Sub-Saharan Africa’s failure to slay the dragon of poverty is due to a logical flaw in its policies: the remedies to reduce poverty don’t address the causes. Poverty is caused by unemployment, owing to a scarcity of jobs that pay above bare subsistence, but grass-roots poverty alleviation measures are exclusively designed to make job-seekers more capable although no jobs are available. The ‘appropriate’ technologies of the grass roots movement that dominates anti-poverty policies are oriented towards consumption, ignoring production jobs. Poverty persists from low productivity in agriculture or outright landlessness. Irrigation and rural electrification are required to facilitate economic diversification into non-agricultural work. Yet irrigation and electrification require central political coordination and application of modern science and technology. Centralized decision-making is low on the agenda of the anti-poverty movement, with deep roots at the local level. To create employment requires capital investments to expand entrepreneurial opportunities and increase productive jobs. The most successful countries to grapple with poverty have ‘scaled up,’ not down; Big, not Small, is Beautiful. The statistical evidence for a large number of developing countries strongly supports the hypothesis of a trickle down effect, not a bottom up effect as the best way to beat poverty.
Alice H Amsden, “Grass Roots War on Poverty“, World Economic Review Vol 1 (2012), pp. 114-131. (free access)
MIT political economist Alice Amsden is best known for two books: Asia’s Next Giant: South Korea and Late Industrialization (Oxford University Press, 1989) and The Rise of “The Rest”: Challenges to the West from Late-Industrializing Economies (Oxford University Press, 2001). She died suddenly on March 15th, 2012, at the age of 68. Her thoughtful and provocative contribution to the development debate will be missed by many, myself included.