By Lyn Ossome and
In this interview, Rama Salla Dieng shares her thoughts on methods, feminist political economy, land questions in the Global South, radically reclaiming parenting as a political terrain of subversion and resistance, commitments to decolonisation while located in the western academy, radical acts of self-care, and African feminism.
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I recently have had opportunities to reread the works of Professors Erik Reinert and Peer Vries and to reflect on my previous work on the relationship between institutions, economic development, and China鈥檚 development policy for escaping poverty. Professors Reinert and Vries have studied, along with a few other distinguished economists and economic historians, 鈥榩overty traps鈥� at national and transnational levels for decades (eg, Serra 1613; Landes 1998; Reinert 2007; Reinert 2009; Vries 2013). Both argued that innovation and structural change are the keys to escaping poverty.
Professors Reinert鈥檚 and Vries鈥檚 work on economic development has brought the work of Joseph Schumpeter (1883-1950) to light. In this blog post, I will review how the work of Schumpeter, Reinert, and Vries helps us explore three key questions: First, what kind of development does a country need to escape poverty? Second, what kind of institutions can promote development? Third, how to develop? These three questions are crucial to understand China鈥檚 escape from poverty.
Professors Reinert鈥檚 and Vries鈥檚 arguments can be well supported by China鈥檚 national development policy. Below are a few highlights of rich empirical evidence. In 1984 the Chinese government proposed a development-oriented poverty reduction policy to replace the previous aid reliance policy (Central Committee of the Communist Party of China and the State Council 1984; for critiques of relying on massive foreign aid to escape poverty, see e.g. Moyo 2009; Hubbard and Duggan 2009; Banerjee and Duflo 2011). On 18 January 1992, Deng Xiaoping (1904-1997, leader of the PRC from 1978 to 1989) made a famous speech in his Southern Tour, emphasising that 鈥榙evelopment is the absolute principle鈥� (fazhan cai shi ying daoli). Since then, China鈥檚 economic development has entered a new stage. In 1994 the Chinese government fully adopted the development-oriented poverty reduction policy as a national policy.
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If I had to describe three central characteristics of the Indian economy鈥攊ts three defining features in the neoliberal period鈥攖hey鈥檇 be i) , ii) growth in the absence of formal job-creation, and instead an , and iii) the in value added even as its share in employment remains sizeable. In June-July 2019, I did intensive fieldwork in Sangli, a village in in southern Haryana, to make sense of the ways in which these processes interact with agrarian change and play out for agrarian households, i.e. the contemporary Agrarian Question [1].
Sangli is in Haryana, where Green Revolution techniques (high yielding seed varieties, chemical fertilizers and pesticides, and agricultural machinery like tractors and threshers) were adopted early on. It also happens to be close to the industrial belt that extends from the to its surrounding districts, where in the neoliberal era. This makes it an interesting place to study processes of generation and re-investment of agrarian surpluses, and to peer into the relationship between 鈥渕odernized鈥� agriculture and neoliberal industrial and urban growth that has dwarfed the rural economy.
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Informal savings group in Tarime district, Tanzania. Photo: Daivi Rodima-Taylor
Self-help groups can be found in many areas of Africa鈥攊ncluding the chama groups of Kenya, isusu of Nigeria, and stokvels of South Africa (Ardener and Burman 1995). Their customary rotating credit arrangement is also popular among African diaspora communities (Hossein 2018; Ardener 2010). A significant rise has occurred in these groups at the wake of the neoliberal restructuring reforms of the 1980s-90s, with a decline in formal sector employment and state-funded producer cooperatives. At present, these mutual support groups are targeted by FinTech platforms as well as conventional banks with various financial products and software apps. My recent research explores of the contentious interplay between the formal and informal finance in these emerging digital interfaces in Africa. It studies the intersection of FinTech with the social economies of African mutual help groups in Kenya and South Africa, situating this dynamic in longer-term colonial legacies and present-day policies of extractive financialization (Rodima-Taylor 2022).
Informal mutual support groups with their saving-credit patterns have long served as an inspiration for the development industry. The initially successful micro-finance model drew on pre-existing reciprocities and mutually negotiated liability in largely informal contexts. However, as the microfinance formula shifted from socially situated lending towards 鈥榝ast-scaling鈥� and universalizing group lending in an expanding range of localities, the industry was faced with repayment crisis (see Haldar and Stiglitz 2016). The recent conceptual shift from microfinance to digital financial inclusion foregrounds mobile payments and fee-based service delivery, with payment industry also experimenting with new sources of value such as customer data (Maurer 2015). Microloans have remained an important part of the digital financial inclusion enterprise, with poorly regulated lending apps fueling over-indebtedness. As informal savings groups and mutual support associations have become central in the livelihoods in many low-income communities, I suggest that more attention is needed to the intersection between the self-help groups and FinTech initiatives in the global South.
