The most important global development lesson from Easter Island is not what you think
Bear with me for a brief academic pitstop. The cornerstone theory of rationality in economics rests on the assumption that an individual’s behavior is an accurate representation of his or her preferences. This assumed coherence between thought and action is essential to facilitate economists’ modelling, analyzing and drawing conclusions about consumer behavior. This inference of what humans value is referred to as “revealed preference”, and was introduced into the economic discourse by Paul Samuelson in 1938 and formalized in 1948 in his article “Consumption Theory in Terms of Revealed Preference”. Samuelson believed that in observing consumer choices one could construct the utility function, and therefore the preferences, motivating their behavior.
Forty years later, in an attempt to draw important lessons about environmental dynamics and sustainability, James Brander and Scott Taylor constructed an “economy” of Rapa Nui (Easter Island) that operated according to an environmental predator-prey model within a particular carrying capacity. The paper takes a Ricardian (as in David Ricardo) production structure and places it in a Malthusian (as in Thomas R. Malthus) examination of the negative impacts of unchecked population growth and open-access resources without established property rights in order to understand the dynamics of economic growth, environmental degradation and eventual collapse. In this context, Brander and Taylor make an implicit nod to Samuelson’s revealed preference:
The most visible evidence of Easter Island’s past glory consists of enormous statues (called “moai”), carved from volcanic stone. Many statues rested on large platforms at various locations on the island. The largest “movable” statues weigh more than 80 tons, and the largest statue of all lies unfinished in the quarry where it was carved, and weighs about 270 tons…The population grew rapidly and was wealthy in the sense that meeting subsistence requirements would have been relatively easy, leaving ample time to devote to other activities including, as time went on, carving and moving statues…Population probably peaked at about 10,000 sometime around 1400 A.D., then began to decline. The period 1400 to 1500 was a period of falling food consumption and initially active, but subsequently declining, carving activity…Carving had apparently ceased by 1500.
Brander and Taylor take these historical accounts to track the economic dynamics of Rapa Nui. Their model is composed of two factors of production: a natural resource stock[1] and a labor force[2], and involves the production and consumption of two goods: the harvested renewable resource[3] and an aggregate “other good”, of which moai is a primary component.[4]
Brander and Taylor, as economists, make no normative judgments about Rapa Nui’s [archaeologically] revealed preference for moai and the mobilization of the island’s resources and population around their production — they simply take it as given. This is a crucial concept to understand about economics as a discipline. Individuals are assumed to be rational economic agents (aka homo economicus), where their actions accurately reflect their desires and preferences and therefore maximize their utility, or happiness. Since these economic agents know best how to optimize for their well-being and act accordingly, economists can suspend judgment about what those preferences are and merely study the dynamics associated with their pursuit.
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This concept of Rapa Nui’s moai has stuck with me. Economists are right — the cumulative output of our decision-making is, to some extent, a reflection of what we value (whether consciously or unconsciously). When I considered what a future society may say of our revealed preferences in the development enterprise, the conclusions were startling.
I would assert that development is, for the people engaged in the enterprise, a collective endeavor to improve the livelihoods and well-being primarily of those identified as materially impoverished. But we know, as has been documented countless times, that the collective effort in this space over several decades now has not yielded significant impact on that original goal. Many indicators have improved, but arguably not as a direct result of the organized development enterprise.
Suspending the “to aid or not to aid” argument for a moment, I think it is worthwhile to assess what the moai of development may be, using components of the “development enterprise economy” that are analogous to Brander and Taylor’s model. Let’s assume that the “natural resource stock” in this case are development dollars allocated by donor agencies. The “labor force” are development practitioners, consultants and contractors. The “harvested [non-]renewable resource” includes money siphoned off because of corruption (what I like to call the “graft tax”), distributed in the form of cash transfers, or that which ends up going to minority country (i.e., economically-dominant) contracting firms.
But what of the aggregate “other good”? We are still left with a tremendous amount of resources and labor to account for. Just like the economy of Rapa Nui that must have produced some amount of housing and tools, this component of the development enterprise economy cannot be a homogenous monolith, but there is likely some component around which a significant amount of energy is ultimately organized. In my experience, the moai of development are…wait for it…
endless reports produced primarily for donor agencies.
A few anecdotes have led me to this conclusion.
· The first is that upon examination[5], much of development activity is organized around the production of reports. Countless contractors and consultants around the world are hired to write reports on a myriad topics, and these reports very rarely are distributed or even accessible to anyone outside the agencies that commissioned them. This system has even generated its own specialized labor market for consultants who are experts in the reporting norms of different organizations, especially those with particularly complex and burdensome evaluation requirements.[6]
· The second is that donor agencies actually speak in terms that suggest a report is the objective they are working toward. The most senior member at a former client[7] (a development bank) said to everyone in our kickoff event, “Let us produce a report that stands the test of time and does not just collect dust on the shelf.” This was actually considered the inspiring aspiration around which to rally everyone in the room. Now I believe in the back of his mind he genuinely aspired to improve the livelihoods and welfare of the people that were the subject of the report, but our efforts were still organized around the production of the report itself.
