The Politically Incorrect Guide to Ending Poverty
theatlantic.com
theatlantic.com
A more apt comparison would be suzhou. Areas of it were developed under singaporean authority. The singaporeans ended there with huge losses, and I don't think they are interested in doing such anymore.
And singapore and china are relatively close culturally - if for example china were to setup cities in Africa, diaster would occur. You can see the same happening with current chinese ventures there: they are run and managed solely by chinese and employ chinese. I was watching a BBc documentary the other day about some chinese companies in Angola, and an Angolan man complained: "Why do they need to bring people from China here to drive trucks?" The answer is simple - if you have people from two different countries and two different cultures where one is driving a truck and the other is managing his work, then productivity will sink massively.
A country administering a town in another country will be constantly beset by these cross-cultural problems. There will be conflicting interests, conflicting cultures and conflicting work attitudes. One side will resent the other, and instead of new booming towns, there will be wastage and empty buildings.
The current system is better, where a country simply sends its people to build infrastructure and then walks away. Perhaps even build the entire physical infrstructure and buildings of a city, but the actual management has to be separate, I'd think.
http://www.singapore-window.org/suzhou.htm
Some more recent sources suggest that the relationship slogs on.
http://en.wikipedia.org/wiki/Suzhou#Industry
The whole page almost seems like a piece of PR.
I think this is one of the stronger arguments- given that's it's better than living as an illegal immigrant in a far away nation, some people in their current living situation would choose this. I definitely agree with you that differences as a result of culture are huge and not to be underestimated. But a lot of these countries are clearly desperate enough to try stuff (similar the Green Revolution when India had problems with extreme hunger), and it's conceivable that this could work.
If you were trying to remotely build a business in Angola, how would you avoid having it stripped bare by staff corruption? The politicians would use bullying to push the 'wrong' people away from applying for jobs there, and look for opportunities to make payoffs to get their people hired into the structure. Their people have grown and been fed by corruption, and would perpetuate the practice.
"Starting up a business with locals would be a nightmare."
I hate to be the one to break it to you, but many companies from many countries are successfully creating businesses in Africa. And they are getting rich at it. But people like you undermine the entire growth process of africa - because you just lump everything together into a single bundle, and then condemn it to be a place nobody should ever invest in. That's just horrible.
The problems ARE cross-cultural. You know why? European & American companies trying to set up shop in Africa do indeed face the problems you are describing above (probably because they come in with your mindset), but south african companies are making billions selling goods to consumers. Things like satellite TVs, Mobile Phones, etc are making billions in profits, without it being 'stripped bare by staff corruption'.
Why's that? It's because they understand the cultural issues and don't expect western style personal responsibility.
Just like in china things have to be done the chinese way, in africa, things have to be done the african way. Those who know how to do it that way are making money in the continent with the highest growing GDP.
People like you, however, who make these blanket statements about how it can never be improved and should never be invested in, should indeed stay out - but best of all would be if you don't discourage others from investing.
In preparing my earlier comment, I originally typed out and then deleted a long section saying that we need language that allows us to distinguish regions of India, Brazil, South Africa where it's straightforward to do business, and to distinguish that from places where it's not. That the term "third world" is too broad.
People like you, however, who make these blanket
statements about how it can never be improved
You have basically no idea about how business runs in Africa or what are the countries. That's why you're pointing out the old mainstays of SA and Botswana. That's not where the growth is in Africa.
You, my friend, are prejudiced. Yes, I'm using the word correctly, because you have formed opinions about places and things before you actually have information and facts about them.
We don't need language to further categorize African countries into a fourth world or however you'd like to describe it. Rather, we should get rid of the terminology that even categorizes countries as a lower kind of world.
You have basically no idea about how business runs
in Africa or what are the countries.
Rather, we should get rid of the terminology that
even categorizes countries as a lower kind of world.
People like YOU are the greatest problem Africa faces. I'm glad the chinese are not like you, but go where money can be made.
