Lant Pritchett’s idea of development

Pritchett has one of the most unorthodox view on growth and development. (I had mentioned briefly about him here)

He says migration i.e. let the people migrate to developed countries as temporary wokers, earn a decent living and come back to their homes. Sample this (from this NYT profile):

To those standard solutions, trade and aid, Pritchett would add a third: a big upset-the-applecart idea, equally offensive to the left and the right. He wants a giant guest-worker program that would put millions of the world’s poorest people to work in its richest economies. Never mind the goats; if you really want to help Gure Sarki, he says, let him cut your lawn.

He has published a book called “Let Their People Come”, which is available for free online which puts forward most of his views. He says there are three generations of reforms:

The first generation tried everything at once — roads, drinking water, new crops — and failed through complexity. The second generation simplified: road builders just built roads; well diggers dug wells. But some villages got roads when they needed wells. And some villages got wells that did not work. Some villages got nothing because people stole the cash. The third generation program is flexible; the money can be put to many uses. It is “demand driven”; villagers decide. It is “transparent”; the accounting is posted on a bulletin board.

Further the article says:

Pritchett sees five irresistible forces for migration, stymied by eight immovable ideas. The most potent migration force is the one epitomized by Nepal: vast inequality. In the late 19th century, rich countries had incomes about 10 times greater than the poorest ones. Today’s ratio is about 50 to 1, Pritchett writes in “Let Their People Come.” The poor simply have too much to gain from crossing borders not to try. What arrests them are the convictions of rich societies: that migration erodes domestic wages, courts cultural conflicts and is unnecessary for — perhaps antithetical to — foreign development. When irresistible force meets immovable object, something gives — in this case legality. Migration goes underground, endangering migrants and lessening their rewards.

The key to breaking the political deadlock, Pritchett says, is to ensure that the migrants go home, which is why he emphasizes temporary workers (though personally he would let them stay). About 7 percent of the rich world’s jobs are held by people from developing countries. For starters, he would like to see the poor get another 3 percent, or 16 million guest-worker jobs — 3 million in the U.S. They would stay three to five years, with no path to citizenship, and work in fields with certified labor shortages. He assumes that most receiving countries would not allow them to bring families. Taxpayers would be spared from educating the migrants’ kids. Domestic workers would gain some protection through the certification process. And a revolving labor pool would reach more of the world’s poor.

However, he has opposers to his idea:

One of those people is Jeffrey D. Sachs, director of the Earth Institute at Columbia University. “Separation has spread adultery, divorce and AIDS across the developing world. “It’s tragic!” he said. “Let them come as a family! Having tens of millions of men separated from their families in temporary living conditions is hardly going to be conducive to the kind of world we’re aiming to build.

The best words come from Summers:

Lawrence Summers, Pritchett’s old mentor, said Pritchett’s book may be like Milton Friedman’s “Capitalism and Freedom,” which seemed “lunatic in the moment” but won converts with time. Still, he wonders if the West can create migrant subcastes without compromising its values and fears that voluntary compacts do not solve the moral problem.

It is phenomenal that the debate on how to reduce inequality and help development is finding may takers and such diverse and well-thought out points. A must read ….both the article and Pritchett’s book….

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