Development Policy and the Poor, Part 1: The Preferential Option for Merchants, Capitalists, and Bureaucrats

Abstract

AbstractThe often‐stated goal of economic development is to lift people out of poverty. However, the poor are usually an afterthought in the design of development policy, with any benefit that reaches them “trickling down” from what goes to whatever group is the real focus of development policy. All development policy consists of directing and redirecting resources to the group that is felt will promote the aims of those implementing the policy. Political realignments and the evolution of capitalism have changed the group that is in the vanguard of development at various stages. In this essay (Part 1), we will look at the economic arguments that each of the first three vanguard groups—merchants, capitalists, and bureaucrats—applied to development policy, with special emphasis of the position of the poor. In a separate essay (Part 2), we will look at the Catholic principle of the “preferential option for the poor,” which recommends making the poor the central focus of development policy. In the past seven decades of the U.N.’s development agenda, we see a tension between a status quo development policy that makes economic growth the primary goal and a bottom‐up development strategy that emphasizes programs to build up the capabilities of the poor. We also look at some of the evidence of the successes of each approach and argue that a human‐centered agenda has a better chance of lifting the poor out of poverty.