GENIUSES AT THE GATE
A 2-Pager by Ajit Chaudhuri
‘Professors – be good to your A students, for one day they will come back and make excellent faculty. Be good to your B students, for they are the mainstay of the graduate class. Be good to your C students, for one day they will come back and donate $100m for a new science building.’
I have long argued for the development sector attracting smarter people. Now – I am not so sure! Two recent papers make a convincing case for good old laziness, self-satisfaction and stupidity. Allow me to elaborate!
The first, “Wall Street Smarts” , takes a tongue in cheek look at investment banking and concludes that the havoc is all because smart people started going to Wall Street. If one looks at where the toppers of 30 years back are now, one finds that they are in government, or in research, or are university professors. It was the bottom third that went into banking – their families were already in banking, and they were blessed with pleasing personalities and good social skills. They were not greedy – they already had that second home and an ocean going boat. And they could never have come up with concepts such as derivatives or credit default swops – the maths was beyond them.
And then, the toppers started coming to Wall Street. Why? The author attributes the phenomenon to the rising cost of higher education, which had toppers postponing their moves to public service, fundamental research and PhD programmes to make some money and pay off loans, and then letting the big bucks cancel these altogether. These guys could (and did) come up with complicated schemes to make money and subvert checks and balances. Their bosses, of the previous paragraph, could not understand what was going on but were making serious money – and were therefore in no position to exercise control. And that, in essence, is the cause of the global economic crisis. The paper itself makes a powerful argument in a humorous way, and I recommend a read (you can google the title) in case you have missed it.
The second, “Giving in India” , provides a glimpse of what happens when the toppers dump investment banking (or vice versa) and hit the development sector. The authors, all of whom are specialised in equity research, spend a year studying the philanthropy industry in India, come to the conclusion that much that happens is wrong, and make a case for research and analysis guiding funding decisions. The serious reader would find the paper, despite its many positives (especially on the use of the public domain for intellectual property), underwhelming for three key reasons –
It plays ‘zap the bozos’: Communiqués from the intelligent to the unintelligent have two common indulgences. One, they make strong statements without bothering to effectively justify them. Two, they use technical terms incorrectly and/or inappropriately with confidence that they are unfamiliar to the reader. This paper is not an exception. I include a small addendum to provide reasons for these remarks without losing the flow of this note.
It doesn’t examine the antithesis: Is there a tiny possibility that people providing money for philanthropy are not idiots, and that their money is going into the correct places? And could it be that the Indian NGO sector is an unworthy recipient of money for philanthropy compared to, say, religious institutions or local government? The paper assumes not without question.
It doesn’t make a convincing case for research and analysis: The fact is that the number of NGOs in this country that are honest, capable, and have permission to receive money from foreign sources is not impossibly large. A few development conferences, a meeting or two with informed sources over drinks, and a Google session on a computer and you are likely to have an adequate list of possible NGOs to work with. The paper does not convince the reader that the additional benefits of rigorous analysis outweigh the costs.
If you are a topper, chances are that you are not as repelled by the development sector as you were last year. And if you are looking for an opportunity within, here is some unsolicited (but, I hope, constructive) advice.
Do something useful: Make more money available for social development, or enable benefits reach needy communities effectively. Please do not look to make the sector a new repository for ‘socially useless activities ’ now that the financial sector is clamping down – there are enough middlemen here!
Do not replicate blindly: Does it work in Scandinavia, or in Africa? Or Bangladesh? It does not mean it will work here. India is a graveyard for those looking to replicate successful ideas, policies, systems, programmes, etc. in social development from elsewhere – even from elsewhere within India.
Remember – beneficiaries are people: Control group experiments, randomised control trials and suchlike may sound fancy, may be the ‘gold standard of measurement’, and may enable rigorous attribution of effect to activity. But, when they are applied here, what they actually mean on the ground is the purposeful denial of services (such as immunisation, or a toilet) to a poor community (the control group). The ideas you concoct should pass a basic test – of treating beneficiaries as people and not mice in a lab.
Do not play God: Being poor is not so much the lack of this or that as it is the unequal relationship with others, the lack of voice, and the denial of rights. Handouts from philanthropists will not change this. The government can, however, and you may support or oppose but please do not look to replace.
Think out of boxes and silos: Social development is complicated and chaotic. Things don’t slot into nice little boxes and columns to make neat explanatory diagrams. And a successful education project requires work on a gamut of issues that seemingly have no connection to education, such as governance, health, livelihoods, et al – if it is only about education it is doomed to fail.
Let me leave you with two thoughts from the management guru Peter Drucker on the occasion of his birth centenary. He said that ‘cleverness is no substitute for knowledge’. He also said that the only reason they use the word ‘guru’ is because ‘charlatan’ is difficult to spell.
Addendum: The introductory section in chapter 1 says that ‘the evidence suggests that money is neither being allocated to the most important areas of social need, nor given to the most effective organisations’, and that ‘funding is dysfunctional’. The evidence that follows to substantiate the statements is vague and unconvincing through the paper . It goes on to say that this can be conceptualised as a ‘broken’ funding market. The term ‘broken market’ has a meaning – it describes a situation in which the chooser of the product does not purchase it and the purchaser of the product does not choose it – the market for school textbooks in the US, for example. It is difficult to think of the philanthropy industry as being a market at all, broken or not, in the absence of sellers, buyers and choice for the final users i.e. the benefiting community.