People Develop, Not Places

Measuring the development of patches of Earth seems ridiculous. But that's exactly what we do. How might things differ if we measured income per natural instead of income per resident?
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Ortelius world map 1570. (MAP: PUBLIC DOMAIN)

Ortelius world map 1570. (MAP: PUBLIC DOMAIN)

"People Develop, Not Places" is an odd tagline for a geographer. I picked it up from economist Michael Clemens. Place-centric thinking hinders economic development policy. Clemens and Lant Pritchett tackle this problem, recommending replacing "income per resident" with "income per natural":

If we interpret income per capita to indicate material welfare, this is unsatisfactory. While production has a place, people, not patches of Earth, have well-being. The focus on income per resident has rested more on the spread and use of national accounts data and on statistical cost and convenience than on conceptual or welfare-theoretic foundations. But if income per resident is used as the measure of Salvadorans’ welfare it leads to untenable conclusions: if a Salvadoran moves from the countryside to San Salvador to get a factory job that raises her income 30 percent, this will be recorded as a welfare improvement for Salvadorans on average, but a 500 percent increase in income from a factory job in Texas does not (with, at best, only the portion remitted to residents counted).

Here we suggest and estimate a new statistic: income per natural, the mean per person income of those born in a given country, regardless of where they now reside. Income per natural differs substantially from income per resident. This is obviously true of small countries with large emigration—Guyana, Jamaica, Liberia—but it is not limited to a handful of tiny nations. 42.8 million people live in countries whose income per natural is 50 percent higher than its income per resident; 235 million people live in a group of countries where the difference is 20 percent or more, and for 1.1 billion people the difference is 10 percent. The estimates of differences in income per natural are consistent with estimates of the differences in other indicators calculated on residence or natural basis such as poverty or child mortality.

Measuring the development of "patches of Earth" seems ridiculous. But that's exactly what we do, with all kinds of industries (such as placemaking) stemming from this perspective. Migration is a zero-sum game. For people, migration is most certainly not a zero-sum game. If a person's development comes at the expense of a place, then so be it:

“This report points to important considerations for policy makers, NGOs, and multi-lateral organizations working to support adolescent girls around the world,” said Kathy Calvin, United Nations Foundation president and chief executive officer. “Girls on the Move, in many ways, challenges assumptions that migration of adolescent girls in the developing work is fraught with danger, despair, and disconnection.” She added “This report proves that—with the right safety nets in place—girls’ migration can have many positive outcomes for girls and their families. If girls choose to migrate and are supported throughout the migration experience from before leaving their natal home through arrival and transition to their new environment, some migrant girls are able to combine work and schooling, expanding their opportunities.”

Instead of focusing our efforts on helping adolescent girls develop, we despair the rural community left behind. Whatever will we do about the demographic decline? Places (or companies) don't own talent. There is no such issue as brain drain.

Income per natural has profound implications from how we help the poor to urban planning. On the latter score, the place-centrism of amenities migration:

Providence’s decision to move forward with its streetcar plans is likely to be met with praise from advocates who have supported a street car system ever since former Mayor David Cicilline first proposed the idea six years ago.

In 2011, Jef Nickerson, founder and editor of the Greater City Providence blog, argued that creating a robust transit system would spur economic development in Providence.

“Businesses and, perhaps more importantly, the talent they are looking to attract are looking for well-built cities that are easy to navigate,” Nickerson wrote at the time. “Employees want to avoid spending the bulk of their annual salaries on gas and parking and all their free time on a horrendous commute, and employers are looking for the same.”

The $114 million streetcar system is a boondoggle. People migrate for economic development opportunities, not cool cities. In fact, most of the schemes designed to revitalize a city or town are for talent retention. If someone leaves, then there must be something wrong with the community. Case in point, Richard Florida to Pittsburgh's rescue:

To this end, the Pittsburgh region must provide the broad lifestyle and amenities that are intrinsic to the social and cultural shifts in the new economy. Sports stadiums, an exciting downtown, and a vibrant cultural district are a good start, but they are not enough. The new economy demands a new kind of lifestyle which is oriented around the creativity and energy that come from a dynamic street life, vibrant music scene, and extreme outdoor sports.

Pittsburgh should be more like Portland. Portland puts place before people. The city is world famous for doing so. Build it and they will come ... and do nothing. People develop, not places. Pittsburgh had it right all along.

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