Debunking the Silver Bullet Solution

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Emily Cunningham is one of OneSeed’s amazing summer interns. This is her fourth guest blog.

Emily is a sophomore studying economics at Harvard University. She is interested in microfinance and social enterprise, and is currently in the process of starting a fair trade jewelry network in Gujarat, India. In her spare time, she enjoys playing guitar and saxophone, surfing, Frisbee, and being outdoors.

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Human ingenuity is a puzzling thing. We have the capacity to create vaccines for many of the major diseases that plague the developing world, but we often fail when it comes to their distribution. Since the end of colonialism, the international community has generated billions of dollars in foreign aid with the motivation of serving the interests of the poor; still underdevelopment, treatable disease, and malnutrition persist.

Academics, politicians, and rock idols alike have attributed their own root causes to this great development failure. Corruption and special interests certainly play a role on both the giving and receiving end. General indifference, the overwhelming nature of the many problems facing the developing world, poor infrastructure, lacking institutions, and unlucky geography have all in some way contributed to the stalemate that developing countries find themselves a part of even in the twenty-first century.

But there is one cause of underdevelopment that has not been addressed near enough- our tiny American attention span.

Since Bretton Woods, America has latched on to whatever the latest quick fix in development has happened to be, placed it on a pedestal as the singular solution, and dismissed it just as readily as we embraced it when it failed to save the world.

With the rise of strict neoclassical ideology in the 1970s, the free market was the antidote for any problem in the developing world. Throughout the 1980s, the IMF tenaciously carried out structural adjustment programs with an utter disregard for the political economy of the developing world that would have had even Adam Smith turning in his grave. Yet after the lost decade of the 80s, when multilateral lending institutions realized the error of their ways and began to implement programs tailored to the circumstances of individual economies and to include local leaders in the planning process, it was too late. The IMF and its sister organizations would be demonized and criticized and their programs remain branded as complete failures even today.

More recently, after the dismal returns to scale of foreign aid and humanitarian assistance, “sustainability” became the buzzword among development workers. If a project wasn’t completely self sufficient, it simply wasn’t worth it. While sustainability is ultimately a promising goal, extremists have taken this zero tolerance policy for hand outs to the next level, advocating the end of humanitarian aid and insisting that it would be better for children to contract malaria while a locally sourced market for bed nets is established than to have a third party provide them.

Today, the field of microfinance does not escape the microscope or the critical eye of the American public and media. Major publications that once embraced the idea of financial inclusion now run stories of little analytical substance, peppered with anecdotes about microfinance gone wrong. While it is important to question poorly constructed programs that facilitate high interest loans with no financial training, blanket attacks against the basic right of financial inclusion are not constructive.

This has been the pattern of international development policy; politicians, economists, and especially the media, are just as happy to jump off the bandwagon as they were to jump on.

But this isn’t just the case on the macro scale- perhaps no one story better summarizes the death of a promising development project than This American Life’s “Island Time.” Paradoxically, an influx of donations in the wake of the Haiti earthquake actually halted several promising development projects so that bigger, better ones could be dreamed up, abandoning half-baked infrastructure and leaving real people stranded in their fight against poverty.

We have a results oriented, driven, and exceedingly impatient culture that can take no idea in moderation. We can be visionary and well intentioned, but innovation and true change often seems to get bogged down in the logistics and implementation.

As a budding development economist, I had thought a lot about the solution to poverty, until William Easterly put things in perspective for me. Regarding a water project in Ethiopia, he writes:

“With the new water pipe, life was better. I don’t know if this experience is replicable on a broader scale or even if this anecdote of Water Aid offers any insight into how to make aid more effective. But I am glad that some aid dollars can reach some very needy people some of the time (40).”

This surprisingly obvious idea resonated with me. There is no solution to poverty, corruption, or the multi-million dollar aid conundrum, but there are solutions, and they come on a micro scale, if we are slow to broad criticism, receptive to real data, and patient enough to seek them out.