Looking to the future

Four months into the pandemic, it is obvious that poverty reduction in low and low-middle income countries (L/LMICs) in the past decades will be jeopardized by the disastrous fall out of Covid-19.

In the last four decades, several poverty alleviation initiatives, such as participatory development, microcredit, and conditional and unconditional cash transfers, were devised to address the needs of the most marginalized in L/LMICs. This essay will focus on participatory development of the kind practiced by Rural Support Programmes in Pakistan.

The basic concept of participatory development is that if communities take responsibility for meeting their needs via collective action (spontaneous or induced), the results will be sustainable. The reasoning is that such participation can tap local knowledge. Further, it can give communities a sense of ownership and involvement, leading to sound project construction, operation and maintenance. This process is associated not only with greater efficiency, but also with greater democratization and community empowerment.

Critics have picked holes in participatory development on methodological and technocratic grounds. More radical critics have sought to go beyond such criticisms to a more fundamental critique. They view participatory development and other similar initiatives as mechanisms to diminish the role of the state in delivering social services and furthering human development. Additionally, they argue that such initiatives conceal and reinforce oppression at the micro level while obscuring and sustaining macro-level inequality and injustice.

However, this criticism of participatory development is actually a Marxist criticism of capitalism. In L/LMICs, a hybrid semi-feudal / semi-capitalist / statist system usually prevails. This system, based predominantly on the private ownership of the means of production, gives some play to market forces. A Marxist critique applies to this hybrid system also (ie: it is based on accumulation and hence can be extractive, predatory and oppressive).

The outcomes of this hybrid system are more deleterious to the public good because effective legal and social protections, like those that were instituted in high income countries (HICs) to counter the spread of Marxist ideology, are limited. To expect poverty alleviation initiatives to somehow address system shortcomings is a big ask. The fault is that of the system and not that of poverty alleviation initiatives.

The endorsement by the World Bank and partner organizations (eg multilateral aid agencies, regional development banks and bilateral aid agencies) of many of these poverty alleviation initiatives, which originated in academia or from the work of development practitioners, stigmatizes them for progressives. These organizations have a dual mission. The primary, if unstated, mission of these organizations is to promote and preserve a market based socio-economic system with a neo-liberal agenda. This entails structurally adjusting L/LMICs such that the state’s role is contained, market forces are given more play and foreign capital is welcomed. The side-effects of such policies are inequality and poverty.

The subordinate stated mission of these organizations is poverty alleviation, which serves to ensure that the potential social instability resulting from the dominant mission does not threaten the system. After Covid-19, the influence of organizations promoting neo-liberalism will grow and these organizations will push both their stated and unstated agendas more aggressively.

The capitalist system is subject to internal (cyclical) and externally induced crises (such as Covid-19), which creates enormous misery for the most vulnerable. Also, capitalism, and associated hybrids, have very limited moral justification. While effort partially counts in determining individual economic outcomes, inherent ability, social position, luck and the interaction of market forces with individual and business realities count for a lot more. Thus, the system is a lottery.

The fallout of Covid-19 is a perfect example of how the market arbitrarily creates winners and losers based on social position in combination with the forces of supply and demand.

If the capitalist system is mostly an arbitrary misery generating machine (blind to equity or social justice), the question of what to replace it with is one with which many have struggled. On this issue, radical critics of poverty alleviation initiatives are silent. The remainder of this essay briefly considers alternative options.

The best option, in the abstract, is the formation of an equitable society that addresses the economic, social and ecological injustices of the capitalist system. While Marx diagnosed the cause and nature of social injustice resulting from capitalism, his analysis undermines a utopian alternative. His focus on the human proclivity to accumulate suggests that an alternative based on altruism and social harmony is unlikely.

Socialist societies have admittedly invested more on average in human development and gender equality. Indicative of this is how left of centre governments, such as those of Kerala (India) and Vietnam, have been comparatively effective in dealing with Covid-19. However, several socialist attempts at building societies without feudal and capitalist exploitation have, for the most part, led to other forms of accumulation, autocracy and repression of human freedoms.

Another option is radical redistribution (of wealth and income) to build an equitable social democracy in a market-based system. Even Marx conceded the capitalist system had enormous productive potential. Social democracies harness this productive potential, while striving for equity and social solidarity based on redistribution.

Strengthening social democracies is one major objective of social activism and social movements. In L/LMICs, social movements are not as well organized, coherent, or sustained as they are in HICs. They can also confront brutal repression. For these among other reasons, social movements, such as the Arab Spring, dissipate before realizing their potential with regard to social benefits.

To sum up, the first option is ideal, but in practice the positives outweigh the negatives – not even taking into consideration the social dislocation and violence that might result from moving towards it. Enhancing social democracy by supporting social movements is currently the most feasible option. However, given the difficulties in realizing this option in L/LMICs, progressives could support various poverty alleviation initiatives, such as participatory development, as an interim pragmatic option at the micro level with due regard to cost-effectiveness and managerial transparency. At the macro level, a green policy for industry and agriculture that builds on developing indigenous technological capacity is the best stimulus going forward.

The writer is a US-based economist and a former executive director of SDPI.