(I plan to say much more about some of the questions addressed below in a review of Robert Biel's groundbreaking "The New Imperialism". For the time being, I want to focus in one question posed by the article's observation that "Though they do not entirely reject the macroeconomic policies of the old school, the new-style economists have begun to focus on smaller initiatives in public health, agriculture and education." Biel makes the keen observation that bourgeois development economics of the sort exemplified by Walt Rostow has been abandoned gradually over the past 30 years as free-market orthodoxy has gained hegemony. Rostow's modernization theory put forward the notion that *all* nations could go through successive stages in order to gain rough parity with the industrialized nations. That no longer is the case. For the most part, Thatcherism/Reaganism has been extended to the international arena with some nations ending up as "winners" and some as "losers", just as is the case inside a given country. The lottery mentality underpinning this paradigm allows Virginia Postrel and the idiot economics professor at Columbia she quoted to shrug off misery in Latin America and Africa. Just as long as there are "winners" in India in China, who cares what happens in Argentina. The other thing to take note of is the obvious affinity between postmodernism and Duflo's fascination with "smaller initiatives". Obviously there is a distrust of "grand narratives" of either the Marxist version or Rostow-like modernization. In fact, when Rostow first became aware of this phenomenon, he wrote a bitter attack on postmodernism in the 1984 "The Barbaric Counter-Revolution". For Biel, the shift in ideology that made Rostow antiquated and people like Duflo trendy is directly related to changes in North-South economic relations that I will detail in my review.)
NY Times, Aug. 20, 2002 Small-Picture Approach to a Big Problem: Poverty By DANIEL ALTMAN Though rich countries may be able to rescue middle-class economies like those of Uruguay and Brazil from crises simply by lending them billions of dollars, attacking the problems of the poorest countries is not so easy. Putting aside old, one-size-fits-all approaches to development, a new school of thought emphasizes more specific grass-roots solutions. A cadre of young economists who study development, including some of the most sought-after professors in the nation, are dissatisfied with supposed panaceas like balanced budgets, new infrastructure and financial stability. These economists are using basic insights about people's motivations and the flow of information to guide policy in emerging economies, one piece and one country at a time. Esther Duflo, an associate professor at the Massachusetts Institute of Technology, epitomizes the new development economics with her broad use of theoretical and statistical tools and her willingness to conduct research in the field. Ms. Duflo, whose work has placed her among the year's top picks for lifetime tenured positions, says she ultimately wants to find out why the world's poorest people almost always stay poor. That quest has led her to ask how governments and outside organizations can best help the citizens of poor countries, and why information and technology that can promote economic advancement spread less quickly in some settings than in others. Old-line development economists often assumed that all people would follow textbook theories and that lessons learned in rich countries would stay true anywhere. Yet according to Ms. Duflo, "the level of discrepancy between what people do and what we as economists think they should do can be pretty substantial." Ms. Duflo has studied the growth of the software industry in India, school construction in Indonesia, pensions in South Africa and household accounting in Ivory Coast. Her current research, conducted jointly with Michael R. Kremer of Harvard, has found, for example, that the use of fertilizer for growing maize in Kenya takes hold quickly among farmers who see demonstrations but that those farmers rarely share their new knowledge with others. In the past, economists might have missed important discoveries like this by concentrating solely on the big picture. The International Monetary Fund, the World Bank and other teams of economic advisers often took the same message wherever they went, preaching the necessity of programs meant to clamp down on fiscal waste, stop inflation and improve foreign trade and investment. Over the last half-century, these policies helped Chile, India, Israel and Mexico to stabilize their currencies and lay the groundwork for growth. Yet in Africa, the former Soviet bloc, many parts of Southeast Asia and Latin America, there is little to show for all the well-intentioned advice. Put simply, the same policies have not worked in every setting. "To some extent the field has been driven by abandoning big-picture paradigms," Timothy J. Besley, director of the Suntory- Toyota International Centers for Economics and Related Disciplines at the London School of Economics, said in a recent e-mail message. "The problems are different country to country and even region to region within countries. These big-picture efforts are good for giving us inspiration, but probably not much good in making concrete progress within particular countries." Though they do not entirely reject the macroeconomic policies of the old school, the new-style economists have begun to focus on smaller initiatives in public health, agriculture and education. Finding successes among these programs could yield lessons for broader policies. "I see my job as trying to uncover little pieces of knowledge that can help us define policy for development," Ms. Duflo said. full: http://www.nytimes.com/2002/08/20/business/20DEVE.html Louis Proyect www.marxmail.org
