New Strategies for Social Innovation

Market-Based Approaches for Assisting the Poor

Steven Anderson

• Editorial: Columbia University Press
• Año: 2014
• ISBN:
  9780231537384
• Categoría: Politica e relazioni internazionali
• Categoría: Politica sociale

Market-based development strategies designed to help the world's poor receive significant support from advocates, academics, governments, and the media, yet frequently the perceived success of these programs rests on carefully selected examples and one-sided, enthusiastic accounts. In practice, these approaches are often poorly defined and executed, with little balanced, comparative analysis of their true strengths and weaknesses.

This book is the first to assess emerging market-based social change approaches comparatively, focusing specifically on social entrepreneurship, corporate social responsibility, fair trade, and private sustainable development. Steven G. Anderson begins by identifying the problems these programs address and then describes their core, shared principles. He follows with a general framework for defining and evaluating these and other development approaches. Separate chapters provide background on the historical development and application of each approach, as well as interpretations of the processes for implementation and the underlying behavioral assumptions related to successful outcomes. A final chapter compares each approach across a set of important program development dimensions and analyzes the utility of market-based approaches as part of a general consideration of social development strategies for the developing world.

Introduction to Market-Oriented Social Development Approaches

THE MECHANISMS OF social provision are undergoing fundamental changes around the world. Even before the great worldwide recession of 2008, the security of social benefits provided through governmental systems was being seriously challenged. The recent financial meltdown has further attenuated such benefits, and global economic forces and demographic factors such as aging populations promise to further constrain governmental effectiveness in addressing the most fundamental needs of citizens.

Of course, governments are not the only means through which disadvantaged citizens receive social benefits. Kinship and family networks, employers, religious organizations, private market purchases, and voluntary mutual assistance organizations are all important vehicles for social benefit provision (Gilbert & Terrell, 2010), with the prominence of each varying significantly across countries. Nonetheless, governments have played unique roles in protecting the rights and basic living standards of the most challenged members of societies; thus growing limitations in their ability or willingness to do so are troubling.

Perhaps the most fundamental question arising from this state of affairs is whether governmental regimes that fail to assure basic living standards merit continued support from their citizens. I would join many social advocates in responding with an emphatic “no.” This raises the difficult subsidiary question regarding whether responsive change efforts should focus on transforming regimes or on overthrowing them, and raises related questions about the most effective political tactics for achieving one or the other of these aims.

The aforementioned questions are critical in forming philosophical orientations to social change but are not the focus of this book. Rather, my intent here is to describe and assess an important set of social development approaches that have emerged largely outside of the scope of governmental provision in recent years. In particular, I will focus upon four such development models: social entrepreneurship, corporate social responsibility, fair trade, and private sustainable development.

These four change approaches often are described loosely and somewhat interchangeably in academic writing and applied change settings,¹ but I will argue that they vary considerably in their philosophical orientations and related causal logics, and therefore may be distinctly assessed. However, they also are held together conceptually in that they operate largely outside of governmental auspices and because they emphasize private market interactions and adoption of market or business principles. An interesting corollary is that these models typically consider consumer perspectives and practices as central features of program initiatives. Although there undoubtedly are other market-oriented approaches worthy of examination,² these four have been implemented quite broadly in practice and have enjoyed increasing research attention and support. Each therefore has been sufficiently established to allow for both particularistic and comparative assessment.

Although the models to be discussed are not all primarily philanthropic in nature, each expresses intentionality with respect to its purported social contributions and each emphasizes strategies and ideas that are intended to improve benefits for disadvantaged groups. They consequently are appropriate to consider as social development models, which I view here as program or benefit delivery strategies focused on improving the economic and social well-being of low-income or other disadvantaged groups. I should note that I define social development somewhat more broadly than some authors do. For example, in keeping with the United Nations World Summit on Social Development, Midgley (1997) defines social development as “an approach for promoting human well-being that seeks to link social programs directly to economic development efforts” (p. 75), and further contends that such programs should “contribute to economic development” (p. 76). This economic development focus is not central to all of the programs to be considered here, but it is at the heart of most of them and indirectly related to nearly all. For example, social entrepreneurship efforts to improve developing world health outcomes are not generally framed as economic development efforts, but they clearly can have important impacts on economic development. These nuances aside, I will focus largely on thinking about the market-based models to be presented in terms of their contributions to economic development and their provision of basic benefits for the poor.

