Question: How are economic development and environmental quality related? What institutional frameworks will allow individuals in the developing world to solve environmental problems and eradicate poverty?
The clearest relationship between economic development and environmental quality appears to correspond to an inverted U-shaped curve known as the Environmental Kuznets Curve. This basically stipulates that in the initial stages of development of any economy - that is, the initiation of industrialization – the environmental is likely to be impacted negatively. In fact, this negative impact is such an anticipated factor on the path towards development, such that it steadily rises, achieving a climax, which marks a turning point. The turning point is precipitated by the notion that eventually within the developmental path of the economy, an increase in the per capita income will lead to the reversal of the damage that had previously been meted out on the environment.
Though the concept of the environmental Kuznet curves appears to have gained credence around 1991, its conclusion seems to echo a very basic tenet of capitalism: basically, that social ills (more pertinently in this case, “environmental ills”) will eventually be addresses by ‘marketing forces’, which will seek to put things in working order. However, in its defense, the concept tries to show that the improvement phase in this relationship between economic development and environmental quality is not merely a direct correlation; rather, the improvement in environmental quality is more realistically the result of synergy between raised per capita incomes, the formulation of appropriate policy and the creation of institutions to enforce those policies.
Proponents of capitalism’s ability to bring about positive social change probably viewed humankind’s effect on the surrounding environment as a mere extension of which “class” of the people’s needs was being met according to Maslow’s hierarchy of needs. In this sense, you cannot expect someone struggling to meet the very basic provisions of daily food rations to care enough about their environment. Environmental consideration does not factor into their mindsets in the daily scheme of things. However, once people are able to make enough money to afford healthy and nutritious meals for their family, enough to house their dependents, and perhaps enough to educate their dependents with enough left over as some form of savings, then they might be more appreciative of environmental considerations. However, in any such simplification of reality, gross underestimations are usually made, and the biggest factor that is underestimated in such an idyllic supposition is the potential for man’s greed. At its best it is quenchable, and at its worst it is simply insatiable. Thus, it is this greed, the need to maximize profit to the detriment of others (and the environment) that has to be seriously hemmed in by appropriate legislation and enforcement bodies. And, if these measures ‘pan out’, then we are able to realize an improvement in the state of the environment.
At this point, it becomes wise to reflect on the state of things on the ground. Despite the accurate theorizing of the Environmental Kuznet Curve, a vast number of developing nations do not appear to be progressing fast enough towards being able to eradicate the poverty that plagues a vast majority of their masses. In fact, some of this stagnation comes in the wake of various enthusiastic initiatives that have been put in place by Non-Governmental Organizations (NGOs) that are based in developed countries; the failure of these projects is a frustration that does not augur well for the fate of these countries. The best remedy at this point would be to examine the failures and to determine their underlying causes. I would postulate that some of these failures have resulted from these NGOs trying to apply salve-measures that have worked in other countries, with the impression that they are universal and will record similar successes if they were to use them in other developing countries. One thing is evident though – the levels of poverty might appear similar when dealing with developing countries across the board, but the underlying causes that maintain the vicious cycle of poverty are diverse and hence different scenarios call for different remedies.
One of the problems that is still quite a reality to developing nations is the issue of landlessness. In the article Population & Development, Ronald Demos Lee suggests that the issue of the economic importance of land in the developed world has reduced with the advent of new inputs that have boosted the productivity of the land. The developing world, on the other hand, had not been able to realize these same rates of productivity. In fact, the poverty-stricken masses of these countries tend to place an unusually high economic value on land. To some extent, this problem can be blamed on the unjust system of colonialism whereby the colonialists apportioned the prize lands for themselves at the extent of the locals. Therefore, in this day and age, decades after most developing countries were able to achieve independence from their colonial powers, the issue of land is still very explosive. However, there really is no simple way to fix these problems associated with land. One might argue that re-distribution of the land is the way to go; in fact, this is the very same mistake that
Stemming from this issue of landlessness, the issue of land degradation comes into play. This is because so long as people hold a really high value for land and remain locked out of viable ways to acquire it, important resources such as forests and wetlands become fair game; and this is where the Tragedy of the Commons arises. These people convert these precious resources into subsistence land, unaware of the fact that these changes in the ecology diminish the stabilizing effects that the forests and wetlands have on the entire country. The effects that follow, such as eutrophication of water bodies, increased incidences of drought, soil degradation and the reduction of water catchment areas, effectively serve to reduce the value of the land around the forests and wetlands, and even in areas located further away from the immediate sites of degradation.
