The Optimist

Wealth of Nations

It's time to stop calling countries like Brazil and China "developing." They're just rich.

What's a rich country? It might seem an innocuously straightforward question. But it's not. Rich enough to do what? If you define rich as being able to afford long-range missiles and nuclear weapons, then even poverty-plagued North Korea qualifies (as long as you aren't too concerned about whether the missiles actually work). What about being rich enough to ensure a decent life for all your country's citizens? Many in the United States and Europe would argue that even their developed countries, with the world's highest standards of living, aren't rich by that measure. Or what about being rich enough to be a good global citizen, providing aid to those in more desperate need?

The good news is that, by almost any definition, there are a lot more rich countries than there used to be. The number of countries classified by the World Bank as "low income" -- at or below a national average of $1,005 per person per year -- fell from 63 to 35 between 2000 and 2010. That means there are now more middle-income countries than ever, while still other countries have moved up from middle-income to high-income status. And because rich countries generally lead the charge when it comes to providing aid to other places that need it, a lot more countries could soon be contributing to the global general good. The rise of the nouveau riche could really help change the world.

The United Nations classification of "developed regions" currently comprises Australia, Canada, Japan, New Zealand, the United States, and Europe as far as Russia. It's a group that basically includes the countries on top of the global income rankings; in other words, it's all relative, indicating status in the world pecking order, not necessarily wealth itself. And it's a definition that comes with obligations. The U.N. encourages these countries to provide 0.7 percent of their gross national product to foreign development assistance; 16 countries have pledged to meet the target by 2015, and Denmark, Luxembourg, the Netherlands, Norway, and Sweden have already surpassed it.

This generous spirit is a longstanding tradition. Fifty-two years ago, in March 1960, the first meeting of the Development Assistance Group was called to order in Washington by Italian U.N. Ambassador Egidio Ortona. Officials from Belgium, Britain, Canada, France, Germany, Italy, Portugal, and the United States discussed their assistance programs to less-developed countries. Within months, Japan and the Netherlands had been asked to join. All were already giving money to poorer countries spread across Africa, Asia, and Latin America -- the idea was to encourage coordination and greater aid flows.

Yet, most strikingly, many of these donor countries were still reeling from World War II and were far from what we'd think of as rich today. Italy's annual income per capita in 1961, according to the late economic historian Angus Maddison, was $6,373. That's less than the average 2008 incomes in Brazil, China, Malaysia, Mexico, Russia, and Thailand (measured in constant dollars). And Italy, mind you, was twice as rich as Portugal was in 1961. By 2008, Egypt and South Africa were already considerably better off than Portugal was back then, while India was roughly on par -- and it's surely richer today.

According to Maddison's data, about 28 percent of the world's population in 1961 lived in countries richer than Portugal, the poorest of the Development Assistance Group members. By 2008, 61 percent of the world lived in countries richer than Portugal was in 1961. In 1961, 75 percent of the world's GDP was produced by countries richer than Portugal. By 2008, that proportion had climbed to 89 percent. Here's the point: Today, most people live in, and the vast majority of the world's output is produced by, countries that would have been considered rich in 1961.

And it's not just income. Countries usually considered "developing" today have far higher average education rates and better health indicators than countries considered "developed" back in the 1960s. Portugal's life expectancy in 1961 was 63 years, according to World Bank data. That's lower than the 2010 life expectancy in Bangladesh, Ghana, and India. In Brazil and China, people in 2010 lived a full 10 years longer than those in 1961 Portugal. In fact, the average Brazilian or Chinese today lives longer than the average Brit or American did in 1961. And the average citizen 15 or older in Bangladesh, Ghana, Zambia -- or even Haiti -- has spent more years in school than the average German or French adult had in 1970.

So perhaps we should ditch the "developing" label we often slap on countries like Brazil, China, and Russia. In historical terms, we'd call them something else: rich. And it seems only fair to ask them to start acting like rich countries -- or at least like the ones from the 1960s.

To be fair, some already are. China's aid program has been growing at nearly 30 percent a year. The assistance programs of Brazil, India, and Russia are also rapidly growing. Add in the longstanding programs from the Middle East (like Saudi Arabia's $3 billion assistance program), and we're talking real money coming from new donors.

