28 February 2010

Complexity

Ranil at AidThoughts has a pop at shrill advocates of cash transfers, migration, and aid transparency.

Being a shrill advocate of cash transfers, migration and aid transparency myself, I feel duty-bound to respond.

What is bugging him is simplistic arguments, but he couches his argument in terms of the complexity of development.

The trouble is, it is precisely complexity which makes market and network-based solutions so attractive – in a world where no single person or organisation can know everything, markets can harness the power of lots of decentralised sources of information.

Market-based solutions like giving aid as cash transfers direct to poor people and allowing greater international movement of people, or network-based solutions like aid transparency to allow for crowd-sourcing scrutiny to both rich and poor country citizens, are attractive relative to the central planning of state provision of public goods precisely because of complexity.

This is not to say that any of these issues are magic bullets. They will not solve the development puzzle. But I would argue that they are $100 bills lying on the sidewalk that aren’t being picked up. There is often a good reason that they aren’t being picked up, such as a guy with a gun standing there telling you not to (border guards); or someone who’s job depends on you being unable to pick it up (aid workers), but that doesn’t stop it being a good idea. That doesn’t stop it being a heinous waste, heinous because waste and inefficiency is so tragic when so many people have so little. And yet we let the dollar bills lie. That is why I am shrill.

And finally, Ha-Joon Chang? Really?

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