2.1 Introducing the Micro-Macro Paradox: Success at
the Micro-level Does Not Lead to Success at
the Macro-level?
In development economics the question whether aid contributed to economic
growth was hotly debated after Mosley (1987, 139ff) identified this as the
“micro-macro” paradox. He could not find any statistically significant correlation
between development aid and the economic growth rate of recipient countries,
taking into account other factors that cause growth. Mosley defended aid nonetheless, as benefits at the micro level were often shown to be substantial and essential.
Nevertheless, economic growth was supposed to be the engine of future development that would make aid unnecessary, and if aid would not contribute to economic
development, it could turn out to be ineffective in the longer run and not have
meaning beyond just the benefits of a specific and localized project or intervention.
Even if a project has significant short term outcomes, but it did not contribute to
economic growth, it could be argued that the sustainability of its benefits are
questionable.
A second milestone in this discussion was reached in 1998 with the publication
of the World Bank report on “Assessing aid: what works, what doesn’t and why?”
(Dollar and Prichett 1998), which focused on the role of aid in reducing poverty,
and rekindled the micro-macro paradox discussion, as it better identified when aid
could potentially contribute to economic growth: when countries had good policies,
good governance and management and well-functioning institutions. The ensuing
debate in development economics revived the micro-macro paradox, until in (2010)
Arndt, Jones and Tarp aimed to close the arguments by demonstrating a positive
and statistically significant causal effect of aid on growth in poor countries over the
long run. “There is no micro-macro paradox”, they conclude (p. 27). What is
interesting in their analysis is that they attribute their success in demonstrating
evidence for growth to “methodological advances in the programme evaluation
literature”, which have “improved the profession’s capacity to identify causal
effects in economic phenomena” (p. 26).
Evaluation methodology thus has helped to solve the micro-macro paradox in
development economics, according to Arndt, Jones and Tarp. If we accept that, let
us explore whether evaluation methodology is also able to help us in solving the
paradox of successful climate change interventions, versus a devastating trend of
global warming and associated climate variability that does not appear to be
influenced by climate change interventions.
The opportunity for a broad perspective on this issue presented itself at the 2nd
International Conference on Evaluating Climate Change and Development, where
several comprehensive evaluations of Climate Change aid were presented. They
offered an opportunity for a meta-analysis of the results of some of the largest
public sector efforts to address climate change in developing countries. Of special
interest is whether these evaluations offer any hope regarding the micro-macro
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R.D. van den Berg and L. Cando-Noordhuizen
the Micro-level Does Not Lead to Success at
the Macro-level?
In development economics the question whether aid contributed to economic
growth was hotly debated after Mosley (1987, 139ff) identified this as the
“micro-macro” paradox. He could not find any statistically significant correlation
between development aid and the economic growth rate of recipient countries,
taking into account other factors that cause growth. Mosley defended aid nonetheless, as benefits at the micro level were often shown to be substantial and essential.
Nevertheless, economic growth was supposed to be the engine of future development that would make aid unnecessary, and if aid would not contribute to economic
development, it could turn out to be ineffective in the longer run and not have
meaning beyond just the benefits of a specific and localized project or intervention.
Even if a project has significant short term outcomes, but it did not contribute to
economic growth, it could be argued that the sustainability of its benefits are
questionable.
A second milestone in this discussion was reached in 1998 with the publication
of the World Bank report on “Assessing aid: what works, what doesn’t and why?”
(Dollar and Prichett 1998), which focused on the role of aid in reducing poverty,
and rekindled the micro-macro paradox discussion, as it better identified when aid
could potentially contribute to economic growth: when countries had good policies,
good governance and management and well-functioning institutions. The ensuing
debate in development economics revived the micro-macro paradox, until in (2010)
Arndt, Jones and Tarp aimed to close the arguments by demonstrating a positive
and statistically significant causal effect of aid on growth in poor countries over the
long run. “There is no micro-macro paradox”, they conclude (p. 27). What is
interesting in their analysis is that they attribute their success in demonstrating
evidence for growth to “methodological advances in the programme evaluation
literature”, which have “improved the profession’s capacity to identify causal
effects in economic phenomena” (p. 26).
Evaluation methodology thus has helped to solve the micro-macro paradox in
development economics, according to Arndt, Jones and Tarp. If we accept that, let
us explore whether evaluation methodology is also able to help us in solving the
paradox of successful climate change interventions, versus a devastating trend of
global warming and associated climate variability that does not appear to be
influenced by climate change interventions.
The opportunity for a broad perspective on this issue presented itself at the 2nd
International Conference on Evaluating Climate Change and Development, where
several comprehensive evaluations of Climate Change aid were presented. They
offered an opportunity for a meta-analysis of the results of some of the largest
public sector efforts to address climate change in developing countries. Of special
interest is whether these evaluations offer any hope regarding the micro-macro
14
R.D. van den Berg and L. Cando-Noordhuizen