The approaches to be assessed have been applied in a wide variety of settings, but my focus is on assessing their usefulness in assisting the poorest members of society in developing world contexts. These are places of pressing world concern and, in turn, where a great deal of development work is occurring. I will briefly discuss prominent developing world social problems later in this chapter, but it is worth initially mentioning the critical nature of poverty in these countries. Estimates from the World Bank (2013a) indicate that in 2010 nearly 1.2 billion people in the world were living on the equivalent of less than $1.25 per day, which is the definition the World Bank uses in defining extreme poverty. About 2.4 billion people lived on less than $2 per day, which is another common measure of severe deprivation. These figures indicate that more than one-third of the world’s population lives in poverty even by very modest standards, and the vast majority of those in poverty by either measure live in three developing world regions: East Asia, South Asia, and sub-Saharan Africa.³ Although recent reports have found striking declines in extreme poverty in the developing world (World Bank, 2013b), poverty in these countries remains unacceptably high.

ORGANIZATION OF BOOK

The four change approaches to be assessed have enjoyed their recent growth in the context of important trends regarding social provision and social change. I therefore will begin in this chapter by analyzing this broader context. In particular, I will provide a more detailed rationale for assessing market-based models and will highlight some environmental factors that have stimulated their growth. I also will provide a brief description of major developing world social problems to elaborate the primary contexts in which I will consider these models. Finally, I will conclude Chapter 1 by introducing the special role that consumers play in many of the approaches to be discussed.

As mentioned earlier, one of the difficulties in assessing market-based change models is that consistent criteria for depicting and analyzing them generally have not been well-developed in previous literature. Progress in this respect therefore requires the development and application of a comparative conceptual framework for describing and contrasting models. I will turn to this task in Chapter 2 by delineating a conceptual framework that can be used for assessing not only these but any social change approach. This framework then will be applied in assessing each change model in subsequent chapters, in order to facilitate model comparisons. My broader intent is to establish a general framework that will be useful to scholars and students in comparing other social development models as well.

Chapters 3–6 will present and critically assess each of the four development approaches. In addition to defining key conceptual components, each chapter will briefly describe the historical development of the approach, its primary applications, its primary strengths and limitations, and the environmental conditions and skill sets that appear most important to its successful application. My intent in these chapters is twofold. First, through the application of a consistent conceptual framework, I hope to set the stage for useful comparisons between approaches. Second, each of these chapters is intended to serve as a stand-alone presentation of a particular development approach, which should allow change agents to more meaningfully assess implementation and best practice implications as they consider potential model applications in specific circumstances.

Finally, Chapter 7 will serve an integration and comparative analysis function, in which I will highlight similarities and differences among the models as well as their relative strengths and limitations. In addition, I will explore the potential for collaborative relationships between governments and the practitioners of each of these approaches, as well as factors that may attenuate the development of such relationships. The roles that governments can play in supporting productive applications of market-based approaches also will be considered in this context, and reflections on the continuing importance of government social provision given the limitations of market-based approaches will be offered. I will conclude by considering the relative importance of market-based models within the broader context of social development and social change.

An overview of two features of my presentations in the following chapters may be useful to the reader. First, I will present brief case examples to illustrate various model approaches throughout the book, and I should explain my intent in this respect. Many case examples illustrating each model already have been described in the literature, so my purpose is not to develop new ones here. Rather, I primarily will rely on previously published case examples that I think best illustrate the key features of an approach, with the intent of helping the reader understand model dynamics in an ideal sense. My choice of examples therefore is not intended to be either supportive or critical of an approach but rather to be expository in nature. I will separately present my overall assessments of the strengths and weaknesses of each model, but that assessment is not reliant on case example selection.

Second, I use a good deal of terminology in describing these approaches, as well as in elaborating my general framework for assessing these approaches. I will try to be consistent in employing such terminology throughout the book in an effort to present analysis consistently across approaches. Much of this terminology is introduced in Chapter 2 (see in particular the section entitled “Some Basic Terminology”).

THE RISE OF NONGOVERNMENTALLY DIRECTED MARKET-BASED CHANGE APPROACHES: RATIONALE FOR MARKET-BASED FOCUS

Some would argue that market-oriented approaches have arisen largely as reactive responses to declining governmental support, as well as from change agent frustrations in working with governmental bureaucracies (Dees, 2007). Critics sometimes add that these and related strategies collectively constitute an intentionally marginal response that deflects attention from government ineffectiveness in responding to fundamental societal problems, such as growing income and asset inequalities (Bendell, 2004; Edwards, 2010; Karnani, 2010). Others have stressed that, even if unintentional, “neoliberal” approaches such as these focus far too narrowly on instituting business practices that are insufficient to overcome more fundamental problems, and that market systems are partially responsible for causing such problems in the first place (Lindblom, 2001; Sachs, 2008; Stiglitz, 2007). A market-based social provision focus likewise may deflect attention from more promising development approaches featuring governments, nonprofit sector institution building, and inculcation of civic norms and sound community practices (Edwards, 2008).

I share some of these concerns. Nonetheless, market-oriented approaches also have featured the increasing engagement of persons with business experience and skills, which has brought new responsive techniques to the social development arena. They likewise have been encouraged by an increasing recognition among social science-trained change agents that carefully designed market mechanisms can be powerful drivers of positive social outcomes. Other societal changes, such as the increasing scope of global corporate power and the greater possibility for creative social interaction resulting from the digital revolution, have extended the reach of these approaches.

