Is there a Brazilian model of development?

By Armando Barrientos and Edmund Amann. Originally published in Policy In Focus, a publication of the UNDP’s International Policy Centre for Inclusive Growth.

As the world begins to wake up to the dire social and economic consequences of rising inequality, we must recognise that it is not an inevitable side-effect of economic growth and development. Many Latin American countries, and Brazil in particular, have demonstrated it is possible to achieve inclusive growth, which has reduced inequality and poverty.

Despite its current difficulties, Brazil offers a striking example of inclusive growth. Inequality has fallen sharply over the past decade and a half, a period which has also seen the country lift an estimated 40 million people out of poverty. Although growth rates have been modest in comparison to China or India, Brazil has implemented a raft of measures to ensure the results of such growth have been shared throughout society. While Brazilians have seen their incomes rise, the poorest have benefited most.

PiF

The growth experienced by Brazil hasn’t simply been attained through the unsustainable exploitation of natural resources. Despite serious lingering problems, deforestation rates in the Amazon have fallen remarkably since 2004. New jobs have been created, child mortality has plummeted, and schooling rates have increased.

So how have these gains been achieved, are they sustainable, what challenges remain, and what can other developing countries learn from Brazil’s experiences? These were the questions asked by a team of researchers from Brazil, Europe and the USA who formed the International Research Initiative on Brazil and Africa (IRIBA). This issue of Policy in Focus looks at the findings and insights they have produced.

The foundations of Brazilian progress can be traced back to the transition from a dictatorship to a democracy in the mid-1980s and the vision for the country which emerged. A firm consensus between citizens and politicians to address the ‘social debt’ created by soaring inequality set the country on a new path. After the economy was stabilised in the mid-1990s, the economic management pursued by successive governments enabled innovative social policies to flourish.

As a more inclusive and prosperous Brazil has developed, the public demand for further progress has also grown. The large protests surrounding the 2014 Football World Cup, worries about an economy mired in recession, and deep concern with serious corruption scandals demonstrate that the Brazilian consensus is under considerable strain. Public demand for better public services and transport infrastructure, less corruption and a more progressive tax system must be addressed by the country’s leaders. While much has improved, Brazil faces pressing challenges. It must ensure that the development gains made over the past decade and a half throughout times of economic growth are not eroded or scaled back throughout the troubling economic times it presently faces. The sustainability of those gains may well be the most important piece of any such Brazilian model of development, yet the jury is still out as to what extent this may be possible.

While the Brazilian experience is the product of a unique set of circumstances, it contains many lessons that should inspire debate and critical appraisal in other developing countries. The world is changing rapidly, and there are more opportunities than ever for genuine cooperation between countries of the Global South with recent and direct experiences of radically reducing poverty. This edition of Policy in Focus is essential reading for anyone grappling with how to reduce poverty and inequality while promoting sustainable and inclusive growth.

Download the full Policy in Focus report.

 

A Climate Potluck in Paris

cop

By Jonas Amtoft Bruun

“We have an agreement”. Those redeeming words from French foreign minister Laurent Fabius in the evening of Saturday the 12th of December unleashed a wave of standing ovations from high level UN staff, delegates and observers from business and civil society. Preceding this historic moment had been a fortnight of marathon negotiations and sleepless nights for the approximate 50.000 people that attended the 21st UN Conference Of the Parties (COP 21). The Paris meeting was a culmination of a 6-year redress effort for the UN climate regime following the catastrophic Copenhagen meeting in 2009, which collapsed into chaos and recriminations.

One point five, to stay alive

In The Paris Agreement developed and developing countries alike have agreed to limit emissions to hold the increase in the global average temperature to well below 2 °C (with an aspiration of 1.5 °C) above pre-industrial levels by the end of the 21st century. They have furthermore agreed to jointly mobilize billions of dollars in so-called climate finance, to help poorer countries cut emissions and manage the adverse effects of climate change. Targets will be subject to review on a 5-year basis.

The goal of limiting global temperature increase to 1.5 °C made it into the agreement through a well concocted lobbying campaign orchestrated by the Alliance of Small Island States (AOSIS). This was supported by over 100 countries and a large number of civil society organizations. According to the coalition, the half a degree difference is critical to the survival of the world’s poorest countries. In fact, Desmond Tutu once wrote, “A global goal of about 2 degrees is to condemn Africa to incineration.”

Unfortunately, reduction targets in the Paris Agreement are not yet adequate to avoid the disaster of more than 1.5-2°C of warming. More than likely they will lead to a 3 °C warming, which will bring with it disastrous climate change.

The Paris Climate Potluck

The inconsistency between targets and ambition has to do with the way the Paris agreement has been put together.

