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Normative Constraints on Economic Development Theory

 

            The process of economic development is an important instance of the interanimation of policy,  contingency, and justice.  Governments construct development strategies based on a variety of political and social objectives; this process may be characterized in terms of a decision-making process based on instrumental rationality.  The outcomes of these strategies depend heavily on a variety of factors, only some of which are within the control of policy makers—world commodity markets, the behavior of powerful outsiders, weather and climate variability, and so forth.  And the outcomes and implementations of development strategies unavoidably raise problems of justice.  This is so because they have deeply significant distributive effects that may endure over many generations.  Different groups do well or badly under different policy alternatives.  So policy makers ought to be responsive to the demands of justice in their adoption of priorities and the instruments they choose in pursuit of the goods of development.

            This essay raises problems about the role of normative considerations in several aspects of this story.  These problems arise in two general areas.  First, there are problems defining the instrumental rationality of policy makers.  Even if we bracket the problem of distributive justice there are perplexing problems that arise in attempting to characterize the goods of development and how these should be treated by policy makers.  (For example, how should environmental quality and average longevity be compared, given that a policy that results in lengthening life expectancy may also require worsening environmental quality?)  And how should we think about the role of moral considerations within the policy process?  The second broad topic is substantive: what are the overriding goals of economic development?  I will argue that the highest priority goal ought to be the alleviation of poverty, a stance I describe as "putting the poor first".  Policy makers ought to give highest priority to improving the well-being of the poorest strata.  But this position is faced with the task of explaining in substance why this is so: what is the bad of poverty?  What is involved in placing highest priority on poverty alleviation?  And what compelling moral reasons may be offered to support this position?  These questions are important because the answers we provide for them will in large part determine how much importance we place on poverty alleviation in comparison with other compelling development goals.

            Seen from one point of view, this complex of issues is a relatively small part of applied moral philosophy, of interest only to a rather specialized audience.  From another point of view, however, this area ultimately invokes virtually all of the most difficult and important topics within normative social philosophy: the problem of planning for a process of social change, the justice of the allocation of the benefits of social cooperation across individuals and groups, the problem of intergenerational justice, the legitimate claims that different groups and individuals have on each other and on outsiders, and the definition of the good of human life and social arrangements.  So close study of the problems of economic development may have a considerable contribution to make for social philosophers more generally.

 

Feasibility

 

            One of the attractions of economic development as an occasion for thinking about justice is that it poses a set of problems that are immediately and essentially practical.  It is not desirable or useful to offer idealized theories of justice in this context; policy makers need solutions that can be implemented given existing social arrangements, allocations of political power, and the like.  Questions about feasibility are essential.  We want to know, not what the ultimate just society would look like, but what avenues of change are possible given our starting point, and which among attainable outcomes is preferable on grounds of justice.  It is possible, for example, that the prescriptions of an ideal theory of justice—Rawls's formulation of the difference principle, for example—are inaccessible from certain starting points and a given set of constraints on policy.  These considerations dictate that recommendations in this area must be subject to appropriate feasibility conditions.  There is no value in a description of a desirable goal if there are no feasible means through which to arrive at this goal.  The most general way of putting the requirement of feasibility is this: a goal is feasible if, given everything we know about social and economic processes and the motives and actions of typical agents, there is at least one pathway through which agents could act in such a way as to bring about the goal.

            The ultimate test of the policies associated with the poverty-first prescription, then, is this: Do these policies lead to the desired outcome?  Are they feasible, given the constraints of individual motivations and the workings of political and economic institutions?  And are these policies consistent with the long-term interests of humanity—the requirement of intergenerational equity?

 

Incentive feasibility

            Economic change unavoidably occurs as the net effect of the independent activities of vast numbers of agents: consumers choose commodities based on incomes and prices, producers choose products and techniques on the basis of their expectations about future prices, and government agencies act on the basis of perceived interests of the agency.  It is not possible for policies to be mandated by government without attention to the incentives, opportunities, and constraints that the policy will create for participants.  There are substantial costs of enforcement that rise steeply the more contrary a given policy is to the interests of the agents whom it affects.

            The central constraint is this: we may assume that agents have private interests (income, security, wealth, access to health care) that have a substantial or even dominant motivational role, and that agents are opportunistic: they will select strategies that permit them to take advantage of existing institutions and markets in such a way as to advantage their private interests.  Policy instruments and goals that require that individuals ignore their private interests are infeasible (absent substantial coercion).[DL1] 

            Consider the example of collective agriculture in China in the 1960s.  Collective farms were created involving large tracts of land and the pooled labor of 100 to 300 farm families.  The goal of this system was to reduce rural inequalities and to enhance efficiency through economies of scale.  However, collective farms turned out to be highly inefficient, due in part to incentive problems: family income was determined largely by the average productivity of the collective, and there was little relation between quality and intensity of work and income.  Each worker had little incentive to work efficiently or intensively, since the added product that resulted from higher quality work had the effect of raising the social average only slightly.  The result was low quality work of low intensity.[DL2]   (See essays in [Nee, 1989] for elaboration.)

 

Political feasibility

            Policies are implemented by governments, and governments are subject to a variety of political constraints.  Within a democratic electoral system governments are unavoidably concerned about the effects of various policies on the electoral blocks upon which they depend; so it is difficult for a government based on the support of rice farmers to abolish input subsidies.  But there are political constraints within authoritarian regimes as well. Such regimes rarely have sufficient power internally to dominate the whole of civil society, but depend rather on the support—explicit or implicit—of various interest groups within society.  Once again, it is difficult or impossible for such a government to implement policies that are inimical to the interests of the groups upon which it depends.[DL3] 

[DL4]             Political feasibility constraints do not entail a wholly conservative development agenda, or one that is unavoidably hostile to the interests of the poor.[1]  For it is possible for disenfranchised groups to acquire political influence, permitting them to pressure governments to adopt policies that offend previously dominant groups.  In order for this progressive outcome to occur, however, it is mandatory that there be some pathway by which the interests of the disenfranchised are converted into effective political resources.

            Consider an example derived from Adam Przeworski.  Suppose that our theory of justice dictates that the just society requires democratic socialism.  And suppose the central constraint is that policies must be adopted and implemented within the context of democratic electoral institutions.  Then Przeworski offers an argument to show that the socialist outcome is inaccessible from a starting point in which capitalist property owners exist; for a socialist regime may be voted into office, but once it begins to implement a program of socialist reform it elicits a strategic reaction from capitalists that produces economic crisis; during the crisis a reform capitalist program can outbid the socialist reform program for electoral support; and the process of socialist reform is interrupted [Przeworski, 1985, Capitalism].

