Why Nations Fail, Famine and the Nobel Prize

The 2024 Nobel Prize for Economics was awarded in October to the authors Daron Acemoglu and James A. Robinson in part for the analysis of international inequalities in their best-selling 2012 book Why Nations Fail:  The Origins of Power, Prosperity and Poverty (Crown Publishers), which arrays economic development experiences of many countries to argue that poverty and famine are due to a lack of inclusive institutions allow for broad participation in decision-making processes and provide incentives for innovation and productivity.  The authors refer to “extractive” examples where the interests of elites are empowered over the needs of the population.

While not specifically exploring hunger, the authors touch on agriculture and food insecurity, for instance when comparing North Korea (characterized by extractive institutions) and South Korea (inclusive), including North Korea’s drift toward famines.  The authors also look at the extractive rule of Robert Mugabe in Zimbabwe, which resulted in famine.  They write:  “The persistence of poverty in many parts of the world is not due to lack of resources or ignorance… but to extractive economic institutions.”

Acemoglu teaches economics at the Massachusetts Institute of Technology, and Robinson at Harvard University.   They write: “economies based on the repression of labor and systems such as slavery and serfdom are notoriously noninnovative. This is true from the ancient world to the modern era. In the United States, for example, the northern states took part in the Industrial Revolution, not the South. Of course slavery and serfdom created huge wealth for those who owned the slaves and controlled the serfs, but it did not create technological innovation or prosperity for society.

Governments resist agricultural reforms that can mitigate malnutrition and poor health because of fear.  “”Fear of creative destruction is often at the root of the opposition to inclusive economic and political institutions.”

The authors note: “In many African countries, the majority of the labor force works in agriculture, yet agricultural productivity is very low…. The Green Revolution in agriculture… had a major impact on the lives of millions of people, but its benefits were highly unevenly distributed.”

Acemoglu and Robinson acknowledge that geography and culture play some role, as does agency.  But they array evidence that inclusive economic institutions like property rights, rule of law, ease of starting businesses, and open, competitive markets create incentives for investment, innovation, and widespread economic participation – driving sustained growth.  Echoing decades of comments by other economists, they observe that many poor nations are trapped in a “vicious circle” where extractive political institutions inhibit economic reform and preserve the power and wealth of elites.

Some critics of the authors’ argument focus on reverse causality.  In other words, wealthier, modernized countries are more likely to foster inclusive institutions.  Bill Gates critiqued the authors for attributing Venice’s decline to institutional changes rather than external factors like competition in trade routes.  Similarly, Gates argued that the authors overlook environmental factors like droughts in explaining the collapse of civilizations such as the Mayans.

 

S Hansch

 

BOOK REVIEW: The Enduring Struggle: The History of the U.S. Agency for International Development and America’s Uneasy Transformation of the World

BOOK REVIEW:  The Enduring Struggle:  The History of the U.S. Agency for International Development and America’s Uneasy Transformation of the World, by John Norris.   2021.   Lanham MD:  Rowman & Littlefield Publisher.

America’s primary international assistance organization, for moving federal tax dollars to solve global problems, has for over 60 years been the United States Agency for International Development, known more commonly as USAID (or in the past, AID).

USAID has had a long and illustrious history of providing varied development and emergency assistance in most countries of Africa, Asia, Latin America, the Middle East and the former Soviet Union since its founding in 1962 at the initiative of President John F Kennedy.  In The Enduring Struggle, author John Norris tackles the sweep of USAID’s work, starting in the late 1950s.  The book is organized largely around big new decadal initiatives undertaken.    Parenthetically, it recounts the creation of the separate Millennium Challenge Corporation.

This book provides readers with the context for how anti-hunger programs are marshalled for federal funding of agriculture, “feed the future,” nutrition, livelihoods, and anti-poverty projects by NGOs in Africa, Asia and Latin America.

The USAID Alumni Association provided critical support for the writing.  One supporter, Alex Shakow, says “We are especially pleased. We hope that students and scholars will, over time, dig more deeply into the many issues raised and programs… readers have said all AID staffers should read the book to help them better understand the history, experience, and culture of the agency of which they are a part.  In fact, AID Management has made it possible for every person in AID to have access to the book.”

