Time To Catch Up To a New Economic Awareness in the Development Industry
In this provocative blog, Lorenz highlights what many systems thinking development practitioners have been struggling with for years, which is whether the myopic focus on saving the individual ignores more dangerous systemic misalignments. A central theme in the 2019 Market Systems Symposium was a call for more donors, practitioners, researchers, etc. to question long-standing assumptions about development, economics, markets, and agriculture. Through the use of systems-thinking lenses, insights can be gained on why serious issues such as climate change, inequitable markets, and political corruption remain so intractable, including how positive change can be catalyzed. It seems increasingly clear that good development has to be able to do both, deal with immediate and acute issues facing certain populations, while also embracing complexity as a way to more effectively catalyze positive and inclusive systemic change.
This blog will raise the question of how we, as MSD practitioners, should respond to the failing global economic model upon which we base our work.
I left the Market Systems Symposium in Cape Town energized and excited. Catching up with old colleagues, meeting new people, and sharing learning all made me feel like I was part of a community of leading thinkers in MSD, ready to take on global challenges for the well-being of others. But I was also left with a nagging thought, a feeling coming from the gut that has bothered me since I started doing economic development work in 2005 in Kyrgyzstan. And while I was planning on writing a simple practicable blog upon my return, I’ve suddenly been called to fry a bigger fish as I once again question whether or not, through our work, we are promoting a global economic model that is sustainable and equitable.
I actually believed to have found the answer to this question some years ago when the value chain development approach evolved into Making Markets Work for the Poor (M4P), now more commonly known simply as Market Systems Development (MSD). In this approach practitioners identify opportunities to benefit the “poor” (by economic standards mostly) by capitalizing on existing market forces.
I dove into the MSD world, excited to put my brain and brawn behind an approach that aims at benefitting the “poor” in a sustainable way that is also scalable, the multiple MSD orgasm. I worked in Ethiopia, Jordan, and Solomon Islands on MSD projects that saw thousands of people increase their resilience, incomes, and find jobs. But, despite these and other positive development outcomes, the nagging feeling in my gut grew stronger, and the question - am I promoting an economic model that is inherently unsustainable and inequitable? - grew louder.
I am now seeing that the answer has been screaming in my face for years, starting with the 2008 global financial crisis, the Panama and Paradise papers, global warming, the plastic waste dilemma, species extinction, continuing violence around the world; the list goes on and on.
While our global economic system, largely of neoliberal capitalist timbre, has helped, and continues to help millions to rise up out of economic poverty, we have bet on the future and negated the costs of negative externalities that are now coming to the fore. This is especially evident in our current environmental crisis, the resulting climate change-promoted natural disasters costing millions in dollars and lives, and record-breaking levels of “economically developed” illnesses such as cancer and depression.
While disheartening statistics, such as the one from the 2019 Oxfam Report showing that the "26 richest people on earth in 2018 had the same net worth as the poorest half of the world’s population, some 3.8 billion people” could be justified by the fact that a rising tide lifts all boats, more troubling is that the report also claims that 2,200 billionaires worldwide saw their wealth grow by 12 percent, even as the poorest half saw its wealth fall by 11 percent.
Yes, statistics can be cooked, framed, and re-framed, and used for an agenda, and not all development is regressive. The book Factfullness, by Anna Rosling Rönnlund, Hans Rosling, and Ola Rosling, actually shows that, in terms of the United Nations Millennium Development Goals, some real progress has been achieved, especially in the areas of health and education. But I again ask, at what cost?
One doesn’t need to be a genius to understand the basic mechanism that an increasing global population with increased wealth, largely coming from the regions of our work, require more food, demand more meat, and with improved purchasing power will want to take part in the race to own all the latest gadgets. Agriculture is shown to be one of the biggest, if not biggest, contributor to climate change. So how is this going to work?
This paradox is what has scientists screaming; activists screaming; youth screaming; spiritual leaders screaming (see the encyclical "Laudato Si" - “On Care for our Common Home” - from Pope Francis addressing environmental challenges, economic systems, and the question of social justice); while we, MSD practitioners, enthusiastically labor to perfect the MSD approach, fail to look up from the microscope to see the larger reality that with good intentions and some good results we are promoting an economic system that is failing humanity, failing to contribute to the common good of all.
The “common good”, rather than just wealth, is, in fact, what the economy is supposed to produce. As Claus Dierksmeier, director of the Weltethos-Institut (Global Ethics Project Institute), points out, this idea has been a historical consensus of the greatest political and philosophical minds (Reframing Economic Ethics. The Philosophical Foundations of Humanistic Management, Palgrave Macmillan, 2016, p. 35). It is also the principle and fuel of various new movements underway, including the Institute for New Economic Thinking, the New Economy Coalition, the New Economic Foundation, and one by my fellow Austrians, Christian Felber, the “Economy for the Common Good Movement”. Felber echoes Dierksmeier as he shows us that virtually all constitutions over the world posit that the economy must be a means to an end, and not the other way around (see Colombian constitution’s article 333, US Constitution’s Preamble, and Bavarian constitution’s article 157).
So what does this principle, of the “economic for the common good" mean for us, MSD practitioners?
What is our stance? What is our role, if any?
Are we satisfied knowing that our work improves the lives of many now, while contributing to future negative impacts for the entire planet?
About The Author:
Lorenz Wild, a seasoned MSD practitioner who is currently on pseudo-sabbatical in Italy and actually has some time to think about stuff rather than dash wildly after donor reports, partnership negotiations, staff capacity building, baselines, budgets, and so on.