Development “Laboratory”

The whole “Development Industry” seems to me to be a big fancy laboratory in which the trendiest theories are developed and experimented on developing countries. Development agencies and institutions apply these theories hoping that this time they got it right. I do understand that there is no miracle solution that will enable developing countries to actually develop; and that the development industry is doing its best. The problem is, this trial and error process can be extremely frustrating and harmful.

The best example of the negative consequences that such a process can afflict on developing countries is the Structural Adjustment Programs developed by the International Monetary Fund and the World Bank in the 80s and 90s. These programs were pretty much derived from Friedman’s theory of Development: Neo-Liberalism. The Structural Adjustment Programs promoted liberalization of the economy. It was believed that free trade would ultimately propel developing countries toward development. However, these programs had conditions that ultimately came with huge social costs. In order to borrow money from the World Bank or the International Monetary Fund, developing countries had to agree to reduce their subsidies to their farmers, cut state expenditures directed toward education and healthcare, and devaluate their currencies. This ultimately resulted in the 1990s in a crisis marked by increased social inequalities, poverty, corruption; and to some extent an increased risk of armed conflict because the state had been left extremely weak .

My point is that Development agencies and developing countries need to rethink their approach to the Development issue. Developing countries should ultimately take the matter in their own hands. Just waiting for the next development theory to be developed by development institutions and apply them blindly is not going to do any good. It seems to me that most developing countries expect the solution to their problems to come from outside, and more specifically from the West. Too many developing countries are sure that the IMF and World Bank will always be there to come to their rescue. I believe that this dependency mentality ultimately dooms all efforts to promote development to fail. Merely lending money to developing countries is not conducive. Developing countries need to be aware of how crucial this issue is, and genuinely commit to promote development. Developing countries need to focus on developing their human capital and infrastructures, create favorable conditions for foreign investments, and not just rely on aid that can so easily be embezzled. In the end, the ball is in their court.