 

Economic feasibility

            A third constraint on poverty-first development strategies is economic: we must have good analytical reasons to believe that a given set of policies will in fact have the desired economic effects.  The problem of institutional design—the creation of property arrangements through which efficient, modern agriculture may proceed while serving the ends of equity and welfare—is a knotty one.  Moreover, it is a commonplace that economic policies often have unforseen and perverse consequences.  For example, suppose that we are interested in raising incomes to unskilled rural workers.  We might consider introducing minimum wage legislation in farm labor.  Assuming that labor-hiring farmers are faced with choices of crops and techniques, this policy may well have the effect of reducing demand for unskilled labor, leading in the end to a decrease in demand for labor and lower overall incomes flowing to workers in this sector.

            A second feasibility constraint concerns economic growth.  Economies with low per capita incomes are incapable of improving the welfare of the poor very much.  So economic policies that are chiefly redistributive will fail in alleviating poverty; greater equality will mean little more than spreading poverty more evenly.  Instead, the policies that are chosen must have the effect of producing sustainable economic growth.  This means, in particular, that development strategies must be productive of sufficient growth as to permit expansion in real incomes.  If a given recommendation has the predictable effect that it will lead to economic stagnation, then it is disqualified by this constraint.

 

Intergenerational constraint

            A final constraint is normative, but derives from the interest that each generation has in the wellbeing of the next.  This is the requirement that the policies adopted should be broadly consistent with the interests of future generations; policies adopted today ought not be such as to guarantee harm for future generations.  Several factors fall under this consideration: resource utilization and conservation; preservation of air and water quality; preservation of wetlands and rain forest; sustainable patterns of urbanization and urban development; and sustainable population policies.[DL5] 

 

The normative context of development planning

 

            Let us begin with a consideration of the normative position of the development policy maker.  Policy making obviously involves an analysis of means and ends.  Policies are sets of instruments designed to bring about certain outcomes, and the desired outcomes are selected because they embody one or more goods that are favored by the policy maker.  But this formulation glosses over two issues:  What is the nature of the goods toward which development policy is oriented?  And what role, if any, do normative commitments play within the policy-making process?

 

Heterogeneous goods

            The goal of economic development can be described rather briefly, it might appear: to promote a process of social and economic change leading to sustained improvement in the average welfare of society.  And the central characteristics of this process are easy to describe as well: modernization of industry and agriculture, technical and organizational innovations leading to rising labor productivity, and establishment of efficient economic institutions.  Development economists are inclined to summarize these features of development in this way: economic growth is aimed at increasing per capita national income, and this occurs as a result of the introduction of modern technologies and efficient market institutions within a stable political context.  "Economic growth refers to a rise in national or per-capita income and product. . . . Economic development, in addition to a rise in per-capita income, implies fundamental changes in the structure of the economy" [Gillis, 1987].  To this "growth and modernization" stance at least some development economists will add an equity goal as well: income inequalities should be managed in such a way that the benefits of growth have a positive effect on all participants.

            This simple description needs amplification, however.  Here we encounter a new problem: how are we to characterize the good of society?  Social welfare theory brackets this problem by assuming something like a classical theory of utility; the goal of social policy is to maximize social welfare.  This approach is probably too single-dimensional even for steady-state policy problems.  But economic development involves massive social, technological, and economic change over an extended period of time, and it involves a set of heterogeneous goods.  So a single dimension of "welfare" is inadequate as a basis for reasoning about development policy.

            Consider the following list of goods: average and total national income; income shares disaggregated across social classes; life expectancy and morbidity (again, average and disaggregated); rising literacy and educational levels; broadening the scope of individual liberties; extending the scope of democratic decision-making; the welfare, health, and liberty of future generations; improving the equity of distribution of resources and incomes across regions, groups, and classes; preserving and enhancing environmental quality; and conserving natural resources.  Each of these is a good thing; it would be desirable to improve each variable as a result of a given development policy choice.  Unfortunately, two facts are relatively clear.  First, these goods are largely heterogeneous; there is no common measure to which they could be reduced (e.g. utility).  So we do not have the simple option of choosing that policy that maximizes utility across all these goods.  And second, there are substantial conflicts among them: policies that favor some of these goods harm others.  (There is debate within the development world, for example, over whether democratic institutions may not make the structural adjustments required by economic development difficult or impossible; so we are forced to choose between democracy and efficient growth.  For a review of this debate see [Haggard, 1990, Periphery; Kohli, 1986, Democracy].)  If some strategies strictly dominated others with regards to these goods, then the problem of choice is relatively simple: the former are strictly preferred to the latter.  Most commonly, however, it will be the case that policy options are mixed, with policy A doing better than B with regard to good Gm but worse with regard to Gn. 

            If we are to make calculating choices in this circumstance, our options are limited.  We might try to find a common measure for all the goods—which looks impossible.  We might try to arrive at a set of priority rules ranking the goods of development: always favor an improvement in Gn over an improvement in Gm.  This would be to give lexical priority to Gn over Gm (as Rawls assigns lexical priority to liberty over welfare [Rawls, 1971]).  In general, however, it is difficult to justify a lexical ranking of goods, since this implies that any minuscule improvement in the higher-ranked good will justify massive losses in the inferior good.

            Third, we might try to assign a rough and ready scheme of weights to the various goods (perhaps changing in different stages of development and at different levels of provision of the various goods).   This option allows the policymaker to consider tradeoffs among goods: is a substantial savings of rain forest sufficient to justify a modest reduction in rights of political association?  Is a modest increase in individual liberties sufficient to justify delaying poverty alleviation by a generation?  This suggestion gives rise to a microeconomic approach.  We might conceive of each of these goods—income to each group and environmental bads—as individual commodities and then construct a series of indifference curves between each pair of goods.  These curves establish the "price ra­tios" of each good against every other, for every level of provision of the goods: the ratio of marginal quantities of each we are willing to exchange.

 

Figure 1. Indifference curves for income and environment

 

            Panel A represents the idea that we will accept large environmental costs in order to achieve relatively small increases in incomes to the poor—when those incomes are very low; whereas we will require greater improvements in the income of the poor in order to accept a unit of environmental cost at higher levels of income.  But the elasticity of environment with respect to the poor is high throughout the range; a small percentage of change in incomes to the poor is sufficient to justify a larger percentage of change in environmental quality.  By contrast, the indifference curve in panel C embodies a low elasticity of environmental quality with respect to incomes to the non-poor.

            This approach raises a difficult problem of interpretation, however: whose indifference curves are thought to be represented here?  It is one thing to postulate individual indifference curves among commodities, based on observed price behavior.  It is quite another to postulate a "social indifference curve" analogous to a social preference ranking.  Presumably this problem is subject to the same sorts of impossibility results as arise within classical social choice theory.  We might attempt to finesse the problem by regarding the policy-maker's indifference curve as the social ordering as well (this is the "dictator" strategy; [Arrow, 1963]).  To the extent that we want economic development policy to derive from a democratic process, we need to have some way of aggregating individual preferences into a social preference function.

