Opinion: Don't despair, innovate — Now is the time to try new forms of development cooperation

Devex
By Michael Clemens

A United States visa. Photo by: wwwarizmonterojazcom / CC BY

With political winds blowing at gale-force, development workers know they’ll probably come under sharper scrutiny over the next few years. More than ever, voters and funders will ask how spending money abroad makes life better at home. The standard answer — that prosperous countries produce fewer terrorists and epidemics — may lose persuasive power.

But such confrontation breeds innovation, and it’s time for development professionals to reevaluate the way we do business. In 2017, this means designing a limited portion of development work, from the ground up, to generate and demonstrate mutual benefit for both partner countries. Not instead of charity, which has great importance, but alongside it.

Development professionals have infinite ways to explore opportunities for mutual benefit, but within the confines of our existing organizational structures, very few of those ways have ever been tried. I’ll highlight just one way it can be done, in the hope of inspiring others.

A taxpayer’s alternative to aid

After Haiti’s catastrophic earthquake in 2010, I proposed innovations in U.S. migration policy that would allow somewhat more Haitians to work abroad, earning money to fuel the recovery of Haiti’s economy while adding value to the U.S. economy. That proposal became a project, now run by Protect the People, that matches Haitian farmers to short-term jobs on U.S. farms. Participants have typically spent a few months in Alabama or Oregon, doing tasks like planting seedlings or picking fruit.

The project had a staggering effect on Haitians’ incomes. Traditionally, highly successful anti-poverty projects might raise the value of participants’ labor by 10 to 30 percent. This project raised the value of participants’ labor by 1400 percent. At home in Haiti, the typical hard-working participant works an entire week to earn just $20. In the U.S., he earns that much in two hours.

But that’s not even the most important way that this kind of cooperation differs from standard aid. The U.S. farms are not donating money. Like all wage earners, the Haitian workers raise the productivity of the U.S. farm and that productivity gain is split between the worker and the employer. The employer’s cut goes to investing in the farm, and buying inputs — such as fuel, fertilizer and shipping services — which stimulates the businesses they buy from. U.S. consumers directly benefit from what the Haitians help produce. That ripples through the whole U.S. economy, with a remarkable implication.

This brand of development cooperation doesn’t cost taxpayers anything. To the contrary. These Haitians’ work generates more tax revenue for the U.S. government.

Not only is this an extremely effective form of development cooperation with Haiti, it’s better-than-free for U.S. taxpayers. It actually gives money to U.S. taxpayers.

Our study uses a small sample. This project is in its early stages, and funding constraints give it an uncertain future. But there is other, similar evidence from the other side of the world, in some work by the World Bank.

The South Pacific precedent

Quick: Which World Bank project has been the most effective at reducing poverty in its participants? It doesn’t get much press. The answer lies in the South Pacific, where a program easing temporary migration restrictions allowed very low-income islanders to work on farms in New Zealand. A World Bank evaluation called the program “among the most effective development policies evaluated to date.” This mechanism of using visas as aid, too, raised the incomes of participants by an order of magnitude, with all kinds of positive effects for their households, children and communities in Tonga and Vanuatu.

Completely unlike most development cooperation done by New Zealand or the World Bank, that project also doesn’t need donor-country money to be sustainable. It generates revenue for donor countries.

So why isn’t this project featured on the World Bank home page, celebrated every time the World Bank President Jim Kim gives a speech? Why isn’t international labor mobility highlighted as a core tool to meet the Sustainable Development Goals?

Because migration is a “hot button” issue, right? Look closer. Those Haitian farmworkers aren’t migrating permanently to the U.S. and don’t receive any welfare; they come to work. They only fill jobs that the U.S. government certifies no American will take. Name your political concern about migration, and a program like this likely addresses all of those concerns. Name your concern about aid, too — that it requires more taxes, that it doesn’t reach the poor — and the same applies.

Political hot buttons don’t have to be a reason to give up on innovation. They can be a reason to innovate more — and to innovate better.

International cooperation may be in a time of crisis. Crises are uncomfortable, but comfortable people rarely innovate. Testing new ideas in labor mobility could be one way to bring new ideas into development cooperation. There are a thousand more. What’s yours?