On Measuring Development Success

Amanda comments on the difficulty of defining "good work". I think we are basically hitting on the problem of measurement. This is a problem raised in many industries such (e.g. health care) where there are multiple parallel goals (e.g. health care has cost reductions, patient survival, patient satisfaction, long term health outcomes, to name just a few that need to be accounted). The argument runs that in all these industries, boiling down measuring results is much more difficult than in business.

I personally think this is a false argument, at least to some extent. Business success isn't as easily measured as looking at the profit line. Any Board of Directors that's any good looks at profits, but also at asset position (balance sheets), future growth prospects, human resources talent, etc. and makes a somewhat subjective decision on a manager's success and their deserving compensation. Deciding between the value of short term profits versus the value of long term investment in future growth comes down to a subjective "guess" educated somewhat by historical data. It's not much different than balancing present health care cost reductions versus future health outcomes, or development funds raised versus future economic growth. If anything, I think the moral nature of these endeavours makes it easier to decide what the ultimate priority is (i.e. future heath outcomes; future economic growth). Where I think we do run into trouble is lacking historical data to guide our valuations of various endpoints. Without this data, I think our guesses become more uneducated.

I don't think that the difficulty of measuring "good work" should necessarily be a barrier to making development an industry; we just need to do some research to figure out the ballpark for reasonable valuations of various success rates. If we get past this point, I think Amanda's core issue (glancingly addressed, hinted, but never quite stated) is simple, but powerful: will it work?

If we knew that making development a business would work, and work better than the status quo, I think the case against it would be very difficult. Similarly, if we knew that it would lead to worse outcomes, I doubt that anyone would advocate for it. Sadly, answering this question scientifically is difficult: we need to compare two very similar situations in which each endeavour has been tried and then compare the results. In the absence of scientific data, we are left to make arguments based on reasoning. With a complex system that no one fully understands, or probably even understand well, none of us can have much confidence in reasoning.

Nonetheless, I'm going to engage in a bit of reasoning.

Development as Local Industry

At a fundamental level, I think that everyone agrees that development needs to be about self-sufficiency. If an underdeveloped country never becomes self-sufficient and is always dependent on outside help to remain afloat, then it hasn't reached a point of being "developed".

Necessary in any conception of self-sufficiency is that people (in the developing world) can earn at least a living doing the work. And if we assume some level of freedom and private enterprise, innovation is going to be contingent on the ability of people to earn a profit should their investments in innovation pan out. More simply, further development will be contingent on the ability of the indigent to earn a profit. Otherwise, no one but rich philanthropers will invest in potential innovations: where is the incentive?

This is an argument about locals and not expats. However, in this narrow case, the logical endpoint is that we need development work to result in an industry (or more precisely, many industries) for the locals so that continued development will occur.

So Should External Intervention be a Business

If we accept then that external involvement in development needs to result in a local industry as its endpoint, the question with which we are left is how should external involvement build this local industry. This is a much more difficult question to answer.

In some cases, we know the answer. When it comes to economic development, I think we agree that foreign investors should be investing in the businesses that have good business plans and the chance to be successes; investing in failures will result in everyone who has a state in that business (including the population of the communities that need that economic growth), losing. Therefore in the case where we are creating nascent industries (e.g. much of Engineers Without Borders's work), a profit motive and a business mindset is essential.

The answer becomes more difficult when it is not clear that we want to have a stake in the outcome. E.g. when setting up schools and training teachers so that children can get a primary education, having a stake in the outcome feels immoral. Do we want to be claiming a share in future teachers' salaries when those teachers likely won't have a very high standard of living? Do we want to own the schools we build so that we can earn a profit from the local government's educational funding we receive when that money could instead be used by the local governments for other activities? The way around these situations is often to get the developing world to do take the stakes instead: get the government or universities to have a stake in teacher education, and locals to have a stake in school construction and operations. But that's not always possible: if that could happen so easily, the developed world wouldn't need to be involved in development. And even when it is possible to give the locals a stake in the endeavour, the developed world is intervening to encourage this model and we've ducked the question of whether the external interveners should be rewarded for their performance in accomplishing this.

And that's really the third case which is completely murky: where the work done isn't nearly connected to any sort of earnings—which is really the kind of work the developed world needs to help out with. E.g. promoting women's rights or building democratic institutions do not lend themselves to external partners having any real stake in the results, nor are they work tied in any way to any sort of profit: they are purely philanthropic acts. I think this group forms one of the two groups for whom we need to debate this question. The second group, as Amanda noted, are executives.

A reasonable starting point for these would probably be to look at what competitive pricing for staff would attract: would we get similarly-able development workers, or would there be actual improvements? As well, if we pay more for development workers, what are reasonable estimates of what we'd gain (by better workers) and lose (by spending more on staff and less on non-staff expenses, or fewer staff).

I think it is hard to go any further in this debate without having answers to these questions which probably means that these questions are punted over to development organizations that have to make staff decisions. And of course, underlying all this remains the original question: will it actually work?