Paul Streeten

Basic Needs: Some Unsettled Questions

Abstract Though the large basic needs literature has clarified some issues related to anti-poverty strategies, it has also raised others. This paper identifies some of these unsettled questions: (1) who is to determine basic needs? (2) do basic needs refer to the conditions for a full, long and healthy life or to a specific bundle of goods and services that are deemed to provide opportunity for these conditions? (3) what is the purpose of participation? what form should it take? how does a right to participate (if it exists) relate to the political/administrative structures necessary for efficient implementation of basic needs approach? (4) what is the relationship between the redistribution approach to development and the basic needs approach? does the basic needs approach require fundamental systemic change, or is it a palliative? (5) what is the relation between meeting basic needs as an end in itself and as an instrument for developing human resources? (6) in what manner should international support for basic needs approaches be mobilized? (7) what is the relation between poverty eradication and reducing income inequalities?

Nongovernmental Organizations and Development

Nongovernmental organizations (NGOs) are not normally good at the activities they claim as their merit, but they have virtues that are frequently not proclaimed. In particular, they rarely reach the poorest, they depend in many ways on government support, and they are often not participatory. On the other hand, they are adaptable and suited to promoting self-reliance. Participation has been used more as a slogan than a thought-out strategy. There are many exceptions to the principle that people should have a right to participate in the decisions that affect (importantly?) their lives and work. A more valid question is, Who should take what decisions at which level and in what sequence? There are many links between government and NGOs, not confined to finance. Finally, NGO projects are compared with governmental technical assistance, and the drawbacks of the latter are compared with the merits of the former.

Structural adjustment: A survey of the issues and options

Abstract The article raises and attempts to answer questions such as: adjustment for what purpose? to what shocks? of what factors or forces? by whom? who loses and who benefits from adjustment? and adjustment how? It also discusses the question of adjustment when? The distinction between external and internal shocks is rejected as neither helpful for the allocation of blame nor for the justification of raising finance. An analysis of the impact on the poor is sketched out. After a brief discussion of the role of the market and government intervention in adjustment policy and the fallacy of aggregating country policies, there follows a discussion of the double paradox of conditionality: why should a donor impose conditions that are in the best interest of the recipient, and why, instead of paying for getting good advice, is the recipient rewarded with extra money? Ten possible reasons are given. The paper ends with proposals as to how to overcome the conflict between national sovereignty and assuring that donor money is well spent.

Globalisation: Threat or Opportunity?

Globalisation is transforming trade, finance, employment, migration, technology, communications, the environment, social systems, ways of living, cultures, and patterns of governance. The growth of technology and globalisation mutually reinforce each other. Much of the process of globalisation is historically not unprecedented, but the technology, the setting, the absence of a single dominant centre, and certain features such as the replacement of trade of raw materials for manufactured products by largely intra-sectoral trade, are new. International interdependence is growing, and to some extent and partially, so is international integration. But it is accompanied by disintegration and fragmentation of other parts. Partial international integration (mainly of the elites), without global policies, leads to national social disintegration. Is globalisation a threat to humanity or an opportunity? A tentative balance sheet is drawn up. Markets, to be efficient, have to be embedded in a framework that enables their productive potential to flourish and to be used for socially and ecologically sustainable development. The reduced power of national governments combined with the spread of world-wide free markets and technological innovation without a corresponding authority to regulate them and hold them accountable has contributed to the marginalisation of large regions and groups of people. The state has become to some extent ungovernable, while the global society is ungoverned. Unemployment, poverty, inequality and alienation are increasing, partly (though not solely) as a result of this process. Crimes, drugs, terrorism, violence, civil wars, diseases, and environmental destruction are also becoming globalised. In the struggle of international competition capital, technology and high skills dominate the more readily dispensable factors unskilled labour and the environment. Cost reductions are carried out and labour and nature suffer.

Global institutions for an interdependent world

Abstract After a brief discussion of some necessary conditions for an international order concerned with development, a distinction is drawn, following Boulding, between the exchange system, the threat system and the integrative system. It pays one country to put up protectionist barriers, whether others do so or not; it pays one country to build up arms, whether others do so or not; it pays one country to pollute the global air and oceans, whether others do so or not. These typical prisoners dilemma situations call for global reforms. There is a lag between technological advance that has unified the globe and the institution of the nation state. Suggestions are made as to how to overcome this lag, when the world no longer has a dominant power that provides the global public goods and avoids the global public bads.

Global Prospects in an Interdependent World

Abstract After discussing the necessary conditions for a working international order concerned with development, three future scenarios are discussed: the global, the bloc formation, and the oligarchic scenarios. The lag between technological advance and political institutions is said to be responsible for many of our problems. Institutional innovations that transcend the state are the solution. Several illustrations of such innovations are given.

What's Wrong with Contemporary Economics?

