DEVIN STEWART: Dr. Birdsall, great to have you here today. Thank you for coming to Carnegie Council.
NANCY BIRDSALL: Thank you. It's a pleasure.
DEVIN STEWART: We start out these interviews by asking interviewees to describe the world they see. Tell me about the world you see today, particularly from a moral perspective.
NANCY BIRDSALL: Well, I'd say the most important thing about this century, the 21st century, is that there is an up-tick in the interdependence among people, independent of where they live around the world. Certainly we've had globalization in the past, certainly we had lots of globalization in the latter half of the 20th century. But there's something about the Internet, Facebook, global supply chains—there's a clear up-tick in the degree to which people feel exposed, in the worrying sense, but also they feel the opportunities are out there because of this connectedness around the world.
Now, what are the moral implications of that? I would say, particularly for people in the rich world, like the United States and Western Europe, that it increases people's responsibility to be aware of how what they do and what their policymakers do on a whole range of issues matters for a lot of people, millions and millions of people, who don't have much control. So what our Congress in this country does on climate matters for hundreds of millions of people who have very few mechanisms to provide their views to our legislators. That's one way to think about it.
DEVIN STEWART: Your expertise is development. Tell me about how you see the world in terms of development. Are we doing a good job?
NANCY BIRDSALL: We are, although I would say most of the credit for tremendous progress in the last 50, 60 years, especially in the last 20 years, goes to people in the developing countries and their leadership. But there's no question life is getting better for everyone.
I have a colleague, Charles Kenny, who finished a book that's titled Getting Better. He is very clear about documenting huge gains in life expectancy; infant mortality in Africa just in the last five years fell dramatically again.
Many more children are in school. We're a little worried in the development community that in many places they're not learning that much. But I do think the fact that now girls go to school as much as boys in many places is absolutely fundamental. It reflects and reinforces a changing norm, which says that women have equal status and rights.
In addition to all these gains on social indicators, people's incomes are rising and their consumption is rising, as the outcome of growth that's actually faster now in the developing world than in the advanced economies. More people are working in jobs where they have some measure of security.
The way to think about that in terms of better lives is—it sounds sort of crass to talk about it in money terms, but we're talking about people going from, say, $3.00 a day per capita to $4.00 or $5.00 a day per capita. That's also hard to understand if you're living in a place like New York City.
A better way to understand it is people are going from a situation where they're spending 65 percent of their income on food to a situation where they're spending perhaps 30 percent of their income on food, or 40 percent. That's a huge gain in terms of human dignity, consumption choices, how you think about the future for your children, and so on.
DEVIN STEWART: Excellent. That all sounds great, and it does connect with a lot of the themes we've been hearing from interviewees.
What concerns you most?
NANCY BIRDSALL: Well, I'd say two things concern me.
One is that the progress, what I would call the huge successes of development, have left out still maybe half-a-billion people, maybe a billion people. I'm optimistic about poor people in countries that are growing. There are a lot of poor people in Brazil, there are a lot of poor people in India, but they are in societies where presumably they feel that they have a chance, or at least their children have a chance.
But then we have a group of states that are called in the development community fragile states or flailing states or weak states or sometimes front-line states, where there is civil conflict or war, and where even the civil conflict and war is partly the outcome of very incompetent states, or the organizational capacity isn't there, the market hasn't started to click in, and governments aren't able to serve the needs of their people in terms of basic services. I don't think in the development community we really know how to address that problem of state-building, let's call it, in the most fragile countries. So that's one area.
Of course, the failures that led, say, to the civil war in Liberia, which has happily been resolved, then leak over to other neighboring countries. This is a real problem in many parts of the world because it creates all this insecurity for people on the ground, and particularly for women. We're learning more and more about the problems for women and children when they're in these insecure situations.
The second thing that worries me is climate change. I think in the United States and Europe, we understand in the Netherlands how they manage to cope with it. We'll cope with it. It will be a small hit perhaps on overall growth rates. If our governments in the advanced economies don't get on top of the problem, we'll end up spending a lot of money, as is happening in the case of the $60 billion that will go to help New Yorkers and New Jerseyans after Superstorm Sandy.