            Finally, we might offer a mix of the last two approaches: rank some goods lexically and the rest according to a scheme of weights.  Thus, for example, we might set a minimum level of poverty alleviation and basic democracy that must be satisfied before we begin sacrificing further advances in these goods for the sake of resource conservation or environmental protection.

            The point of this discussion is messy but important: the policy-formation process cannot be adequately characterized in terms of a simple utility-maximizing framework of decision-making.  There are heterogeneous goods that must be accommodated within the process; there are problems aggregating individual preferences into a social preference function; and the policy process is extended in time within a stochastic world, with the result that the planning process requires constant readjustment.

 

Intergenerational justice

            A second topic in the normative framework of development policy concerns the problem of taking present and future interests of society into account—the problem of intergenerational justice.  Suppose we are confronted with two development choices.  The first policy package leads to an immediate and gradual improvement in the welfare of the poor, followed by slow but steady growth over the next 50 years.  The second policy package leads to some decline in the position of the poorest 40%, then gradual improvement and medium steady growth for the next 50 years.  Finally, suppose that the welfare of the poor on the second plan passes that of the first plan after 30 years.  (This can best be visualized in the form of a graph of incomes flowing the poor over time.)  Considered with strict temporal neutrality the second plan is preferable to the first; for an historically brief time the first dominates the second, whereas for the rest of time the second dominates the first.  The gains achieved by the future poor vastly (perhaps infinitely) outweigh the sacrifices of today's poor.

            On the other hand, we might reason along these lines.  The needs of today's poor are extremely urgent.  Infant mortality is high, morbidity is high, literacy is low, nutritional status is compromised, and so on.  Today's poor need immediate attention.  Tomorrow's poor deserves consideration as well; but their condition will be better than that of the poor today.  Therefore we should give first priority to poverty alleviation for today's poor, and then turn to improving the prospects of later generations.

            Both these arguments have a certain amount of force.  (Ideally, of course, it would be preferable to adopt the poverty alleviation strategy for the first 30 years and then switch effortlessly to the growth strategy.  But this may not be feasible; the technological and institutional innovations needed for the first may not support the second.)  So how are we to resolve the issue; shall we maximize utility over time—thus favoring the growth strategy?  Or shall we maximize the welfare of today's poor—thus favoring the poverty-first strategy?

            One possible line of analysis involves introducing a time discount function.  If we discount future utilities by even a low rate, then large gains in the distant future will not outweigh small gains in the near future.  Moreover, if we do not discount future utilities, then we should always favor investment over current consumption—at every point in time.  So a time discount is mandatory.  But setting the discount rate high or low is a substantive moral issue, and we need to have a justification for our choice.

            The way we treat this issue makes a great deal of practical difference in the kinds of de­velopment plans that we favor.  If the present generation gets strong priority, then there will be less investment in productive assets and more in current consumption—food grain subsidies, free health care and education, and the like.  On the other hand, if we favor future generations very heavily over the present generation (as might be justified by a temporally neutral social choice approach considering a large number of generations), then we will choose a mix of strategies heavily biased toward longterm investments in productive assets.

 

A role for justice

            When we ask the question, what does justice require of economic development policy, we are forced to consider whether the answer we arrive at has any relevance for the behavior of actual policy-makers.  To what extent, and in what ways, do policy-makers take account of moral ideas, ideas about justice, and other normative commitments?

            There is a line of analysis of policy choice in political science today that works on the assumption that policymakers are motivated solely by their particular private interests—not an estimate of what is best for society at large, but what is best for the policymaker's own interests.  This approach is described as "realism" or public choice theory.  Margaret Levi represents a recent instance of this approach in her analysis of state revenue policies.  "My hypothesis follows from two paired assumptions.  The first is that all the actors who compose the polity, including the policymakers, are rational and self-interested.  By this I mean that they calculate the costs and benefits of proposed actions and choose the course of action most consistent with their fixed preferences.  The second is that actors who compose the state have interests of their own, derived from and supported by institutional power" [Levi, 1988, Revenue].  Likewise, Robert Bates's analysis of African government agricultural policies aims to explain the policies selected as the result of the strategic efforts of groups in charge of government to maximize their power and income [Bates, 1981, Markets].  On this account, state policy formation is similar to any other kind of rational action: the agent has certain interests and chooses instruments that best serve those interests.  Political behavior is un­derstood as the result of a straightforward calculation based on self-interest.  And the interests in question are private interests; either personal (the wealth, power, and privilege of the particular policymaker) or corporate (the wealth, power, and privileges of the policymaker's group).  (On such an ac­count, group-oriented policies emerge through the logic of coalition politics: in order to achieve his ends Minister A must gain the support of group B; and this requires A's putting forward poli­cies that serve the interests of B as well as himself.)  This model appears to leave little or no room for an influence to be exerted by normative principles or constraints.  What, then, is the relevance of a normative theory of justice in development?  To what extent and through what mechanisms do moral ideas about the justice of development affect the choices of powerful agents in the de­vel­opment process?

            It would be foolish to deny the operation of this sort of calculation of self-interest within the policy process.  Here I will only suggest that the approach is flawed in its claimed comprehensiveness.  The public choice approach implicitly denies that policymakers are motivated or constrained by moral considerations.  But much recent work in rational choice theory converges on the conclusion that this strictly instrumental conception is inadequate for all but the most artificial examples of rational deliberation—e.g. consumer choice among commodities based on price and quality.  In more ordinary instances decision-makers have to take into account both their particular interests and a range of normative constraints and values [Margolis, 1982; Sen, 1982, Fools; Scott, 1985; Elster, 1989, Cement; Little, 1991, Rational; Taylor, 1982, #931].  Practical rationality has more structure than the narrow model of economic rationality allows, and deliberation is a complex process in which the agent attempts to balance interests, commitments, and concerns for the public good.  Debate arises over whether to regard these factors as extra-rational; my own position is that they are part of "extended practical rationality" which reduces to narrow economic rationality in special circumstances [Little, 1991, Rational].

            In the area of economic development policy these points can be extended in several important ways.  First, at any given time policymakers are operating within a normative framework that sets broad constraints on the nature and application of policy options that may be considered.  (A politician who proposes abolishing state subsidies for public education in the United States would plainly transgress such limits.)  Such constraints are often internalized, so that the decision-maker will not even consider adopting policies that flatly contradict the framework; but they are also externally embodied, so that there are substantial political costs that accrue to the regime that flagrantly violates popular assumptions about justice.  A normative framework has the effect of helping define and limit the opportunity set for the decisionmaker; options that involve reintroducing chattel slavery are simply ruled out of consideration, whatever their economic effects.  Norms affect policy choices by altering the options available to agents, giving priority to some goals over others, and making certain choices entirely unavailable.  And they may have the effect of aiding in the mobilization of affected groups (e.g. the landless poor) whose new political dispositions impose new constraints and imperatives on policy makers.  So even policy makers who are themselves indifferent to the new moral assumptions may be compelled to act otherwise.

