Market Fundamentalism and Scientific Hubris

Left behind places have been the victims of a decades-long consensus among policymakers and development experts. This consensus has insisted on the independence of freeing markets from government interference and sought to minimize what its advocates saw as the economic distortion caused by social planning and other state-led economic interventions. As a result, much of the world has been in the grip of market fundamentalism for decades.

This free-market consensus was bolstered by authoritative but often misguided development economists who derived broad policy recommendations based on highly sophisticated quantitative analyses reliant on data from countries that did not generalize to most left behind places. In particular, to conduct rigorous statistical tests assessing the efficacy of market-based reforms on economic indicators, economists need very high-quality data that can only be provided by countries that already have the preconditions for economic success — e.g. effective governance.

In the end, apart from a decade-long commodities boom beginning in the mid-2000s that temporarily lifted all boats — particularly those of commodity-dependent low-income countries in Africa and Central Asia — decades of market reforms in the poorest sixty countries left them even farther behind the rest of the world in terms of economic development and quality of life.

But not all left behind regions chose the path prescribed by mainstream economics. In the United States, despite decades of bipartisan consensus around the need to let the market choose economic winners and losers in the wake of deindustrialization, local leaders in Pittsburgh decided to ignore the dictates of orthodox economists. As a result, Pittsburgh transitioned from an economically ravaged shell of its former self in the 1980s to the twelfth-most successful city in the United States today.

In another telling comparison, Collier describes the divergent trajectories of South Yorkshire, England — once a thriving center of steel manufacturing — in the wake of deindustrialization and East Germany after the fall of communism. In 1990, East Germany was in much worse shape economically than South Yorkshire, whereas today the former is thriving while the latter still struggles. The key explanation for this divergence is, according to Collier, that the British government pursued a radical market-oriented approach to its left behind regions that essentially cut them adrift economically. This led to massive capital flight, increased unemployment, lower wages, and a host of associated social ills. By contrast, the West German government — against all advice from economists at the time — made a political decision to not let the East fail, and so invested heavily in subsidizing economic recovery in the former German Democratic Republic.

Likewise, whereas the steel industries in the United States and UK were gutted by tight monetary policy and Korean competition, the Germans made a political choice to maintain competitiveness in the sector through government support. In short, Collier’s point is that market fundamentalism was not inevitable, and that left behind countries and regions that resisted the procrustean logic of mainstream economists and policymakers were often able to escape the trap of economic and social decline.

Radical Experimentation and Local Control

If simply ignoring the advice of economists was enough to help left behind places catch up, however, we’d see a lot more success stories. But Collier argues that what matters even more than the specific policies enacted is taking a pragmatic approach of trial and error that leads to government actions suited to the specific characteristics of each place. Collier inveighs against deductive strategies that generate recommendations on the basis of general economic principles that often fail to account for the specificities of place and time. Instead, he implores leaders to pursue the humbler inductive path of practical experimentation, provisional assessment, and adjustment — then rinse and repeat until the most appropriate policies are identified and refined.

Left Behind is full of vivid case studies exemplifying Collier’s theoretically simple but practically daunting proposition. For instance, he describes the early economic reforms of Deng Xiaoping, who turned China into a laboratory of pragmatic experimentation. Deng named the country’s top economic managers as local party chiefs of China’s forty regions and instructed each to experiment locally with policies that would improve economic growth and standards of living. Over time, successful experiments were analyzed and scaled up, unsuccessful ones were studied for lessons learned, and a fantastically successful new economic model was gradually devised based on local knowledge and experimentation.

A more modest but hugely impactful example Collier gives is the experience of health care reform in postgenocide Rwanda. In its efforts to expand medical services to rural areas, the Rwandan government quickly realized that the country’s inadequate road network would make overland transport of blood prohibitively expensive. In response, creative bureaucrats pioneered the use of drones to provide much needed medicals supplies to rural areas where it was too expensive to ship supplies via refrigerated trucks. Amazon had learned how to deliver packages with drones and the Pentagon to drop bombs, but only these local authorities chose to use them to improve public health.

A related ingredient for success in left behind places is decentralized decision-making to place the power to make choices about local needs directly in the hands of local communities. A common refrain throughout the book is that left behind places simply cannot be saved by top-down interventions from wealthier areas or economic experts with little knowledge of local context — indeed these interventions are often counterproductive.

For example, the UK government imposed a one-size-fits-all approach to economic development on local governments from London, forcing local officials like those in South Yorkshire to implement economic strategies that only left their area farther behind economically thriving Greater London. Centralized decision-making, combined with the hugely disproportionate share of London-based bureaucrats in charge of key state institutions, has led to a massive imbalance of power and influence that has helped London and its surroundings to prosper while everyone else has suffered. In contrast, Collier explains, East Germany’s remarkable economic recovery was facilitated not only by generous economic largesse from the West, but crucially by the decentralized way that this support was distributed, allowing local officials, civil society, and business leaders to experiment and make decisions that worked best for their communities.

The Importance of Leadership

While most economists and political scientists discount the importance of leadership, Collier argues that effective, selfless leadership has the capacity to fundamentally alter a country’s economic and social trajectories. Effective leadership, he argues, can counteract many of the negative effects brought on by the economic dislocation of left behind places.

Collier argues that a key reason why left behind communities struggle to catch up is due to collective hopelessness and conflicts between different groups in the community who blame each for other for their woes — rather than the external economic and political forces that are actually responsible. The first step in counteracting this vicious cycle of spiraling down is forging an effective collective identity and ethos of communitarian solidarity that can minimize intergroup tensions and foster the shared sense of short-term self-sacrifice needed to build a foundation for long-term success.

