The Power of Freedom: Uniting Human Rights and Development

Copyright © 2009 by Cato Institute.

All rights reserved.

Library of Congress Cataloging-in-Publication Data

Chauffour, Jean-Pierre.

The power of freedom : uniting human rights and development / Jean-Pierre Chauffour.

p. cm.

Includes bibliographical references and index.

ISBN 978-1-933995-24-3 (alk. paper)

1. Economic development 2. Human rights—History I. Title.

HD82.C468 2008

338.9--dc22

2008049125

Cover design by Jon Meyers.

Cover painting by Dan Cooney.

Printed in the United States of America.

CATO INSTITUTE

1000 Massachusetts Ave., N.W.

Washington, D.C. 20001

www.cato.org

Dedicated to my children,

Jeanne and Basile,

and my wife,

Brigitte

Although we have a tendency to make distinctions among fundamental human rights in terms of abstract ‘‘categories’’ such as ‘‘civil and political’’ and ‘‘economic, social and cultural,’’ or ‘‘first generation,’’ ‘‘second generation,’’ etc., this approach lacks intellectual rigour. Such categorizations overshadow what is common to all human rights, and overemphasize irrelevant differences.

Louise Arbour,

UN High Commissioner for Human Rights,

Geneva, January 14, 2005

And yet this apparent victory of the idea and use of human rights coexists with some real skepticism, in critically demanding circles, about the depth and coherence of this approach. The suspicion is that there is something a little simple-minded about the entire conceptual structure that underlies the oratory on human rights.

Amartya Sen,

Nobel Prize–Winning Economist,

Development as Freedom, 1999

Acknowledgments

This work began in 2005 when I was the International Monetary Fund’s representative to the World Trade Organization and the United Nations in Geneva. While the book has benefited from the comments and the perspectives of many, the ideas discussed in it originated from my participation in the UN High-Level Task Force on the Implementation of the Right to Development and the lively exchanges with Joe Ingram, Ellen Johnson-Sirleaf, Stephen Marks, Ibrahim Salama, Arjun Sengupta, and other members of the task force. Many people read early drafts of this book. Without implications, I would like to thank Geoff Barnard, Daniel Bradlow, Pierre Dhonte, Klaus Enders, Marion Jansen, Flemming Larsen, Ross Leckow, Ramanand Mundkur, Catherine Patillo, Mark Plant, Margot Salomon, and two anonymous referees for their insightful comments. For fruitful dialogues on key sections of the book, I am especially grateful to Carstens Fink, Michael Keen, Hans Peter Lankes, Simonetta Nardin, and Doris Ross. I am also indebted to Mark Allen, Benedicte Christensen, William Easterly, Anne Krueger, and Saleh Nsouli for their encouragement at various stages of this project. This work also reflects endless discussions with my friends Alain Fe´ler and Se´bastien Dessus on the role of government and individuals in economic development. Last but certainly not least, Judith Campbell provided first-class editorial support and my friend Dan Cooney let me borrow one of his great paintings for the book cover.

I thank the Cato Institute and, particularly, Ian Va´squez, director of the Center for Global Liberty and Prosperity, for their trust, support, and continued commitment in the final phase of this project. Ian has been invaluable in getting me to focus my work so as to address the various intended audiences in an intelligible way. He also brought in Cato’s excellent publication team to polish the draft. In line with the Jeffersonian philosophy that animates Cato’s work, I hope this book will contribute to broadening the parameters of public policy debate to allow more consideration of the liberal principles of limited government, individual liberty, free markets, and peace.

The findings, interpretations, and conclusions expressed in this book belong solely to the author, and nothing contained in it should be interpreted as representing the views of the International Monetary Fund, the World Bank, their executive boards, member governments, or any other entity mentioned herein.

Introduction

Development, freedom, and peace are, perhaps more than ever before, the topics of our time. They have been placed at the top of the global geopolitical agenda and acknowledged on many solemn occasions as the interlinked and mutually reinforcing foundations for collective security and well-being. The evidence is there: without peace, there can be no sustainable development; without development, there can be no lasting peace; and without respect for fundamental freedoms, there can be neither peace nor development. The three pillars of peace and security, human rights, and development have thus been proposed as the foundation of the multilateral architecture to address today’s international challenges (United Nations 2005a).