            Finally, it is unreasonable to assume that decision-makers' interests are defined narrowly in terms of self-interest.  As A. K. Sen argues [Sen, 1987, Ethics], it is better to conceive of agents as having a broad network of interests ranging from narrowly private interests, to family interests, to class or national interests.  And interests at any of these levels may be motivationally efficacious at various times.  In the development process this leads to a conclusion: it is at least possible to motivate decision-makers to choose policies because they are best for society at large.  Whether this concern plays a prominent or minor role is not a matter of logic or economic rationality, but one of moral education.  And it may well be that what distinguishes between more and less predatory states is the character and quality of the process through which young policymakers are trained, selected, and promoted.

            I conclude, then, that discussion of the justice of development is not a purely philosophical exercise.  It is rather an attempt to contribute to a debate that may come to change the framework of our assumptions about the priorities of development, and eventually to change the motives and constraints that govern the behavior of the agents whose choices in fact determine the course of development.  Normative theory is behaviorally relevant in explaining the course and character of an ensemble of policies (military, economic, political, or social).

            The reason I have dwelt on this topic is that it makes a difference to how we think about problems of economic development policy and economic reform.  If as potential reformers we are best advised to look at policymakers as self-serving adversaries to be out-maneuvered, then one line of strategy is recommended.  If on the other hand it is true that decisionmakers are to some extent swayed by moral arguments and considerations of the public good, then a strategy based on moral argument is feasible.  In the former case our only hope is to create institutional arrangements that assure that the private interest of the policymaker is best served by adopting policies that we think best for the common good.  In the latter case it will be causally efficacious to advance reasonable arguments about fairness, the welfare of the poor, or the demands of future generations; considerations of these sorts may be decisive in affecting policy choice.

            I propose, then, that we think of the normative position of the policymaker along these lines.  The agent is assumed to have a range of interests: personal security, income, and privilege; the continued ability of his or her party to retain power; the ability of the regime to reward its supporters with jobs, state investment and subsidies, and the like; and concern for the present and future welfare of some or all of the rest of society.  And the agent is situated within the context of a set of moral assumptions about justice, entitlement, concern for disadvantaged groups, and the like, that are current in the society at large and that affect behavior by constraining and impelling choice.  When considering a policy problem, whether a grand development theme (shall we liberalize our agricultural system through price reform and removal of subsidies?) or a more particular policy initiative (shall we replace current rice subsidies with a needs-based food stamp program?) I assume that the agent initiates a complex process of deliberation.  What effect will the proposed policy have on me personally?  (Perhaps liberalization will mean the ministry of development will have less importance within government and corresponding loss of funds and prestige.)  What effect will the policy have on the electoral prospects of my party?  (Perhaps the destitution caused to the landless poor will lead to massive loss of support for our party in the next elections.)  What effect will the policy have on the welfare of rural society, in the short, medium, and long term?  (Perhaps liberalization will lead to much unemployment in the short term, followed by strengthening demand for agricultural goods in the medium term, followed by rising demand for labor in agriculture in the long term.)  What effect will the policy have on inter-sectoral equity, in which urban living standards are currently substantially higher than rural?  (Perhaps liberalization will improve the terms of trade between urban and rural sectors, leading to rising rural incomes and a slight drop in urban incomes.)  Finally, I will assume (with a proviso) that all these factors are potentially efficacious as a source of motivation.  The policy chosen may in the end be one that is judged to be consistent with the official's current interests, consistent with the electoral future of the party in power, and relatively progressive in its effects on social welfare and equity; and it may be the case that a different policy would have been chosen if welfare and equity concerns had not entered the calculation.

            The proviso is this: there appears to be an almost unavoidable ranking of these considerations in any actual political decision-making context, such that the interests of the policy maker and his or her party must be satisfied as a necessary condition to the selection of a strategy.  It is one thing to say that policymakers are concerned to further social welfare and equity; it is another to assume that they will do so even at the cost of loss of position, power, and privilege.  We may read this proviso as a stipulation of political feasibility; policy initiatives that require the self-extinction of those who implement them are non-starters.  Fortunately, the requirement of political feasibility does not narrow the opportunity set too drastically; there remain a range of options, some of which have better effects on the public welfare than others.  What is excluded is the adoption of policies that would be best overall but that require that wielders of power relinquish substantial portions of their power, wealth, and privilege.  (This is perhaps the central obstacle to meaningful land reform in the Philippines.)

            If there is any force to this conception as a quasi-empirical theory of the reasoning of agents within the policy-making process, then debate and discussion of the goods and justice of development from the point of view of society as a whole have a practical role to play within development policy realm itself.  In this case normative theories of the goods of development, the bad of poverty, or the requirements of justice in development may have the effect of clarifying the normative issues involved and thereby inducing policy agents to choose options they would not otherwise have chosen.  (This approach would be to put the philosophical examination of the ethics of economic development into the category of other fields of applied ethics—e.g. medical ethics—in which one of the goals of the field is to affect the behavior of practitioners.  One might hope that the Kennedy School's program for officials from developing countries might have this effect.)

 

Putting the Poor First

 

            Let us turn now to a conception of the substantive aims of economic development.  In other places I offer an extended argument for putting the poor first in economic development policy.  This amounts to something like the following:

 

    Economic development policies, both domestic and international, should be structured in such a way as to give highest priority to improving the welfare of the poor in developing countries.

 

Before developing this view in greater detail, let us consider three broad development alternatives that place different weights on growth and poverty alleviation.

 

Three pure strategies

            Consider the time profiles of three pure strategies: growth-first, poverty-first, and imme­diate welfare improvement.

 

LF        laissez-faire growth: choose those policies and institutional reforms that lead to the most rapid growth: unfettered markets, profit-maximizing firms, minimal redistribution of in­come and wealth

PF        poverty-first growth: choose those policies and institutional reforms that lead to economic growth favorable to the most rapid growth in the incomes flowing to the poorest 2 quin­tiles

WF       immediate welfare improvement: direct as much social wealth as possible into programs that immediately improve the welfare of the poor (education, health, food subsidies, housing subsidies)

 

            These strategies reflect a stylized set of assumptions about the dynamics of growth and distribution.  (Distribution is measured by the percentage of GNP flowing to the poorest 40%.)  I have assumed that the LF strategy has a consistently higher rate of growth, that PF be­gins with a growth rate 1% lower than LF, and that WF begins 2% lower (5%, 4%, 3%).  I have assumed that each growth rate begins to fall in later decades (reflecting the notion that exponen­tial growth is not permanently sustainable).  Second, I have assumed that both LF and PF show a Kuznets-U pattern of distribution over time, with inequalities increasing and then declining, but that PF declines less and recovers sooner.  Figure 2 illustrates these assumptions.  On the basis these assumptions I have computed GNP and income to the poor for each strategy over a fifty-year period; the results are provided in panels C and D of figure 2.