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In collaboration with EADI and King’s College, London, 51本色 has launched a new podcast on Hierarchies of Development. The podcast offers long format interviews focusing on enduring global inequalities. Conversations focus on contemporary research projects by critical scholars and help us understand how and why structural hierarchies persist. Join hosts Ingrid Kvangraven (KCL/DE) and Basile Boulay (EADI) for this series of discussions on pressing issues in the social sciences.
The first episodes was on environmental hierarchies, with the brilliant guests and :
This podcast was developed with editing support from Jonas Bauhof. Subscribe to get updates on new episodes (you can choose your preferred platform).
In Price Wars: How the Commodities Markets Made Our Chaotic World, sociologist and filmmaker Rupert Russell travelled to some of the world鈥檚 most chaotic places: war zones in Ukraine, Iraq, and Somalia, the climate wars in Kenya and Guatemala, and Venezuela鈥檚 economic catastrophe. Told as gonzo investigation into what made the 2010s so tumultuous, Russell links each of these eruptions to swings in commodity prices, and the financial speculators whose bets set their prices.
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The race to pay drivers as little as possible is underway in Indonesia. In this competition, the participants are platform companies in online transportation services, such as Gojek, Grab, Shopee Food, Maxim, InDriver. Some researchers argue that competition between platform companies will create equilibrium prices, also called a , which is considered positive.
This positive assessment of the platform’s inter-corporation competition is rooted in the neoclassical economic notion of . In this theoretical framework, it is assumed that competition equalizes supply and demand to create a balance of goods prices, wages, and profits; the results of which will create mutual benefits. Therefore, the preconditions for such competition are emphasized as important from a policy perspective. These preconditions include strong legal systems to support the operation of the 鈥榝ree鈥� market and the minimization of state intervention, which is thought to distort market price signals.
However, the story of perfect competition is far removed from how competition actually plays out. Indeed, capitalism is not as harmonious as the neoclassical framework suggests. This has led to the recognition of imperfect competition within the neoclassical framework. , for example, sees that markets may not work perfectly because of information asymmetries. The Marxist economist has proposed an entirely different view of competition. For him, what takes place in capitalism is not perfect competition, but real competition. In a real competition framework, there is competition between companies to cut production costs so as to enable them to lower commodity prices below those of their competitors. With lower prices compared to their competitors, their commodities tend to be chosen by consumers. This means that competition is a fight to beat rival companies, which often leads to a process of centralization: the strong get stronger and the weak get competed out of the market.
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There is growing interest in 鈥榚mbedded experiments鈥�, conducted by researchers and policymakers as a team. Aside from their potential scale, the main attraction of these experiments is that they seem to facilitate speedy translation of research into policy. Discussing a case study from Bihar, Jean Dr猫ze argues that this approach carries a danger of distorting both policy and research.
Evidence-based policy is the rage, to the extent that even village folk in Jharkhand (where I live) sometimes hold forth about the importance of 鈥�ebhidens鈥�, as they call it. No one, of course, would deny the value of bringing evidence to bear on public policy, as long as evidence is understood in a broad sense and does not become the sole arbiter of decision-making. However, sometimes evidence-based policy gets reduced to an odd method that consists of using randomised controlled trials (RCTs) to find out 鈥榳hat works鈥�, and then 鈥榮cale up鈥� whatever works. That makes short shrift of the long bridge that separates evidence from policy. Sound policy requires not only evidence 鈥� broadly understood 鈥� but also a good understanding of the issues, considered value judgements, and inclusive deliberation (, 2020a).
Enormous energy has been spent on the quest for rigorous evidence, much less on the integrity of the process that leads from evidence to policy. As illustrated in an earlier contribution to Ideas for India (), it is not uncommon for the scientific findings of an RCT to be embellished in the process. This follow-up post presents another case study that may help to convey the problem. It also illustrates a related danger 鈥� casual jumps from evidence to policy advice. The risk of a short-circuit is particularly serious in 鈥榚mbedded experiments鈥�, where the research team works 鈥榝rom within鈥� a partner government in direct collaboration with policymakers.
The case study pertains to an experiment conducted in Bihar in 2012-2013 and reported in Banerjee, Duflo, Imbert, Mathew and Pande (2020)1. This is a large-scale, influential experiment by some of the leading lights of the RCT movement 鈥� indeed, a formidable quartet of first-rate economists reinforced by one of India鈥檚 brightest civil servants, Santhosh Mathew. The high technical standards of the study are not in doubt, and nor is the integrity of the authors. And yet, I would argue that something is amiss in their accounts of the findings and policy implications of this study.
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