Yet although the nexus between human rights and economic development has long been recognized in principle,¹ actual human rights and development practices have generally advanced independently and on parallel tracks. Complex human rights machinery dealing with international standards in human rights and related monitoring mechanisms has been established alongside—but separately from—no less complex machinery to deal with development policies and poverty reduction strategies. To illustrate the current state of the art in the human rights and development debate, international law professor Philip Alston (2005) uses the metaphor of two ships passing in the night, each with little awareness of the other, and with little, if any, sustained engagement with each other.

The premise of this book is that the lack of any practical recognition of the link between human rights and development lies at the core of two momentous failures of our time: the failure of the development community to keep its promise to the world’s poor that extreme poverty and hunger will be eradicated and other Millennium Development Goals (MDGs) achieved by 2015;² and the human rights community’s failure to deliver on its claim of promoting universal respect for and the observance and protection of all human rights and fundamental freedoms for all.³ A further premise of this book is that a common factor lies at the heart of these two failures: the incoherent and inconsistent treatment of freedom in both the development and the human rights paradigms. Because development and human rights are not properly understood and attended to in developing countries, domestic policies—even when well-intentioned—often tend to be ineffective if not downright harmful.

Although human spiritual and material achievements have been rooted for time immemorial in human freedom, the current, traditional approach to economic development has tended to pay only lip service to the fundamental role of freedom in development. More often than not, orthodox development strategies resulted— intentionally or not—in self-defeating policies that had the effect of hampering people in exercising their free will to own, work, save, invest, trade, innovate, create, and so on. As New York University economic professor William Easterly (2001, p. xii) put it, while busy promoting new remedies (from foreign aid to investment in education and machines) and engineering new schemes (from giving loans conditional on reforms to debt relief), the development community has too often ‘‘peddled formulas that violated the basic principles of economics in practical policy work.’’ The problem was not the failure of economics, but the failure to apply the basic principles of economics in a consistent manner, starting with the key role of freedom as the ultimate incentive for people to lead lives that they value.

In the same vein, while freedom for all without distinction as to race, sex, language, or religion has been the subject of great rhetoric in human rights circles, an entire part of the international human rights edifice conceiving of individual rights as positive claims on other individuals has had the effect of surrogating human rights for a subjective form of social justice, such as the elimination of social disparities and inequalities. As a result, a certain human rights orthodoxy cannot, paradoxically, be reconciled with a free society. Paraphrasing Easterly, the human rights community has also too often peddled formulas with a high moral ground that violated the basic principles of human rights. The problem was not the failure of human rights, but the failure to apply basic human rights principles—starting with the protection of all fundamental freedoms for everyone—in a coherent, consistent, and practical way.

This book will argue that liberty in all its civil and political, as well as economic, social, and cultural dimensions is the only viable way for thinking about development and human rights in an internally consistent and mutually supportive way. It will take the Declaration on the Right to Development as its specific object of examination. The reason for choosing the Declaration on the Right to Development is that it is the main universal normative instrument adopted by the United Nations at the crossroads of the human rights and development paradigms. The right to development was introduced more than 20 years ago as an overarching human right, by virtue of which every human being and all peoples are entitled to participate in, contribute to, and enjoy economic, social, cultural, and political development, in which all human rights and fundamental freedoms can be fully realized. Whether one is mesmerized or dismayed by the aspirations of the Declaration on the Right to Development, it provides fertile ground for reflection on the meaning of a number of basic human rights and development principles.

First, how should one think about the right to development? Is the right to development really a ‘‘right’’ in the same way as the right to life is a ‘‘right’’ not to be deprived of life? Or is the right to development more like the right to happiness—a right for each person to pursue his or her own development and happiness as he or she sees fit? If the latter is true, as will be argued in this book, are there elements of the right to development that nevertheless constitute key empowerments (as opposed to entitlements) to think about development as the respect for, protection of, and promotion of core legal rights? Second, how do these core rights relate to other human rights instruments, such as the International Bill of Human Rights? Third, are these rights reconcilable with the concepts of freedom, liberty, or free will? If so, how then are limits to individual freedom to be dealt with given one’s subjection to various determinisms? And if this can be answered, how then can economic development actually be advanced as the promotion of various freedoms? Fourth, are there any concrete applications of a human rights—based approach to development? In particular, to what extent have the MDGs, developing countries’ poverty reduction strategies, or the official development assistance of developed countries been permeated by the human rights discourse?

