We’re on home stretch of the book, with Easterly focusing on the success stories of Japan and China (countries never colonized by the West), and the atypical success stories of previously-colonized Singapore and Hong Kong.
The thesis of the chapter may best be described in Easterly’s contention that “it is easier to search for solutions to your own problems than to those of others.” While this statement doesn’t scale (I’d actually contend that in a lot of cases, he basically has it backwards – sometimes an outside pair of eyes can provide the solution that insiders are blind to), let’s go with it for now.
Japan’s success can partially be ascribed to their attitude towards the West in the 1860s:
“’Japanese spirit, Western learning.’ The young revolutionaries combined patriotism with pragmatism – they realized the West was ahead, and they wanted to borrow Western methods to catch up, while preserving Japanese institutions, culture, and independence… They invited Westerners to Tokyo, and themselves went on long tours of the West. But this was to create no dependence on the West; the watchword was ‘self-help’”
With strong government institutions, private property rights, and a sufficient tax base, Japan was poised to capture the gains from the private sector’s innovation (known to those us in the West today as giant conglomerates like Mitsubishi), and success begat success.
Then came World War II and the annihilation of Japan, followed by America’s rebuilding of the decimated country (physically and institutionally). I think it’s fair to say that much of what America did was similar to its Marshall Plan in Europe: the physical and institutional infrastructure existed previously, so Japan simply needed the funding and the time to rebuild.
But what, if anything, should Japan’s experience tell us about foreign aid specifically? Monetarily, Western foreign aid was sparse – but that’s because it wasn’t needed. It’s difficult for me to ascribe any significant lesson from Japan to the developing world today with respect to monetary aid.
What was needed included Western expertise from a technological and business management standpoint, which can be seen throughout Japan’s history: the “Western methods” the revolutionaries picked up in the 1860s and Deming’s post-war injection of operations expertise led to the creation of some of the world’s most vibrant and prosperous companies (Sony, Mitsubishi, and Toyota among myriad others). I think this lesson is largely transferable; where possible, Western methods, expertise, and general know-how can serve as innovation catalysts for entrepreneurs and innovators in the developing world – if done in a culturally-sensitive and humble way. The West can midwife progress, in other words, without driving it independently.
Next up: what’s the deal with Singapore and Hong Kong?
They’re both former colonies, yet they’re killing it in the global marketplace. Easterly holds that their success can partially be explained by the fact that,
“they were unoccupied territories that the British colonized with the permission (or coercion) of the nearby local rulers….The British also left the Chinese communities free to pursue their incomprehensible customs and more of less govern themselves…”
To simplify things a bit: the former colonies are successful today because the British didn’t upend everything – mainly because there wasn’t much to upend in the first place. Here too, I think it’s tough to make the argument that significant lessons for today’s environment can be learned from Singapore and Hong Kong, other than a very general “try not to change everything; only do what’s absolutely necessary.” Even this is problematic: “absolutely necessary” is an awfully flexible phrase, open to wide interpretation with the benefits of hindsight.
Next up: China. Let’s be honest: China is a weird success story; as Easterly notes,
“It is an unconventional homegrown success, failing to follow any Western blueprint for how to be modern. It combines lack of property rights with free markets, Communist Party dictatorship with feedback on local public services, and municipal state enterprises with private ones.
I am decidedly not an authority on recent Chinese history, so I have a hard time taking a critical eye towards this section (of course, the same holds for Japan and Singapore, and non-Western history in general); it’s impossible to ascribe China’s success to any one causal explanation, and it’s hard to say if China’s “weirdness” will continue to be a boon for its unheard of growth.
In any event, Easterly’s claim about China – and subsequently India – is that Western intervention was not the proximate cause of their growth; homegrown Searchers were.He holds that the World Bank and IMF are trying to take credit for a success that isn’t theirs.
This may or may not be true, but it’s kind of a specious argument; successful development can’t be ascribed to Western help, but all cases of unsuccessful development are at least partially caused by Western ineptitude, Easterly seems to argue.
In short order, Turkey, Botswana, and Chile are heralded as exemplars of homegrown development. I’d rather not touch on Chile (much has been written about Milton Friedman’s “Chicago Boys” and their influence on the country – well worth reading up on), but Botswana warrants some attention. Easterly holds that Botswana is an example of an African country that shows that “if Africans can get good government from their rulers, the abundance of natural resources can be turned into a blessing.” At the same time, Botswana doesn’t typify African countries, so it’s hard to draw a 1:1 conclusion:
“…favorable factors were benign neglect by Britain during the colonial period, the absence of ethnic conflict because of the relative homogeneity of the Tswana people, and clear indigenous property rights based on cattle holdings.”
We can decry colonialism all we want, but we’re stuck with its deleterious effects. Most African countries don’t have the mix of favorable conditions that Botswana does, so the question isn’t “How can we scale Botswana’s success to other African countries,” it’s more like, “How can we assist in developing the institutions necessary to allow other African countries to positively draw from Botswana’s experience?”
As we’ve seen throughout the book, Easterly would hold that we shouldn’t play a part in deciding that; democracy and free markets are great, but implementing both in a country ready for neither is a recipe for disaster. My intuition says that there should be a third way that is more moderate, but I’m also very new to this, so I’ll hold off on thinking through these possibilities on paper for now.