Collier gives the examples of Lee Kuan Yew of Singapore, Julius Nyerere of Tanzania, and Seretse Khama of Botswana as leaders who successfully forged strong national identities and enduring cross-class and cross-ethnic political coalitions in fractious, multiethnic societies with the help of a highly dedicated cadre of professionals whom they held to rigorous standards of accountability. This sense of national identity and shared self-sacrifice facilitated a communitarian ethos in which people were willing to make personal sacrifices in the present in order to achieve longer-term economic objectives.

Somewhat provocatively, but consistent with his broader dictums against the imposition of one-size-fits-all Western economic and political development models in left behind countries, Collier praises these leaders for understanding that democracy had to be postponed in order to stop the country being taken over by corrupt elites who sought only their own benefit, as happened in places such as Burundi and Malawi. For Collier, these experiences show that electoral democracy alone is neither a necessary nor a sufficient condition for helping left behind countries succeed.

Politics and Scale

On the whole, Left Behind is a thought-provoking and refreshingly open-minded book that readers on the Left will find many reasons to critique, but will nevertheless benefit from engaging with seriously. The structure of the book at times feels a bit too loose, with illuminating case studies stitched together with thin throughlines that might have benefited from consolidation across chapters. But the book’s somewhat rhapsodic structure nicely mirrors Collier’s broad thesis about the importance of answering big questions well rather than precisely.

Left Behind is, however, limited by its author’s technocratic understanding of political change, and, following from this, his underestimation of the scale of political transformation required for left behind places to flourish.

Politics is clearly present in Collier’s work. He regularly discusses the importance of finding strategies to build effective political coalitions for change, and he stresses the role of regional and class power imbalances in creating and reinforcing inequalities between left behind and prosperous places.

Yet, apart from discussing the happy accident of a country having a farsighted leader like Lee or Nyerere, Collier says very little about how power relations can be altered. Indeed, even when he talks about the importance of social movements in generating political change, Collier presents them almost as if they were natural resource endowments that countries either have or not. For example, Collier talks about how in 2021 a social movement emerged in Sudan that played an important role in bringing down the government of Omar al-Bashir. But he says nothing about how that movement came about or why, or the conditions that allowed it to do so. The reader is left with the impression that ordinary people have very little agency to affect political change.

Yet at the same time, Collier goes to great lengths discussing the importance of cultivating dense civil society networks to strengthen communal ties and shift control over economic decision-making to the communities most affected by those decisions. He clearly believes that ordinary people can engage in transformational collective action, but apparently only in an apolitical, nonconflictual way.

As a result, Collier virtually ignores the fact that meaningful political change requires not only cooperation and collective solidarity, but also leverage. Economic elites’ willingness to accept taxation and workers’ rights can and does shift over time. Collier rightly notes that this willingness can be increased through the development of strong cross-class communal ties and a shared pride of place.

That said, activating the better angels of economic elites’ nature also typically requires strong independent organizations representing workers (i.e., unions) whose capacity to eat into company profits through industrial action effectively forces firms to accept greater social responsibility. Voluntary cooperation and shared values are a critical part of the story, but Collier doesn’t acknowledge that cooperation and changes in norms also depend on credible threats posed by those without power against those with power.

An illustrative example of this omission in Collier’s analysis is his discussion of the Rotary Club in the early twentieth century. Building on recent work by the political scientist Robert Putnam, Collier argues that the shift we see away from individualistic and toward community values in the United States of the 1930s and 1940s can be explained by a dramatic increase in voluntary associations like the Rotary Club, which was founded in 1904. I don’t doubt that this thesis is at least partially correct, but it is somewhat puzzling that Collier makes no mention of the fact that the period in question covers the same years that the US labor movement exploded. While it is conjecture on my part, I would be very surprised if the development of voluntary associations like the Rotary Club had anything approaching the impact that unions — with their capacity to induce more prosocial behavior on the part of employers — generated in US politics, society, and culture during this period.

More broadly, Collier’s focus on discrete policy interventions that can move the needle in a modestly positive direction for left behind places tends to obscure the more drastic changes in political power both within and across most countries that would be required for more than a clever minority of left behind places to policy-hack their way out of oblivion. In fairness, this is a problem Collier acknowledges, and he argues that small-scale movements in the right direction can be the catalysts that put new virtuous cycles of economic and community development into motion in left behind places. His many examples from across several continents certainly lend some credence to this theory.

Ultimately, Collier’s tool kit for left behind places is not an adequate match for the scale of the problems these communities face. Explicitly comparing our situation today to that of the 1930s, Collier concedes that tackling economic depression and endemic inequality were only possible then by creating a dramatic sense of national urgency through the New Deal and a sense of shared collective identity through the experience of World War II. Invocation of visionary leaders like Lee and Nyerere provides some sense of the magnitude of political transformation required, but it is unclear how these examples of postindependence authoritarian nation-building could be applied to the context of contemporary middle- and high-income democracies that face perilously high levels of inequality and political polarization between left behind and affluent areas.

Collier’s policy prescriptions, though undoubtedly constructive for many policymakers in left behind places, are not easily translatable into a politics that appeals viscerally to postindustrial working-class communities in the United States, Europe, and beyond who feel exhausted, betrayed, and demoralized. To effectively reach these communities, a more overtly political approach may be necessary, one that names the (albeit stylized) corporate and political enemies who have led us to where we are today, and who can only be defeated by a new sense of collective identity driven by strong institutional champions (i.e. unions) capable of bridging the many divides that stand in the way of working-class solidarity.