Cargo Cults: not just in the South Pacific?

Smithsonian magazine just ran a piece on a cargo cult in Vanatu

These cults started during WWII as the US air-dropped material all over the South Pacific. Well after the war ended, Islanders would create “runways” and build wooden planes and conduct ceremonies to induce the air-dropped riches to re-appear.

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Daniel Ellerman claims that the World Bank has systematically encouraged developing countries to practice a similar cargo cult religion, by encouraging them to adopt the outer trappings of rich countries and assuring them that wealth would follow.

Get the institutions right, increase your school enrollments, get a stock market going, privatize, get the prices right, create a competition authority, enforce intellectual property rights.

In practice, are these injunctions (which by and large poor countries have followed without the promised success) so different from the hollow planes and ceremonies of the South Pacific culters?

I don’t think they are.

Isn’t the WB guilty of practicing cargo cult science?

I think they are.

What do you think?

3 thoughts on “Cargo Cults: not just in the South Pacific?

  1. To be fair, there was a degree of directed planning in the case of the industrialized countries that were not Great Britain circa 19th century. France, German states, Netherlands, and US governments looked at Great Britain and decided, “Let’s do that, but we’ll have to do XXXX to get there.”

    I think it’s just that the policies that really help a country industrialize are not particularly good for existing rich countries in the short term. Imagine publicly telling a country to

    1. Beg/borrow/steal as much IP and expertise as you possibly can, re-purpose it to work with your factor endowments – then later pivot and begin defending IP against poorer countries using the same strategy;

    2. Get basic schooling up even if it’s crappy;

    3. Use your factor endowments to promote them as “cores” for industrialization, even if it’s protectionism.

    4. Don’t nationalize – instead force more productive foreign companies to set up local industrial sites in-country to generate the human capital and infrastructure which can then bleed off and help to industrialize the rest of the country.

  2. I don’t think there are any simple answers to development issues. After reading Mr. Ellerman’s essay I find I agree with most of it.

    I started writing some opinions and ended up with a long essay of my own. Instead I’ll just give a few brief maxims for the developed world:

    1. Know your limitations. You can’t force a nation to development. You can’t force political reform. Let nations decide their own fate.

    2. Don’t encourage bad government. Don’t condone corruption. Don’t facilitate dictators looting a country. Or perhaps just make sure the secret bank accounts, payoffs, etc. become public. See ipaidabribe.com (not a developed world project, but a great idea).

    3. Be wary of forcing cultural change. Nations get enough Western influence from television. We have enough backlash against Western culture without it being forced on nations from the outside. Even if the cause is worthy and people are being oppressed, the impetus has to come from within.

    4. Allow free trade (don’t just talk about it). It would probably be more effective for the United States to allow (for example) unlimited agricultural imports and use its foreign aid budget to pay US farmers to quit growing those crops (though this violates my next item).

    5. Lead by example. Don’t be cozy with the local dictator while talking about the wonders of democracy.

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