While the Kyoto Protocol set quantified and legally binding targets for rich countries related to their historic responsibility for causing climate change and current economic capabilities to mitigate them, the Paris agreement is essentially a ‘potluck’ of carbon-cutting plans submitted by each country.

These plans, which in UN jargon are called ‘Intended Nationally Determined Contributions’, differentiate substantively in ambition and jointly they do not add up to the reductions required to stay below a 1.5 °C or even 2 °C temperature increase. Furthermore, since the Paris agreement does not have any enforcement mechanism, there will be no penalty if countries break their promises.

Developed vs. Developing

A returning schism in the UN climate negotiations is over who should pay for developing countries moving beyond fossil fuels in economic development and also helping them adapt to the adverse effects of climate change. Climate finance is supposed to be new and additional from e.g. development aid.

In Copenhagen, developed countries promised to mobilise $100 billion annually by 2020. This figure has not changed in the Paris Agreement, however new language introduces the possibility of fundraising being a global effort. This will entail developing countries chipping in as well.

Global fundraising for climate finance is highly controversial. Most developing countries find being forced to pay some of the bill for climate change, which they did not cause, very unjust. Meanwhile developed countries argue that the strongest (economic) shoulders should carry the heaviest weight and many of the richest economies today are considered developing countries in the UN climate regime. This has to do with the fact that the division between developing and developed countries was made in 1992, when the United Nations Framework Convention on Climate Change (UNFCCC) was established. Back then major economies such as China, India, Brazil and South Africa were a lot less developed than today.

Essentially this boils down to a debate about what should be the basis for obligations: ‘historic emissions’ or ‘current economic capabilities’.

As this question has not been definitively resolved in the Paris Agreement, developed countries will likely look to the private sector to raise capital.

Granted, no one believes that it is possible to resolve the climate problem without engaging the private sector. However, it is important to identify the areas that private sector investments will not cover. Evidence shows that there is a lack of private climate finance flowing towards adaptation, which means that public funding will need to be allocated towards countries hardest hit by climate change.

Everything but the kitchen sink

Parties should also try to avoid creative accounting, such as the newly released report by the OECD, in which developed countries claimed to already be mobilizing $62 billion in climate finance. Using the OECD methodology (which accounts for everything but the kitchen sink) to analyse new promises made in Paris could take that total to $94 billion per year.

Meanwhile an Indian finance ministry analysis of the OECD report said that the real flow of climate finance is closer to $2.2 billion.

The debate over what counts is yet another reason why a clear definition of climate finance is urgently needed if the UN system is to make greater progress in the future. Paris was an important first step, but it will take a lot more consensus building from all parties to keep us in a 1.5–2 °C trajectory.

Socrates, a pig and progressive taxation: A Mirrleesian morality tale

By Cathy Wilcock, Doctoral Researcher, Global Development Institute

 

Socrates and a pig walk into a bar. Socrates orders a fine bottle of claret and argues for hours with the bartender about Romantic poetry. Being infuriated by the bartender’s base reading of Ozymandias, Socrates attempts to stab the bartender in the heart with his pocketknife. He is so drunk on claret that he misses completely. In the meantime, the pig has ordered several pints of mud and poured them over himself. The bartender slips over in the mud, lands on the pig’s pocketknife and is stabbed in the heart. Who is morally better – Socrates or the pig? And please show your working.

For Utilitarians like Bentham and Mill, the answer lies in the felicitus calculus: the sum total of the happiness produced in the consequences of any given action or inaction. In Socrates’ encounter with the bartender, the sum total of happiness was far greater than in the bartender’s encounter with the pig. In spite of Socrates’ nefarious intentions, he is more morally virtuous in this situation than the pig. For utilitarians, only the consequences matter. Variations of this calculation can, and often are, applied to pressing social, economic and political questions. For example, as in the subject of this seminar, how much should we tax the rich?

For Utilitarians like Nobel prize winning economist James Mirrlees – and his former PhD student Ravi Kanbur, our esteemed speaker – the ‘right’ answer is that which produces the greatest happiness for the greatest number. Mirrlees developed a calculation for working out what tax rate would maximise the sum of utilities or, in ordinary language, which would make the most people most happy. He concluded that a progressive rate of taxation – where the rich are taxed proportionally more than the poor – would produce the greatest happiness for the greatest number. Therefore, utilitarian calculations can provide evidence for arguments for progressive taxation.

