Crowding out exceptionalism, crowding in empathy: a different way to think about international development
As someone who left her secure perch in a big multilateral finance institution convinced that a failure of courage is what’s stopped us from seriously confronting inequality and the havoc it wreaks, you can imagine how gleeful I was to hear that Heather Boushey will be part of the Biden-Harris Council of Economic Advisors. Once I finished cheering and settled in to browse the most recent work from her team at the Washington Center for Equitable Growth, I gave myself homework. (I’m a nerd. It’s what we do.)
Assignment: What alignment, synergy, or complementarity can be discerned or constructed between the domestic policy priorities from Equitable Growth’s 2020 guide for the transition, and an innovative forward policy agenda for US development aid? The eight topics differ in terms of how accessible they might be in the aid/development context, but six of them resonated with me based on the conversations I’ve had sitting across the table from ministers in developing countries. I’ve copied in the policy topics and links from the Center’s work, and framed the questions I would want to explore — you’ll find those nerdy offerings below.
I offer these in the spirit of imagining what aid would be if it was realigned to crowd out exceptionalism and crowd in empathy. What if we identify common challenges and engage as fellow travelers, rather than as superior beings?
- Worker power has declined in the USA as firms amassed more control over their suppliers, contractors, and workers, wages stagnated, and unionization rates dropped What role can US aid policy and participation in the multilateral system play to rebalance structural anti-worker or exclusionary policy stances globally, as well as at home?
- The United States taxes income from wealth at much lower rates than income earned from working. This two-tier tax system gives preferential treatment to wealthier Americans, exacerbating inequality by income and race. How can US aid communities collaborate with international finance institutions (IFIs) to both support a US policy agenda focused more on making taxes more progressive and equitable, and encourage others to do the same?
- The market power of multilateral corporations (many of the most powerful of which are in/from the US) means consumers pay more for what they need, workers earn less, innovation declines, and small businesses aren’t as likely to succeed. Monopoly power also increases inequality by boosting the wealth of executives and stockholders. How can US aid communities collaborate with IFIs to support policy advice on trans-national corporate governance and reforms focused on beneficial ownership transparency, and implement those here at home?
- Racial economic mobility and inequality divides have powerfully come to the fore in the U.S.; economic mobility is declining as inequality is rising. And Black Americans not only are more likely to experience downward mobility than White Americans, but also face systemic and institutional barriers to wealth building, access to credit, and income security. How can the US aid agenda look for partnerships with countries who,m like us, need to focus more on economic mobility dynamics & systemic barriers for marginalized communities in partner countries, and policy options how to address them?
- Automatic stabilizers are policies that move economic support programs up and down as economic conditions (e.g. unemployment) rise and fall. Making more economic aid “automatic” means quicker, more sustained support and fewer political tussles. Are there universally relevant automatic stabilizers that are proving themselves effective in the pandemic response, and could be part of the US conversation with aid and development finance agencies?
- Small businesses are suffering globally during the coronavirus recession and may lag in ‘bouncing back’ during recovery programs; many developing and middle income countries do not have even the most basic frameworks for any kind of bankruptcy protection, which means there are fewer near-term options to prevent layoffs, support small employers — much less scope to provide assistance to ‘left-behind’ areas or businesses owned by marginalized persons. Are there ways to restructure whatever mechanisms do exist to assist businesses so that small firms can be rescued with the same speed as big businesses, guarding against elite capture?
