Reducing poverty

I’m big on reducing poverty, both locally and globally. (I do worry that more rich people will use more resources, suggesting that reducing poverty isn’t an unalloyed good thing. On yet another hand, only rich people can afford things like sequestering carbon or preserving habitat. It’s complicated.)

Since I’m interested in reducing poverty, I was interested in Lant Pritchett’s recent talk Everything you think you know about poverty is wrong.

Pritchett and I see pretty much eye-to-eye on how to have a rich country, I think.

These well-off countries have a productive economy, a government that is responsive to the citizens, a capable bureaucracy, and the rule of law.

This has interesting implications for global development, because these are all things where it’s very difficult to improve someone else’s situation. If a country has government by-and-for the elites, or a corrupt bureaucracy, it’s going to be poor—and there’s very little outsiders can do to help. One of Pritchett’s points is that things that seem like they might help, such as improving education, seem to do more harm than good—perhaps because well-educated corrupt bureaucrats are worse than ignorant ones.

His solution is for rich countries to create or expand guest worker programs, which I think is a poor idea.

It’s not that I don’t think it would work. A poor worker who came to a rich country and worked a couple of years could both support relatives back in the poor country and save up enough money to return home and start a business. That would relieve poverty both immediately and going forward. It would also produce another person with first-hand experience of the advantages of a less-corrupt society (as opposed to merely seeing the advantages of getting in on the corruption).

The main reason I think it’s a poor idea is that enforcing a guest worker program eventually requires a police state. Somebody has to check all workers—it’s the only way to identify those who aren’t legally entitled to work. Somebody has to make sure those whose permission to work has expired get fired. Those whose permission to live here has expired, but who don’t go home, become an underclass with all the usual problems of an underclass—crime, violence, oppression, disease. I’ve written about this before (see Missing the point on immigration).

There is also the issue of how guest workers affect salaries, wages, and working conditions of citizen workers (short version: I think it makes them worse).

The ideal solution, of course, would be for every country to be rich enough and free enough that people from all over the world would want to move there. But that just brings us back to where we started.