Size matters: the need for human-scale economic institutions for development

Abstract

Current mainstream development thinking, with the exception of a few areas like microcredit, tends to favour size over substance. This article aims to challenge the belief that large-scale companies, markets, and institutions are the most effective means of ‘delivering development’. We argue that, by designing institutions to meet different needs at different scales, long-term sustainable development outcomes are more likely. Through an analysis of ‘new economics’ thinking, we look specifically at how the concept of subsidiarity could be applied to development thinking at the community and business levels, and we draw on some examples of where the concept is already manifest in practice, such as energy and commodity production.

Notes

1. Notably within the areas of microfinance and growing support for decentralisation of government functions to state and local levels.

2. This was confirmed in February 2004, when Britain's Chancellor of the Exchequer, Gordon Brown, and the President of the World Bank, James Wolfensohn, jointly penned an article in the Guardian that described how the international community has been drifting away from meeting the targets rather than closing in on them. In particular, they showed that sub-Saharan Africa was more than a century off-target to meet its goals of expanding primary education, cutting child mortality, and halving poverty.

3. The examples of El Paraíso and the Barefoot College have been submitted to the Ashden Trust renewable energy awards, and are documented in a report published by the New Economics Foundation (nef) in June 2004 on renewable energy entitled ‘The Price of Power’.

Additional information

Notes on contributors

Julian Oram

Julian Oram is a senior research analyst at the New Economics Foundation (nef)

Deborah Doane

where Deborah Doane is an Associate and Chair of the Corporate Responsibility Coalition (CORE).