Who chooses? a response to Jishnu Das

There was widespread admiration in my Twitter stream yesterday for an article by World Bank Senior Economist Jishnu Das slamming The Economist for its support for making cash transfers to the poor conditional. I am less convinced by it.

Jishnu finds it ‘ridiculous’ that the Economist could reach the conclusion that conditional transfers are attractive based on the following evidence:

School enrolment among families that got conditional grants rose by 41% on average in the various programmes; the increase among those that got unconditional grants was only 23%. If conditions were implicit or soft (eg, if recipients were simply encouraged to take children to school), enrolment merely rose by 25%. The big difference came when conditions were tough (eg, if school attendance was mandatory): that boosted enrolment by 60%, a big bang for the relatively few bucks involved.

As he sees it, without conditions, parents are able to take better account of their own priorities, favouring nutrition or healthcare over education, or simply spending the money on beer so they can relax after a long day at work.

Any imposition of conditions suggests that donors know better than parents and is an example of the ‘purely elitist’ mind-set that bedevils development. “Has our hubris really taken us that far?” he asks, despairingly. “What happened to respect for the poor?”

Jishnu bases his arguments on the assumption that there are two legitimate rationales for government intervention in an otherwise free society: to fix market failures and to transfer money from the rich to the poor.

But using these yardsticks, I still struggle to see consistency in the case he is making. The World Bank has long championed the idea that there are substantial social returns to education, especially at primary levels, so markets will fail to deliver optimum outcomes.

Most countries recognise this, make schooling compulsory and then spend considerable resources delivering it. Here in the UK, we even jail parents for failing to make their children go to school (a practice I disapprove of). What price parental choice then?

Jishnu accepts that parents may not always make decisions based on the long-term interests of their children, but in a fairly narrow sense: they themselves can’t ensure they get paid back in full:

“[Rural] parents want children to provide for them in their old age,” he writes. “If they could sign a contract with their kids, they would educate them to the efficient levels. The problem could be that they can’t actually sign these contracts and educating them makes it more likely that they will leave the ‘farm’.”

Elsewhere, however, he argues that “governments should improve education for all children,” influencing delivery of schooling through both public and private sectors. So I am left confused why there should be a presumption in favour of state intervention in education (often backed by significant aid flows), but this intervention becomes unethical when cash transfers are used as a mechanism for getting more kids into school.

Jishnu says that the case for redistribution, meanwhile, rests on ‘society’s judgment’ that an ‘alternative distribution of consumption’ is better than the one achieved by markets. This then allows a government to start moving money from rich to poor. But if ‘society’ is allowed to reach this judgement about income, why should it not make similar judgments about educational provision? And what about the rich person’s preference not to be taxed?

Perhaps, the problem is whose choices we regard as sacrosanct. Jishnu suggest poor parents make the best choices as long as they receive accurate market signals. He also seems to be happy with national governments making choices in certain situations, but parental choice comes first.

However, I am not sure either parents or state necessarily represent the long-term interests of children effectively. In the most extreme cases, parents use violence to prevent their own offspring (girls in most cases), from going to school, acting directly contrary to the child’s clearly expressed wishes. Just a few weeks’ ago, I read some distressing first-hand accounts of this practice where the child was quite clear their parents didn’t know best.

From Damien de Walque, another senior economist at the Bank, we have evidence to suggest that conditionality has the greatest impact on the most disadvantaged children. Using evidence from an RCT in Burkina Faso, he and his co-authors find that that conditional transfers are no more effective that unconditional transfers in increasing the enrolment of children that parents give a high priority to educating., but that “CCTs are more effective than UCTs in improving the enrollment of ‘marginal’ children, those who are initially less likely to go to school, such as girls, lower ability children, and younger children.”

As for governments, one of the defining characteristics of the poorest and most disadvantaged groups is that politicians – and society as a whole – rarely give a damn about them. That’s why poverty reduction is often impossible without challenging political constraints.

So what about the choices of donors and other external actors – the international community’s interfering do-gooders? Jishnu accepts that they may have their own views about how money should be spent, but his preference is that these views should not be expressed.

If you are a donor, you could always tell people that you are giving money to them and you want them to spend it in a certain way. I don’t have a problem with that; it is, after all, your money, and you should do with it as you please. This is a contract between the person who gives the money and the person who receives it. But equally, I think it is our job, and that of magazines like The Economist, to always clarify that it is the donor’s preference that is being imposed on the recipient.

Aid is politically unsustainable in the West if it is distributed without conditions, but leave that aside for the moment. In most cases, donor preferences are not plucked from thin air, but come bolstered by a host of normative instruments, not least the fundamental right to education which governments repeatedly endorse on the international stage.

Now, I am not saying that donor preferences trump government ones, and that both outrank choices made by parents. Like Jishnu, I prefer to see the hierarchy run the other way. But I am suggesting that the relationship is complicated and am uncomfortable with the ease with which he dismissed conditionality as inherently unethical and elitist.

Look at this question more broadly and it’s clear that many of us have deeply contradictory instincts, a problem that comes into relief when we look at poverty within the post-2015 development framework.

As part of this agenda, it seems likely that a series of ‘getting to zero’ goals will be agreed for the world’s poorest people, with targets disaggregated for the most disadvantaged groups.

This will come close to imposing a ‘responsibility to develop’ on those countries that currently lack the capacity or political will to tackle poverty (or to reach those poor people they care least about). I am deliberately drawing a parallel to the responsibility to protect here.

At the same time, the definition of success is likely to be much more stringent after 2015 than it was in the MDG era. In education, for example, we can expect to see a goal for all children to achieve minimum standards of learning, not just to spend a certain number of years in school.

Furthermore, some champion a goal or target for a maximum permissible level of inequality. This would mean that, to use Jishnu’s formulation, ‘society’s judgment’ on redistribution would henceforth be taken, in part at least, at global level.

So at one end of the spectrum, we have powerful reasons for believing that poor people are in the best position to make their own choices. We also increasingly have the technology that allows unprecedented direct targeting of transfers to the poor.

Next, we have a strong commitment to ‘country ownership’ – the principle that governments of developing countries are in the best position to determine development priorities and how development programmes should be implemented.

And then we have global norms that are likely to be strengthened significantly if the world makes a post-2015 commitment to end poverty in all its forms – and that will sometimes cut across country ownership and elite preferences, or the libertarian notion that individual choice is sacrosanct, especially when it comes to reaching the poorest and most disadvantaged.

Some will undoubtedly continue to try and ignore this trilemma. They’ll proclaim the need always to listen to the poor in one room, insist on the overriding importance of country ownership in another, and decry the failure to deliver global goals on poverty in a third.

Others like Jishnu will stake out an absolutist position. Parents always know best. Or governments should always decide, however shaky their legitimacy. Or – maybe an unusual position today, but I suspect not in ten years’ time – the international community should act forcefully if a government persistently refuses to take steps to lift its citizens out of absolute poverty.

But in the real world, there will continue to be conflicts over whose choices predominate, however ridiculous, elitist and hubristic that may sound.