Turning to the economics of the right to development—that is, the linkages between human rights, capital accumulation, and wealth—a no less fundamental set of questions arises. First, what are the characteristics of a macroeconomic paradigm consistent with human rights? In particular, what would the scope of the state be to make it consistent with economic freedom and the protection of civil and political rights? To what extent are these fundamental freedoms and rights important to economic growth? In this relationship, what is cause and what is effect? Second, if freedom is indeed a determinant of economic growth, what then are the key institutional features of a free society? How can the rule of law enable the government to control the governed, yet oblige it to control itself? To what extent should the property rights system define the permissible forms of competition in society? What is the meaning of participation in a democratic system? How can governance be ensured to operate for the common good, particularly in the area of public-sector management? Third, how can a country’s set of macroeconomic policies (fiscal policy, monetary and exchange rate policy, trade and competition policy, and so on) be gauged in the light of human rights? For instance, is there a human rights–friendly tax system, public investment program, monetary framework, inflation rate, exchange rate regime, foreign exchange regulation, tariff policy, labor-market regulation, and so on?

In answering these questions, the main purpose of this book is to build a bridge between the human rights and development ‘‘communities,’’ to join the dots between the fundamental role of freedom in human rights and the no less fundamental role of freedom in economic development, and to make a logical case for a true human rights approach to economic development. Although the book challenges a number of human rights and economic orthodoxies, it does not offer any paradigm shift or, for that matter, any leap forward in the areas of human rights or development economics. What the book suggests is a shift of attention on how to think about human rights in a development context and development in a human rights context.

To be sure, many human rights specialists will find many points objectionable in the book and will find other aspects incomplete. Likewise, many philosophers, economists, historians, or sociologists will express misgivings about the superficial treatment of their subject matter. Yet the purpose of this book is not to tell the reader everything on such notions as human rights, free will, democracy, good governance, economic growth, happiness, and so on. Neither is it to delve into the arcane nature of macroeconomic policymaking. This book simply aims to see beyond the comfort zones of the development and human rights ‘‘communities’’ and to show how the power of freedom can unite them in their quests for development and human rights. The purist may not approve of this approach. However, any attempt at integration of different fields, and evidence across selected time and studies, is usually unsatisfactory to purists, partly because the weights one places on different aspects are pregnant with biases. As rightly noted by economists Raghuram Rajan and Luigi Zingales (2003, p. x), ‘‘We would apologize for these were it not for our firm belief that bias is inevitable in all work, and it is competition between biases that generally drives thought ahead.’’

This book is divided into two parts and seven chapters. Part I introduces foundations for thinking about human rights in general and the right to development in particular. Chapter 1 presents the Declaration on the Right to Development in its historical context and legal dimension. Chapter 2 discusses the origins of the Declaration on the Right to Development, in particular as it relates to other instruments of international human rights law, such as the UN Charter, the Universal Declaration of Human Rights, and the International Covenants on Human Rights. Chapter 3 lays out the logical (and less logical) concepts for thinking about human rights and elaborates on the notions of positive rights, positive liberty, rights holders, core rights, economic needs, and economic rights. Chapter 4 then reviews the practice (or lack thereof) of the right to development, especially as it relates to the mainstreaming of human rights in developing countries’ poverty reduction strategies, the MDGs, and the official development assistance of developed countries.

Against the principles discussed in Part I, Part II develops a broad policy framework for thinking about the economics and institutions of the human right to development. Although the framework can be applied in a wide variety of country circumstances—from the situation of the overly regulated economies of western Europe to that of the often badly regulated economies of many developing countries—it is mainly targeted at the circumstances of low-income countries and stagnant economies. Chapter 5 discusses the key features of an economic paradigm consistent with the right of everyone to pursue his or her own development, including the fundamental role of economic freedom, the importance of civil and political rights, and the scope of the state. Chapter 6 analyzes the main institutional dimensions needed to support such a rights-based paradigm to development, in particular as they relate to the rule of law, property rights, participation, and governance. Finally, Chapter 7 examines the set of macroeconomic policies—from fiscal policy to monetary and exchange rate policy, competition and trade policy, and other macro-related structural policies—that are consistent with the economic paradigm and institutions of a free society.

