Nietzschean Development Failures

Arye Hillman ()

Public Choice, 2004, vol. 119, issue 3_4, 263-280

Abstract: Government policies, and substantial external resources and technical assistance provided over the course of decades, have neither eliminated broad poverty nor resulted in equitable income distributions in the poorer countries of the world. This paper explains the development failures with reference to Nietzschean behavior where the strong act without ethical restraint and the rule of law does not protect the weak. While Nietzschean behavior violates principles of social justice, there are also inefficiencies. The Nietzschean strong who rule have no incentive to adopt efficiency-enhancing policies. Efficiency in a Nietzschean society is also greater, the higher the leisure preference of the weak and the less the weak are capable of producing. Labor productivity is low because the weak do not consistently work. These are the outcomes when the strong behave as roving bandits. When the strong behave as stationary bandits, efficiency is enhanced but income distribution can be expected to remain unequal. The Nietzschean perspective on development failure is compared with alternative explanations for the sustained plight of the poor in poor countries and the unequal distributions of income and wealth.

Date: 2004
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