What will most likely happen is some type of slave camp deal as it is already happening in Dubai.
Now you will say, "but the people have a right to vote with their feet, i.e. to leave if they do not like the place." Technically yes, but in reality no. The poor foreign workers that are being held in Dubai also theoretically have a right to leave, but they cannot because the Dubai police will simply club them on their heads if they even mention leaving before finishing their job.
If you do not have an overall legal framework that protects individual rights, if the people do not have the right to elect their own leaders and/or police chiefs, then it is very unlikely the police will protect the people's rights.
Having said that, I won't argue either way. The devil is in the execution no doubt. But in trying out his idea, I would hope that there's something we can learn from it besides the would-be automatic response of "that doesn't work." What we're currently trying is clearly not working all that well, so we'd be insane not to try something different and I'd hope that Romer can get two parallel "experiments"--for concisenss--in two different countries to see which conditions, if any, are better suited for his model.
The Atlantic is one of the few magazines that I subscribe to in print. There's a nice blend of culture, politics, and forward thinking, and there doesn't seem to be a ton of editorial stance. You'll read one article from a liberal perspective, and then another one from a conservative one. It seems to be an all around solid publication. I don't always agree with what they publish - but its almost always thought provoking.
I agree with the upshot of Moldbug's argument: "Thus the practical problem with 'charter cities' is that no one wants them: not the host regime, not the international regime. For both, they simply work too well. Colonialism had to die not because it didn't work, but because it worked too well."
The US didn't colonize NA land. We took it and "gave" them reservations, which we mostly ignore.
They'd be better off as colonies or independent. As colonies, we'd care about getting a return on our investment. As independent, they'd benefit from whatever development that they did.
Now, that's of course a distortion of the forces at work that caused the so-called reservation of lands to be necessary, but there's also some contemporary value to Indian leaders in restoring that sense of meaning to the word today.
There's a lot of difference in the idea of land someone else reserved for you vs land you reserved for yourself.
The place where the land is will not be changing, but it's possible to change the perception of what that land represents, and thus the benefits of that land in a political sense.
Perhaps only nominally so originally, but that doesn't mean it can't be used to advantage now.
This is tangent to my arguments against using the new term "differently enabled" as opposed to "disabled". "Disabled" indicates that there is a problem that society needs to spend some resources on to correct and fix. "Differently enabled" is some politically correct term that seems to mask a problem and make people feel ok when they shouldn't.
No, it isn't. Native Americans didn't pick the land that they were sent.
In your terms, that land was reserved for them. It was NOT reserved by them.
And even putting the genocides aside, look at South Africa under the Afrikaaners. Explain to me how this was a good thing for the colonized?
The blog post that so outraged you argued that colonial administration was better than the post-colonial regime, so I'm not sure if you're engaging with that and missing, or just raging.
Something that struck me both times I visited New Zealand was how strong and honestly respected Maori culture was. The Maori identity seemed to be much more positive and proud than the Aboriginal identity is in Australia. I'm not sure if we have an Australian equivalent of the Treaty of Waitangi (http://www.nzhistory.net.nz/politics/treaty/the-treaty-in-br...).
But what about consensual colonialism? Is it possible for the structure of colonialism to be used for mutual benefit? That's the question this article asks, and I think it's a pretty incisive and relevant question.
I think a more relevant (if less sensational) question is "What role should outsiders play in defining the goals and mechanisms of development?"
http://www.economics.neu.edu/activities/seminars/documents/i...
(I'll generally ignore the "I hate descendents of people distantly related to colonisers sooo much" part of your post, with one exception. The other measure of "good modern outcomes" is dead babies. Is "fewer dead babies" also a synthetic measurement created by colonizers?)