Before we start, a note on method. Among the issues that recur throughout this book is the question of the tension between normativeness and utilitarianism in addressing human rights and development challenges. A utilitarian solution to a problem would conclude that a policy is good if the good outweighs the bad, or if there are more winners than losers. The fact that someone’s rights may be abused along the way is irrelevant as long as the result is a positive-sum game. Because utilitarianism is an ends-justifies-the-means philosophy, widespread violations of individual rights could be consistent with this philosophy. In a normative approach, the end does not justify the means. If rights have been violated, the policy is automatically inappropriate, even if the result would be a net positive-sum game. Achieving a critical comprehension of development as freedom requires keeping these two sets of perspectives in mind. Development is neither a normative-free nor a utilitarian-free process but requires the reconciliation of these two whenever possible. This is also what this book has strived for.

Part I: The Human ‘‘Right’’ to

Development

The basic premise of the human right to development is to consider human rights and development as essentially cosubstantial notions: the fundamental capability of peoples to free themselves from various wants and unfreedoms (to borrow a term from Sen [1999]). In this conception, poverty can no longer be defined undimensionally as lack of adequate income, as had been traditionally assumed in development policies. For some (OHCHR 2004, p. 7), inadequate income even ceases to be a dimension of poverty at all, because ‘‘income is not a capability and hence not an aspect of well-being in itself, although it may contribute to the achievement of capabilities.’’ Development can only be pursued in a human rights way, and human rights must be integrated into sustainable human development.

The shift in emphasis toward a rights-based foundation of development should imply that development is no longer simply a matter of development policies but of legal entitlements.¹ Realizing the human right to development is therefore conceptually different from conventional policies and programs for development, whether seen as increasing the growth of gross domestic product, supplying basic needs, or improving the index of human development (Sengupta 2000). Underpinning this approach is the fact that, in the last 60 years, traditional development policies have not delivered as promised, and the perception that governments and international agencies have failed too many peoples in too many parts of the world.² As a result, a new approach to economic development based on human rights has gradually emerged as an alternative framework for lifting people out of poverty.

The ‘‘rights’’ paradigm to development encompasses various approaches through which human rights thinking is applied to development.³ Although all approaches are meant to be ‘‘people centered’’ and assume that poverty constitutes a denial or nonfulfillment of human rights,⁴ they tend to differ as to the scope of the rights involved. For instance, while the concept of the right to development and human rights–based approaches to development overlap, the latter is a narrower concept. A rights-based approach would focus on the rights perceived as essential to development and thus would not consider the nonfulfillment of any kind of human rights as constituting poverty.⁵ OHCHR (2004, p. 301) illustrates this point in observing that ‘‘if a tyrant denies his political opponent the right to speak freely, that by itself would not make the latter poor in any plausible sense.’’⁶ In contrast, the right to development would encompass the overall development process, including planning, participation, allocation of resources, and priorities in international development cooperation. It captures former UN Secretary-General Kofi Annan’s point: ‘‘Even if he can vote to choose his rulers, a young man with AIDS who cannot read or write and lives on the brink of starvation is not truly free. Equally, even if she earns enough to live, a woman who lives in the shadow of daily violence and has no say in how her country is run is not truly free’’ (Annan 2005, p. 6).

For the purpose of this book, the analysis will focus on the broad concept of the right to development as adopted by the United Nations in the Declaration on the Right to Development. It will argue that, although the declaration has achieved a high degree of international consensus on its purposes, the human right to development is a flawed concept that has been politically skewed since its inception and, thus, proved to be largely impractical. It will further argue that, while the right to development is unlikely to ever deliver on its promises, other human rights instruments, such as those dealing with economic freedom and civil and political liberties, provide a consistent subset of rights that can indeed realistically form the foundation for a rights-based approach to development.

The four chapters in this first part provide a logical foundation for thinking about the human right to development. Chapter 1 presents the content of the right to development as adopted by the