One might argue that the only long-term plan for dealing with a situation such as this is the education of the people. If, perhaps, they were taught to appreciate the importance of these natural resources to everyone in the country, and the vicious cycles that arise from their destruction, then they might be mindful of the way they use these resources. However, in the short-term, there needs to be a direct economic incentive for them to perceive, such that they would feel the need to protect their environment. An example of this can be seen in the case of how
It is easier to understand this notion of land degradation when the focus group is poor landless individuals. However, yet another focus group exists when it comes to the issue of land degradation: politically-connected individuals. Early on in the development of developing countries, land settlement schemes were usually set up to address the issue of landlessness. However, sadly, some politically-connected individuals were able to have this land allocated to themselves. Some individuals were also able to degazette forest land, such that they could allocate vast swathes of the natural resource to themselves. This is the case in a country such as
All in all, the enabling environment that will ensure the education of the citizens and will build upon their innovative nature has to be put in place by the government. A lot of the problems suffered in developing countries are very deep-rooted in nature, and it will take a deep-seated political will to fix them. In her treatise, Institutions Matter, Laura Phillips rightfully suggests that, “Many developing countries do not have good institutions, but rather they have predatory ones that increase uncertainty and limit exchange.” The citizens of these developed countries may complain about these very institutions, but they understand that the institutional rot is tied up in political power. Hence, if the political class forgets the fact that it is there to serve its people, this will very well be reflected in its institutional deficiencies. A cultural universal that tends to be displayed by developing countries is the fact that they have very powerful political classes; this allows the people in power to rule with impunity, to the detriment of the very people who put them in power. As these countries continue to develop, I believe their hope lies in the notion that their institutions can be divorced from the current political class of the day. Setting up strong institutions, which are independent of political machinations, will ensure that these institutions can run effectively regardless of political transitions or shake-ups, and this stability would enable them to decrease uncertainty.
In this very same manner, the political systems of these developing countries need to shed the role of managing institutions that they have apportioned to themselves. They need to understand that their biggest task is that of formulating the overarching policy that will ensure that their countries inch closer towards self-sufficiency. A lot of developing nations are playing a deadly game of “catch-up” as they try to formulate policies based on worldwide initiatives like the Millennium Development Goals, which may not appear feasible in the long run. Just like the initiatives set up by NGOs in these countries, such measures are usually doomed to fail because they do not adequately appreciate the situation on the ground. To get these developed countries going in the right direction, their political elite have to commit themselves to a master-plan that is entirely home-grown, with a set number of short term goals and long term goals that they can hold themselves to. The investment of the national resources in these ventures would then be expected to proportionally reflect the political will to bring about this change. One thing that citizens of developing countries consistently call out for is development. They want to have better roads and infrastructure, perceptible results for the vast amounts of money that they pay in form of taxes and a vision of where the country is headed – basically, they want a system that works; and they are more likely to vote into power those individuals that they feel can make this a reality for them. Practically all the wars for independence were fought on grounds of social inequality, and thus far the people in developing countries are still waiting for these problems to be addressed. They want their politicians to prove to them that they can act better than their former colonial masters, and answer the people’s calls of socialism. In this case, the self-interest suggested by Max Borders in his article, Public Choice Theory, will have to be fairly diminished because it is something that the people are already tired of. These people are waiting to see an equitable trickling down of the national resources, as this is the only justification of the huge investment that they put into the country.
The need for homegrown solutions becomes particularly important in the face of globalization that is currently underway. These developing countries will be pitted against their developed counterparts, and without adequate measures put in place to protect them, they will suffer from unfair competition. For these developing countries to expect that their developed counterparts will institute policies to protect them is indeed a “pipe dream”, because these countries aim to maximize their profit. Sometimes this profit-making might very well occur to the detriment of the fledgling industries of the developing countries, most of which are agriculturally based, and which operate more expensively because they use older forms of technology for production. Thus far, it appears that developing countries will not be able to resist being swept up by the wave of globalization, but before that happens, they have a duty to prepare themselves as much as possible. One way in which this can be done is by maximizing the profitability of their industries; these governments should ensure that their people have access to the latest forms of production technology, as well as being able to benefit from the government’s extension services, and be able to acquire loans and benefit from inputs.
In conclusion, poverty eradication can only be brought about via a concerted political will. If people are economically empowered to the extent that they can actually have a stake in nation-building, then there will be a drastic reduction in the rates of poverty that we witness today. The citizenry of developing countries are a useful resource, and if an enabling environment exists to tap into this resource, the gains realized will be massive. I also tend to think that since we can reflect on the examples of developed countries, the developing countries can use these opportunities to steer clear of the very mistakes that these countries made with regard to their environments; hence saving themselves a whole host of environmental problems.