Singer asks, if it’s obligatory to save the drowning child you happen to encounter at the expense of your shoes, why isn’t it obligatory not to buy the shoes in the first place, but instead to save a child in equally dire straits?
As a profession, we are in an odd but unfortunate situation. Our best philosophers and theorists develop accounts of global justice that are disconnected from the best empirical insights about poverty and prosperity.
Reading these theories, one might think that our best prospects for alleviating poverty around the world lie in policies of redistribution, foreign aid, reforms to the international system, new global institutions, and so on. And one might think that markets, property rights, and economic freedom are at best incidental, and more likely inimical, to the eradication of global poverty.
Such ignorance, if not denial, of the empirical findings about development and growth is irresponsible.
Mainstream development economics, in a nutshell, holds that the poverty is an institutional problem. More precisely, poverty is human being’s natural state. Poverty is normal and does not need to be explained, but wealth does.
The main reason some nations are rich and others poor is not because some nations have better geography, better natural resources, or better genes. Rather, rich countries are rich because they have better institutions. Rich countries have institutions that incentivize growth and development.
These institutions include strong private property rights, inclusive and honest governments, stable political regimes, a dependable and inclusive legal system characterized by the rule of law, open and competitive markets, and free international trade.
Poor countries have institutions that fail to incentive growth and development, and often instead have institutions that encourage predation. These countries have weak recognition or active disregard of property rights, exclusive and dishonest governments, instable political regimes, undependable legal systems characterized by the capricious rule of men rather than the rule of law, and closed, rent seeking, crony capitalist markets, or few markets at all, and little international trade.
Overall, we are not against charity. We accept that charity is good on the margins. We both give money to various charities.
But to focus on charity as means of fighting poverty is misguided. Mainstream development economics holds that that international aid and charity tend to do little good overall, and tend to do as much harm as good.†
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As a profession, we are in an odd but unfortunate situation. Our best philosophers and theorists develop accounts of global justice that are disconnected from the best empirical insights about poverty and prosperity.
Reading these theories, one might think that our best prospects for alleviating poverty around the world lie in policies of redistribution, foreign aid, reforms to the international system, new global institutions, and so on. And one might think that markets, property rights, and economic freedom are at best incidental, and more likely inimical, to the eradication of global poverty.
Such ignorance, if not denial, of the empirical findings about development and growth is irresponsible.†
We share van der Vossen’s concerns.
Mainstream development economics, in a nutshell, holds that the poverty is an institutional problem. More precisely, poverty is human being’s natural state. Poverty is normal and does not need to be explained, but wealth does.
The main reason some nations are rich and others poor is not because some nations have better geography, better natural resources, or better genes. Rather, rich countries are rich because they have better institutions. Rich countries have institutions that incentivize growth and development.
These institutions include strong private property rights, inclusive and honest governments, stable political regimes, a dependable and inclusive legal system characterized by the rule of law, open and competitive markets, and free international trade.
Poor countries have institutions that fail to incentive growth and development, and often instead have institutions that encourage predation. These countries have weak recognition or active disregard of property rights, exclusive and dishonest governments, instable political regimes, undependable legal systems characterized by the capricious rule of men rather than the rule of law, and closed, rent seeking, crony capitalist markets, or few markets at all, and little international trade.†
To be inclusive, economic institutions must feature secure private property, an unbiased system of law, and a provision of public services that provides a level playing field in which people can exchange and contract; it must also permit the entry of new businesses and allow people to choose their careers.†
Now, not every development economist shares Acemoglu and Robinson’s exact views. But their general position — that private property, markets, and economic freedom — are needed for sustained growth is the mainstream view.
To be clear, we are not saying that mainstream development economics calls for libertarian politics at a domestic level. Economists have varying positions about the degree to which governments can and should correct market failures. They also have varying positions about the extent to which countries should provide social insurance to their citizens.
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Our view — consistent with development economics — is that first-worlders’ willingness to buy DVD players and iPhones, not their desire to donate their income, is that thing that actually makes the bigger difference in fighting poverty.
Taiwan and South Korea grew rich and became First World countries, not because of handouts, but because they produced and sold luxury goods (on the broad definition of “luxury good”) to the First World.
But, as far as we can tell, they talk this way because they are ignorant and/or misinformed about the relevant empirical work. Philosophers disagree with economists not because they have read and discovered serious flaws in the economists’ work, but because philosophers have for the most part just ignored development economics.
Philosophers are of course free to disagree with mainstream development economics, but they bear the burden of proof of refuting it. We do not bear the burden of defending it here
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But in the long-term, we’ll shut down the very economic system that made the First World rich. The Third World doesn’t need to eat our success — they need to emulate
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Second, the history of food donations is fraught with peril. Donating food to the Third World sometimes alleviates a famine — it is sometimes the thing to do in an emergency.
But, more frequently, first-world food donations just put Third World farmers out of business, and make them dependent on donations in the future.†
Again, the consensus in development economics is not that the Third World needs us to give them grain, but, on the contrary, that the Third World needs our governments to stop subsidizing grain production in the first world, so that we First Worlders instead buy our grain from the Third World.
