New development models and even economic theories are redundant, argues Wieck Wildeboer: "As a donor community, we may practice some modesty".
In her opening statement for the Bellagio initiative, Steffie Verstappen poses the question “What would a new development model based on human wellbeing look like?” I would argue that a new development model is redundant, as our present models and strategies sufficiently cover the preliminary requirements for wellbeing. Furthermore, I would add that a new set of economic theories or even funding is not necessary either.
Before going into the modalities of a possible new economic model, two questions should be raised. In the first place “what is human wellbeing?” and secondly “do we need a new development model?” Let me start with the conception of “human wellbeing”. Already in 1943, American psychologist Abraham Maslov argued in his “Theory of Human Motivation” that self-actualization and esteem are the ultimate needs of human beings. This state of “wellbeing” could however only be achieved if other needs as food, water, shelter, health and employment had been secured.
Consiously or unconsiously, the ILO Conference of 1976 seems the have accepted this conception of “wellbeing” as it formulated a “basic needs stategy”, covering the requirements at the base of Maslov's pyramid. The Copenhagen “Summit on Social Development” in 1995 focused on the eradication of absolute and relative poverty and the Millenium Goals cover many of the basic needs issues. Hence, one may say that present development models and strategies sufficiently cover the preliminary requirements for wellbeing.
Many developing countries have formulated “Poverty Reduction Strategies” without the expected results. Lack of implementation of those beautifully formulated pro-poor strategies remains the root cause of poverty, inequality and the lack of opportunity to participate in the benefits of economic growth. Consequently, there is a greater need for capable, dedicated, uncorruptable politicians and bureaucrats to execute the strategies than for new economic theories or development models or even for money. Any new strategy would face the same disappointing results if these obstacles are not tackled beforehand or simultaniously. This also means that, while accepting the need for the dynamics of a market driven economy, countervailing powers should be put in place in order to secure that the interests of private entities remain in line with public goals. I agree with Narendar Pani that “inclusive economics” is about the methods used to formulate economic policy and “thus does need not to present a completely different set of economic theories” [i].
Finally, I would like to refer to the excellent paper written by the World Bank’s Elena Ianchovichina en Susanna Lundstrom [ii]. First of all, it does away with the notion that sustainable redistribution of wealth and income can be achieved without economic growth. The main instrument for sustainable and inclusive growth is productive employment, according to those researchers. The paper also makes clear that economists do not only measure GDP, but many more variables in socio-economic development.
In regard of all of the above, Steffie Verstappen’s opening statement is a bit one-sided or perhaps meant to be provocative. As a donor community (be it governmental or non-governmental) we may practice some modesty and concentrate our efforts on the requirements to fullfill basic needs in order to contribute to the “wellbeing” of mankind.
[i] Narendar Pani (2001). Inclusive Economics: Gandhian Method and Contemporary Policy. Sage Publications.
[ii] Elena Ianchovichina and Susanna Lundstrom (2009). “What is inclusive growth?”: http://siteresources.worldbank.org/INTDEBTDEPT/Resources/468980-1218567884549/WhatIsInclusiveGrowth20081230.pdf
Photo credit main picture: Image by E.D.W.W.