What is the micro-oriented state approach?

The micro-oriented approach proposes that poor people benefit more when you generate opportunities that are small in scale and low-tech, accessible to people with less capital and less formal education.

• Instead of building high-tech factories, where formal hierarchy pervades, where technology replaces labor, the micro-oriented approach suggests building low-tech workshops.

• Instead of building linear highways that will speed people from one place to another, the micro-oriented approach suggests constructing networks of smaller roads, even dirt roads, that will connect rural communities with marketing towns.

• Instead of scaling up agricultural production by combining land and using high-tech tractors and combines, the micro-oriented approach suggests encouraging small scale agriculture, conducted by owner-operators.

The micro-oriented approach encourages the establishment of small businesses—even tiny businesses, businesses of human scale—and not just businesses, but infrastructure, farms and communities.

Such opportunities lack the shock and awe of the large-scale, the impressiveness of the high-tech. Such an approach seems to be, in not exactly Luddite, then at least the opposite of what we often mean by modernity. Yet the micro-oriented approach does not reject modernity or progress; instead it redefines what these mean and reorients the way we measure them. The micro-oriented approach does not reject technology, but instead, implements right-sized, right-function technology rather than technology for its own sake.

The fundamental principles of the micro-oriented approach have been around for a long time—yet they remain vastly understudied. Why? Because most large-scale initiatives addressing poverty come under the auspices of development, and development, almost by definition, is about growth, urbanization, technology, and accumulation—a quartet I’ll call GUTA.

GUTA represents the fundamental orientation of the vast majority of development experts. The goals of development embodied in GUTA unites:

• neoliberal economists like Milton Friedman;

• dependency theorists like Galal Amin, Andre Gunter Frank, or Theotonio Dos Santos;

• scholars associated with dependent development like Fernando Cardoso or Guillermo O’Donnell;

• advocates of the developmental state like Alice Amsden, Chalmers Johnson, and Peter Evans; and

• even Marxist scholars like Paul Baran or, well, Karl Marx.

Members of these camps have debated bitterly about the means of achieving development. Worse, wars have been animated by these disparate ideas. Yet the one thing that unites all these scholarly traditions is the commitment to the end goal of development policy: scaling up of industry, urbanization, technological advancement, and modernization.

By leveraging economies of scale and using the input-augmenting advantages of technology, GDP can be augmented to almost an unlimited extent. And like it or not, GDP is currently held as the scorecard of nations. It is the statistic we use to judge leaders. Increasing it is the core goal of economic policies of countries in nearly every corner of the world. In fact, the United Nations requires every member to collect GDP data in specific ways if they want to be a recognized member of the United Nations: the adoption of a stacked scorecard, in exchange for sovereignty.

However, if our goal is poverty alleviation, there’s another paradigm that does the job better than GUTA. The micro-oriented approach has different goals, and different means of achieving those goals. What characterizes the approach is that rather than seeking to maximize economic activity, it seeks to funnel a greater portion of the economic activity it generates into the pockets of poor families. Not through welfare. Not through high taxation and redistribution. Not even necessarily by empowering the poor.

Instead, the micro-oriented approach does so by generating employment opportunities that poor workers can partake in to ensure that a greater degree of the benefits that economic activity generates will go directly to poor people. Likewise, in its measures, the micro-oriented approach looks less at maximizing profits and more at maximizing employment and productivity.

Few countries have rejected the goal of increasing GDP, of industrializing rapidly, of urbanizing, of ramping up technology—irrespective of whether doing so makes any real impact to anything that we really value. Yet, examples of the positive impact of the micro-oriented approach are everywhere.

The longstanding ideas behind the micro-oriented approach are ripe for study – as are the many successful examples of this approach which can be found all around the world. Let’s explore this emerging paradigm shift, and what may be possible inside it.