 

Figure 2. Three development strategies

 

            Several points emerge clearly from inspection of these graphs.  First, the laissez-faire strategy succeeds in accomplishing its central claim: it produces a substantially higher GNP at the end of the 50-year period—a 33% advantage over the poverty-first strategy and a 110% advantage over the welfare-first strategy.  Over the long term (75-100 years) all income groups are better off with the highest growth rate strategy: even though this strategy gives the lowest relative share to the poor, the more rapid increase in total GNP more than compensates.  From the point of view of the welfare of the poor over the bulk of the period of development, however, the LF strategy does less well.  For the first twenty-five years the incomes to the poor are higher on both the PF and the WF strategies—even though LF's GNP is substantially ahead of both alternatives.  Second, in the near short term (0-25 years) the poorest groups are most advantaged by the immediate-welfare strategy.  During this period incomes to the poor improve very slowly on the LF strategy, and improve significantly on the PF strategy.  The critical period, though, is the medium term.  In this period the poverty-first strategy passes the immediate-welfare strategy, and it retains the advantage over the laissez-faire strategy as well.  The immediate-welfare strategy looses ground in the medium term because it has made too little productive investment in the national economy and has di­rected too much of the available surplus toward immediate welfare improvement.  Incomes to the poor then stagnate (along with GNP as well) and improve only slowly from this point on.

            This exercise has several important lessons.  First, these idealized strategies show that development policy forces us to choose among vari­ous things: average income versus income to the poor; rate of growth versus rate of improvement in welfare of the poor; improvement in the present versus well-being in the future.  Second, this example makes it clear that privileging the inter­ests of the poor does not entail neglecting economic growth.  It is plain that sustained economic growth is the only longterm solution to the problem of poverty.  National economic plans that work primarily toward channeling existing income into welfare assurance plans have shortterm benefits but promise longterm stagnation.  (This may be the case of Sri Lanka in the 1970s and 1980s.)  Only if a national economy is able to produce substantially greater per capita income and wealth will it be possible to create and sustain a process of improvement in the condition of the poor.  This example makes it clear that other things being equal, economic growth is desirable from a poverty-alleviation point of view.  Growth makes possible a sustained improvement in the income and welfare of the poorest strata of the developing economy.  But whether that improvement occurs or not depends on the particular characteristics of the growth process and the institutions and institutional innovations through which incomes are distributed.  If growth is stimulated by capital-intensive investment for world markets, there will be only sluggish increase in the demand for labor, which means that the pool of modern sector labor will expand only slowly and modern-sector wages will rise only slowly.  To give lexical priority to poverty alleviation, then, entails that we should rank strategies by their impact on the income and welfare of the poor, irrespective of overall growth rates.

            Equally important, however, the exercise shows that if we pay attention only to efficiency and growth, the interests of the poor in the short and medium term will not be well-served.

            These lessons also suggest that economic development planning should be time-sensitive.  In a distributive environment in which there is extensive poverty and deprivation, pol­icy should sacrifice some economic growth in exchange for more rapid improvement in the wel­fare of the poor.  As the situation of the poor begins to improve substantially the mix of policy tools should then adjust toward a higher-growth strategy.  And in fact there is a mixed strategy that suggests itself upon reflection.  It would certainly be possi­ble to shift the balance of strategy priorities over time, favoring the poor in the early stages and favoring growth in later stages (as the absolute welfare of the poor improves substantially).  This would be a time-sensitive strategy: choose poverty-first strategy while there is widespread abject debilitating poverty; begin to shift to growth-first strategy as the poor pass the level of abject poverty in order to maximize the well-being of the least-well-off in future generations.

 

Heterogeneous goods and the poverty-first dictum

            Let us now attempt to formulate the poverty-first dictum more carefully.  In terms of the discussion of heterogeneous goods in the previous section, I will defend this principle as involving a segmented hierarchy of the goods of development.  Improving the welfare of the poor is to have lexical priority over all aggregate income improvements—in particular, over growth in per capita GNP.   Poverty alleviation is to have a heavy weight in comparison to important non-welfare goods of development (resource conservation, environmental quality), particularly at low levels of income to the poor.  And the interests of today's poor are to be weighted more heavily than tomorrow's poor, through a time discount function.  Let us examine each relationship more closely.

            The lexical priority of poverty alleviation over GNP growth reflects the idea that the  needs of the poor are more urgent than those of higher income groups.  Rising GNP per capita entails that average income is rising as well.  But we can infer nothing from this fact about the behavior of incomes of the various income groups.  It is entirely possible for increases in income to be concentrated in higher-income groups.  The distribution of the fruits of growth depend entirely on the character of the distributive institutions in place in the developing economy.  And it is not only possible but historically common that a widening income stratification will accompany growth, with the result that the poorest 20 to 40 percent of income earners show little or no improvement; their incomes may even fall absolutely as a result of worsening income inequalities [Fields, 1980].

            It is important to mark the implications of this ranking.  An increase in per capita GNP means an increase in overall social welfare: some groups, at least, derive higher incomes as a result of growth in national income, and this increase will have positive effects on their welfare.  Moreover, there is no reason to suppose that the beneficiaries of growth are limited to the idle privileged classes; it may be, for example, that a growth-first strategy has a greater impact on the welfare of the near-poor than either the poor or the rich.  (This would be true if the chief result of growth was a rising demand for modern-sector labor, leading to an increase in the size of this class and the real wage; [Fields, 1980, Poverty].)  And on any account these improvements are important and desirable.  Increase in income to the near-poor may mean that families are able to keep their children in school longer, to provide better nutrition and health-care, or to avoid the imperatives of child labor.  Putting the poor first may entail that we select a policy option that provides a small improvement in the welfare of the poorest, at the cost of a much larger improvement in the welfare of the near-poor, and this is a substantial cost.[2]  Nonetheless, I will defend this ranking of the priority of the poor over the rest of society, though it may be that others would prefer only to give greater weight to improvements to lower income categories [Chenery, 1974, #119].[3]

            Whatever justification there is for giving lexical priority to poverty alleviation over average growth, it does not extend to non-welfare goods such as environmental quality or resource conservation.  It is utterly implausible to maintain that any small improvement in the condition of the poor would justify even massive environmental harm (e.g. burning down the Brazilian rainforest in order to create more cultivable acreage for the landless poor).  What does seem true, however, is that increments in the welfare of the poor should count for more than increments in average welfare or the welfare of the non-poor in assessing environmental costs.  The urgency of the needs of the poor would seem to justify environmental costs that improvements of the welfare of the non-poor could not justify.  At the same time, this position requires that we make a calculating decision about possible tradeoffs between benefits to the poor and costs to non-welfare goods: the higher the non-welfare cost, the greater must be the benefit for the poor.

