Welcome to Development Book Review! I hope you enjoy the reviews on this site, and that they’re useful.
In this blog I’d like to review books by both development advocates and critics –those who celebrate development progress and those who take a more critical stance. The first book I’m going to review is definitely in the former camp. Steven Radelet’s The Great Surge is an account of how the past 20 years have been “a time of the greatest development progress among the global poor in the history of the world”.
Radelet puts together a strong narrative of how life has got better for poor people in recent years. His argument rests mainly on World Bank statistics, which show that, since around 1990, poverty is reducing at unprecedented rates, incomes in developing countries are increasing, much fewer children are dying in the first five years of life and more are going to school, and also that democracy is spreading rapidly in developing countries. Radelet goes on to identify four factors which have acted as catalysts of these positive changes. First, the collapse of the Soviet Union and the end of the Cold War, which put an end to Western and Soviet support for dictators with bad policies, reduced the appeal of communist economic ideologies, and put in place more liberal economic and political regimes in many developing countries. Secondly, increased openness to trade and new technologies, including the shipping container, the mobile phone and new varieties of crops, also played a role in the transformation. Thirdly, he argues, developing countries are better governed, with better leadership, more effective economic policies, and more democratic freedoms. Fourth and finally, Radelet claims that foreign aid has played a positive part. He admits that there have been many failures of aid, and that aid was not the most important factor in the transformation he describes, but finds that on balance aid has made more of a positive contribution than a negative one. The book concludes with a discussion of whether the positive changes he describes are likely to continue, to slow down or even be reversed – and with recommendations for how to ensure that progress is sustained.
I must admit I came to the book as something of a sceptic and was partly won over. I didn’t really like the title, with its overtones of Iraq, and the many mentions of ‘progress’, ‘marching forward’ etc make it sound a bit propagandistic at times. But despite all this, Radelet does make a persuasive case that something unusual has been happening economically in the past 20 years. In particular, he does a good job of addressing the perception that recent successes in reducing poverty are entirely due to the success of China and a few other fast-growing Asian economies. Looking at Africa, the continent where I currently live, there have clearly been some dramatic improvements in aspects of health (especially infant mortality), and GDP is growing fast in many countries. Even the overall percentage of people living on less than $1.25 per day has been falling since 1999 (though not yet the absolute number of poor people). Reading The Great Surge made me want to go back and look into the data myself, in particular to see to what extent the popular narrative of disappointment with sub-Sarahan African economic progress needs to be revised. I looked at GDP per capita data from 1960 to 2014 in some specific African countries. The results are below.
The biggest story here is the dramatic growth and decline of Cote d’Ivoire between 1960 and 1990 – driven by the rise and fall of the fortunes of the cocoa and coffee sectors, specifically the collapse in prices in these sectors in the 1980s. The economic troubles of the Democratic Republic of Congo and Zambia between 1960 and around 2000 are also evident. But looking at the end of the graph, starting in the late 1990s, there is another story. Almost every African country in this chart – and many others which are not in it – have been registering robust growth in GDP per capita in the past few years. The fact that so many countries are growing, after the previous more varied performance, suggests that we are living in unusual historical times. But the graph also shows it is too early to celebrate – none of these countries is close to the levels of GDP per capita of Cote d’Ivoire in the 1970s, and Cote d’Ivoire’s history also shows that any and all gains could be reversed.
As to what is driving this growth, I would tend to agree with Radelet that the triumph of free market capitalism since 1990 or so has got something to do with it. Developing countries are more and more connected to the global economy, and many countries are making the most of the opportunities this provides, for example exporting more and benefiting from inward investment. Macroeconomic management has also improved significantly since the 1960s and 70s. However the triumph of capitalism also has downsides, and these are rather underemphasised by Radelet. Firstly, there is the whole issue of the effect of recent economic growth on inequality. This is covered only briefly in The Great Surge. Radelet finds that inequality between countries is reducing, as China and others catch up with richer countries, and that when looking at inequality within countries, this has been getting worse in some, better in others, and in most there has been little change. This seems quite a glib conclusion; others, such as former World Bank chief economist François Bourguignon, have concluded that inequality within countries is severely worsening. A broader debate on this might have been useful.
Secondly, there is the issue of what globalization and free markets are doing to the structure of developing country economies. Historically, countries which have made a sustained exit from poverty (such as China, South Korea and Taiwan) have tended to go through an economic transformation, moving away from primary commodities and towards manufacturing. Some of Radelet’s success stories are currently going through a similar transformation, such as Bangladesh. But other countries, especially in Africa, are still focused on agriculture and natural resources, and this seems to be a consequence of their integration in the globalised economy. The exposure of these countries to international markets in colonial times effectively killed off whatever local industry existed at that time (e.g. iron smelting, weaving and salt production in pre-colonial Tanzania), and concentrated economies on the export of primary goods. Since then countries have struggled to transform their economies, and the experience of countries like Argentina suggests that it will be difficult for them to sustain growth in the longer term if they fail to make such a transformation.
I’ll skip over my other bugbear with the book – the rather rose-tinted assessment of the spread of democracy – and come to the biggest challenge: the threat to the environment and climate change. This is again downplayed by Radelet, and only gets a look-in towards the end as something that could prevent future progress. But it’s hard to escape the sense that environmental degradation and climate change are an inevitable consequence of the ballooning global economic growth that the book describes. The global environment has already suffered significantly from the economic growth of a few countries; it’s likely that more equitable global growth, including the ‘catch-up’ of developing countries with today’s richer countries, will lead to more catastrophic change. There is something of a dilemma here, as the capitalist model of economic growth which seems to have the best chance of helping developing countries catch up with richer countries is also likely to lead to dramatic environmental damage which will hurt these poorer countries more than the rich ones.
The Great Surge convinced me that, at least according to the statistics, life for many poorer people in the world is significantly better now than it was in 1990. But living for three years in Tanzania – one of Radelet’s success stories – I found that many Tanzanians were less positive about how the country was changing. There was a general perception among many that the benefits of economic growth were only going to the elite, and that the rising cost of living cancelled out any increase in incomes that ordinary people had seen. But if the statistics show that people’s lives are getting better – for example that fewer children are dying in infancy, incomes are increasing, there are fewer people living on less than $1.25 per day – why do many people not feel that their lives are improving? Are people’s lives also changing in ways that are not captured well by statistics? I’d be interested in your views.