Norris, who has written other books (including Disaster Gypsies) and a blog about political leadership at USAID, orients his history from the view of senior political leaders in Washington, DC.  Norris gives human face by quoting political appointees who interfaced between USAID, the White House and Congress.  More attention is given to USAID’s top officials (the head being called “Administrator”) and White House strategists, than to career aid specialists working in the field.  There is scant specific description of USAID’s large field offices, which today are in over sixty countries,, though Norris drew heavily on the many “oral histories” that have been done by many alumni and available at:  https://adst.org/oral-history/oral-history-interviews/#gsc.tab=0

The author credits a sea change in the US approach to foreign aid to Herbert Hoover who engineered life-saving food aid to Europe during World War I to Belgium and then after that war to the Soviet Union.  He gives weight to different decades, including the 1960’s and 70’s when there was an emphasis on endless new policy making, planning exercises and constant addition of new requirements for funding.   Aid had to reposition itself time and again, such as when it was no longer needed strategically as a tactic in the Cold War.  He notes the biggest jumps in USAID’s budget occurred under Republican Administrations (e.g. Bush, Reagan).  It casts light on provision of aid inside war zones, including Vietnam, Central America and Afghanistan.

The Enduring Struggle addresses food security and food aid, and health (smallpox, HIV, COVID-19), but keeps a broad sweep of initiatives, without discussion of the NGOs, Universities, UN agencies, and local organizations designing and implementing aid projects.  Norris covers the important early initiative to promote family planning was controversially led by Rei Ravenholt who had “unusual latitude and authority over personnel, spending and the direction of the program, reflecting a focus in the 1960s and 1970s on over-population.  This program laid the groundwork for dramatic decreases in fertility and a long-term plateau in population growth.

Norris’ references to food assistance, which has been the most popular, robust and consistent part of foreign aid (of over $100 billion in aid) are derived from selective and few references that led to further misconceptions about the effectiveness of Title II food aid, mostly delivered by NGOs and the World Food Programme.  He conveys none of the achievements in promoting local food security that have accounted for $100 billion of nonprofit efforts across the world during the last half-century.  Norris diminishes food aid as the product of farm and shipping lobbies, ignoring how US nonprofits fighting hunger have been the biggest supporters of food aid to Congress.

USAID Alumni leader, Alexander Shakow, who helped arrange for Norris to have inputs from USAID alumni, said “We are especially pleased that AID staff, current and retired, have been very positive in their reactions.  …Norris has made excellent use of AID retirees’ oral histories, files from Presidential libraries, and many other sources that bring his stories of major programs to life, and as a result the book is a very interesting read in addition to all the substance that one learns.”

The author gives greater attention in many cases to the politics or news-version of issues than the relevance in the field.  He comments about how HIV/AIDS was identified in the early 1980s but not a topic of interest to the President of the United States, presumably as a theme for foreign aid.  This makes little sense because, apart from Haiti, the AIDS epidemic was not understood at that time to be a problem elsewhere in the world.  It was really only in the 1990s (long after Reagan) that USAID programs revealed the prevalence of AIDS infection in countries like Malawi and much of southern Africa.

A strength of this book is that it is well vetted and is accurate in what it does  cover, particularly the politics of aid.  What’s unfortunate is that it does not touch on what was actually accomplished (for instance, lives saved) with US taxpayer’s taxes, in the form of a great many momentous successes of USAID (it does mention the eradication of smallpox).  It conveys well the inside baseball politics of USAID meetings in the Cabinet and White House.  But, in the end, it gives little insight about what assistance looks like at the level of its delivery in the field.

In the final chapter, Norris writes “The United States Agency for International Development has been in existence for sixty years, and foreign assistance has been established as an important part of the American ethos…. Aid can provide incentives for reform and encouragement and support to local reformers.  But it cannot, by itself, overcome entrenched resistance by those who benefit from bad policies or corrupt politics.”

He concludes, “As this history describes, the United States and other donors have delivered lifesaving humanitarian assistance to millions upon millions of people since 1960; without that assistance the death toll from wars and famines… would have been far higher.”

Shakow adds that We hope that students and scholars will, over time, dig more deeply into some of the many issues raised and programs left without adequate detail.  Many readers have said all AID staffers should read the book to help them better understand the history, experience, and culture of the agency of which they are now a part.  In fact, AID Management has made it possible for every person in AID to have access to the book.”

One interview with the author, as streaming media, at the think tank CSIS, can be found at:  https://www.csis.org/events/book-event-enduring-struggle-conversation-john-norris