But the problem is in countries where people are already living at a margin of subsistence or close to poverty, they don't have the means to adjust as easily. In many cases, they will be living in countries where at the institutional level it's much harder to cope and provide services, or to do anything like the relief programs that the United States can do in the case now recently of New York or the drought in Texas.
So in welfare terms, in absolute income terms, it's not a different issue. But in welfare terms, being close to the poverty line makes you insecure, and events that are less predictable—maybe they'll become more predictable—the need to move, the need to recover, imposes higher costs.
DEVIN STEWART: You talked about an interesting thing. You talked about the limits of what the development community knows, a very interesting topic. If we can stray slightly from the questions here just for a bit, it's very difficult to deal with fragile states.
Now, how about the other end of the development spectrum, when you're dealing with countries that are growing rapidly and are in a manufacturing phase of rapid growth, the takeoff phase if you will, and there's a giant question of whether places like Vietnam or China or Thailand can move from a manufacturing economy to an innovative economy. Do smart people in the development community know what the secret sauce is to go from a manufacturing-based economy to a richer innovative economy?
Part of my question is related to the zeitgeist in the popular media about whether global capitalism is sort of running out of steam, this idea of the stagnation in the future for rich economies. I would be fascinated just to hear what you think about this.
NANCY BIRDSALL: I don't see the problem that you articulated as actually a problem. I think Vietnam and China will be fine.
On the one hand, I think there are some obvious lessons about the successes of a few countries that went from middle-income status to really advanced status, that escaped what some people are starting to call "the middle income trap," which you were referring to.
Economists and the development community understand that Finland had huge gains in schooling and education and was really smart about it. We understand that Korea has the same issue, actually. So the challenge is more that it may not be the same recipe in every country because it's context-specific.
Development people are starting more and more to describe the process of development as a process that's kind of complex, adaptive, using metaphors from evolutionary science, from biology, that everything is dependent on everything else. So we don't have in the community anymore even the notion that, "Well, if you just get your macro-policy right, you'll be fine," or, "If you move ahead on privatization or liberalization of trade, you'll be fine."
There are still some lessons about why certain of those things make sense, but the specific sequence and how it gets done we know from experience has been so different in China than in Brazil, so different in Ecuador than in Thailand, et cetera. That's why I said really so much of this development is the outcome of decisions within the countries. In a sense, I think it's important for outsiders to have more humility about what can be done.
Now, the other thing is we do know that if you administer vaccines to children, they are less likely to suffer from disease and die. So there are some inputs that clearly work to improve people's lives in the short run. What's hard is how you create better institutions for the medium term that stick, that are democratic, responsive, accountable. Maybe the lesson has to do more with encouraging transparency and encouraging principles, like you need to have accountability in the way your government runs, rather than specific policies.
DEVIN STEWART: Now, talking about some of those basic principles that might help with economic development, part of what we are looking at here with this project is the idea of shared values and a global ethic. It's a bit abstract. But just a few days ago, there was a leak out of China saying that Xi Jinping rejects universal values for the Communist Party. Do you believe that there is a global ethic; and, if so, what is it?
NANCY BIRDSALL: I guess I don't know how to conceive of what a global ethic would be. I do believe that, because we are more connected—in a sense, it's not just that the world is more flat, as Tom Friedman said—it's smaller. So to the extent that in the traditional moral approach the idea was you have certain responsibilities that are greater to your family than necessarily to your community, to your nation, and so on outward, well, the world is getting smaller.
So I think if there is something that is a global ethic for me, it does have to do with, in effect, the greater proximity across people quite independent of the country they live in. Therefore, the greater responsibility, if you are at the top of the income distribution in the world, which is basically the reality for most people in the United States, most people in Europe, to at least be aware of how what they do and don't do affects people elsewhere.