Then again, Brazil, China, India, and Russia combined gave away somewhere less than $6.4 billion in foreign assistance in 2010. By contrast, Canada alone gave $5.2 billion, France gave $14.4 billion, and the United States gave more than twice that. And if you take low-end estimates of the combined aid outflow from Brazil, China, and India in 2009, they're still considerably smaller than the aid those same countries collectively received. India, for one, gave aid worth about $488 million in 2009 and received aid worth about $2.5 billion.

So the BRICs -- along with other nouveau-riche countries like Malaysia and Mexico -- have some catching up to do. But if these new donors continue to expand their assistance programs at double-digit growth rates, they'll soon become a real force for development. That's especially important as traditional donor countries cut their aid budgets left and right. Austria and Belgium, for example, slashed their aid budgets more than 13 percent last year, and all signs point to the United States doing something similar this year.

Thankfully, there's a dwindling pool of countries in desperate need of help. Between 2010 and 2025, the number of countries with an average income below $1,165 (the cutoff to receive extremely low-interest loans from the World Bank) could fall from 68 countries with a population of 2.8 billion to 31 countries with a population of less than 1 billion, according to research from the Center for Global Development. Of course, places where the average income is just $3 or $4 a day still qualify as very poor -- and there's a huge role for aid there -- but the need will surely shrink in the coming decades. If aid budgets continue to rise at the same time, wiping out absolute poverty worldwide will become increasingly possible.

Telling Americans living on the poverty line of around $13 a day that they are 10 times richer than the vast majority of humankind throughout history is probably of limited comfort. But the absolute wealth of economies really does matter. It means there are more than enough rich countries to stop talking about the tradeoff between reducing poverty at home and helping the less fortunate abroad. They can afford to do both. Just ask Portugal.

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The Optimist

Dumb and Dumber

Are development experts becoming racists?

Columnist John Derbyshire's recent effluvia on the subject of things your white kid should know about black people was met with suitable disdain and a rapid expulsion from the web pages of the National Review. Genetic determinism with regard to racial intelligence -- alongside the very idea that intelligence can be meaningfully ranked on a single linear scale of intrinsic worth -- has been firmly debunked by Stephen Jay Gould, among others.

Sadly, Derbyshire-like prattishness on the intellectual inferiority of dark-skinned races and its impact on social and economic outcomes in the United States has a historied international equivalent. In fact, if anything, the academic consensus on why some countries are rich and others are poor is tacking closer to the shoals of genetic determinism than it has been since the days of high empire. Derbyshire's deserved disgrace is a needed reminder to throw brickbats at his partners in malodor who work in global development.

The supposed superiority of the white man's genetic endowment was one important justification for his colonial "burden" at the height of empire, perhaps especially in Britain, where the country's industriousness was taken as a sign and symptom of Saxon racial superiority. Nineteenth-century Scottish historian Thomas Carlyle epitomized the thinking in his "Occasional Discourse on the Negro Question" -- though expressing the sentiment in such shockingly crude terms hastened the decline of his influence. Talking to his "obscure black friends" in the West Indies, he laid plain why whites should rule over the former slave population: "You are not 'slaves' now; nor do I wish, if it can be avoided, to see you slaves again; but decidedly you will have to be servants to those that are born wiser than you, that are born lords of you -- servants to the whites, if they are (as what mortal can doubt they are?) born wiser than you."

Development economists over the past 50 years have eschewed genetic explanations for the wealth and poverty of nations, favoring factors from lack of investment to lack of health care and education to wrong policies to poor government institutions. But the mainstream is moving back in the direction of "deep causes" of development. These involve determinants such as the relative technological advance of regions some centuries (even millennia) ago or levels of ethnic diversity that have long historical roots. And Enrico Spolaore and Romain Wacziarg have gone even further back, arguing that "genetic distance" -- or the time since populations shared a common ancestor -- has a considerable role to play in the inequality of incomes worldwide. They estimate that variation in genetic distance may account for about 20 percent of the variation in income across countries.

Spolaore and Wacziarg take pains to avoid suggesting that one line of genetic inheritance is superior to another, preferring instead an interpretation that argues genetic distance is related to cultural differences -- and thus a more complex diffusion of ideas: "the results are consistent with the view that the diffusion of technology, institutions and norms of behavior conducive to higher incomes, is affected by differences in vertically transmitted characteristics associated with genealogical relatedness.… these differences may stem in substantial part from cultural (rather than purely genetic) transmission of characteristics across generations," they write.

