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Tuesday, April 20, 2010

The Power of Freedom: Uniting Human Rights and Development

Jean-Pierre Chauffour, an economic adviser at the World Bank, constructs a framework within which human rights and economic development are mutually consistent. His book is a response to policymakers and academics who view economic development as a “fundamental right” calling for government intervention; it demonstrates that the policy prescriptions derived from their ideas are counterproductive to the goals of economic development. Chauffour then sets forth a common ground for development and human rights founded on the ideas of freedom, “negative rights” (rights against coercive interference), and protection of private property. Societies that ensure these basic freedoms will achieve far greater economic development, he argues.

Chauffour first explains the history of thought behind the idea that economic development itself is a human right. Advocates of that view focus on attaining “positive rights”–that is, a right to have things regarded as necessary for a good life. That notion has strong roots in socialism. Many regimes give high priority to these positive rights, but they necessarily violate true human rights in order to sustain their political agendas. Even in its less extreme forms, the “positive rights” approach to development inevitably designates some government force that is supposed to be capable of ruling in the interest of citizens, instead of permitting them to pursue their own interests as they would under a “negative rights” regime.

In advancing his argument that economic development will result from individual liberty, Chauffour uses the insights of the Austrian school of economics. He illustrates that policies intended to promote human-rights agendas are plagued with both knowledge and coordination problems. He incorporates many of F. A. Hayek’s ideas, which both cast doubt on the political feasibility of government-directed development and point out the logical inconsistencies of systems based simultaneously on positive and negative rights.

Crucially, Chauffour emphasizes that simply proclaiming that all individuals possess certain positive rights, such as freedom from hunger, does not provide governments with the resources or the knowledge necessary to guarantee those things. The mere act of declaring something to be either a right or an obligation does not help anyone, except perhaps the politicians. Chauffour might have strengthened his point here by arguing that declaring an obligation that is impossible to fulfill, such as that employers must pay “decent wages,” may be harmful in underdeveloped societies. Giving people the expectation that they are entitled to specific outcomes breeds inertia and inaction.

While most of the book is about the harm done by positive rights-based policies and how negative rights are more logically consistent than positive rights, Chauffour asserts that “it is a fact that the protection of certain negative rights cannot be ensured without positive actions by the state.” In saying that, he sells short private solutions that can emerge to solve complex property-rights issues that most governments struggle to control via regulation. Even in developing countries, the free market works well to devise protections for property rights, and Chauffour could have strengthened his case for laissez faire by noting that.

Another difficulty is that Chauffour seems to underestimate the challenges of making the transition from a society dominated by “positive rights” thinking and intrusive government to one where individual rights are upheld. Major development successes will happen when societies embrace economic freedom, but how do we create the institutional context under which people (and especially their rulers) who have been accustomed to strong government control will throw off those shackles and embrace freedom? Chauffor’s diagnosis is right and the prescription is right, but can the patient be induced to take the medicine?

Following the devastation of the earthquake in Haiti, this is a particularly good time to read The Power of Freedom. Haiti is a desperately impoverished nation, and that poverty has made the death toll far greater than it would have been in a wealthier, modernized nation. Haiti has received great amounts of foreign aid but that has not translated into economic development. Moreover, the nation ranks low on indices of economic freedom, particularly in terms of property-rights protection. Perhaps this tragedy will at least cause some development experts to consider Chauffour’s point that freedom will allow poor people to start advancing economically, whereas looking to government to catalyze development is certain to lead to disappointment.