CENTRE for POLICY ANALYSIS

CENTRE for POLICY ANALYSIS

“Social progress can be measured by the social position of the female sex” - Karl Marx

ARTICLE


Treating the Poor as Development Guinea Pigs


India has long been a testing ground for Euro-American products, particularly in agriculture and medicine - and of late, finance and insurance - whose producers make the most of loose regulations and the diversity of a huge population. This cuts research costs dramatically for lucrative products to be sold in those countries, as also to promote the agenda of globalisation.

The relationship is highly exploitative and many believe it represents a new form of colonialism. Development is a new and fertile ground for such experimentation upon the poor. Poor societies have become the subject of experimentation by development scientists. The Nobel Memorial Prize in Economic Sciences, funded by the Bank of Sweden, was recently awarded for such randomised controlled trials that have changed the face of development economics. What was earlier used for clinical trials of medicines has now become a tool for gauging the efficacy of financial and social medicines.

Everyone must have heard depressingly familiar tales of poor, often uneducated people saying how flattered and privileged they were made to feel as they were suddenly offered the chance to receive medicines and nutritious food usually out of their reach. All of them claim that, contrary to Indian laws governing drugs trials, they gave no informed consent. The companies choose only poor, illiterate people who do not understand the meaning of clinical drug trials, even though drug trial protocols demand that they should be carried out on all sections of society.

India has also been fertile ground for swindles that have bilked mostly low-income households of many millions of rupees. The often illiterate investors have been periodically gulled by nefarious characters into dubious schemes. In the absence of strong laws, these mercenaries have been able to successfully game the system. As a result the poor have now become wary of investing money even in credible organisations.

New agricultural practices are also being propagated with enticements of extravagant promises. By manipulating the choices of consumers at bottom of the income pyramid, these corporations are further disempowering the poor. The damage to the economy and ecology of these already fragile societies is now starkly visible. The cost of bearing the failure of these experiments can be significantly high for those who, apart from coping with harmful effects, also face the opportunity cost of setting them right.

We often mistake innovation for invention. Innovators are anything but inventors: they offer deliverables because their focus is on taking something already known and improving it. Inventions are the real breakthroughs which have the effect of transforming entire cultures for the better.

The commercial pitch

A fresh nuance in the innovation discourse is the concept of ideas which have potential business value or a strong commercial proposition. In the new paradigm the net benefit to the society is usually outweighed by the profit revenues accruing to the innovators' financial backers – the investors and political actors who now form a new and important element in the ecosystem.

Most innovations are now being measured in terms of their commercial and business worth, and how effectively they can be pitched to the investment world. The language of innovation is now increasingly couched in financial jargon, and we must acknowledge this new development, however disdainful it may appear to us. There may be innovations which bring substantial net benefits to the society, particularly to those excluded from mainstream development, but these may not find strong adherents because they don't have a robot business value.

Such innovations are oftentimes skewed and tailored to meet the needs of the rigid financial framework of the funders. This usually results in a compliance culture, one that is highly regimented leaving little scope for creativity and attention to other dimensions of clients' well being.

Thus the tramlines are set. What can be measured becomes the defining metric, and what cannot be measured using existing tools is completely overlooked, even though it may have meaningful impact for people.

Regimentation and compliance is the way of getting people through a system they don't own, or own up to, and hence aren't going to give their fullest commitment. A narrow set of measures, enunciated by funders, undervalues the potential of development agents to use their own native wisdom and skills to add value to the work.

The dynamics and motivations of those associated with the project are so profoundly influenced by the investors' rigid parameters that the system as a whole becomes a military operation. In interventions for housing and health for the disenfranchised, the values of a welfare state are made to speak to the instruments of a market economy.

This new dimension of development and innovation has both pros and cons. While it is being made out to be a win-win formula for the creators of the model and the recipients, given the influential position that the proponents enjoy on account of their financial and political muscle, and the dominant position they have in the equation, it has degenerated into a monopolistic power for the funders. Microfinance is perhaps the starkest example of this.

There is now huge money in the field of innovation, but much of it comes from business-minded investors who are using this double-edged sword for their own hidden agenda. They claim to be investing money for the betterment of society, and often they benefit from this claim, so they do not give the faintest hint of their larger commercial and business objective.

Concepts like social value, social audit, sustainable development, and holistic growth have now only academic value and have become fatigued on account of overuse and misuse. These are terms that hide the true face of business corporations. Perfunctory references to these concepts in annual reports and public statements have reduced them to having only ritualistic value.

Innovations are usually not precise. They do not come with any elaborate user manual. They are sketchy and the main ideas have to be fleshed out. These experiments are performed on the vulnerable. The models suggested by innovators are sometimes wild thoughts, sometimes wilfully ignorant, sometimes they are seeds which germinate and sport if they get the right soil and wither if the soil is unpalatable.

Any innovation has several gears and levers. What gear works and makes for a perfect ride in a given terrain is up to the driver's skill. It is the driver who makes the innovation roadworthy.

Responsible research

When conventional wisdom fails and its predictions turn out to be ridiculous, and when hopes become cruel illusions, people in power do not as a rule hold up their hands and admit their mistakes. They cannot accept a loss of face and the subsequent denudation of their privileged positions.

However, the point to bear in mind is the nature of the beast. Even the most meticulous and conscientious managers will make mistakes. The first instinct of managers is to try and cover up, pretend it never happened and hope it will go undetected. Instead, if you have made a mistake, acknowledge it. If you act defiant and unapologetic, you will end up in trouble.

On the other hand, innovations such as randomised controlled trials in the field of policymaking remind us that all innovations and interventions must be informed by hard thinking and rigorous evidence. Such research based policymaking is indeed bearing fruit here and there in the world’s battle against poverty. Most ideological activists have contempt for details, and it is here they will have to understand that woolly idealism is fraught with dangers unless it is tempered and informed by intelligent policy design.

Akin to this sense of responsibility on part of the development community is the system of accountability. Development staff cannot be given discretionary powers without adequate checks. This does not imply that accountants can bog down projects by insisting on compliance with minor conditions, particularly when a delay would adversely affect the execution of the project. This is particularly true in case of rehabilitation programs for those affected by natural calamities. At times such systems may affect project schedules and result in cost overruns, but the credibility of the system cannot be diluted for the sake of expediency.

This is one of the most important lessons offered by projects that have failed in the past. Poor systems give a lot of scope for the abuse of power.

There is need for greater fidelity to the principle of system integrity, which is based on the concept of a whole that's greater than the sum of its parts. A critical element of this principle is to understand how parts of the system are interconnected, how they influence one another within the whole, and how the relationship of the whole weighs on each of these parts.

Although the problems of poverty, inequality, and jobless growth are all interlinked and demand a systemic, holistic and coordinated approach, policy instruments often adopt a disjointed and siloed perspective to achieve results, ignoring the interdependencies between systems, sectors and scales. Many well-intentioned policies are poorly designed because they overlook this aspect.

A policy must be seen as a living organism where each organ has its own unique contribution to make to overall health. There are several policies which when dissected have novel objectives and features which are, however, not organically aligned. There are good ingredients but they have not been meshed into the right recipe.

A better way to drive a revolution of this type is through empathy. Not a form of sympathy that comes from superiority, but one born of profound humility. It is an offering of respect, a moment of listening to stand in the shoes of another. The most successful leaders are those who recognise this truth and invoke it in the developmental interventions they shepherd. When we design solutions that recognise all as equal partners, we have a real chance of making it to the goalpost. And beyond, to ensure enduring and sustainable success.


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