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WHY do some states progress rapidly while others don’t? Economists lack robust answers. One can identify economic policies which seem sensible, eg, investing in people, ensuring savings and having fiscal sanity. But the puzzle is why all states do not simply follow them? The debate then inevitably wanders towards non-economic factors determining the quality of governance.
One set of such factors which earlier received much attention among economists, especially when the modernisation theory was very popular after the Second World War, was the issue of national culture. Propagated by conservative American economists, the theory argued that people in developing states lack certain cultural traits critical to the US success, eg, hard work, enterprise, saving and planning etc. Thus, their self-flattering advice to others was to become more like Americans. However, this theory soon lost credit since it could not provide strong evidence.
But even almost 50 years after the fall from grace of this theory, similar ideas continue to enthral popular imagination. Thus, one hears ad nauseam in social events that the primary reason Pakistan does not develop is that Pakistanis are lazy, dishonest, disunited etc.
This is not surprising given that the theory’s basic elements have intuitive appeal, for obviously no nation can succeed unless its people work hard, save, be enterprising, etc. Also, even educated people without social science training have no clue about the complex cause and effect relationships between structural factors that influence economic development. Thus, they invariably place heavy focus on factors which they are familiar with, in thinking about development. Given the heavy doses of moral training people usually receive during childhood at school and home, these latter factors invariably relate to individual moral behaviour such as honesty, hard work, enterprise etc.
Cultural change does not precede but may follow rapid progress.
Before I get accused by conservatives of trying to spread immorality through Dawn’s august pages in discounting the virtues of honesty, hard work etc, let me clarify that I am not against the importance of these sterling individual qualities. My argument is that the widespread lack of these individual traits is not the set of binding constraints which holds nations back. Nor are these the primary factors endogenous changes which ignite national progress. These traits are either already present in most nations or can be quickly grafted when the tides of global capitalism turn in favour of a nation due to other factors.
One can consider countries which were languishing earlier but which have developed rapidly in recent decades, like China and India. If the culture theory is correct, their earlier lack of progress must have been due to inappropriate cultural traits.
More crucially, their subsequent progress should have occurred due to major changes in these cultural traits which occurred several years before they started developing (China in 1978 and India in early 1990s). But is there any evidence that a few years before each country started to develop rapidly, cultural habits there underwent major changes, due either to coincidentally simultaneously occurring individual brooding and awakening by the majority or social movements led by state or non-state actors? Not really. True, China had its cultural revolution from 1966-76, but that only wreaked havoc.
The general consensus is that both countries developed by loosening bureaucratic controls and opening up to the global economy, but not to the extent advocated by neoliberals. Further, after the two countries started developing, cultural changes did occur. So, anecdotal evidence suggests Indians in larger cities associated with global capitalism have become more materialistic and brash, at least going by Bollywood portrayals.
So, cultural change does not precede but may follow rapid progress as societies adopt the discipline of morality global capitalism imposes. This morality is selective. Labourers, consumers and ordinary people are exhorted to be honest, disciplined and rule-bound. But no such expectation is imposed on owners of capital, especially financial. States are asked to develop disciplined labour forces and ensure their salaries strictly follow productivity and do not become too high. But states are also encouraged not to tax and regulate capital too heavily so that the work incentives of entrepreneurs are not squashed. No such sympathy is expressed with respect to the work incentives of labourers.
Thus, once one exposes the cultural theory to the test of evidence, its intuitive appeal vanishes quickly. Readers may ask if not culture then what the drivers of development really are. Given that I am nearly out of space, I will follow the strategy followed by Scheherazade (the verbose orator of Arabian Nights stories) to keep the king engaged, by encouraging readers to read my future pieces for answers to that issue.
The writer heads INSPIRING Pakistan, a progressive policy unit.
Published in Dawn, September 27th, 2016
