Posts Tagged ‘economic policy’

The soul of Argentina

Friday, July 1st, 2011

It is winter time in Argentina. In the course of my three-day visit for an HSM conference, I will discover this is physically and figuratively true. The young woman charged by the conference organizer to shepherd me through the event has the sadness of Argentina in her eyes. She’s sharp as a tack, is curious about everything she can learn from me, and knows her job prospects are bleak. She wants to know all about the US and whether she would still be living at home if she were going to a US college. She dreams of green campuses and independence.

Argentina is like its soccer teams, brilliant and ultimately self-destructive. At every international soccer event, Argentina is one of the favorites, expected to combine creative play and game toughness to challenge the best. Year after year, they disappoint. This week, the news is dominated by the relegation of River Plate, one of the two leading club teams of Buenos Aires, who will have to play in a second-division league for the first time in its 110-year history, creating talks of bankruptcy for the club. For good measure, giant riots erupted after their last match around the Monumental stadium where they play, and more than 70 people were hurt.

I am coached not to mention River Plate’s fate on any of my speeches. Emotions are still raw. On the way to the airport last night, I catch from the road a glimpse of the Argentine national team starting its training for the Copa America tournament. Maybe this time…

At the conference itself, as well as during journalist interviews and company visits, there is strong interest in co-creation. Argentines love the notion that business is about people – there is an instinctive humanity you can feel anywhere in Argentina – and they know for not being very good at it that business is about building ecosystems. For a fleeting moment, it feels like hope.

In the evening, though, gloominess returns during a dinner I am attending with some business executives of Buenos Aires. The conversation starts with agriculture, where exorbitant export duties and the vagary of the government’s granting of export licenses are challenging a highly competitive intrinsic global position. In the oil sector, YPF, a very competent exploration and production and refining company, has been a political football for many years, moving from independence to being acquired by the Spanish company Repsol, to being sold again in a complex government scheme. There seems to be little love between the business community and the current government. Inflation has returned with a vengeance, with economists estimating it at 25-30% (the number is highly contested), but this does not seem to worry the government of Cristina Kirchner, widow of the previous President. Everywhere you turn, there is little hope for growth.

The remarkable thing about Argentines is that while few of their institutions work, they remain a nation of remarkable talent, giving their society a soulful dimension which touches your heart. Leonard Cohen’s Beautiful Losers novel comes to mind. “Don’t worry about us, we’ll be all right,” one of the executives tells me, probably reacting to my empathetic look. “We’re used to this. We’ve learned to cope.” A minute later, though, he starts dreaming of Argentina adopting the Brazilian growth model.

“It would be fun to start growing like them,” he says. “But beating them in the final of the Copa America in a few weeks would be even better.”

The true role of government

Wednesday, December 29th, 2010

From education to healthcare to economics, we love people with visions, and aim to translate their visions to policies. The various federal, state, and city administrations look for authoritative experts. Universities, think tanks, and pundits provide those experts, and they gladly opine on each topic, advocating the killer policy that will solve the problem once and for all.

There’s only one issue with that approach: no top-down policy ever worked. If it had, wouldn’t we have solved education, healthcare, and economic growth problems by now? At best, what we call inspiring visions or successful policies are revisionist interpretations of experiments that have “degenerated” into favorable results at a sufficiently large scale to have been renamed a policy. The revisionist nature comes from the fact that we define the policies by selecting the winners with the benefit of hindsight, and conveniently forget all the failed experiments that were part of the original lineup.

Every successful policy emanates from a bottom-up experiment that has gained momentum by mobilizing a set of key players with a vested interest in making the experiment successful. If this is true, the name of the game is to frame the field of experimentation, engage a large number of the right self-interested players to participate in a large number of experiments, and provide the infrastructure that allows the successful ones to emerge as a result of the co-creation process. The true vision lies in structuring the right process of collective engagement, not in guessing right at any particular outcome. The policy is what this collective process of engagement will produce once a large number of experiments have been tried and the protagonists have settled on what works for them.

I don’t know whether the ratio of students to teachers matters more to education than quality of teachers, children’s safety at home, or nutrition, but I trust that the right school administrators, teachers, students, and parents can work out the best solution in the unique context of their community more effectively than any expert. Once some communities have figured it out, I also trust that the right models will be picked up by their neighbors, establishing a de facto migration path across towns and cities that a smart Department of Education will eventually call “a policy.”

I also do not know whether the US will make the most progress in healthcare by clamping down on unnecessary tests, opening borders to imported medication, capitating reimbursements, or encouraging hospitals to become insurers, but I trust that local doctors, hospitals, employers, and patients will work something out with state insurers and regulators if provided the right process of engagement. Most underplayed of all is probably the opportunity to engage businesses, consumers, and the population at large in creating economic success at the local level.

I am neither a Republican nor a Democrat, for neither side appeals to me with attempts to lure me into agreeing with their policies, which would automatically pit me against the other half of the country. Democracy is not about choosing visions and policies. It is engaging all citizens in an effective, structured process of co-creation. By that yardstick, we have a long way to go.