            The reason why environmental quality and resource conservation appear more weighty than growth or average welfare seems to derive from a cross-temporal or cross-generational consideration.  Environmental quality is a public good for persons of the present generation, but it is also a public good for persons of future generations.  And the value of that future good depends on the development and consumption choices made by the present generation.  Whatever else intergenerational justice requires, it demands at least that we should give some weight to important future interests in all our choices.  Therefore it cannot be that the welfare of today's poor trumps any consideration of environmental cost.  But here the asymmetry of time creates a new problem.  Tomorrow's environmental quality is not a public good or a private good for today's consumers.  So we must postulate that consumers and policy makers take some altruistic interest in the welfare of later generations; otherwise environmental quality may be expected to decline rapidly.

            This brings us to the final priority identified above: placing relatively greater weight on improving the welfare of today's poor over tomorrow's poor.  Here I am making several assumptions.  Most important is the assumption that poverty alleviation is occurring through a carefully structured process of economic growth.  This guarantees that the condition of tomorrow's poor will be better than today's poor.  Consider figure 2 once again describing hypothetical trajectories of three strategies in terms of the income flowing to the poorest 40%.  Strategy WF leads to an immediate improvement in income to the poor.  Strategy LF produces a slower rate of improvement in the first several decades.  After 40 years the curves cross; after this point the real income of the poor is higher on strategy LF.  By that time, however, the deprivation of the poor is no longer as severe as it is today; real incomes have doubled by this point.  On both strategies, we may suppose, the poorest strata have access to health care, adequate nutrition, and secondary education.  A temporal discount of future benefits gives us a way of giving immediate improvements in welfare greater weight than future improvements; at the same time, however, it rules out the situation in which extremely small improvements in the present trump massive improvements in the future.

            Consider one final difficult comparison of heterogeneous goods: this time the tradeoff between welfare of the poor and overall social well-being indicators such as infant mortality or longevity.  Suppose we are faced with a pair of policies, one of which confers a bundle of additional resources on the poor, whereas the other provides for an across-the-board increase in social health subsidies.  And suppose that the predictable consequences are these:  Plan A leads to higher income and welfare for the poor, which in turn produces an improvement in health indicators.  This improvement amounts only to a small percentage increase in average well-being, however.  Plan B leaves incomes as they were but produces a uniform improvement in health status, with a larger percentage increase in health indicators for society as a whole.  Both plans lead to socially desirable outcomes; so how should we choose between them?

            Here too I take the position that improving the welfare of the poor should receive greater weight than improving average social well-being.  But this position does not at all amount to diminishing the importance of the latter.  It is certainly a good thing to improve the health status of the near-poor, the non-poor, and the rich.  Given, though, that there are insufficient social resources to achieve all good things, we need to have a way of comparing the relative urgency of the choices before us.  And the following is a strongly supportable generalization: one's position within the scheme of income inequalities within a typical developing society is a very good indicator of one's performance on non-income indicators such as health status or longevity.  Low-income groups have sharply poorer access to food, health care, and literacy, with the result that their health status is dramatically lower than the social average.  Thus longevity, infant mortality, and morbidity are strongly associated with income, and raising the incomes of the poor may be expected to have a substantial effect on their health status.  (K. Nagaraj documents this sort of pattern in his analysis of infant mortality in Tamil Nadu [Nagaraj, 1986].)[4]  This circumstance has two implications.  First, the poverty-first approach is likely to have the greatest overall effect on health status for a particular group.  And second, the improvements that occur do so at the level where they affect the most urgent human needs.  It is always a good thing to add five years of life expectancy to a group average; but such an improvement is more significant when it takes the form of increasing the average from 45 to 50, than from 60 to 65.

 

 Distributive justice in development

 

            We now have a reasonably clear idea of what is meant by the principle of poverty-first development.  But why should we think that this principle is acceptable?  Why should we put such a high priority on the alleviation of poverty?  Why is poverty such a singularly important problem, demanding our immediate and highest attention for remedia­tion?  We think of poverty as synonymous with low income, implying material deprivation; and none of us would choose to live in the material circumstances of the poor.  But we can say more than this about the bad of poverty: there is a fundamental relationship between poverty and ob­stacles to human develop­ment.  It is not merely that the poor are able to consume less than the non-poor; it is that they are less able to develop their full human potential.  Poor or absent medical services lead to illness and premature mortality; poor education and illiteracy lead to stunted intel­lectual achievement; long and tedious work hours (when available) give rise to demoralized ev­eryday experience; and the social stigma of shabby dress, poor housing, and low status employ­ment lead to a failure of self-respect.  So poverty is a unique bad in its concentrated destructive effects on the realization of the full human capacities of the poor: it is not just that the poor have a lower standard of living, but that they live less than fully human lives.

            A. K. Sen's writings have contributed much to clarification of the bad of poverty. In his lectures on the standard of living Sen [Sen, 1987, Living] distinguishes between a commodity‑based defini­tion of the standard of living and a "human functioning" view of well-being. His central insight is that we are centrally concerned with human beings in possession of a bundle of human capabili­ties which can be either realized or impeded through the economic and social environment in which the person is located. 

            What reasons can be put forward to defend the poverty-first position?  It might be argued, against this position, that all members of society should be treated equally; and this means that no group should receive priority.  So privileging the poor is unfair and contrary to a principle of equality of treatment.  Instead, it might be insisted that improving average welfare should be the goal, or that equal proportional increases in welfare for all income classes should be the goal.  Or again, one might hold that poverty alleviation is a good, to be sure; but it is only one out of many important social goals, and should receive no more weight than other important goals—e.g. envi­ronmental goals.

            In this section I will consider a number of arguments for giving priority to poverty allevia­tion over other social goods in development planning.  None of these arguments is wholly com­pelling.  But taken together they give strong reasons for giving high priority to improving the wel­fare of the poorest strata of society.

