The risks of fighting poverty too well
China's example raises tough questions about the real-world consequences of getting it right.
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Even if China's success in alleviating extreme poverty didn't present massive new challenges, many of the world's economic and aid institutions are themselves unwittingly set up to resist progress. Like almost any other organization, aid agencies, nongovernmental organizations, and contractors suffer from an inherent conflict of interest: They exist to run projects and perpetuate themselves – not to put themselves out of business. While individuals are deeply passionate about progress, institutions like things as they are – the bigger the problem, the bigger the operating budget.Skip to next paragraph
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The rich world's institutions need to fundamentally reconsider the incentives and rewards they apply, not simply to last-billion governments, but to their own organizations. For example, rather than link managers' seniority to the number of people and dollars under them, they should be rewarded for analytic assessment, experimentation, and country-based outcomes (not activities). That way, good people get recognized and rewarded for doing the right thing, rather than defending budgets.
Many Western politicians demonstrate real ambivalence about bringing the last billion into the global economy. They run for office claiming they'll "protect" low-skill, low-wage domestic jobs from the threat of cheap foreign labor. If the last billion start to become capable workers in large numbers, their political support among rich-nation electorates could well evaporate. On this front, Western voters should hold candidates accountable for a more honest conversation about the need for worker retraining to keep them moving into better-paying, higher-value jobs.
Many activists, meanwhile, revere the purity of presumed commercial innocence in "simpler" societies and resist the idea of wealthy nations imposing their version of development on the rest of the world. But where people on the very edge of survival are concerned, romanticism over the "noble savage" fades to irrelevance. Generating the economic growth needed to lift people out of abject poverty means ushering corporations into putative paradise. Many humanitarian activists are deeply hostile toward business. But to help the worst-off, commerce must be enlisted, managed, and regulated, not resisted.
As we've learned recently from China's stunning success, progress out of extreme poverty introduces new questions of risk, ranging from global climate to working conditions to rich-world job security in lower-value employment. If we're serious about eradicating abject poverty, it's critical that we learn to manage – or at least more actively mitigate – the real-world consequences of getting it right.
(Tomorrow: What policymakers and you can do.)