When Helping Hurts, Chapter 6 – “McDevelopment: Over 2.5 Billion People NOT Served”

Synopsis

  • In the post-World War II era, the Western world has spent over 2.3 trillion dollars to reduce poverty. Yet, despite the tremendous spending approximately 40% of the world’s population lives on less than two dollars a day.
  • Despite a vast increase in anti-poverty spending since LBJ, the poverty rate in the US continues to hover at around 12%.
  • In a quest to be as efficient as possible, relief groups have sought to systematize an one-size-fits-all approach to addressing poverty. The problem is, since no two communities are the same or have the same causes of poverty, this approach is destined to fail.
  • Alleviating poverty requires that outsiders not do something to or for poor communities, but look for solutions together with them. When poor individuals and communities have ownership over programs, they bring knowledge, expertise, and a desire to see the work be fruitful. When outsiders impose solutions upon communities, the community has no stake in seeing it succeed because they know it won’t work and if it doesn’t those outsider rich folks will just pour more money into the project.
  • “Participation is not just the means to an end but rather a legitimate end in its own right.” Fikkert and Corbett (F&C)

My Thoughts

This chapter presents an intriguing irony. I would state it like this:

1. Rich people are good at making money. They have a particular set of skills, insights, and best practices that help them be successful at taking a little bit of money and making it into much more money.

2. In taking care of material poverty, we desire to take a little bit of money and equip poor communities to make much more money. Rich people should be really good at this! Let’s use their methods!

3. The skills, insights, and best practices that allow businesses to be successful are not the skills, insights, and best practices that make for successful poverty alleviation.

Ouch.

Profit requires streamlined approaches that minimize material waste and maximize profits. Business is all about efficiency. A successful business will always put the best person on the job. Successful franchises use standardization, speed, uniformity, etc. These practices reduce uncertainty (which dampers expansion) and maximize predictability. These practices help rich people get richer because they minimize their risk by helping them to invest in those places where their money is most likely to grow. The best way to build a profitable fast food restaurant is to build them all exactly the same. The best way to build a car is on an assembly line. Standardization and uniformity are the lubrication that keeps our modern capitalist economy humming. Standardization and uniformity mean efficiency, lower costs, higher returns. If you want to be a successful entrepreneur you standardize, then provide a product cheaper and faster than anybody else.

Yet, these practices implemented in poverty alleviation mean certain failure. A poor community in the Appalachians will not climb out of poverty the same way a rural Chinese community will.

The skills, insights, and best practices that allow for robust poverty alleviation are slow and inefficient. They require us to build relationships with the communities. They require us to give over control for projects to people that may not be the best educated or the fastest workers, but who know things that we can’t possibly know – the community.

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