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Development Redefined: How the Market Met Its Match

by Robin Broad and John Cavanagh

The financial market meltdown was decades in the future. Development experts were assuring countries that the free market was their ticket out of poverty. But an indigenous farmer had a pointed question for Robin Broad that would lead her to critique the faith in the private sector long before today’s economic crisis made skepticism seem prescient.

Her latest book, Development Redefined: How the Market Met Its Match, has a premise as timely as today’s headlines. But it’s been 30 years in the making.

The roots of the book go back to the late 1970s, when Broad was a recent college graduate with a fellowship to spend a year with subsistence farmers in the Philippines.

She loved it so much that she dreamed of staying in that remote area, hoping to make a difference.

Then a farmer she knew had a question. Why was it, he asked, that rich countries gave aid that ended up destroying the very people they were trying to help? “If you really want to help us,” he told her, “go back to your country and figure out why the world works this way.”

In a sense, Broad has spent 30 years working on that question. She’s now an economist and professor of international development at AU’s School of International Service who, in Development Redefined, takes on the assumption that trade, foreign direct investment, and less government control are cures for global poverty.

The wide-ranging, historically based look at development theory and practice is cowritten with her husband and fellow researcher, John Cavanagh, director of the Institute for Policy Studies.

Broad’s work has long indicated that in environmental and social terms, the free market has not delivered on its promise. The problem, in the simplest terms, is that numbers don’t tell the whole story. A country pushing to join the developed world can appear on paper to be making progress if aspects of its economy are prospering. But that’s not the whole story. “Unless you look at figures of inequity,” Broad observes, “it can look good.”

For instance, subsistence farmers who had little material wealth but were at least able to feed their families while living in strong communities in relatively healthful conditions have often been pushed off their land as it came into the hands of the business elite or international corporations.

Those farmers once may have lived on a dollar a day, and thus appeared poor on paper. The land where they grew their families’ food, which didn’t add to the country’s bottom line, is now a vast tract of sugar or pineapples grown for export, bringing in foreign currency and raising the gross national product. But if the onetime farmers have been squeezed into the slums of sprawling cities, where they labor to afford the food they once grew, has the country truly improved?

Broad is careful to note that she doesn’t romanticize the life of a subsistence farmer or the real need to improve health care, education, and chances for the next generation. But neither does she accept what she and Cavanagh call the myths of development. Development Redefined describes some of those myths, such as:

The primary focus should be on extreme poverty, as defined by a per capita income of less than $1 a day. This, they argue, relies on poverty measures that are deceptive and don’t measure quality of life.

Development is a linear process of people from all walks of life moving up the ladder. In fact, what often happens is growing inequality.

Protectionism is the only alternative to market-opening globalization.

Other models of development have been devised by what is generally called the “anti-globalization” movement but which, Broad and Cavanagh argue, should more properly be called “alter-globalization” because its leading proponents don’t suggest disengaging from global trade, but offer a different vision of development and alternative ways of measuring progress.

The current economic crisis has exposed many of the weaknesses of the old model. “I think we’re in for some dire times,” she says, “but essentially, I’m an optimist. Crisis brings opportunities. It’s a lesson to remember now.”