> I'll generally ignore the "I hate descendents of people distantly related to colonisers sooo much"
You're mischaracterizing what I said. Some of my best friends are descendents of colonizers and for that matter so am I. However, if we claimed that there were benefits for the colonized, we'd be just as self-serving as you and the person in this thread who suggested that it was really in Native Americans' interests to be colonized and the guys who wrote the paper.
Oh, while we are on the topic: Ireland was a colony of England. Some Western Europeans were colonized, mostly by other European countries (e.g., "France" wasn't always a single nation). And while you are cherrypicking Japan as an example of uncolonized Asian countries, keep in mind where Thailand ("Land of the Free") got their name.
(Also, Native Americans were a very special case. Unlike most of the rest of the world, North America and the Amazon had no livestock. This rendered them uniquely vulnerable to communicable disease.)
I love political history threads on HN.
What's the difference between extending Canada to include a bit of Africa, and letting more Africans move to the existing Canada? I think it's pretty minor. Then why would Canadians bother with Romer's plan, when they could simply relax their immigration laws?
Surely, immigration is good for the home country of the emigrants economically speaking (think remittances, entrepreneurs going back, etc). This, I'd argue, is indeed better than foreign aid. But what Romer is arguing is that his model is meant to change the rules and bring the ideas to the country. As an immigrant, what would be the point of moving to Canada and learning new models/ideas if when you go back, you won't have the power to change them and expose others to them under the same circumstances?
Not poverty-reduction-related but does relate to the subject in a different way..
This article cites China as a model. Hong Kong did not pull the rest of China up as it grew. It certainly played a role, but frankly the communism that took resources from the urban coast and built roads, schools, and other infrastructure in rural areas was more likely a bigger contributor to the massive improvement in (purely economic) standard-of-living for most Chinese.
It was in particular /not/ enlightened foreign rule of urban areas that did this. If we accept that all geopolitical entities respond to incentives, it is not clear that direct foreign control of areas of the developing world will produce the ideal outcome for those areas: this will only be the case when the incentives and interests of both the local population (which is not monolithic, btw, but we'll ignore that for now) and the foreigners align; long term prosperity requires that incentives align for both in the long term, which seems terribly unlikely. Moreover, the history of development is fraught with stories stories good-intentioned outsiders failing to make a beneficial impact because they poorly understood the complex local situation, and it's simply unrealistic to assume you can just start with a clean-slate-by-fiat in a "charter city" and build without considering a place's history.
I think Romer has a good core idea, one that few people would argue with. Namely, development is not just a matter of fixing the "Production = F(capital & labor)" equation; good governance, good ideas, and good people all are required. While it may be surprising to some, this is an idea that is pretty well understood (at least at a high level) in the development community/industry. My beef with his idea is a flawed execution, and one that I think could be potentially damaging in the long term. These ideas need to come from local populations and make sense for their own contexts.
As an analogy, you just aren't going to reproduce Silicon Valley by emulating the Bay Area's regulations and investment level: there is a whole history that made it the way it is. Attempts to do so are kind of doomed from the start, so it's better to focus on creating new centers of prosperity that make sense for the local context. I don't think foreigners are well positioned to do that.
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Another point to make, the Millennium Villages Project had a similar premise to Romer's. The idea was that solving the problems of poverty in particular villages through strong international partnerships would lead to spillover effects throughout the surrounding areas. Everything I've heard about it is that the results have been alright, but not really that great. Besides a bit more of a heavy-handed foreign-involvement approach, I'm not sure if the "charter cities" idea really is that different than MVP and hence it's not clear how it will overcome the obstacles MVP faced.
Edit: William Easterly is quoted here. He has an awesome book, "The Elusive Quest for Growth", that discusses a lot of non-intuitive reasons why development efforts have historically failed. I would highly recommend it.
Something closer to the lines of SEZs seems to capture the best of both worlds and makes more sense to me. It's a way to encourage liberalization (which we'll accept as a purely good thing for now, though obviously there is debate on that), bring in improved regulation, and provide some foreign expertise which could be helpful. It also aligns incentives a bit better, since it specifically focuses on business, rather than all aspects of governance (it's easier for us all to get along when we're in a mutually profitable relationship).
