The New Tyranny

How development experts have empowered dictators and helped to trap millions and millions of people in poverty.

On the morning of Sunday, Feb. 28, 2010, the villagers of Mubende District, Uganda were in church when they heard the sound of gunfire. They came out to find men torching their homes and crops. The soldiers held them off at gunpoint from rescuing their homes; one 8-year-old child was trapped and died in the fire. The soldiers then marched off the 20,000 farmers from the land that had been in their families for generations.

The reason for the violence was that a forestry project financed by the World Bank wanted the land.

The only thing that distinguishes this episode from the many human rights violations that happen in the name of development is that it got unusual publicity. The New York Times ran a front-page story on it on Sept. 21, 2011. The World Bank the next day promised an investigation. 

What is most revealing of all about this episode is what happened next: nothing. The World Bank never investigated its own actions in financing this project. Now, just after the fourth anniversary of the Mubende tragedy, it has been forgotten by nearly everyone except its victims.

The sad neglect of the rights of the poor in Mubende follows from the ideas behind the global war on poverty. Those who work in development prefer to focus on technical solutions to the poor's problems, such as forestry projects, clean water supplies, or nutritional supplements. Development experts advise leaders they perceive to be benevolent autocrats to implement these technical solutions. The international professionals perpetrate an illusion that poverty is purely a technical problem, distracting attention away from the real cause: the unchecked power of the state against poor people without rights. The dictators whom experts are advising are not the solution -- they are the problem. 

The individual economic and political rights crucial to development include all those we take for granted at home, such as the right to your own property, the right to trade with whomever you wish, the right to protest bad government actions (don't burn down our houses!), and the right to vote for politicians who do beneficial actions (clean our water!). Technical experts in development sometimes concede some rights and deny others, which disrespects rights for what they are: unalienable. The Uganda story shows the Mubende farmers' lack of both economic rights (rights to their own property) and political rights (prevented at gunpoint from protesting).

The tyranny of experts that neglects rights is first of all a moral tragedy. It reflects a double standard in which we respect rights for the world's rich -- is it conceivable that we would forget these farmers if the story had happened in Ohio? -- but not for the poor. 

The technocratic approach of dictators advised by experts is also a pragmatic tragedy, because it does not actually work to end poverty. New research by economists on history and modern experience suggest that free individuals with political and economic rights make up remarkably successful problem-solving systems. Such systems based on rights reward a decentralized array of people: Economic entrepreneurs with property rights get to keep the rewards of solving the problems of their consumers. Political entrepreneurs at many government levels and in many departments get rewarded with a longer tenure in office if they solve the citizens' problems, and they are driven out of office if they don't.

In contrast, Uganda's dictator Yoweri Museveni (a longtime favorite of development experts) can use repression and patronage -- financed, for example, by the sales of the Mubende farms -- to stay in office despite harming his own subjects. 

Focusing on rights yields two perspectives on how development success happens. First, societies that have already attained individual freedom are likely to have already escaped poverty. Economists have gone back deep into our own history to confirm this widely-accepted story for how we in the West escaped our own poverty, but we seem unwilling to consider that the same story could play out in the rest of the world. Second, societies in which there is a positive change in in freedom will likely see a positive change in prosperity (ergo, rapid economic growth and fall in poverty). Despite the indifference or even hostility of development experts, freedom is spreading anyway to some places outside the West.

The lifetime of a Korean peasant born in 1915, Chung Ju-yung, illustrates what can happen with growing freedom. Chung was born into a society that had only recently abolished a rigid class system that included slaves and "out-castes," in which he would have had little future. A 1919 Korean declaration of independence said "by protecting our individual rights to freedom our joy shall be full." The Japanese colonial regime then occupying Korea was less enthusiastic about individual rights, killing 7,500 people demonstrating for independence and jailing 46,000 more. In Cheamni village near Suwon, the Japanese herded villagers into the local church, locked the doors, and burned it down. 