It sounds strange to think that the ‘right’ way to tax people is based on the total amount of happiness produced by taxation. What about justice? Shouldn’t taxation be about evening the playing field which has, through accident of birth, allowed some people to make more money than others? Isn’t ‘happiness’ a crude and naïve way to measure what is best for complex human beings? Can it also be used to justify some types of inequality? For example, if the ‘sum’ of happiness is the most desirable outcome, we are committed to preferring a society where 40% are desperately unhappy and 60% are deliriously happy over a society where 100% are quite happy. All of these are critiques launched at utilitarian approaches by egalitarians who, in this context, we can take to mean creatures who would like to find ways of reducing inequality.

What Kanbur is saying is that these egalitarians, while some of their critiques of utilitarianism hold water, shouldn’t be so sneering at utilitarianism. Why? For two key reasons. First, the Mirrleesian formula provides egalitarians with key evidence to support progressive taxation. In the face of those arguing ‘We shouldn’t tax the rich because if we do, we incentivise them to work less hard and our economy will become inefficient’, egalitarians have a ready-made response in Mirrlees’ calculus. By using Mirrlees they can show exactly how much you can tax the rich before they will reduce their labour supply. Mirrlees’ formula clearly demonstrates that efficiency is not compromised by a progressive tax rate. Utilitarianism therefore, according to Kanbur, gives egalitarians an anchor to argue for progressive taxation.

Secondly, Kanbur builds his case for a utilitarian approach to taxation by arguing that non-consequentialist approaches to taxation proposed by egalitarians as alternatives to utilitarianism, can actually support regressive taxation. For example, an approach based on equality of opportunity, as opposed to outcome/consequence, can paradoxically lead us down a non-egalitarian route towards a regressive tax rate. In an approach which attempts to level the playing field by adjusting for equality of opportunity, we have to demarcate between inequalities that are due to circumstance and inequalities that are due to lack of effort. In following the logic inherent within a framework such as this, Kanbur says, we would end up arguing for a regressive rate of tax. Kanbur argues, in abandoning our calculation of consequences and focusing instead on non-consequentialist approaches to taxation, egalitarians are driving themselves down a non-egalitarian cul-de-sac. This is the last thing that they want!

Therefore, Kabur is arguing that people who are interested in reducing inequality should stop sneering at utilitarianism and actually make use of it in their arguments for progressive taxation. He says, despite their apparent incompatibility, utilitarianism isn’t all that bad a doctrine for egalitarians!

I would like to ask two questions about this argument. The first is – is utilitarianism useful to egalitarians or is it really only Mirrlees who is useful?  On the one hand, utilitarianism positions the ‘right’ action as the one which produces the greatest happiness for the greatest number. On the other hand, the ‘right’ action for egalitarians is that which produces the greatest decrease in the gap between rich and poor. Mirrlees set out with a utilitarian aim of creating a taxation system which maximises the sum of happiness – it just so happened accidentally that the utilitarian outcome was a progressive rate of tax. Utilitarians would accept a regressive tax if that was proven to be the one which maximises happiness, but egalitarians would never accept this. While Mirrlees’ position on progressive tax converges with the ideal outcome for egalitarians on this occasion, it is only really an accidental quirk of Mirrlees’ findings. If another calculation were applied or if circumstances changed, the greatest happiness for the greatest number might be a taxation system which increases inequality. In this sense therefore, egalitarians are perfectly sensible to reject utilitarian frameworks. Sure, Mirrlees’ framework happens to help them out on this occasion but does utilitarianism in and of itself really do them any favours?

Secondly, do egalitarians really need the help of utilitarian approaches? Can they argue for progressive taxation without resting on a utilitarian crutch? The equality of opportunity approach is only one alternative to utilitarian consequentialism which, admittedly leads to regressive arguments. As Kanbur himself pointed out in his talk, alternatives to consequentialism ‘may, but not always, lead to non-egalitarian arguments’. Other alternatives to consequentialism – such as Rawlsian theories of justice and other deontological approaches – don’t lead to arguments for regressive taxation. So my final question is – why should egalitarians cautiously use consequentialist utilitarianism when they can confidently use non-consequentialist egalitarian arguments?

Thanks to Chris Lyon whose comments on the seminar really helped me with this blog.

Academic publishing and the (hidden) dynamics of censorship

By Dr. Tanja Müller 

I just had an article published in Africa Spectrum on Universal Rights versus Exclusionary Politics, using aspirations and despair among Eritrean refugees in Tel Aviv as the case study. This article was originally submitted to a different Journal that focuses on ‘Africa’, and the way it was rejected raises serious concerns about peer review processes and how individual hatred and vanities can impede on those – if the editors allow this to happen.

For the original submission, two referees were consulted. The verdict of one of those was that the article was a fascinating piece, constituting a timely and interesting work of scholarship, and to publish with minor suggestions. The verdict of the other reviewer was not a verdict; really, it was a rant, frequently crossing the boundaries between professional judgment and personal insults. The field of Eritrean Studies is a small field with clear fault lines, and one can usually work out easily who the reviewer has been.

