The Big Easy and Government Farkage

Starbucks China World 1
Just anotha Maniq Mundeh
1115 hrs.

Doing research for my book on innovation in China has really underscored what I call The Government Farkage Factor, or the extent to which government funding, direction, or primary role in any sizable development project is almost an a priori guarantee of graft, wastage, and failure. While I am no longer convinced that the private sector has an answer for every major problem, it is pretty clear that most serious development challenges demand an intelligent response from a balance of government, commercial, and non-governmental entities.

The New Orleans Example

The city of New Orleans continues in its role as the worlds preeminent development petri-dish because it is one of those places where all of the other factors have been eliminated and we can watch the various forces contend with each other in an effort to revive an entire political/economic entity. While most coverage has concentrated on the failures of various levels of government (municipal, parish, state, and national) first prepare for disaster, then to clean, repair, revitalize and fortify New Orleans in its wake, several reports have surfaced in the last month that point to the much-ignored but all critical role of other players in what is, basically, a problem of development.

The first I heard was a report on PBS’s excellent NewsHour with Jim Lehrer about people who have moved to New Orleans on their own for whatever reason to start a new life. They’re called “pioneers.”

Second, while catching up on my NPR podcasts, this excellent report by Eve Abrams covers the beginnings of an effort of New Orleans residents to take on recovery tasks on their own.

The third was a speech at the University of Chicago Graduate School of Business by Jack McGuire, CEO of the American Red Cross, who talked with the frankness of a former corporate CEO of the ability of NGOs to respond to challenges more effectively than government. McGuire basically had to rapidly expand the Red Cross to help catch the ball fumbled so badly by the government. It wasn’t pretty, but they did it.

Finally, there is an excellent article in BusinessWeek by John Tozzi who talks about the role entrepreneurs are playing to get the city back up on its feet again.

Takeaways

There are entire syllabi of lessons to be learned from New Orleans, but my take away vis-a-vis China is that it is not only more evidence of the very real limits of government in development, it is also (and more importantly) a lesson in the very wide range of forces that have to come into a situation – often of their own volition – in order to make it better.