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World Bank Still hasn't figured it out

A remarkable World Bank report recently stated that conventional methods of economic development just don't work. Balanced budgets, sound currency, and economic growth through opportunity fostered by free and open markets are not enough against conditions of endemic poverty.

The report, released this fall, concludes that traditional assumptions on alleviating world poverty are probably wrong. The levels of world poverty have improved negligibly using programs based on conventional assumptions. These assumptions have tended to produce a single format for all types of programs to alleviate poverty. It seems that one size does not fit all.

The report suggests that other items are more important for the world's poor in efforts to alleviate their poverty. The poor need more income security during crises (war, droughts, and financial panics), and better institutions of governance, including court systems that really ensure property rights and a social safety net.

These may be worthy goals, but let's stop a minute and consider who is issuing this report - the World Bank. This institution has left a well-documented trail of mistakes and contrition since its founding in the wake of the Second World War. A creature of the Allied powers, the World Bank was meant to provide stability in the world's economic and political structure. This centralized behemoth developed its own prescriptions for how programs were supposed to work and what the results would be. Unfortunately, these recipes often resulted in inedible stews, and it has been the poorer peoples and countries of the world which have had to become the guinea pigs of the World Bank and its failures.

One can point to the fads of over-industrialization, ecological disasters, and sector realignments that were fobbed off on needy countries as the only way to reach the bright future of Western-style prosperity. The results were much less than inspiring. Cultural diversity and the willingness of many World Bank clients to settle for less - because it made sense for that culture - were set aside by World Bank practitioners. But, in the end, centralized economic decision-making pushed by the World Bank did not work.

What happened next? The recipe of the day was dropped and another took its place as the "real" program to reach "real" prosperity. So, a new failure replaced an old one, and still the dollars came forth from the World Bank coffers.

In contrast, with practical successes over the past 20 years, Native Americans have demonstrated that culturally appropriate economic development is the key to solid economic progress. Culturally appropriate development means activities that are driven by a community's cultural values, based on kinship, shared responsibilities and benefits, and respect for the environment.

Established development thinking tends to be large-scale, but very few people identify themselves as cogs in a global machine. Local culture counts and must be considered seriously in any development program worthy of the name.

In development programs, the focus is often the exploitation of a resource. This exploitation is not value free. The conventional view is that a resource should be exploited, no matter what the locals think. Local communities often make this decision themselves, but it is out of desperation and ignorance. Real community development restores choices and options, but does not presume a particular outcome.

Viable programs are established when culture is respected and the assets of a people are mobilized. Development practitioners should give it a try. Nothing else has worked up to now.