The journal editors sent me both reviews, apologizing for the tone in one, with the verdict to reject the paper straight away. I was, to be frank, quite astonished. Not because of the rejection itself, I would have had no problem with that if based on sound judgment and evaluation, as this is part of the experience of life in academia. But the fact that what was a six-page long demolition, often using single sentences out of context to make rather insulting remarks, would count as the base for that verdict, left me quite speechless. I would have at least expected a third reviewer to be consulted.

I did raise the manner of feedback and decision making with the editors at the time, and got a reply along the following lines: They themselves were a bit taken aback by the tone of the review – and that there had been a discussion whether to send it to me at all. But that was not really the issue, I rather know what decisions are based on than not. They then continued to say that neither editor had any particular expertise on the topic thus had to rely on suggestions of others on adequate reviewers, and once those were chosen one needed to respect their verdicts – well, in this case the verdict of one of those, who happened to be somebody obviously not fit to write such reviews in the spirit of the game. It was also suggested that in such cases of a bitterly divided scholarly community one might point out upon submission certain people from whom one might not get a fair review – but then cautioned that such a statement might be treated with suspicion in itself.

I do not know how many papers never get published because of a personal vendetta by certain reviewers (I do know some of my colleagues working on equally divided area studies themes do not submit to certain journals because of who sits on the editorial board, but do not think this almost self-censorship should become part of academic practice) – and in fact the reviewer in question has a history of feedback that is personal rather than topical. Also, if the editors would have cared to look, I had some years back reviewed one of the books of said person quite critically, and this might, one would have wished, given some pause for thought and drawn a third reviewer in. Ironically, under the previous editorship, a third opinion was always sought in such cases. I once was that third reviewer for an article by said referee that was badly written but dealt with an important subject I found worth publishing, so I had a role to play in ‘saving’ that submission.

In the end, this editorial decision-making that to my mind amounts to a form of censorship and certainly contravenes what I would regard appropriate standards of a refereeing process did me a great favour. The paper is out now in an Open Access Journal (that even has a higher impact factor – not that I care much about that in making decisions where to publish my work) – something I think all academic publications should be. I find the fact that publishing houses make a profit from often publicly financed scholarly work that should clearly be available to everybody in the general public interested enough to read it unethical and rather appalling. But that would be the theme for another blog. And the readers of this blog may judge for themselves what they make of my article – freely available to all.

 

The article in question is Tanja R. Müller, “Universal rights versus exclusionary politics: Aspirations and despair among Eritrean refugees in Tel Aviv,” Afrika Spectrum 50, no.3(2015) : 3-27, available at http://journals.sub.uni-hamburg.de/giga/afsp/article/view/886/893

LISTEN | David Hulme on the SDGs as transformation or evolution?

GDI Director Professor David Hulme spoke last week at our Global Development Seminar Series. David discussed the recently announced Sustainable Development Goals, and whether they are merely a continuation of the evolving UN “Global Goals” process or demonstrate that the idea of “development” has been fundamentally transformed.

Listen to the talk →

DON’T MISS | Professor Ravi Kanbur on utilitarianism & egalitarianism

Ravi Kanbur, Cornell University, utilitarianism, egalitarianismThe next lecture in our Global Development Seminar Series takes place on Wednesday December 9, with Cornell University professor Ravi Kanbur. Ravi’s talk is titled Is Utilitarianism All That Bad A Doctrine For Egalitarians?

The lecture will run 4.30pm-6pm in Cordingley Lecture Theatre, Humanities Bridgeford Street (HBS) building.

More on the talk →

LISTEN | Sandra Halperin on Re-Envisioning Development

Royal Holloway Professor Sandra Halperin gave a compelling lecture last week at our Global Development Seminar Series. Drawing on her most recent book, Re-Envisioning Global Development: a Horizontal Perspective, Sandra critiqued Eurocentric tellings of development – calling for a broader narrative that acknowledges the horizontal spread of capitalist development, and the implications of this for global development thinking and practice today.

Listen to the talk:

The Global Development Seminar Series brings together scholars involved in cutting edge research on international development. It aims to facilitate dialogue and discussion, providing a space for leading development thinkers to share their latest research ideas.

Listen to the second seminar, with Professor Dan Brockington on the Paradoxes of Celebrity Advocacy.

A new economic geography of trade and development? 

By Dr Rory Horner

In a new article published via Territory, Politics, Governance, Rory Horner reviews emerging evidence of the growth of South-South trade and argues for the need to move beyond win-win notions from development cooperation to highlight the commercial realities and very uneven geographies and development outcomes associated with this new economic landscape. Rory has synthesised the article for us below.

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