 

A welfare argument

            There is a straightforward social-welfare rationale for putting the poor first. Sup­pose that we postulate a utility-based social welfare theory and we maintain that policies should be con­structed so as to maximize average social welfare.  The difference between the poor and the non-poor is that the former have less income.  By almost any measure there is a declining marginal utility of income: the utility gained by expending an additional dollar in a high-income situation is less than that gained by expending a dollar in a low-income situation.  Therefore we can maxi­mize social welfare by biasing policies in the direction of increasing incomes flowing to the poor.[5]

            This approach has very strong implications for distributive justice.  Consider the simplest case in which we have a set of n income groups and an amount of incremental income M to dis­tribute.  The assumption of diminishing marginal utility of income entails that utility is maximized when incomes are equal across groups.  Utility is maximized, then, if income is redistributed to achieve income equality across groups.  If we impose the constraint that no existing incomes can be redistributed (reflecting individual entitlements that cannot be changed), then utility is maxi­mized by directing new sources of income toward raising incomes of the poorest groups.  It can be shown that the increased utility produced by the expenditure of M is maximized by raising incomes from the bottom up: raising the income of the last group to the level of the second-lowest group; then raise this group up to the level of the third-lowest group; and so on until the resources are exhausted.[6]

            It might be noted that this finding is sharply at odds with a common criticism of utilitarian­ism: that the principle of utility is indifferent to distribution [Rawls, 1971].  This is true in one obvious sense: the principle is indifferent between cases in which the same amount of utility is distributed over a small minority or diffused over a large majority.  However, when we turn to consideration of the distribution of resources, along with the law of the diminishing marginal utility of resources, we get a strongly egalitarian conclusion: utility is maximized by distributing resources more equally.

 

An urgency argument

            Social welfare theory is generally premised on a theory of utility as subjective preference.  The good to be achieved through social choice is the satisfaction of individual preferences—what­ever they are.  If we adopt this theory of the good that is the ultimate object of social choice, then it is difficult to see why resources should be biased toward the poor.  The poor will enjoy greater utility through expenditure of these resources, to be sure; but this gain will be accompanied by a comparable loss in preference-satisfaction by the non-poor, and the net sum will be zero.  To put it as simply as possible, the poor will be able to purchase a more nutritious bundle of foods, but at the cost of the non-poor being less able to purchase textbooks for their children's schooling and of the rich being less able to furnish their homes as they desire.  The gains to the poor are balanced by the losses to the non-poor.  Therefore it is impermissible to privilege the poor; instead, the equality of persons requires that development should be neutral between all persons' prefer­ences.

            This argument turns on a subjective theory of welfare.  Well-being is simply the level of preference-satisfaction an individual achieves—whatever the content of his or her preferences.  My preference for truffles should receive as much weight as your preference for clean water.  However, a number of philosophers have argued that an objective theory of welfare is superior.  (See, for example, [Scanlon, 1975], [Griffin, 1986], [Braybrooke, 1987, Needs], and several authors in [Sen, 1982, Utilitarianism].)  On this approach, we ought not be neutral among subjective preferences.  Instead, we should distinguish between basic and non-basic preferences on the ba­sis of a theory of how the objects of preference relate to human needs at a variety of levels.  It is a natural fact about human beings that they need clothing, food, and shelter.  Somewhat less fun­damental are needs for education, health services, and retirement security.  Likewise, humans need meaningful work, opportunities for satisfying social relationships, the grounds of self-re­spect, and free political activity.  Finally, it might be said that persons need varied opportunities for entertainment and sport, access to li­braries and parks, access to means of communication (telephone, television, personal computer), and access to the marks of status and public accep­tance—attractive clothing, fashionable running shoes, or a mountain bike.

            It is fairly clear that there are important differences in the needs listed here.  If it is a choice between providing malaria pills to a cohort of Bangladeshi toddlers or the latest Air Jordan sneakers to a cohort of Boston teenagers, it is not difficult to argue that the former should take priority over the latter.  And this remains true even if we imagine that the net preference-satisfac­tion produced by the sneakers is equal to that produced by the malaria pills.  (Indeed, it might well be that the Boston teenagers feel intensely deprived, whereas the Bangladeshi toddlers are so demoralized that they would experience no subjective deprivation if the pills were not avail­able.)  The harder question is whether this distinction can be generalized.  Is there a basis for holding that certain needs are more important than others?

            Thomas Scanlon offers the distinction between urgent and non-urgent needs as an effort to make sense of this sort of example.  The general idea is that certain needs are more fundamen­tal than others because they are closer to the preconditions of continued existence.  Scanlon's own analysis is somewhat undetailed.  But A. K. Sen's discussion of capabilities provides a more developed basis for generalizing this notion.  On Sen's account, the most fundamental notion involved in human welfare is the idea of normal human functioning and the capabilities that must be realized to permit this level of functioning  [Sen, 1987, Living].

            Let us attempt to generalize this approach.  We can analyze urgency of needs in terms of the centrality of the capability that a certain good serves in the attainment of full human function­ing.  I will define a need in terms of the goods, resources, or institutions that are necessary for realizing some aspect of a fully developed human being.  And one need is more urgent than an­other if it is a prerequisite to the achievement of a feature of the full human personality that is prior to the feature satisfied by the second need.  For example, food is more urgent than educa­tion because a poorly fed child may die, whereas a poorly educated but well-fed child will sur­vive. Likewise, primary education is more urgent than access to libraries, because children who lack primary school will never be able to make use of libraries.  (See [Braybrooke, 1987, Needs] and [Griffin, 1986] for extensive development of the conception of need and objective interests.)

            If this distinction between urgent and non-urgent needs is viable, then we have a distinc­tive justifying the poverty-first principle.  Both poor and non-poor have a range of needs that are not yet satisfied.  But the poor have a much lower level of satisfaction of urgent needs than the non-poor.  And development planning ought to be biased toward satisfying urgent needs prior to non-urgent needs.

            This line of thought looks most plausible when we consider the extreme cases—e.g. malaria pills versus sneakers.  But it should be noted that other cases are more difficult. For most of the non-poor in developing societies are still possessed with a range of relatively urgent needs: higher quality food, more comfortable housing, access to secondary school, and so on.  These are not trivial human needs; to the contrary, their satisfaction is mandatory in pursuit of full human functioning.  And so the tradeoff to be considered is between satisfying the very urgent needs of the poor versus the moderately urgent needs of the non-poor.  And it is not self-evident that justice requires that we give absolute priority to the former; on the contrary, it is persuasive to suppose that large improvements in the latter might justly be chosen over small improvements in the for­mer.

 

A fairness argument

            We might motivate a priority for the poor along these lines: anyone would favor this prin­ciple in advance if uncertain whether or not he or she will be among the poor.  So fairness dic­tates that we should embody this principle in economic development policy.  This is a line of thought that follows John Rawls's construction of justice as fairness. 