Chung and other Koreans would get more freedom after liberation from Japan in 1945. At first, however, South Korea's post-independence rulers imposed extensive controls on Koreans' economic rights, such as restricting trade with foreigners and seizing most of the rewards. But then Chung saw Korean rulers cede more and more economic freedom beginning in the 1960s. Chung also lived to see the triumph of political rights, after student protesters and other activists forced autocrats to allow democracy, which South Korea has now enjoyed for a quarter century. (South Korea is often mischaracterized as an autocratic growth miracle, which fails to understand the theory that would match changes in prosperity to changes in freedom. The correctly predicted match in South Korea is between a miracle of rapidly rising prosperity associated with the falling power and then disappearance of autocracy.)

Chung Ju-yung took advantage of these expanding freedoms to leave the infertile land of his home village and to found an auto repair shop in Seoul, rehabilitating vehicles discarded by American occupation forces. By the time Ford arrived in South Korea in the 1960s, looking for a Korean manufacturer to provide cheap labor for Ford cars, Chung was ready for them. Ford indulged Chung when he wanted to move from assembly of Ford designs to actually doing Korean models, fearing little from a man and a country that had barely seen a car before World War II. Ford woke up too late to the competitive threat of Chung's company that he had given the Korean name for "modern": Hyundai. South Koreans at home chose Chung's cheap small cars to solve their personal transportation problems. Eventually, consumers in the rest of the world got equally enthusiastic about Hyundai cars, creating rising incomes for South Korean workers. Today, the Hyundai Sonata wins quality awards in the U.S. market, Hyundai is the world's fourth-largest auto company, and Chung is only one of the many spontaneous problem-solvers -- individual entrepreneurs, traders, technology imitators, and political activists -- that ended poverty in South Korea. 

So what should we do about rights for the poor? Possible starting places for Western policy changes are to not fund dictators, to not support projects that torch farms, to not break promises to investigate rights abuses, and to not let us forget such abuses and missing investigations.

But obsessing too much on the "what should we do?" question should not hand the agenda back to the same technical experts who have showed so little interest in the rights of the poor in the first place. The danger of such a tyranny of experts is illustrated by a long history of politicians using technical poverty debates as an excuse to avoid debating rights for the poor. 

The concentration on expert development has proven remarkably useful to evade the rights of the poor for nearly a century. In 1919, at the Treaty of Versailles talks after World War I, U.S. President Woodrow Wilson justified the transfer of former German African colonies to Britain as part of a "trust" for the "helpless parts of the world," which would be "administered for the benefit of their inhabitants...during the period of their development." The whole effort would be guided by expert knowledge, what the former Princeton professor grandly called "the counsels of mankind." The idea of expert development was a welcome distraction from the political reality of continuing colonial despotism in Africa in the interests of the colonizers.

In 1925, tensions flared in the British colony of Kenya between white settlers and indigenous Africans whose lands the settlers were taking. Inspired by the technical approach to development set out at Versailles, colonial officials' response to these tensions was to suggest doing a report on British Africa that would be a "dispassionate study of the facts" -- evading the real issue of the white settlers violating the rights of indigenous Africans. 

The eventual "dispassionate study" was not completed until 13 years later. A colonial official named Lord Hailey had called upon an array of technical experts in many fields to produce a 1,837 page report, published in 1938 as "An African Survey." These experts made many precise technical recommendations. A surprising number of these recommendations -- for example, "nitrogen-fixing legumes" for soil fertility -- are identical to those made by United Nations and Gates Foundation experts on Africa today.

The same colonial official, Lord Hailey, took a further step to use technical development to evade the rights debate in the British Empire during World War II. Lord Hailey rebutted those -- including some American commentators -- who wanted to end the empire after the war, justifying its continuation as an agent for "the betterment of the backward peoples of the world." He conveniently assumed that Africans would view "political liberties" as "meaningless unless they can be built up on a better foundation of … economic progress." Yet again, technical development done by a state with unchecked power was an excuse to postpone indefinitely consideration of human rights. 

