By George H. Wittman on 4.6.12 @ 6:07AM

With the nomination of Dr. James Young Kim, Obama wants to rewrite development economics.

There is a rule acknowledged by all who ply their trade in politics that whatever one has written or said in the past easily can be interpreted in the future as having a different meaning than originally intended. Depending on how one desires to be considered currently, this can have either a positive or negative impact. This is the case with James Yong Kim, MD, nominated to be the head of the World Bank Group that has been built around what was originally named the International Bank for Reconstruction and Development (IBRD). Dr. Kim up to now has been the president of Dartmouth College and is the former head of the HIV/AIDS program of the World Health Organization.

It is unusual to nominate someone for this post whose background is in the field of public health rather than in some aspect of economics and/or management. It has been the theme of the Obama administration, however, to emphasize and separate out social concerns from economic issues to the point of judging economic growth by what liberal social benefits it might provide. Dr. Kim and two co-editors published a book in 2000, Dying for Growth. The key element in this book that has brought his nomination into question is found in the introduction: "The studies in this book present evidence that the quest for growth in GDP and corporate profits has in fact worsened the lives of millions of women and men."

Supporters of Dr. Kim have rushed to interpret this key statement as meaning that inequitable distribution of gains (meaning life-style improvement) often occurs in relation to generally calculated economic growth. In simple terms Dr. Kim and his collaborators decided to present arguments to show that advantages gained from major projects subsidized by international organizations -- public and private -- while possibly raising the computation of "gross domestic product" did not equitably improve life for those on the lower rungs of socio-economic life.

What a shock to learn that in spite of the success of a given project the distribution of that success to the general population is unequal in the underdeveloped world. And everywhere else if the truth be told! The implication that Kim and his friends make is that the principal benefit goes to participating corporations seeking to (horror of horrors) make profits. Apparently there still are people who do not recognize that the experiment in state ownership and direction of all phases of life was proven false with the lesson of the Soviet Union.

The World Bank originally was created for the express purpose of stimulating and investing in major infrastructure projects aimed at a long-term impact. Dams and related hydroelectric projects far too expensive for newly independent nations were made a priority. There are massive electric power grids spread across sub-Saharan Africa and elsewhere in the less-developed world as a result of this investment and development. Translating this essential infrastructure creation into a quantitative advance for the local populations is beyond specific calculation, but every village with electric power for water pumping and minimal lighting knows well the gain.
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