A city, on the other hand, is somewhere to live. Poorer residents might work the exact same hours for the same pay, but living in the same place that they work means they're getting indirect benefits like physical and legal infrastructure. They're not just bussed into the SEZ to work in the morning and bussed out again in the evening, back to their 3rd world existence where they may have few economic or political rights. A SEZ on its own only produces goods, but a city produces people and lifestyle and cultural wealth, and thus fills an aspirational function. People go to big cities to pursue their dreams and make money, even though they know it may be expensive and difficult. A SEZ with nobody living inside it is just a place to work, and reduces the people who work there to commodity labor with no stake in the longer-term future of the place.
On the other hand Hong Kong is the exception to the rule that developed countries haven't exactly turned the few pieces of overseas territory they still control into beacons of prosperity. And the example of Singapore shows that effective organisation from within can build a viable modern city state from nothing at least as effectively as British-run Hong Kong. There are many factors the two had in common during their period of rapid economic growth; being in the thrall of a paternally-inclined colonialist wasn't one of them.
I personally think the British are pretty good at this sort of thing, and I say that as a native of a former British colonial possession myself.
Singapore might have had one of the higher GDPs in Asia at the time of independence, but most of the population lived in absolute poverty - the government-financed apartment blocks, vast industrial estates on reclaimed land and most of the financial centre came afterwards, as did the country's appearance in top ten GDP per capita lists. I don't find it particularly easy to believe that the same >7% average annual growth rate would have been achieved if we were in charge.
I think Hong Kong and Singapore are pretty exceptional as former colonial powers go (with a shared characteristic more obvious than British rule being the high proportion of culturally Chinese people) and I am British.
I'm inclined to give a few extra points to the British colonial legacy, despite numerous moral and political failings along the way because their former possessions seem to have come out somewhat ahead of other countries' former possessions as independent nations. It's entirely possible that this has more to do with some basic factor like fluency in the English language, rather than any administrative genius. Among ex-British success stories (none without reservation or controversy) I'd count HK, Singapore, India, Ireland, Israel, the USA, Canada, NZ and Australia. Other places, such as Pakistan and Jamaica and various middle eastern countries, have had less success.
BTW, I'm Irish if you were wondering about the cultural context. So we've had the experience of being independent for longer than many other former territories, but still being partly colonized (northern Ireland) in the view of a few; among people's grudges are things like pre-industrial negligent genocide (famine next door? who cares) and post-industrial political oppression (from 1916 to very recently up north), but on the other hand we were arguably better off insofar as we were ruled directly from London and represented in the British parliament (prior to independence) rather than through a governor or privy council.
Like the US, as soon as we gained independence from Britain we constituted ourselves as a republic with an elected president (although our constitution is a very boring read by comparison), but unlike the US almost all power is vested in the parliament, which runs almost exactly like the British one, and our legal system is exactly like the British one - barristers, wigs, freemasons and so on ;-)
Seriously though, this is the heart of my point: all the countries that were formerly part of the British empire have held onto Britain's common law legal system with few major changes, even though they may have reorganized their political system substantially. American law has been the most highly developed spinoff of this, because with both a federal system and 50 different states, it's larger and more diverse than the law in most other countries, including Britain itself.
Other former colonial powers such as France, Spain, Portugal and the Netherlands left their colonies with civil law systems derived to varying degrees from Roman and Napoleonic codes. It's too much to go into here but a key characteristic of such systems is a much stronger weight for statutory law and a court system where judges hold more of a prosecutorial role and there is less emphasis on trial by jury. I personally feel this leads a more unitary style of government where power flows from the top down and that this inhibits social and economic development somewhat. Others consider that more democratic - a philosophical issue that won't be resolved here.
