Development is Paso a Paso, Step by Step

14 Jul

William Easterly’s article “The answer is 42! Why Development is not about solutions, it’s about problem-solving systems” has generated a lot of buzz for arguing for a bottoms-up, grass-roots, localized problem-solving methodology to development.  While direct solutions such as microfinance or aid programs or fair trade may be a temporary band-aid, they don’t foster development—a “problem-solving system” such as free markets, democracy, in general, forums where local problem-solvers can try and fail at many solutions, does.   This seems sensible enough, but are words spoken like a macro-economist, esp. when he mentions that liberty, and not the work of social planners directly trying to solve problems, was the reason for Western prosperity.  Of course he’s right, but it’s a little hard to create liberty with a 5-year project (though not for a lack of trying by our regime-toppling government), which is the longest-term timeframe for most humanitarian effort, even if the project has a “business approach”.  Liberty is something which takes attitude-changing, revolution, and some kind of political support.

So, what systems can we develop with limited budgeting and a short time-frame?  Well, Innovations for Poverty Action suggests looking for solutions empirically and scientifically, through research diagnosing the problems correctly and randomized control trials which evaluate the solutions.  (It’s hard to imagine that the concept of project evaluation is revolutionary, but it is, mainly because unlike corporations, most non-profits don’t have the budget to perform thorough evaluations which can take years of study.)  Meredith Startz, of IPA, argues that temporary solutions (such as microfinance or de-worming) are okay as building blocks for a better system.  Liberty can be achieved through many tiny building blocks such as education, creating jobs, keeping talented people within the country, forming associations/cooperatives, etc.

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I was in Cochabamba recently, listening to a study conducted by Ciudad Saludable for a recycling project.  Recycling gets done through independent recyclers, illegally scavenging through trash, who sell to a middle man that takes a large cut when he sells to the recycling plant.  The NGO’s mission was to unite the recyclers, some who are illiterate, into an association, which can sell directly to recycling plant and demand higher prices.  After all, the cooperatives for the coffee-growers in Bolivia do the same thing.  As the NGO worker was telling me about the difficulties of uniting the recyclers, who make such little money recycling that they have other day jobs and will scatter often because they don’t see the value in recycling, I thought of the obvious, blurting “Why don’t you rent a space for the recyclers to sort the goods and perhaps hire them temporarily? [In other words, create your own middle-man business, except one that doesn’t take such large cuts].”  Not only does this give stable employment to recyclers so they won’t scatter, but it also demonstrate to the recyclers that they can make a profit in recycling, catalyzing the incentives for the recyclers to form an association without going through the long process of gaining trust, convincing the recyclers to show up to group meetings, and providing them a loan to rent a space.  Already, two organizations have been working in Cochabamba with recyclers for a few years, spent mostly in gaining their trust.  The NGO worker told me patiently that she couldn’t give handouts—teach a man to fish, not give him the fish.  She explained that these things take time, that I was quick to say here were all the ideas and it was easy, but in fact, attitude-changing is the hardest step of all, the one which takes the most amount of time.

She’s right.  The current approach in development is sustainability, giving people tools to build their own products, enterprises, ideas.  It’s the same as showing a student how to derive the quadratic formula instead of giving him the formula.  It’s the same as what William Easterly mentions in not giving direct solutions but problem-solving systems.  Recently, USAID launched a project in coordination with Crimson Capital to facilitate SME financing for coffee-growers and other businesses in the Chapare (cocoa-growing) area of Bolivia.  In one case study, a cooperative of coffee-growers had a Dutch customer but needed a loan to ship and package the coffee.  USAID could’ve easily given the cooperative a loan at a low interest rate, but instead they worked with a local microfinance institution, FIE, to develop a loan-product with a slightly high (per U.S. standards), but reasonable interest-rate.  They were more interested in developing the problem-solving system, the banking infrastructure in Bolivia, than giving a direct, short-term solution.

*Note:  Also see Josh Weinstein’s interesting take on William Easterly.

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One Response to “Development is Paso a Paso, Step by Step”

  1. Adam King December 8, 2010 at 8:16 pm #

    Hi, thanks for writing about Bolivia, I am in Cochabamba for 2 months with my girlfriend, and we’re just getting used to life here, including when to put the rubbish out. We were told that they come about 6am but they didn’t get here until 3:30pm today and they dont hang about long ha ha. Also we’re told just to throw biodegradeable things out for the dogs, which I guess it one way of recycling.
    my girlfriend has a blog: http://www.longbirddesign.co.uk she shall be writing more about Bolivia once we have settled in a bit more.

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