            This approach can be developed further through discussion of Rawls's own principle of distributive justice, the difference principle [Rawls, 1971].  Rawls's difference prin­ciple es­tablishes a baseline in terms of which to evaluate social and economic inequalities, and has the effect of concentrating our attention on the welfare of the least-well-off position in soci­ety.  This principle has implications for economic policies in the less-developed world today; it implies that development policies ought to be structured so as to have the largest possible effect on raising the welfare of the poor in those societies.  Rawls has not applied this framework to the problem of economic development.  (Indeed, Rawls suggests that the "circumstances of justice" do not emerge until rather late in the process of economic development [Rawls, 1971].  ([Pogge, 1989] and [Beitz, 1981] have each borrowed some elements of Rawls's theory in their own theories of international justice.)  However, Rawls's theory of justice has the merit of provid­ing an ex­tensively developed discussion of the justice of inequalities, along with a broad literature identify­ing some of the strengths and weaknesses of this framework. 

            Rawls's theory of justice rests upon his argument that two principles of justice would be chosen in these circumstances of choice to regulate the basic institutions of society.  "The first statement of the two principles reads as follows.  First: each person is to have an equal right to the most extensive basic liberty compatible with a similar liberty for others.  Second: social and eco­nomic inequalities are to be arranged so that they are both (a) reasonably expected to be to ev­eryone's advantage, and (b) attached to positions and offices open to all" [Rawls, 1971,, pp. 60-61].  The first principle is referred to as the "liberty principle," while the second is the "difference principle."  It is the difference principle which is of greatest interest in development studies.  Rawls amplifies the difference principle in the following terms: inequalities in initial life prospects are justifiable "only if the difference in expectation is to the advantage of the representative man who is worse off, in this case the representative unskilled worker" (78). 

            Rawls applies the difference principle in terms of what he refers to as "primary goods"—goods that are needed for the furtherance of virtually any human life plan.  He includes income, status, and the prerequisites of self-respect.  This conception of primary goods converges nicely with the idea of "basic-needs" satisfaction and the fruition of human capabilities that A. K. Sen has of­fered (discussed above).

            The difference principle requires that

 

    inequalities are justifiable only insofar as they work to the advantage of the least‑well-off.

 

Justice requires, then, that the basic structure of society be arranged so as to create the least sys­tem of inequalities consistent with maximizing the position of the least-well-off. In the context of develop­ment, then, we may formulate the following principle:

 

    development strategies should be chosen so as to produce the most rapid improvement for the least-well-off.

 

This principle implies that we should not be concerned about average GNP or total GNP directly, but rather on the share of GNP flowing to the poorest 20%.  It also implies that if two outcomes assign the same absolute amount of income to the poorest segment, we should choose that out­come that contains the least inequality—thereby reducing the total of GNP.  We should not "stretch" the ladder of income.  This principle, however, has seriously counterintuitive implica­tions in the context of development theory.  For one of the central goals of development is to ex­pand the welfare of all members of society—to create a material basis for more fulfilling human life.  Growth, in other words, is of inherent value in development.  The difference principle, however, appears to imply that we should choose to minimize growth, by selecting against poli­cies that benefit groups other than the least-well-off.  This implication violates a reasonable Pareto condition, and would not be chosen by rational agents in the situation of the original position.  In­stead, agents would be interested in establishing the highest welfare floor possible, and then maximizing the welfare of each group above the floor.  Consider, then, the following principle:

 

    First maximize the income to the poorest 10%; then maximize the income to the next decile; and so on through the income ladder.

 

This principle involves maximizing GNP sequentially from the ground up; it does not permit tradeoffs between gains for higher deciles at the expense of lesser losses for lower deciles.  This principle puts the poor first, but also places positive weight on income gains to other groups.  It thus stretches out the income ladder and maximizing GNP consistent with maximizing the position of the least-well-off.

 

A human rights argument

            Finally, we must consider whether there is a human rights basis for favoring the poor over the non-poor in economic development.  (Henry Shue adopts such a position; [Shue, 1980, Rights].)  This line of thought flows rather naturally from consid­erations raised concerning urgent human needs.  Consider the following argument.  All human beings have a right to access to the minimal goods needed to satisfy basic human needs.  This right entails that if we are confronted with a group whose basic needs are not currently satisfied and if there are alternative plans that lead either to increased satisfaction of basic needs or to satis­faction of other persons' non-basic rights, we should choose the former.  The poor do not have a high level of basic-needs satisfaction.  They therefore have a right to priority in development planning until their basic needs have been satisfied.  Therefore development planning should give priority to improving the incomes flowing to the poor.

 

Assessment

            There is thus a family of converging arguments that support giving priority to poverty al­leviation.  At the same time, we have seen that there are other important goals within the devel­opment process as well.  The program of "putting the poor first" must therefore be formulated rather carefully, and the doctrine cannot reasonably be construed as requiring lexical priority over all other social goods.

 

Conclusion

 

            Let us regroup.  Economic development is an instance of goal-directed public policy, in which certain goods are selected as goals, and plans and strategies are adopted so as to bring about those goods.  Here I have focused on several normative characteristics of this process.

            First, I have drawn attention to the complex nature of the goals of development.  There are heterogeneous goods to be advanced, these goods have shifting characteristics over time, and the goods themselves may be construed as reflecting either the preferences of specific individuals (policy makers) or society at large. 

            Second is the problem of the role of justice, and normative considerations more generally, within the policy process.  Is it reasonable to assume that assumptions about justice and fairness have some motivational effect on policy makers?  Or are we forced to adopt the somewhat cynical perspective of narrow public choice theory, according to which officials are assumed to pursue their only own private interests?  I have offered reasons to believe that normative commitments can be motivationally effective, while recognizing the importance and frequency of policies driven by the latter sorts of motives.  This argument has a substantial practical import, since it means that philosophical discussions of the justice of development may in fact affect the policy process.

            The paper then turns to the substantive content of development policy.  I hold that justice requires that development should put a high priority on improving the welfare of the poor.  While recognizing that there are many legitimate goods to be furthered in development, I argue that poverty alleviation should have the greatest weight.  More fully, improving the welfare of the poor should have lexical priority over average growth, it should have a substantial (but not lexical) weight in comparision to intertemporal goods (environment, resources), and today's poor should receive greater weight than tomorrow's poor (through a time discount function).

            It is one thing to advance such a view and quite another to defend it.  In the final portion of the paper I argue that poverty is the most important consideration within the development process because of the intimate connection between poverty and the fulfillment of human capacities.  The poor are not merely relatively deprived; they are blocked from achieving full realization of their human potential.  This basic perspective is then further articulated through a series of arguments that converge on the conclusion that the poor should receive highest priority: a social welfare argument, an urgency argument, a fairness argument, and a human rights argument.

 

Daniel Little

Professor of Philosophy

Colgate University

Hamilton  NY 13346

 

References

[Lewis, 1986, #444, #445]

[Sen, 1982, #872]

[Sen, 1982, #873]

[Kohli, 1987]

[Nussbaum, 1993, #1318]

[Dasgupta, 1993, #1333]

[Dreze, 1995, #1341]

[Dreze, 1989, #175]