Thinking in Silos (4): Per capita GNP and “Development”

Returning once again to my favorite metaphor for thinking that is artificially constrained and deals in isolation with things that need to be thought of more broadly: the round concrete silos used for storing grain.  Another good example of such silo-ized thinking comes from the fact that, for decades, people thought about the silo labeled “per capita GNP” as the only way—or as by far the most significant way—to talk about and measure “development”.  Or, if they made any concessions to its inadequacies, it was to add refinements, like—

• What share of the total GNP goes to the top 5% vs. the bottom 40%?  or
• What is “real” GNP, after taking account of inflation?  or
• What is the per capita GNP in “Purchasing Power Parity” terms, which corrects for the distortion of market exchange rates?

With such additions, the silo may be bigger, but it’s still lonely and isolated.  And, over the years, many of those who think about development have paid increased attention to other key measures of peoples’ well-being that lie outside the GNP silo, such as

- infant and child mortality
- overall life expectancy
- literacy, especially female literacy
- poverty (somewhat associated with GNP, but considered in absolute terms such as “people whose income is less than $1 U.S. a day”)
- hunger
- civil and political liberties (yes, there are some plausible efforts to quantify these)
- proportion of rural people who lack secure land rights
- etc., etc.

In fact, a huge leap beyond the GNP silo came in 2000, when world leaders adopted the Millennium Development Goals—a series of targets that included most of the foregoing.  (And the U.S. Millennium Challenge Corporation created in 2004, likewise looks to such beyond-GNP measures in allocating foreign aid.)

Wow!  Has “de-siloization” come to the crucial global issue of development?

Roy L. Prosterman

 

Editors Note
Roy L. Prosterman, Founder and Chairman Emeritus, Landesa, USA;
Social Entrepreneur; Schwab Fellow of the World Economic Forum

For over 40 years, Landesa (formerly the Rural Development Institute) has partnered with governments around the world on reforms that have helped provide secure land rights to more than 100 million families.

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