Thursday, March 18, 2010

Reciprocality and development aid

The biblical golden rule, "do unto others as you would have them do unto you", is the simplest way to justify development aid with reciprocality. Now I'll develop two improved reciprocality arguments, which are rigorous enough to say what policies are not justified by reciprocality. The golden rule has large cultural impact but it is too vague for supporting or opposing policy decisions.

John Rawls and the veil of ignorance

A way to justify development aid is to say that the gap between the rich and the poor countries is unjust. In Theory of Justice, John Rawls estimates the justness of social organizations with the veil of ignorance. We imagine ourselves as souls in heaven who have not yet born. We don't know in which country we will be born. What kind of development aid policy would we formulate? I'll use Finland and Nepal as examples.

It does justify aid which increases economic growth. Finland and Nepal have 30-fold difference in GDP per capita. If Finland gave 1% of GDP for development aid, it would add 10% to Nepalese GDP. If this is invested for growth with reasonable ROI (for example, better education enables the Nepalese to work in higher-value jobs) we can get 20% difference in 20 years. Surely the souls in the sky who don't know where they will be born would prefer to be 20% richer Nepalese or 1% poorer Finns.

It does not justify aid which does not have effect. Why would the souls in the sky choose to shed 1% of their income as Finns, if the Nepalese can't build lastingly better society with it, instead using the money for corruption?

Now we notice that we need an assumption about people before we can deduce if the veil of ignorance justifies development aid or not.

If we assume that people are fundamentally the same everywhere, then the differences in the standards of living are historical coincidences. With proper education and economic opportunities, the Nepalese will become just like Finns in a few generations.

My opinion is that the people in different nations are fundamentally different. If you meet a Nepali, he is probably polite and his behaviour is within the range of variation which you have seen among Finns. However, if you take 10000 Nepalis and Finns and look what kind of society they will build in 20 years of freedom and democracy, the results differ like night and day.

In a way, Finland is 'fully developed'. This means that there are no low-hanging fruits which external benevolent institutions could pick to cause permanent growth in Finland. Finns further their own interests and the interests of their loyalty groups effectively, since Finns have enough education, access to information, freedom and ability to raise capital for genuinely profitable pursuits.

The 'people are different' assumption can be taken forward to oppose development aid even under veil of ignorance by saying that the Nepalis are fully developed in the same sense. The differences in standards of living originate from the fact that society consists of people, and with people like the Nepali you can't build a society like Finland.

Nepalis in fact do get 10% of their GDP as remittances from Nepalis working in foreign countries and also as development aid. Still, they continue play in the bottom league of the poorest countries. This is strong data to support that they just can't build better society even if given more money.

Alien civilization

A problem with the veil of ignorance is that we can't imagine what it's like to be an illiterate goat herder. Therefore we need to imagine ourselves as the inferior race. Let's imagine an alien civilization with average IQ is about 150 and less measurable character traits like emotional maturity, future time orientation and language skills just as developed. Their behaviour is comprehensible for our xenoanthropologists, and their xenoanthropologists have learned to read and write factual sentences (which are not dependent on human intuitions) in English. For the sake of universe's biodiversity, they let us live, and some of them consider it a fun pasttime to uplift us. What would he want from them?

We would not want them to build us schools or hospitals. That's something that we do quite well ourselves. Better buildings wouldn't even improve the quality of services.

We would not want to copy institutions from them. Institutions which work for them would rest on assumptions which are not valid for us.

We would want their science and technology, preferably packaged into easy-to-use tools. The closest comparison is exchange students who come to Western countries to study, Western companies which sell tools and infrastructure to countries with otherwise low level of technology.

We would want them to decode our genome with their super tech. The closest comparison is malaria research, etc.

We would want to maintain monopoly of violence on Earth, even if we knew that they could blast us to extinction with antimateria bombs anytime. They may be too indifferent to care if, say, Iran used it's nuclear arsenal, or too enthusiastic to meddle, or probably both.

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