The ‘golden thread’, reactions from the US, and Obama’s second-term development agenda

In development circles over the past week or so there has been a lively debate on the Post-2015 High Level Panel (HLP) discussions in London and David Cameron’s op-ed in the Wall Street Journal, which has brought his ‘golden thread’ narrative into the public domain. Cameron’s ‘golden thread’ posits a link between ‘open societies’ and ‘open economies’.  He argues that open economies are good for growth and poverty reduction while open societies involve ‘rights for women and minorities, a free media, integrity in government, and the freedom to participate in society and have a say over how your country is run’.

The theory has provoked interesting responses: broadly positive reactions from US-based commentators including the Center for Global Development (CGD) and from Robinson and Acemoglu, whose historical analysis of Why Nations Fail has much in common with the ‘golden thread’.

Robinson and Acemoglu focus on the process of ‘creative destruction’ as the heart of the matter. In the long run, they argue, autocracy will fail to sustain dynamic economies, because institutions shaped to extract value for the elite will be so effective at entrenching those advantages, they will strangle creativity in the economy.  Their formulation of extractive institutions (bad) vs. inclusive institutions (good) does not map exactly on to ‘open ‘ and ‘closed’ societies/economies, but it’s very close.  Chris Blattman has also highlighted some interesting holes in the developmental logic of the ‘golden thread’ at least as presented up to now – notably a lack of focus on industrial policy.

The responses throw up a couple of general points that can strengthen and sharpen the way these issues are framed, particularly in the context of the next framework of development goals and the work of the HLP.

  • As Chris Blattman notes, voice and empowerment are worthwhile values in themselves. There is a strong case that a holistic view of human wellbeing should include this dimension in the outcomes we want to see reflected in global goals. This is also the case with the issue of protecting people from violence and conflict.  But in the end this is about fundamental values rather than ‘threads’.
  • There is broad support in many of the commentaries for the emphasis on property rights.  There needs to be recognition that assuring the ‘property rights’ of the poor is not a simple question of a few legal changes. The transformation currently taking place on a global scale of patterns of ownership and use of land and related natural resources  threatens to wipe away a vast texture of informal access and use rights on which many of the poorest depend. I’m not against people relocating from rural to urban areas, or changing from land-based to other livelihoods. I am against them being ripped off or made destitute in the process.  If urgent action is not taken this is likely to happen on a huge scale.

The debate so far is missing one key element:  it’s what Dani Rodrik calls the 'Globalization Paradox'.  In short, sovereign democratic states seeking to build their own social contract will want to regulate markets for social ends. ‘Hyper-globalised’ markets become a problem at this point, because they can often prevent the nation state from doing this. Rodrik argues that you can’t have all three – sovereignty, democracy and economic hyper-globalisation. There is a real challenge to ‘golden thread’ logic here. Open, democratic societies may have been a good guarantee of sustainable economic growth in the past, but the conditions of the present challenge the models of the past. 

The final interesting element of the US commentaries is a theme in some that the US should be doing more to demonstrate leadership on global development agendas (taking a lead from the UK).

The re-election of President Obama for a second term puts a new light on this.  Anyone who has read Dreams from My Father will know that the current US President has a deep personal engagement with the world beyond the boundaries of the US – from his African heritage, his experience of childhood in Indonesia and his mother’s career in development. Up to now he has kept that a little bit under wraps, perhaps understandably given the fact that the domestic economic agenda has been so challenging.

From this side of the Atlantic, we would hope that a second term will give him the freedom to focus on the big global development challenges such as climate action, and promoting human security, voice and freedom from deprivation for all as a more prominent part of his agenda.

9 November 2012
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