I have elected to focus on market-oriented social development approaches for several reasons. First, the approaches I will analyze all have enjoyed increasing attention in both the academic and applied worlds, and they often are depicted as improved methods for stimulating social change. Yet they typically have been promoted without accompanying conceptual or empirical assessment. An uncritical description of successful case examples has been especially prominent. Second, although specific nongovernmental market-oriented approaches have gained prominence, no comparative assessments of such change models exist. Rather, separate literatures have grown up around each approach, with little cross-fertilization of ideas. Third, although the key processes essential to change operations have been described, little attention has been given to the resources or conditions that are most essential to successful model implementation or to attendant approach limitations. For all of these reasons, a more rigorous comparative analysis can enrich thinking about the possibilities and limits of various market-oriented approaches, and that is a central intent of this book.

As one trained and working in the social sciences and in social work,⁴ I also hope to promote a broader awareness of these approaches by academics and social change practitioners. This emphasis derives from the fact that these models largely emerged outside of the social sciences, so their orientations and possibilities consequently are not well understood by change agents trained in these academic disciplines and related professional fields. I believe that these market-oriented approaches are among the many possibilities that change agents should explore as they consider the best mechanisms for promoting progress in various developmental contexts, and consequently, that more rigorous analysis of their strengths and limitations is useful. In addition, many initiatives utilizing these approaches include interesting coalitions of social activists, persons with business skills, and new technology specialists, and these may offer insights about socially oriented coalition building in contemporary environments.

I therefore hope to stimulate thinking about approaches by new audiences who have not been well exposed to market-based orientations in either their academic training or practice experience, and likewise to describe business skills that can be useful in improving the delivery of services regardless of the particular service model used. I also hope that the book will appeal to more business-oriented proponents and practitioners engaged with specific market-based approaches, and that it will encourage more sober assessments and comparisons of the strengths and weaknesses of various models. In an age of great needs, constrained resources, and rapidly evolving technologies, it is essential that change agents continually renew their thinking about how best to assist disadvantaged groups. Keeping abreast of best practices in management and in innovative technology use is fundamental. The approaches to be examined here have much to offer in this respect.

In this spirit, I will consider each of these approaches from the perspective of social change agents whose primary interest is engaging in efforts with and on behalf of disadvantaged groups, sometimes in opposition to leading economic, political, and social institutions. I assume these change agents are interested in considering alternative approaches and related philosophical orientations, causal logics, required resources, and general strengths and weaknesses. My intent is to engage them as thoughtful protagonists interested in considering the developmental potential of alternative approaches. I mention this because some may assume that corporate officials, financially well-off individuals, or others in privileged positions necessarily are the primary instigators of market-based approaches. Although this is true in some cases, it is not the norm in most of the approaches considered here. For example, much of the literature on corporate social responsibility operates through the lens of corporate officials focused on either their ethical or longer-term strategic considerations. In contrast, I will assess such efforts primarily from the standpoint of consumer and investor groups utilizing pressure tactics to change corporate behaviors.

Relationships Between Market-Oriented Approaches and Governments

Although my focus is on market-oriented approaches that largely have arisen with only marginal interactions with governments, I continue to view governments as the most critical institutions for assuring benefits for disadvantaged populations. Each of the models to be elaborated in subsequent chapters has been developed primarily under voluntary auspices, and as such, they carry all of the limitations associated with voluntary provision. Among other things, these include an unevenness of coverage over time and space as well as important equity concerns with regard to which groups receive benefits. With their unique authority to tax and compel behavior, especially when accompanied by democratically controlled accountability measures, governments remain the only societal institution with sufficient power to responsibly address such issues.

One related limitation of much of the writing about market-oriented change approaches is that proponents often are dismissive of government service provision. In the more extreme cases, authors promote particular market-oriented models as replacements for inefficient or unproductive government programs (Easterly, 2006). Unfortunately, such portrayals have little balance and fail to address the more fundamental point mentioned earlier: voluntary market-based models have neither the reach nor the needed authority to replace government services.

These critiques may undercut important opportunities to blend the advantages of government social provision with those of market-based social change models. Three areas of governmental and private market or voluntary interactions are especially important in this respect. First, governmental regulations continue to be critical in areas such as establishing the rules of trade, protecting worker rights and safety, and controlling business production externalities such as pollution. Governments thus play critical roles in shaping the broader context within which many of the approaches to be analyzed here occur, and in this role, they can either stimulate or impede the effectiveness of such models. Market-based model practitioners consequently must constantly monitor government operations related to their spheres of interest and often need to advocate for related governmental changes.

Second, and more directly, government contracting for service provision has become increasingly common...