You can contrast China's relative success to the failure of Mexican Maquiladoras. By allowing US companies to set-up shop in fashion that involved no commitment, no building of infrastructure and no requirements to keep capital in the country, Mexico opened itself up for the situation of today, where US companies in Mexico are closing shop and moving to ... China.
Edit: China also had the luxury of being so big a market that many investors have the "I can't afford not to be there" mentality. I'm not sure if any other country could duplicate that now.
As far as I know, Mexico has more or less continually grown since NAFTA, and Maquiladoras play an important role in their economy. They certainly are facing competition from much less wealthy countries (like China), but so is everyone else in the industrialized world.
The idea is good laws and low taxes make very wealthy cities. See also the free state project (http://freestateproject.org/) which is trying to make New Hampshire more economically free.
That is just shockingly untrue, intellectually dishonest, and utterly asinine. I have no clue why your post was up-voted so highly. China reformed its communistic system and embraced capitalism toward the late 70s. GDP growth has grown staggeringly since, and is the fastest growing large economy caused by its move toward a freer market system. Communism hardly caused a dent for its GDP growth between the 50s to the late 70s [1], but instead, caused widespread famine, the greatest destruction to real estate in human history, and deaths in the millions due to massive starvation. [2]
The graph below basically discredits communism contributing anything to the "massive improvement in (purely economic) standard-of-living for most Chinese". [3]
[1] http://en.wikipedia.org/wiki/Economy_of_the_Peoples_Republic...
[2] http://en.wikipedia.org/wiki/Great_Leap_Forward#Consequences
I expect I was upvoted for commentary on the charter city idea, not because I proposed communism as an alternative. Thank you for bringing up an important point though.
Edit: please include the full sentence from my post, I think the part that you removed obscures my meaning.
Hong Kong's prosperity influenced China to transform into a freer economic system. The roads, schools, and other infrastructure built from China's centrally-planned economy would've been much more affordably built with a higher and growing GDP; instead, doing those projects shifted much-needed resources during its Great Famine and many other periods of starvation into unnecessary and ultimately lethal projects that caused the deaths of a lot of people.
The motivation behind "charter cities" is exactly that such a direct effect from liberalization would occur, whereas that doesn't necessarily follow and certainly not well-illustrated by the article's example. It is just one point in a broader criticism of the whole concept: such cities may provide an example, but they don't solve the (IMHO, harder) problem of affecting change in the non-charter city areas, which will still face broader structural obstacles. The existence of a Hong Kong is not a sufficient condition for broad societal change, though it is certainly a helpful one, if not exactly necessary.
I'm happy to continue this discussion via email, no need to take up more of this thread.
China reformed its communistic system and embraced
capitalism toward the late 70s.
On the other hand, for a vast majority of purposes, there are still no free internal markets in China. You can't just start a company manufacturing bicycles and expect to sell them: the government still tightly controls who is allowed to do what and when. Whether you call it a communism, an oligarchy or even a dictatorship doesn't matter: that's not embracing capitalism. At most they've acknowledged how capitalism effectively rules the international markets and gone effectively along with the flow. Internally, there's a far cry from free markets.
Ascribing China's growth to 'embracing capitalist principles' is just wishful thinking from people that think capitalism is the source of all good things. If anything is responsible, it's the fact that a well-informed leadership with a strong vision can pull a country from the dust, like no president of a democratic country would ever have the mandate to do. That is what has happened in China, capitalism be damned. Touting 'capitalism' has just made them look good enough in the eyes of the West to make it that much easier to pull it off.
Has this game even been played out it? From far away, China does not look like a desirable place to live in. Maybe they are just destroying everything in exchange for a few good years?
I remember having read somewhere that the Russians destroyed the Aral sea by starting excessive wheat farming on it's borders. So they had good wheat yields for a couple of years. But then suddenly the Aral sea was gone completely, and with it the wheat. I wonder if we might not see a lot of such things in China eventually.