Big Push

So it's been a while since I studied development economics. There are different theories about what's blocking development in impoverished countries. To quote Krugman:

"There were also disputes over the nature of the policies that might be required to break a country out of a low-level trap. Rosenstein Rodan and others appeared to imply that a coordinated, broadly based investment program -- the Big Push -- would be required. Hirschman disagreed, arguing that a policy of promoting a few key sectors with strong linkages, then moving on to other sectors to correct the disequilibrium generated by these investments, and so on, was actually the right approach."

In any case, without endorsing one position or another, here's my idea. As a humanitarian project, and a test of development policy, the US and a bunch of other wealthy countries could try for a "big push" in a country or a region. By "big push" I mean a concerted effort to improve the country and set it on a path of development. This would involve investment in education, infrastructure, and health. It would probably mean revising the commercial law and economic policy, including trade policy. The developed world would lower tariffs against the country's exports to negligible levels (though this should be done for all developing countries, not just the recipient of this program). If the country is over-populated, it would involve allowing a large number of immigrants into participating developed countries. This immigration policy would be a burden, but it would be limited to this country and would be spread out among a lot of rich donor countries.

This would be different from current development policy in that it would be more expensive, more thorough, and it would require a lot of coordination. Of course, the recipient would have to approve the changes, and it would be quite a sacrifice on the part of the developed world (though not that expensive relative to their budgets). The advantages are:

1. Hopefully it would work, perhaps better than the current haphazard approach. The recipient country or region would improve its economy, literacy, health, and other measures/goals of development.

2. We would learn a lot about the efficacy of such a program. Maybe a "big push" is cost-effective, maybe it isn't. If it works, it can be replicated.

3. It would be an opportunity for broad-based collaborative work (like the space station, except useful). It would also involve contributions from many different disciplines, like the Harvard Humanitarian Initiative. Doctors, lawyers, businessmen, engineers, and economists could all contribute.

Now, obviously we don't want to divert all our development money to one country. This would ideally be funded with new appropriations. As for which country to select, I think it would make sense to pick a poor, medium-sized democracy in a region where its example might lead the way to yet more development. Southern Africa makes sense to me, but there's no shortage of candidates. Part of the process of selecting a country will be finding one that is willing to make serious changes in its laws, if necessary, and to allow a fairly high level of intrusion (though we would take care that the government kept control of its own laws, changing them only if it accepted our advice).

The big dangers I see are under-funding, short attention span, capture of the process by special interests (e.g. in the area of intellectual property), and misallocation of resources within the process. Still, I think it would be an excellent test of our skills as a society, on par with the space program or the elimination of polio. It would also, of course, be a wonderful thing if it worked.