Thursday, March 11, 2010

My Buddy Pine (a.k.a. "Syndrome") Moment

This is the sixth and last of my series of posts re. aid effectiveness guru Bill Easterly. Others are 1, 2, 3, 4, and 5.

If you have children, then you know Buddy Pine (a.k.a. "Syndrome") :He's the kid in The Incredibles who idolizes Mr. Incredible, only to turn vindictive (see expression above) after his hero rejects him as a would-be sidekick (IncrediBoy). Adopting the name Syndrome, he dedicates himself to besting his former idol.

In the confessional spirit that seems to be the flavor of the week on the development blogosphere, this post is about my Buddy Pine moment with the Mr. Incredible of the aid-criticism world, Bill Easterly.

The year was 2006 (or was it 2005?) and Easterly was visiting George Mason for a semester. Toward the end of his visit, I managed to catch a talk of his at the Mason Econ. Department. The talk was full of good stuff on dealing with endogeneity in cross-country growth regressions, the role of institutions in determining development trajectories, and other macro-development topics. After the talk I approached Easterly to pose the question that had been waiting anxiously all afternoon to ask: Would he, by any chance, be willing to author a lead essay on the topic of social entrepreneurs as "searchers" for the journal I had just co-founded with Iqbal Quadir?

Easterly was very gracious, but his reply took me aback nonetheless. Social entrepreneurship might be heartwarming, I recall him saying, but it has nothing to do with development.

Nothing to do with development? What?

Now, given that I can't remember where my car is parked half the time, I could have this wrong. Maybe that wasn't what he said, or what he intended to say. But the remark as I heard it really stuck with me. How could Bill Easterly—of all people!—take the position that entrepreneurship in any form has nothing to do with development? What about the staff of 100,000 that daily carries out the work of BRAC in Bangladesh, founded by Fazle Abed three decades ago? Not the outcome of social entrepreneurship? Not development? What was I missing?

That was the Buddy Pine moment.

From then on, I looked at Easterly's writing with, let's say, a bit more of a critical eye than I had previously. I searched copies of his books for mentions of the words "entrepreneur" and "entrepreneurship." (Elusive Quest for Growth: 6; White Man's Burden: 12 . Compare with Sachs, The End of Poverty: 4; Schramm, Litan & Baumol, Good Capitalism, Bad Capitalism, and the Economics of Growth and Prosperity: 225).

What I have realized over time is that, while Easterly has made a huge contributions in pulling back the curtain on assorted Wizards of ODA that inhabit Emerald ($) Cities on the banks of the East River, the Hudson, and the Potomac, and while he talks a good game about "searchers" and "seekers," he's really not all that interested in entrepreneurs and entrepreneurship. Apparently once a macro-economist, always a macro-economist.

Now, you might say, so what? As Easterly himself pointed out to me earlier this week, it's not very entrepreneurial to try to force everyone to talk only about entrepreneurship.

Of course, he's right... Well, almost... No, actually, he's wrong.

Why? Because, among the prominent development economists and former World Bank staffers that circulate in the same environments as Easterly, the number who really focus on entrepreneur-led development is exactly zero. Which is to say, nobody. Not Rodrik, not Kremer, not Duflo, not Pritchett, not Birdsall. And, no, not Easterly. Keep working down the list. As good as they are along other dimensions, none of them focuses on entrepreneurs and entrepreneurship.

I'm sure you'll agree with me that nobody is a long way from everybody. Therefore... wrong. Q.E.D.

For the A-Team in the academic study of development to be systematically ignoring the core driver of the process of development is an alarming mis-allocation of a scare resource: talent. Instead, academic development professionals (Easterly among them) fixate upon the effectiveness of Official Development Assistance (ODA)—these days, about $100 billion. A lot of money? Well, it's less than one fifth of one percent of global GDP. It's also less than half of the $200+ billion in remittances that flow annually from people in wealthy countries directly to their relatives in poorer countries. And it is less than 1/5 of the $500+ billion that exits poor countries every year and heads to rich countries in illicit transfers of various types.

In sum, Official Development Assistance in its entirety is about as relevant to the process of global development as the programs of the U.S. Department of Commerce are to the advancement U.S. economy. Part of the story, to be sure, but a small part.

But enough about the world. Let's get back to me. I admit that Easterly's introspective ploy did cause me to abandon my plan to lure him back to Northern Virginia and subsequently to read aloud from The Theory of Economic Development (in the original German) until he reversed his prior error and consented to write not one, but a sequence of essays for Innovations about entrepreneur-led development. But, otherwise, the Oprah Show at Aid Watch this week was on the wrong topic. Tweetiquette? Blog decorum? ...

When Mr. Incredible is reduced to politely discussing a topic that doesn't really matter much to start with... well, then this Buddy Pine doesn't even want to be IncrediBoy anymore.

Next posts...
  • Why entrepreneur-led development is development (picking up from Iqbal and from Paul Kagame)
  • Why "top-down" vs. "bottom-up" dichotomy is not the fundamental one. Basic tension is exploration (flexibility) vs. routine (order). Sound like "searchers" vs. "planners"? It's not...
  • "RCT, non merci"... Why ascending markets (a.k.a. "developing countries) need more growth capital for successful entrepreneurs and skilled mentors, not more randomized controlled trials of development projects
... and more relating to the coming prosperity.

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