Now there’s a guy who really puts the full-scale dismal into “the dismal science” of economics – spurring optimists to quickly seek out more hopeful visions of the future.
Those seeking a glimmer of hope about the economic future were well-advised to keep their expectations low as they awaited the gloomy analysis by Prof. Robert J. Gordon, the esteemed economic historian from Northwestern University, who spoke at the World Bank Group’s Macrofiscal Seminar Series on March 31. As anticipated, Gordon’s expertly documented but relentlessly downbeat scenario, based on his latest book, “The Rise and Fall of American Growth,” persuasively made the case for a future of chronically sluggish growth in the world’s advanced economies.
Gordon’s chilling projections combine some of the darkest aspects of Lawrence Summers’ worries about “secular stagnation,” Christine Lagarde’s lamentations of a “New Mediocre” and private-sector leaders’ struggle to strategize for the “New Normal.” Gordon’s bleak thesis foresees “little growth” – although, significantly, not zero growth – as the developed world’s weary economies endure perhaps decades of drift.
Policymakers in the world’s largest economies are surely exasperated by the painstaking crawl out of the global financial crisis – yet they don’t have much positive news to look forward to, asserts Gordon. With “declining potential productivity growth” compounding the impact of declining population growth and a declining labor-force participation rate, there’s probably no technological deus ex machina that can soon propel the world’s advanced economies toward restored prosperity.
That viewpoint defies the techno-utopian visions that have been so eagerly peddled to anxious Western voters, who can only dream of a return to brisk late-1990s-style growth. Quipped the Macrofiscal seminar’s discussant, Deepak Mishra: Gordon “has made a career of busting the technology hype.”
Yet Gordon’s logic need not trigger total despair among the Bank’s poverty-fighting professionals and their counterparts at other development institutions. Gordon emphasized that his analysis is about the American economy, and, to some extent, about the mature economies of Western Europe. His book’s foreboding predictions, he said, do not extend to developing economies, which enjoy “great potential for growth.”
For can-do pragmatists who strive for stronger growth and sustained progress in developing economies, there’s a ready antidote to Gordon-style macroeconomic gloom. By happenstance, immediately after Gordon delivered his grim analysis in the Bank’s J Building auditorium, optimists seeking inspiration needed only to cross the street to the Bank’s Main Complex to hear an energetic appeal for greater hands-on activism.
With an update on the movement for Community-Led Development (CLD), a seminar sponsored by the Bank’s Community-Driven Development Global Solutions Group learned of the promise that CLD offers for inspiring inclusive, sustainable solutions that enlist citizens’ engagement and build community-level confidence in strong governance standards.
Moving from macro to micro – dispelling the dread of inexorable global forces and embracing positive citizen-centric action – the CLD leaders leapfrogged Gordon’s macro-level angst to highlight micro-level opportunity.
The seminar heard from two leading figures in the CLD initiative: the movement’s founder, John Coonrod, the executive vice president of The Hunger Project, and one of its key public-sector practitioners, Michelle Inkley, who leads Human and Community Development efforts at the Millennium Challenge Corporation (a U.S. government agency).
Coonrod described CLD’s vision of an “empowered community integrated approach” that aims to “build systems that hear people’s voices” and ensure that all citizens will be respected as “dignified agents of their own destiny.” CLD includes more than 30 non-governmental organizations that are “committed to taking community empowerment to transformative scale as key to achieving the Sustainable Development Goals” that were adopted at the United Nations last September.
By putting citizens, community by community, at the heart of project selection and decision-making for the programs that affect them most directly, CLD aims to fulfill the promise of Sustainable Development Goal No. 16: to build “effective, accountable, inclusive institutions at all levels.” Coonrod underscored the vital phrase “at all levels” – emphasizing that local-level decisions often have a greater immediate impact on people’s everyday lives than do plans handed down from far-away national governments. Inkley described groundbreaking community-designed projects in the Philippines, India and an array of Fragile and Conflict States where CLD solutions have already achieved tangible results.
In “grappling” with longer-term issues that will affect the CLD agenda, Inkley said that practitioners are still pondering what role the private sector can take in helping shape local-level decision-making. True, public-sector institutions and civil-society organizations seem to have a more immediate role to play in crafting community-level decisions – and thus the good-governance agenda will be crucial in advancing CLD’s success.
Yet it strikes me that the ingenuity of the private sector can also make many positive contributions (as frequent readers of this blog will recognize) to helping shape sustainable solutions for the long term. They can do so not just through civic-minded conduct in their everyday business operations, but in their far-sighted decision-making about such areas as environmental priorities, workplace practices and social policies.
As Prof. Michael Porter of Harvard Business School, among others, has argued amid the shaping of the “Shared Value” philosophy, responsible business leaders who are committed to the long-term health and well-being of their local communities can harness firms’ ability to deliver solutions in ways that help fulfill local stakeholders’ priorities. The evolving debate over the “Business In Society” approach – going beyond the earlier, somewhat half-hearted vows of Corporate Social Responsibility – is steadily advancing toward a broader concept of community-minded collaboration. Community-attuned business leaders increasingly recognize the need for “radical engagement” as a creative partner with citizens and civil society, seeking collaborative solutions.
A wide-ranging exploration of this approach can be found in this anthology (in "pdf" format) at this webpage: file:///C:/Users/WB383042/Downloads/1270060160_Social_Responsibility_BISAnthology_2007%20(1).pdf
A World Bank Institute forum on sustainable development in October 2007 – on “Business Engagement for Governance” in the context of fulfilling the Millennium Development Goals – heard such a Business In Society philosophy advanced by Lenny Mendonca of McKinsey & Company:
“The key point is for business to be an actively engaged partner in addressing social problems," he said. "And that means having business as a full participant in setting the contours of the public debate. . . . Only by putting society’s concerns at the center of corporate strategy – only by making social issues strategic – can we hope to harness all the best capabilities of the corporate, social and government sectors.”
The contrast between Gordon’s fatalism and CLD’s optimism – dueling scenarios of top-down gloom and bottom-up bloom – offered very different visions of the economic and social future. With his attention-getting new book, Gordon may be capturing more of today’s headlines – but I have a hunch that the activists and optimists who are now shaping Community-Led Development are poised to inspire increasing numbers of development practitioners, at the World Bank Group and beyond, long into the future.