DEVIN STEWART: Do you think shared values or universal values are part of achieving prosperity and economic growth?
NANCY BIRDSALL: I do. I think norms are important. A lot of people think, "Well, the United Nations isn't very effective, doesn't get things done." But if you look across the last 50 or 60 years, the UN has been very important I think—it's hard to measure; it's an intangible—very important in shaping people's sense of what is right.
I can think back to in Beijing the conference on women, or the idea of Kofi Annan of a responsibility to intervene at certain times. So part of globalization, which we usually think of in terms of markets and trade and commercial interactions and capital flows—one of the big benefits of globalization is this increased understanding. It's like global space is getting bigger and our responsibilities are bigger, in effect, because we are in a smaller world. That sounds contradictory.
So yes, I guess in that sense I'd say there is a global ethic.
DEVIN STEWART: You talked about the two concerns really, about climate change and the people left behind, if I can put it that way. Would you say that's the greatest ethical challenge facing the planet, or is there something more abstract or more concrete that you'd like to talk about?
NANCY BIRDSALL: I think in the case of people left behind, I think it has to do with—we measure it, economists, in terms of outcomes and changes in the distribution of income. But that's just a proxy for some deeper understanding of the extent to which people have—sometimes it's called equality of opportunity, sometimes we talk about social mobility.
I think a lot about Mohamed Bouazizi, who was the Tunisian who immolated himself. He was in an income category that's very interesting to me as a development economist. He was clearly not poor. It is said that he sometimes gave away some of his fruit and vegetables to poor people in the town where he lived. But he was certainly not middle class. He had not finished high school. He wanted to buy a truck. He had the aspirations of a middle class person, to climb up, but he was in this insecure, kind of struggling group. Now, what happens to him is that he is abused, in effect, he is harassed by the police. That's what triggered his reaction and the tragedy that he immolates himself.
So there's something about equality of access to the courts, to police protection, to dignity in your community life, to participation—some of the things that Amartya Sen talked about years ago—that is at the heart of the challenge. That is more closely connected to questions about ethics and global ethics, for me, than saying, "Well, we need to abolish absolute poverty." I think it would be great if we could abolish absolute poverty. But as soon as we get close, I'm quite sure that as the development community and the international community we will raise the bar for what is absolute poverty.
At some point, poverty is also about your relative standing and your ability. I think it was Adam Smith or somebody who said, "If you don't have the right hat to wear because you can't afford it, and that undermines your sense of self or your ability to participate in your community, then in some sense you're poor." So it's a little bit more about human dignity than absolute income.
DEVIN STEWART: We interviewed Tomas Sedlacek, the Czech economist who talks about the effect of good and evil on economics and the absence of taking into account human values, that you can't price, things like love and friendship; therefore, our models are inadequate. Thinking about maybe one day we might solve poverty, we're almost getting there. Sedlacek was saying—he was referring to previous historical economists—maybe in the future we might see a time where our values shift away from just getting rich to things like leisure and heart and things that are more refined.
Thinking about the next 100 years—we're getting to our Centennial next year—what would you like to see happen in the future?
NANCY BIRDSALL: I'd still want people to have more income so they can buy more leisure. So, as an economist, I think that some of our crude measures will still be important, at least as proxies for the kinds of things you were referring to in terms of values.
There is this literature on happiness and well-being. I think it's pretty well understood now that there are diminishing returns at very high levels of income to more income. And we know that in richer societies—some people call it post-materialist societies—there is more interest, not just in art, but watching sports on TV and playing sports and betting even and having fun and so on.
What was your question? I lost myself.
DEVIN STEWART: What would you like to see happen in the next 100 years or so? If you could think about—taking into account the way economists think about the world—think about an optimistic scenario, where we could be headed that people don't often think about. Is it that we have the ability to solve poverty, or is it that we'll have more leisure time, or is it something more abstract? What would you like? When you dream of the future, what do you see?