Ironically, these development ideas outlasted the British Empire they had justified. The empire collapsed sooner than expected, in the late 1950s and early 1960s. Yet the same technocratic neglect of rights appealed to the indigenous African autocrats who took over after colonial rulers left. The same development economists who used to advise the Colonial Office now advised the new autocrats (for example, later-Nobel-Prize-winning economist Sir Arthur Lewis did both, working with Kwame Nkrumah of Ghana after it became independent in 1957). Where autocrats used to appeal to the divine right of kings, autocrats could use the experts to articulate the development right of dictators.

Neglecting the rights of African citizens also appealed to American foreign-policy experts who sought those same autocrats as allies in the Cold War, cemented by loans from the new post-World War II organization staffed by technocratic experts: the World Bank. Decades of economic stagnation in Africa followed. 

Today, there is yet again a U.S. technocratic embrace of autocratic allies in Africa and elsewhere, this time for the "war on terror," still fueled by World Bank loans. The U.S. military's "Africa Command" views Uganda's Museveni as a "key U.S. strategic partner," providing troops to chase terrorists in Somalia, for example. The technocratic vision made it possible for Hillary Clinton, while secretary of state, to declare that "defense" (of the United States) and "development" (of the rest of the world) were "mutually reinforcing," thus enabling a grand alliance for development between humanitarian and national security interests.

Unfortunately, it is this same political alignment that lets the World Bank get away with its own violations of rights in Mubende, Uganda without even an investigation. The same politics also helps explain the failure of the development establishment to protest the World Bank's violations and its missing investigation of its own violations. 

Because of this long history, the debate between authoritarian and free development never really happened. So the choice that development made a long time ago to prefer the tyranny of experts over the rights of the poor sadly continues today.

There still remain many compassionate people in the West who have all the right motives to ask "What should we do?" 

And the answer is to have the authoritarian versus free development debate that never happened.

It is time at last for the tyranny of experts to end. It is time at last for the silence on unequal rights for the world's poor and the world's rich to end. It is time at last for all men and women to be equally free.

This article is an excerpt from the book The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor, published in March 2014.

Correction (March 20, 2014): An earlier version of this article, which highlights a World Bank-financed project, carried a photo of the International Monetary Fund. The photo has been corrected to one of the World Bank.

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Bringing the Pain

Can sanctions hurt Putin enough to make him give up Crimea?

On Wednesday, the United States announced an initial round of sanctions in response to the situation in Ukraine, imposing a visa ban on individuals who played a part in Russia's military intervention. Advocates of economic pressure against Moscow clearly hope it's not the last round. Since the occupation of Crimea, there's been a slow rumble of calls from within and outside the Obama administration for using economic pressure to force Vladimir Putin's hand in Ukraine. Certainly, as an alternative to the use of force, sanctions have their appeal. If U.S. and European-led sanctions against Iran brought that radical regime to the negotiating table, then surely a replay could do the same for Vladimir Putin's Russia, right? The economist Anders Aslund is quite optimistic, telling the New York Times's Peter Baker that, "Russia can be forced out of Crimea with the combination of financial sanctions plus straightforward hard diplomacy."

Is he right? I know a little something about sanctions, and so, in response to popular demand, I feel obligated to weigh in on whether economic coercion will work in this instance. But you won't like my answer: even perfectly-designed economic sanctions won't eject the Russians from Crimea, and what will be implemented in the coming days and weeks will be far from perfect. But the United States should impose sanctions anyway.

The first thing to understand about sanctioning Russia over its incursion into Crimea has nothing to do with the impact of the sanctions and everything to do with what is being demanded of Moscow. The United States wants Russia to withdraw military forces from a piece of territory they have long coveted. However much Russia has contravened international law over the past week, they've changed the facts on the ground. They control Crimea, and public opinion in that autonomous republic is pretty Russo-friendly. The current status quo for Russia is that they control that territory. In world politics, there is no greater demand to ask of a government than to make de facto or de jure territorial concessions. The domestic and international ramifications of such a concession are massive -- especially after force was used to occupy the territory. So recognize that the demand being attached to the sanctions is so large that success is extremely unlikely.

