People who matter, not the places

From Reinventing the wheel By William Easterly

• When I worked at the World Bank, management was always checking up on us to make sure our research was relevant for real-world economic development. The standard test question was, "What would your research suggest the finance minister of country X should do?" This question reflected the standard view that has endured since the beginning of development economics six decades ago -- that all countries begin with a blank slate and that development happens when today's government leaders execute wise policies. My job was simply to tell the leaders what those wise policies were.
• Imagine the dismay of my managers if my advice to the finance minister had been, "Make sure your country was well caught up on technology -- 500 years ago." But seemingly irrelevant as that advice might be, it's actually true. If a country had the printing press and the magnetic compass in 1500, it's a pretty safe bet it has a strong national economy today. Ancient history still matters for today's development, providing unique insight into why the lights are still off in the dark corners of the world and what we might do to change that.
• Strangely, history has never figured into the equation when it comes to exploring why some countries prosper and others don't. To understand how it might relate, Diego Comin at Harvard Business School, Erick Gong at the University of California, Berkeley, and I started by compiling a list of 11 ancient technologies that were around in 1000 B.C.: Was there written language? The wheel? Agriculture and iron tools? We drew today's boundaries on the ancient world and assigned each separate technology history to the future country that would form within that territory. Then we expanded the survey to 1500 A.D., looking for the adoption of 24 technologies, including oceangoing ships, paper, printing, firearms, artillery, the magnetic compass, and steel.
• We found that there was a remarkably strong association between countries with the most advanced technology in 1500 and countries with the highest per capita income today. Europe already had steel, printed books, and oceangoing ships then, while large parts of Africa did not yet have writing or the wheel. Britain had all 24 of our sample technologies in 1500. The Democratic Republic of the Congo, Papua New Guinea, and Tonga had none of them. But technology also travels. North America, Australia, and New Zealand had among the world's most backward technology in 1500; today, they are among the wealthiest regions on Earth, reflecting the principle that it's the people who matter, not the places. As migration has transformed parts of the world that were nearly empty in the Middle Ages, technology has migrated with them.

• So what does this tell us about the prognosis for bringing the world's bottom billion up from poverty? For one, it tells us that we've been doing development wrong. The traditional approach to development was as a top-down process led by great men and benevolent autocrats, advised by great experts. Former World Bank chief economist Stanley Fischer used to joke about a new grammatical tense he called the "World Bank imperative form": Country reports were long lists of things that "must be done" by the authorities, ranging from grandiose infrastructure projects to implementing detailed plans to meet health, nutrition, sanitation, and education needs. But our research shows that development is not about what you dictate, but what you discover. Little penicillin did far more to improve the world's lot than big plans conceived around a conference table.
• The World Bank imperative approach gave us Africa's stagnation, the failure of economic reforms in the 1980s and 1990s, and the disastrous transition from communism to capitalism in the former Soviet Union. These and many other disappointments over the past half-century do not predict a cheery future for the great-men-cum-great-experts approach.
• Most importantly, what the history of technology tells us is that the blank-slate theory is a myth. Top-down development programs simply don't work. In fact, the principal beneficiaries of Western largesse today -- African autocrats and dysfunctional regimes -- are themselves the main obstacles to development. If there's anything that "must be done" to spur future development, it's to create the conditions necessary to empower the ordinary individuals who will create new and unforeseen technologies out of old ones. There's a Thomas Edison born every minute. We just have to help them turn the lights on.

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