· The third relates to experiences I have had conducting field research. I discovered data and reporting, even those conducted by national governments (e.g., national budgets), were not readily available to the citizens of those majority countries with whom the data and reporting dealt. They were only readily accessible to donor agencies (e.g., the World Bank). A picture started to emerge here that the institutions and democratic systems of many developing countries (particularly the aid-dependent ones) were actually being seized by the development enterprise — the group treated as the primary constituency of the government was not the citizenry, but rather global or bilateral development agencies.[8]
· The fourth, which initially sensitized me to this possibility, is that in traditional management consulting, you aim to have positive strategic impact on the target of your work, but it is more common than not to find that consultants feel the ultimate evidence of their output is measured in stacks and stacks of paper.
Taken together, these experiences have led me to a different paradigm of how the development enterprise operates. And the development enterprise is not unique in this respect. A similar phenomenon occurs in bureaucracies which are introduced to serve one purpose — usually the public good — but often redirect toward self-perpetuation. In writing about the healthcare system, Edin Lakasing and Heather Francis explain that “A vicious cycle has emerged where bureaucracy requires more managers, who in turn justify their own existence by ratcheting up bureaucracy.” Or as a friend of mine says, “Healthcare doesn’t exist to make you healthy. It’s a bureaucracy, and, like all bureaucracies, it exists for the proliferation of itself. You are merely the sausage-casing for the flow of money to them. The same is true for education bureaucracy, homeland security, military bureaucracy; they exist to expand, not to fix the issue they are formed around.”
From my perspective, it seems that there are two dynamics that capture systems and lead them in this direction:
· Our need for tangible evidence of our effort as a proxy for our impact — this proxy eventually inadvertently seizes the organization of our activity until it replaces the original goal of our efforts instead of merely representing evidence of its achievement[9]
· The inability to maintain total operational and behavioral coherence — it is difficult for the various micro decisions across all parties to be consistently coherent with our collective, thoughtful, deliberately constructed value systems
The first tendency reminds me of James C. Scott’s Seeing like a State. Scott explains that large institutions require reductionist and simplifying mechanisms in order to create standardized systems that allow for governance and power over a large population. These mechanisms turn human reality into a constrained abstraction that yields to analysis. The second tendency relates in no small part to Daniel Kahneman’s Thinking, Fast and Slow where he explains that the brain follows two separate systems to construct thoughts. The first, deriving from our “reptilian”, “animal” brain involves automatic thought processes characterized by their rapid, frequent, emotional and stereotypic nature. The second “higher order” thinking is more deliberate and often slower, requiring more effort. It is logical, calculating and more conscious thought but also less frequently occurring. I would assert that while the second type of thinking is likely where the origin of our value systems reside, “unintentional” and subconscious coordinated efforts may result from the accumulation of rapid decisions and actions informed by the first type of thought. The question then becomes — which type of thinking is informing the resulting moai of our efforts? And what safeguards can we put into place to ensure that the cumulative effect of our efforts actually reflects our values and is not inadvertently co-opted either by excessive systematization nor the dominance of lizard-brain thinking?
I imagine, centuries from now, explorers and archaeologists wondering what this development thing was about and finding towering stacks of paper, imposing, just like the moai.
[1] “The ecological complex consisting of the forest and soil”, which is characterized by a logistical biological growth rate in a constrained environment (intrinsic regeneration rate bound by a carrying capacity), and subject to a particular harvest rate
[2] Equal to the size of the island population
[3] “We think of the (broadly defined) harvest as being food (i.e., agricultural output from the soil and fish caught from wooden vessels made from trees)”
[4] Also includes basic items such as tools and housing
[5] Even something as simple as a search for job vacancies in development
[6] What likely started as an attempt to inject rigor and accountability into development interventions has turned into a bizarre exercise in foreign labor-sourcing gymnastics with developing countries and NGOs scrambling to find someone who knows how to write a report in such a way as to keep donor organizations happy. I encountered this in Mozambique in 2006 when the strict and elaborate reporting requirements of the Global Fund resulted in an effort to recruit an army of evaluation consultants with specific Global Fund evaluation expertise
[7] It’s worth noting that this individual was himself from a post-conflict majority country in Africa
[8] Some economists like Lant Pritchett call this phenomenon isomorphic mimicry — when superficially an institution conforms to the appearance of institutions of its type, but in reality does not fully embody the same behavior nor ultimately serve the same purpose.
[9] The role of income and other materialistic indicators in economics plays the same function of displacing the original objectives of development — there is a rampant conflation and subsequent replacement of prescriptive measures (evidence of progress against the root problem you’re trying to solve) with diagnostic indicators (evidence of the symptom of a problem)
References
Brander, James A. and M. Scott Taylor. “The Simple Economics of Easter Island: A Ricardo-Malthus Model of Renewable Resource Use”, The American Economic Review, Vol. 88, №1 (Mar., 1998), pp. 119–138
Kahneman, Daniel. Thinking, Fast and Slow. Farrar, Straus and Giroux, 2011.
Lakasing, Edin, and Heather Francis. “Bureaucracy in General Practice: Time to Halt a Proliferating Malaise.” The British Journal of General Practice 59.566 (2009): 696–698. PMC. Web. 15 Oct. 2015.
Samuelson, Paul A. “Consumption Theory in Terms of Revealed Preference”, Economica, New Series, Vol. 15, №60 (Nov., 1948), pp. 243–253
Scott, James C. Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed. Yale University Press, 1998.
Squire, Aurin. Interview. October 9, 2015.