The only case of economic coercion succeeding in a similar case in history was the 1956 Suez crisis. In that case, Britain, France, and Israel withdrew their forces from the Suez Canal following a U.S.-inspired run on the pound sterling. Except that the Suez case is not at all similar to Russia/Crimea. Britain was a treaty ally of the United States; not so much with Vladimir Putin's Russia. The Suez was far away from British soil; Crimea is just across the Sea of Azov. And, perhaps most importantly, Britain was in a fragile economic state trying to protect a fixed exchange rate. Russia's economy has its problems, but a shortage of hard currency reserves ain't one of them.

So the conditions under which sanctions would force Russia's hand in Ukraine are far from ideal. The proposed sanctions coalition is equally flawed, however, as my FP colleague Colum Lynch has noted. European Union leaders are not exactly keen on the idea of broad-based economic sanctions, for understandable reasons. Britain needs Russian finance capital; the rest of Europe needs Russian energy. France is traditionally the most hawkish country in Europe, but that country is too busy planning to export warships to Russia to organize European sanctions. As a result, there's been nary a peep out of Paris. If Russia continues to jerry-rig a Crimean referendum to pry it free from Ukraine, then the EU, led by its eastern members, might come around to sanctions. But that will take time -- both to organize and to take its toll on Russia -- and the more time that passes, the more that Russia can do to try and "normalize" the status quo.

The United States, on its own, has limited levers on economic influence over Russia. Financial sanctions and asset freezes sound good, part of the newfound policymaker faith in "smart sanctions" as a way squeezing a country's elite without hurting the population. It's likely that targeted financial sanctions could, if well designed, impose some costs on Russia's oligarchs and officials. But this assumes that Putin needs the support of Russia's plutocrats rather than vice versa. The past 15 years of Russian history have demonstrated that the current Russian president has little compunction with exercising state power at the expense of Russia's 1 percent. As for opening up U.S. energy exports as a way of diluting European dependence on Russian natural gas, it's not a bad idea -- it's not going to generate much pain in the short term.

Sorry, but the fact remains that sanctions will not force Russia out of Crimea. This doesn't mean that they shouldn't be imposed. Indeed, there are two excellent reasons why the United States should orchestrate and then implement as tough as set of sanctions on Russia as it can muster. First, this problem is going to crop up again. Vladimir Putin has now invaded two neighbors in six years to destabilize regimes perceived to be hostile to him. Post-Crimea, any new Ukraine government will continue to be hostile to the Russian Federation. There are other irredentist areas in the former Soviet Union -- *cough* Transnistria *cough* -- where Putin will be tempted to intervene over the next decade. At a minimum, he should be forced to factor in the cost of sanctions when calculating whether to meddle in his near abroad again. President Obama was correct to point out the "costs" to Putin for his behavior -- now he has to follow through on that pledge.

Second, while sanctions cannot solve this problem on their own, they can be part of the solution. Over the long term, Russia does need to export energy to finance its government and fuel economic growth. Even if planned sanctions won't bite in the present, the anticipation of tougher economic coercion to come is a powerful lever in international bargaining. The closer the European Union moves towards joining the U.S. sanctioning effort, the more that Russia has to start thinking about the long-term implications of its actions. Any political settlement over the future of Ukraine will require compromise by the new Ukrainian government and its supporters in the West. Imposing sanctions now creates a bargaining chip that can be conceded in the future.

After decades of policymakers deriding the utility of economic sanctions inside the Beltway, there is a newfound enthusiasm for them. As someone who has made the cause for sanctions under certain circumstances in the past, this is a welcome change. However, no one should have any illusions about what economic coercion will accomplish in Ukraine. Russia will not acquiesce on Crimea because of financial sanctions. That doesn't mean they're a bad idea.

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