But where Spolaore and Wacziarg are careful enough to step away from interpretations based on the superiority of certain allele types, more foolhardy scholars have been happy to jump in. Take the book by Richard Lynn and Tatu Vanhanen titled IQ and the Wealth of Nations. It suggests that the average IQ in Africa is around 70 points, compared with much higher averages in East Asia and the West. Based on their data, the authors suggest that higher average IQ scores are the cause of progress in measures of development, including income, literacy, life expectancy, and democratization. Lynn and Vanhanen even argue that IQ was correlated with incomes as far back as 1820 -- a neat trick given that the IQ test wasn't invented until a century later.

As that surprising finding might suggest, most of Lynn and Vanhanen's data is, in fact, made up. Of the 185 countries in their study, actual IQ estimates are available for only 81. The rest are "estimated" from neighboring countries. But even where there is data, it would be a stretch to call it high quality. A test of only 50 children ages 13 to 16 in Colombia and another of only 48 children ages 10 to 14 in Equatorial Guinea, for example, make it into their "nationally representative" dataset.

Psychologist Jelte Wicherts at the University of Amsterdam and colleagues trawled through Lynn and Vanhanen's data on Africa. They found once again that few of the recorded tests even attempted to be nationally representative (looking at "Zulus in primary schools near Durban" for example), that the data set excluded a number of studies that pointed to higher average IQs, and that some studies included dated as far back as 1948 and involved as few as 17 people.

Wicherts and his colleagues also point out that there is considerable evidence the tests Lynn and Vanhanen use to make their case "lack validity in test-takers without formal schooling." It is, surely, hard to take a multiple-choice test when you don't know how to read. Not surprisingly, IQ test results in Africa are weakly aligned to other measures of intelligence that don't require written test-taking.

Wicherts also points out international evidence that average IQs can rise dramatically over time -- by as much as 20 points in the Netherlands between 1952 and 1982, for example. In fact, Africa's current estimated "average IQ" is about the same as Britain's in 1948. The phenomenon of rising average IQ scores over time is known as the "Flynn effect," named after political scientist Jim Flynn, who popularized the result. It suggests that factors such as improved nutrition, health care, and schooling may all improve IQ test performance. Of course, Africa is currently behind richer regions on such factors, though it is rapidly catching up. Indeed, the Flynn effect may have added as much as 26 points to estimates of Kenyan IQ over a recent 14-year period. That's more than the gap between reported IQs in Africa and the United States estimated by Wicherts and colleagues based on samples from 1948 to 2006. In short, all of the evidence suggests lower levels of development cause lower test scores -- not the other way around.

Lynn and Vanhanen's work is part of a whole cottage industry of pseudo-scientific examination of race and development. For example, Satoshi Kanazawa at the London School of Economics and co-author of "Why Beautiful People Are More Intelligent," suggests a strong relationship between IQ and life expectancy across countries. On the basis of the quality of his work, Kanazawa isn't about to win a beauty pageant. The idea that better health might lead to improved IQ is a subject Kanazawa dismisses in one paragraph, arguing the "current consensus" is that "general intelligence is largely hereditary." Of course, that consensus -- to the very limited extent it is one -- is based on studies within populations born to mothers who enjoyed health care and good diets. And those people went on to enjoy similar luxuries themselves as well as a quality basic education. In short, they don't look much like people born in Niger in 1960.

There is a simple explanation for why the IQs of the offspring of colonists appear higher than those of the first descendants of the colonized. It's because the colonizers acted much as Thomas Carlyle's writing suggested they would -- as overlords with little or no interest in providing public services like a decent education or health care to a native population viewed with disdain. This left local populations malnourished, in poor health, and ill-educated -- if they were lucky enough to be in school at all.

The good news is that decolonization began a process of leveling the playing field, with rapidly climbing and converging indicators of health and education worldwide. Thanks to the Flynn effect, IQs are doubtless on a path of convergence as well, and the poisonous idiocy of genetic explanations for wealth and poverty will soon lose what little empirical support they might appear to have today.

Note: This will be my last weekly Optimist column for ForeignPolicy.com, though I will keep writing for the print publication on a regular basis. Thanks to Charles Homans and Benjamin Pauker for their excellent and patient editing over the past 18 months, and many thanks to you all for reading and reacting.

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