be achieved separately and before these other goals. Such a stance ignores exciting research that incorporates not only what we know about the technological and infrastructural requirements of development but also the roles of power and inequality, which must be addressed to achieve these goals.

A final word on the assertion that gender equality and environmental sustainability “naturally” follows as incomes rise. South Korea is an example of a country that sought to solve its development problems by meeting basic needs—and it did this by promoting export-led growth and rapid industrialization, without any accompanying social protection or insurance programs. The state argued that economic growth was its social insurance program. Many years later, South Korea, now an OECD member, still hasn’t solved the problem of gender inequality. The gender wage gap in that country is one of the widest in the world. As the economy moved up the industrial ladder, defeminization of manufacturing employment occurred; the employment gains women made in the well-paid manufacturing sector were transitory. This is just one example which shows that meeting basic needs does not guarantee the achievement of other important development goals—gender equality, environmental sustainability, and good governance. Our challenge is to be able to develop aid goals that allow for the complexity of the development process.

Prioritization of goals is necessary but oversimplification does not serve us well. And the prioritization process itself is one that requires our scrutiny. Matt Ridley, in a recent Wall Street Journal article, commented on the cost-benefit approach adopted by the Copenhagen Consensus Center (4). The Center asked 60 economists to rank the UN Open Working Group’s (OWG) post-2015 development targets (200 plus!) for 2030.  The group was asked to compare the cost of each goal to its likely benefits on a scale from “phenomenal” to “poor” (or uncertain). The 60 economists ranked one of these—the collection of gender-disaggregated data to help women—at nearly the bottom of the list in the “poor” category in terms of benefits per dollar spent. Well, this is simply an odd ranking, coming from a group of presumably evidence-based economists. Without adequate data on such key items as wages, how are we able to evaluate the costs and benefits of aid interventions? All of this is to suggest once again that over-simplifying the process of prioritization is fraught with potential error, and cost-benefit analysis cannot be a unique ranking tool. Let me add to my argument from above: prioritization of development goals must allow for complexity of the development process and complexity in the methods for contributing to that goal, such as data collection to be able to better identify costs and benefits.

 

Blog references:

(1) Bellemare, Marc F. (2014). “Development Bloat: How Mission Creep Harms the Poor.” Foreign Affairs, January 5.

(2) Grown, Caren. (2014). “Aid and Gender Equality.” UN WIDER Position Paper for ReCom – Research and Communication on Foreign Aid.

http://recom.wider.unu.edu/sites/default/files/Position%20paper%20on%20Aid%20and%20Gender%20Equality.pdf

(3) See for example, two special issues of World Development (November 1995 and July 2000) and a special issue of Feminist Economics (July 2009) on this topic.

(4) Ridley, Matt. 2014. “Smart Aid for the World’s Poor: How can rich countries best help poor ones? Matt Ridley identifies five priorities,” Wall Street Journal, July 25.

 

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