Despite Good Intentions: Why Development Assistance to the Third World Has Failed

CHAPTER ONE: The Developing World and Its Condition

CHAPTER ONE The Developing World and Its Condition 23 An inveterate observer of poverty whom I knew in the late 1960s used to calculate how much time it would take for a cigarette butt dropped on a city street to be picked up by someone else. When he dropped a butt on a busy street in Fès, Morocco, and it just sat there for minutes, attracting no interest , he declared definitively that Morocco was not poor. Academics and development professionals would not be content with such a method, though it does establish, albeit crudely, the idea of thresholds of poverty. In any case, classifying the developing countries has evolved as the development assistance industry has. Many ways now exist to measure and judge which countries count as poor and which are less poor. Before “political correctness,” the “third world” was the commonly used term for poor countries. Even though “third world” was originally intended to signify a world that was neither the West nor the communist “East,” the subtext naturally enough took on the sense of a ranking: to be first is a good thing; to be third, less good. Within the development assistance profession, the term has dropped from official use in recent years in part because of this invidious connotation, but also because the cold war has ended and, even as a rough ranking, “third” is no longer terribly descriptive. The world, even the old “third world,” is now much more segmented than it used to be.1 Nonetheless, the manner in which the International Monetary Fund (IMF) classifies countries still begins with a convenient threefold broad typology. There are the “advanced economies,” which the IMF counted in 1999 as numbering 28; the “developing countries,” which despite their differences are considered as a group (of 127); and the “countries in transition ” (largely the former Soviet Union and Eastern European countries), which number 28, for a total of 183 countries. Current shorthand refers to the advanced economies as the “north” and the developing countries as the “south.” Within the 127 “developing countries” there is great variety, as there is in 1. I continue to use “third world” in the text because it has become a convenient short phrase that many people inside and outside the development industry still use. the methods used to measure how they are doing on their path to development . Gross national product (GNP)—the Dow Jones index of development —used to be favored. But the descriptive value of GNP has begun to fade, partly because it does not capture the dimensions of poverty, or “quality of life.” To do so requires such measures as the Human Development Index (HDI), which statistically combines life expectancy, adult literacy, school enrolment, and per capita gross domestic product (GDP). Another shorthand way to capture poverty differences between rich and poor is to note the causes of death. Organizations such as the World Health Organization track the changing causes of death and morbidity in the developing nations, as well as infant mortality rates. Heart disease is a rare cause of death in poor countries and a leading killer in the north. This is in part due to diet but it is also a statistical artifact—in the “north” people live long enough to get heart disease in the first place, whereas in the “south” they do not. What we in the north might call “mundane” diseases (e.g., respiratory infections and diarrhea) are the leading causes of death in the developing world. Measles, whooping cough, and typhoid, despite lowering rates of these diseases owing to immunization programs, are still on the toptwenty lists. Acquired immunodeficiency syndrome (AIDS) is, of course, a new killer. Among the establishment economists, how the developing countries derive their export earnings is one ranking that has gained currency in recent years. Export earnings are important because they are a proxy for the degree to which a country is part of a global market. And since the world is becoming global, if a poor country is not competing successfully in it or, worse yet, not part of the global market at all, it is not merely isolated but also likely to be and remain poor. A little over 30 percent of the developing countries (forty of them) derive their main source of export earnings from primary products—natural endowments that come from the earth. About the same number (thirty-nine countries) get their export earnings from what the IMF calls “services,” “factor...