Mainstream development economics, in a nutshell, holds that the poverty is an institutional problem.
This is quite right—the best case for development aid in poor countries is through its positive feedback on institutions (most plausibly, civil society). Then again, most proponents of effective giving favor interventions that would plausibly have such feedbacks—for instance, it turns out that a lot of the money GiveDirectly hands out to poor folks is spent on entrepreneurship and capital acquisition, not direct consumption.
South Korea and Taiwan had no problem with Malaria killing children in which the society invested resources.
I don’t understand why Van der Vossen thinks that there is clear evidence that the difference between what happened in a country like South Korea and what happened in subsaharan Africa has nothing to do with genes.
Of course that’s the politically correct belief. But standing there and saying that development economics proved it beyond all odds seems strange to me.
The rule of law does happen to be an important ingridiant to producing wealth but I don’t think you get rule of law directly through buying iPhones.
To the extend that you believe that the rule of law is very useful in helping third world countries the next question would be whether there are cost effective interventions to increase it. That’s a standard EA question.
Again, the consensus in development economics is not that the Third World needs us to give them grain, but, on the contrary, that the Third World needs our governments to stop subsidizing grain production in the first world, so that we First Worlders instead buy our grain from the Third World.
That seems like something nice to say, but politically it’s very hard to imagine that a First World government gives up the ability of the First World country to feed it’s own population without being dependent on outside forces.
Politically it’s easier to ship excess grain from Europe to Africa than burning it but the excess grain doesn’t get produced with the goal of feeding African’s at all but to have European farmers that provide Europe with a food supply that also can supply in times of crisis.
thinks that there is clear evidence that the difference between what happened in a country like South Korea and what happened in subsaharan Africa has nothing to do with genes.
Well, let’s see. It’s quite convenient for us that there’s a country right next door to South Korea, called North Korea. North Korea has the same genes as South Korea, and yet its economy is much more similar to the economy of Sub-saharan Africa than South Korea. Sure, that’s just N=1, anecdotes are not data and all that, but I’d call that pretty good evidence.
The fact that the bad policies of North Korea lead to bad economic outcomes is no evidence that all bad economic outcomes are due to bad policies. It simply isn’t.
Nobody in the EA camp denies that policies of countries matter and that the property rights and the rule of law aren’t important.
I haven’t seen Peter Singer argue either that putting Embargos on other countries to put economic pressure on them instead of engaging in trade is bad.
Most African countries on the on the other hand don’t suffer under strong embargo’s. They are in the sphere of the IMF who preaches property rights for decades and tries to get the countries to respect property rights.
Singer v.s. Van der Vossen:
Singer asks, if it’s obligatory to save the drowning child you happen to encounter at the expense of your shoes, why isn’t it obligatory not to buy the shoes in the first place, but instead to save a child in equally dire straits?
Bas van der Vossen
The article he is quoted in goes on to explain:
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This is quite right—the best case for development aid in poor countries is through its positive feedback on institutions (most plausibly, civil society). Then again, most proponents of effective giving favor interventions that would plausibly have such feedbacks—for instance, it turns out that a lot of the money GiveDirectly hands out to poor folks is spent on entrepreneurship and capital acquisition, not direct consumption.
South Korea and Taiwan had no problem with Malaria killing children in which the society invested resources.
I don’t understand why Van der Vossen thinks that there is clear evidence that the difference between what happened in a country like South Korea and what happened in subsaharan Africa has nothing to do with genes. Of course that’s the politically correct belief. But standing there and saying that development economics proved it beyond all odds seems strange to me.
The rule of law does happen to be an important ingridiant to producing wealth but I don’t think you get rule of law directly through buying iPhones.
To the extend that you believe that the rule of law is very useful in helping third world countries the next question would be whether there are cost effective interventions to increase it. That’s a standard EA question.
That seems like something nice to say, but politically it’s very hard to imagine that a First World government gives up the ability of the First World country to feed it’s own population without being dependent on outside forces.
Politically it’s easier to ship excess grain from Europe to Africa than burning it but the excess grain doesn’t get produced with the goal of feeding African’s at all but to have European farmers that provide Europe with a food supply that also can supply in times of crisis.
Well, let’s see. It’s quite convenient for us that there’s a country right next door to South Korea, called North Korea. North Korea has the same genes as South Korea, and yet its economy is much more similar to the economy of Sub-saharan Africa than South Korea. Sure, that’s just N=1, anecdotes are not data and all that, but I’d call that pretty good evidence.
The fact that the bad policies of North Korea lead to bad economic outcomes is no evidence that all bad economic outcomes are due to bad policies. It simply isn’t.
Nobody in the EA camp denies that policies of countries matter and that the property rights and the rule of law aren’t important. I haven’t seen Peter Singer argue either that putting Embargos on other countries to put economic pressure on them instead of engaging in trade is bad.
Most African countries on the on the other hand don’t suffer under strong embargo’s. They are in the sphere of the IMF who preaches property rights for decades and tries to get the countries to respect property rights.