Issues & questions about the state of nations

PAUL OATES

THE WELL RESPECTED academic Professor Jared Diamond [pictured] makes some interesting points in his essay, What Makes Countries Rich or Poor.

For those of you who already know of Prof Diamond’s credentials, experience and writings, this will come as no surprise.

But what is refreshing is that he has spent the time and effort to visit countries like Papua New Guinea and to travel out into the kunai roots so as base his observations on first-hand observation.

I canvass here some of the issues raised in What Makes Countries Rich or Poor and offer some straightforward questions raised by a consideration of these issues.

Issue: Given a level playing field, those countries that have an inclusive political system seem to do better than those who have an exclusive system or a political elite running the country. Examples provided include the contrast between North and South Korea.

Question: Does that mean aid should not be given to exclusive regimes? Some may feel that aid to these exclusive regimes only helps them retain power. For example, if North Korea spent more on their food production and public health and less on their rockets, parades, ideology and hero worship, their people might be looking at the same standard of living as their relatives in the South?

Issue: Many countries with a high average personal income and wealth are those where their societies have a long history of developing central government. People from these countries have had in many cases, hundreds if not thousands of years to adapt to this concept. In cases where a foreign central government system has been imposed on a country where none existed before, this does not work well. PNG is cited as a classic example.

Question: If countries like PNG had been allowed the time to develop their own brand of central government, would what developed now be better accepted?

Issue: Individual ownership of land and resources as opposed to group ownership tends to encourage greater incentive to produce more. Also, where countries were initially sparsely populated, those who then arrived had to work hard to survive and developed a work ethic of achievement. Australia is among those countries used as an example.

Question: Should nations like PNG now pursue land alienation and encourage private ownership of resources?

Question: If the pioneering ethos of the first European settlers provided the basis of wealth in Australia today, could this only be a temporary situation? Could today’s young people have lost the competitive edge as the challenges of the past no longer exist?

Issue: Those countries with rich natural resources might be expected to have rich societies but this often does not seem to be the case. Extractive industries seem to promote the development of a political elite or worse, dictators who then ends up controlling the nation’s wealth. Many African nations are used as examples.

Question: Should aid be targeted at geopolitical objectives to replace corrupt regimes with democratic and inclusive governments? What ethical basis is there to promote regime change from without? If signing up to the United Nations declarations is the benchmark, why isn’t the UN as a global body applying the necessary means to ensure these declarations are enacted everywhere or has the UN been effectively ‘white anted’ from within?

Issue: Population increases and lack of available birth control methods in poor countries seem to go hand in hand. Women are constantly caring for large numbers of children who are seen as creating a more secure future for their parents. This could mean that half the work force is unavailable for almost any other purpose. It also could mean less available resources to go around in the future.

Question: Do aid giving countries have the right to try and promote change to a society’s customs and culture?

Question: Is the education and liberation of women a decision aid giving cultures should make if this is contrary to the recipient’s culture and customs?

Issue: Climate and rainfall might cause the soils of tropical countries to leach out faster than those of temperate countries. Disease and health problems are also factors affecting the average wealth of the nation.

Question: Should aid giving countries give food aid and so encourage the food dependency of countries where limited food production and limited resources inhibit large scale and broad acre food production using expensive machinery and fuel costs?

Question: Is food aid only likely to increase a recipient’s population to the point it will never be self-sufficient and always dependent and wouldn’t it be better to encourage reciprocal trade rather than an aid dependency?

The big question: If the concept of overseas aid is been effective, what benchmark is used to evaluate this view? If continued aid is required, could this be due to the creation of a self fulfilling regime in itself and encourage permanency in those who promote it for their own objectives?

Observation: Given the immense number of studies and papers currently being written about how aid money should or could be spent and what should so called developed nations do to help so called developing nations, perhaps it would be better for everyone to start thinking about the simple basic issues first and leave the endless esoteric postulation and academic pontification for a later date.

Comments

[Paul Oates]

The last section of Prof Diamond's book review resonates particularly:

'"Why Nations Fail" should be required reading for politicians and anyone concerned with economic development.

"The authors’ discussions of what can and can’t be done today to improve conditions in poor countries are thought-provoking and will stimulate debate.

"Donors and international agencies try to “engineer prosperity” either by foreign aid or by urging poor countries to adopt good economic policies. But there is widespread disappointment with the results of these well-intentioned efforts.

"Acemoglu and Robinson pithily diagnose the cause of these disappointing outcomes in their final chapter:

'Attempting to engineer prosperity without confronting the root cause of the problems—extractive institutions and the politics that keeps them in place—is unlikely to bear fruit.'