NANCY BIRDSALL: That's a great question. I guess I would put it as in 100 years I would like that, not just my children and grandchildren, but Bouazizi's cousins and children and grandchildren, and children and grandchildren in some of the poorest countries today, have the standard of living that we have here today.
Now, the question is: What do I mean by standard of living? That's the deeper question, I guess. But it certainly has to do with having a range of choice, having reasonably good access to the kinds of opportunities that provide for a dignified life for participation in politics if you want, that make you feel that you can hold your own government accountable. At least let's get everybody closer to the standard that has been set in the Western advanced economies.
DEVIN STEWART: I'm really tempted to ask you before we go on to the final questions—there's a lot of debate about whether the West does show the rest of the world what they should aspire to. What are your thoughts on that?
NANCY BIRDSALL: Good question.
I think that there are important differences, even in the West. So I guess I would aspire to people having the choices that we have—not so much how they use those choices, but that they have those choices.
DEVIN STEWART: Moral leadership—how would you describe leadership? How do you see leadership?
NANCY BIRDSALL: Well, I'm a policy wonk, so I believe that improving other people's lives everywhere is not only, or even mostly, about ensuring they have services, but ensuring that they are participating in a system that is accountable to them and where they have voice about decisions that affect them.
Leadership is about working with people, I suppose, to maximize those choices. Particularly if you think of the way development happens or progress happens anywhere as this complex evolutionary force, then leadership is really about observing and listening and perhaps guiding as much as being in charge in the traditional sense of what we think of in terms of leadership.
I think also, as you suggested indirectly in one of the questions you asked me, we're really entering into another round of innovation. Maybe we're going through something more comparable to the Industrial Revolution, and preceding that the agricultural revolution, with this change in the information age and the instant communications.
So leadership in that sense—well, we'll see what it is, right? It's not going to be necessarily the traditional kind, in political space. It's going to be in social space, in corporate space. It's going to be about innovation and adaptation in a more rapidly changing environment.
On the development issues, I've come to believe that we've got to push our leaders in our own countries on these issues like climate or free trade or migration.
The key for people in a country like our own is to bring it home and to push our policymakers to do the right thing with respect to areas like trade, climate, investment in new technologies, migration policy. This is very different from just giving money away. This is about leverage through policy change that alters the whole system and is dealing with the reality the people can benefit from better lives, more dignity, everywhere.
I would say migration is a great example. It's a win/win proposition, where we can help a lot of people escape poverty.
DEVIN STEWART: Andrew Carnegie, 100 years ago, founded our place in part to promote world peace. He made many peace endowments, as you know, in Washington and New York and Great Britain. Is world peace possible? Depending on what your definition of world peace is, what do you think about it?
NANCY BIRDSALL: Absolutely. The world is so much more peaceful today than 100 years ago or 1,000 years ago. I think we're really close. It's a worthy goal.
Humanity has made huge progress in terms of peace in the world and in terms of violence. I see that happening. Even learning about the terrible things that happen to women—rape and murders and so on, the homicide rate—is a sign to me that the norm has changed. Although we have become more aware of these things because we have such instant communications, the reality is we know from the data that it's getting better. We can get there.
DEVIN STEWART: Excellent.
Last question: When you are talking to the viewer or the person who is reading the transcript of this interview, how do they get involved? Who is accountable? How do you encourage action?
NANCY BIRDSALL: On my issues of development, I think the first step is for people to be aware. Don't think that it's not your business what's happening in Pakistan or what's happening in Thailand or the Philippines. Start by being aware. Listen to the radio. Read the paper. Most people, once they become more and more aware, they are in a better position to demand better policies in their own country and they are more likely to get engaged in other ways as well.
We certainly know that there is tremendous interest in the developing world. Americans, anyway, woke up after 9/11—that's my view—and thought, "Oh, it does matter elsewhere, also; what happens out there matters for us here, just as what happens here matters for them." Sometimes major events like that in one place start to change the norm and the attitude.
DEVIN STEWART: Thank you so much, Dr. Birdsall.
NANCY BIRDSALL: Thank you.