Abstract It is argued that in educating economists we should sacrifice some of the more technical aspects of economics (which can be learned later), in favour of the compulsory inclusion of philosophy, political science, and economic history. Three reasons for these interdisciplinary studies are given. In the discussion of the place of mathematics in economics, fuzziness enters when symbols a, b, c are identified with individuals, firms, or farms. The identification of the clear cut symbol with the often ambiguous and fuzzy reality invites lack of precision and blurs the concepts. If the social sciences, including economics, are regarded as a soft technology compared with the hard technology of the natural sciences, development studies have come to be regarded as the soft underbelly of economic science. In development economics the important question is: what are the springs of development? We must confess that we cannot answer this question, that we do not know what causes successful development.

Chapter 13 Culture and Economic Development

Abstract This chapter begins by noting that culture as an element in economic development in the Third World has been largely neglected in traditional development economics, most writers either seeing culture as an obstacle to development or ignoring it altogether. Recently a shift in thinking has occurred whereby culture is now more widely seen as being more central to the development process, especially where a human-centered rather than a goods-centered view of development is taken. A particular aspect of culture that has been seen as important has been cultural diversity; it is argued that the beneficial aspects of diversity can only be realized when they are seen within a global ethical framework. The chapter goes on to consider the destructive and constructive role of conflict in bringing about social change, and discusses the pervasive effects of globalization on the economies and cultures of the world, arguing that international integration can lead to national disintegration. Next the chapter looks at the role of tourism as a significant economic and cultural force in developing countries. Finally the essay concludes with some recommendations for policy.

Interests, ideology and institutions: A review of Bhagwati on protectionism

Jagdish Bhagwati, widely known as one of the most outstanding trade economists, but in fact an economist of much wider range, has turned in this little book to the political economy of international trade. Based on the inaugural Ohlin lectures at the Stockholm School of Economics, this book reflects a dramatic shift in the theory of commercial, indeed of economic, policy that has occurred in recent years a shift to which Bhagwati himself has made a central theoretical contribution. This shift has taken the form of changing the way in which the government and hence economic policy is considered and modeled in economic theorizing. For many years economists have been working with the assumption of the “absent colleague.” When a correct policy was not implemented because political obstacles were in the way, the economist would say: “It is not for me to identify these political constraints; let the political scientist turn his mind to such issues.” But the colleague in political science would do his own thing, and economically correct policies remained unimplemented. We only heard, from time to time, complaints about “lack of political will.” But this is not a helpful notion. The phrase sometimes suggests that the good intentions are there, but somehow the will to give them expression is missing. But it is hard to believe that intentions not manifested in any way other than proclamations exist. The phrase then comes near to being a tautology, for the absence of will is also the absence of the action to express this will. One does not have to be a behaviorist to believe that will must be expressed in action, so that if there is no action, ipso facto there is no will. Alternatively, it might give rise to an infinite regress. It would be of no use to exhort those without the will to muster the will. For if the will to action is absent, the will to will the will will also be absent. Attention should have turned to how to create the political base, the alliance or coalition of interests to implement the reform. Eventually economists themselves started to think about the political economy of policy making. Theorizing about the invisible hand of the market was now supplemented by reflections on the nasty invisible foot of interest groups that trampled on and destroyed the beautiful work of the invisible hand. The earlier economic writings did, however, contain an implicit theory of the state. On this theory, the state and the government, like Platonic guardians, looked after the common interest, the general welfare of the community as a whole. Whenever markets failed, governments stepped in to correct these failures. Whenever markets were inadequate to pursue desirable objectives other than efficient allocation (such as income redistribution, conservation of the environment or the pursuit of cultural values), the government saw to it that these objectives were included. Bhagwati calls it the puppet government view, for government acts like a puppet of the economists. According to this view, government could do no wrong. The new theory of pubiic choice has swung to the opposite extreme: government can do no right. It is simply the executor of the selfinterested pressure groups on whose support it depends, and whose “rent-seeking” distorts economic activity in directions far away from an efficient or equitable allocation of resources. It should be noted that Bhagwati in his exploration of “directly unproductive profitseeking” (DUP) activities has both widened the concept of “rent-seeking” and narrowed the scope of its damaging effects by showing that, pace the public choice school, in a distorted economy additional rent-seeking or revenueseeking can increase welfare.’ Bhagwati examines the ideology, interests and institutions that influenced and conditioned for nearly half a century attempts at trade liberaliza-

International Co-operation and Global Justice

Many of the problems in the international relations of interdependence arise from a combination of the free rider problem, Olson’s problem,1 and the prisoners’ dilemma. Indeed, the free rider, or contributor’s, dilemma is a special case of the prisoners’ dilemma. The free rider problem exists because some of the solutions of international difficulties consist in the provision of public goods (Kindleberger, 1978, p. 15 and 1986). A public good is one from the supply of which all those who value the good derive some benefit, irrespective of whether they have contributed to its costs. The concept can readily be extended to cover common goals or common interests, the achievement of which benefits all, irrespective of whether they have contributed to the costs of achieving these goals or interests. The enjoyment of the good or service by one person does not detract from the enjoyment by others. In this sense international co-operation and the prevention of international wars are public goods. So are markets and a working international monetary order, with an international central bank as a lender of last resort and as a provider of liquidity. Scientific research is of this kind. An international income tax or the co-ordination of international fixed investment decisions fall under the same heading.