Trump, Development and the Environment

by Prof. David Zilberman

Prof. David Zilberman is a co-director of the Beahrs Environmental Leadership Program. He is a professor and holds the Robinson Chair in the Department of Agriculture and Resource Economics at UC Berkeley. He has served as a consultant to the World Bank, the USDA, the Food and Agriculture Organization, the Environmental Protection Agency, Consultative Group on International Agricultural Research and the California Department of Food and Agriculture.

I admit it. When I heard about Donald Trump’s candidacy about two years ago, I thought it was cheap self-promotion with no chance of success. But after he overcame Jeb Bush, I became worried, and now most of us are worried. As an economist, I can explain my perspective about him using basic concepts of game theory. In a simple game called the prisoner’s dilemma, the best outcome for two parties (say the US and the rest of the world), occurs if each party plays nice. The outcome is what people call win-win. One party, say the US, can win even more if they play nasty and the rest of the world plays nice; however, if both parties play nasty, we have a lose-lose situation. I believe that, generally speaking, the world after WWII moved towards parties playing nice with one another. The international agreements have many flaws, but they prevented new major wars from erupting, allowed China and East Asia, and now even parts of Africa to grow. Many in the US have not gained, (partially due to globalization, but mostly due to automation), and some have become even worse off. As behavioral economics teaches us, those who perceive themselves on the losing side are more upset about change than people who are better off. They, to a large extent, are those people who supported Trump. 

Trump’s approach previously applied in business and now in politics is to play nasty while expecting others to play nice. In that case, the US would win and the rest of the world would lose. Trump has taken some extreme positions from which he later retreated, so that his bite may be worse than his bark. But, if his “bark” triggers the rest of the world to take a nasty approach as well, we move to a nasty-nasty dynamic in which we all lose. 

What does this scenario mean for development and the environment? We all will lose because coordinated efforts to control climate change will be reduced, or even disappear. The US will allocate much less funding to support aid and development efforts, except in cases where such efforts directly relate to strategic US interests. Other countries may follow similar paths to disengagement as we see foreshadowed in Brexit, and in the rising popularity of Marie Le Pen, Geert Wilders, and others. In response, China may actually increase its international involvement in order to forge ahead of the US. In many ways, Trump’s nationalist focus is a gift to China. While Trump aims to increase domestic infrastructure spending, (which Democrats support), to increase military spending, to maintain welfare spending, and to decrease taxes, he must work with Republicans, who dislike deficits. Something must give. I worry about drastic cuts in support of research, education, foreign aid, etc. 

So this all sounds grim. My hope that this experiment won’t last and that President Trump will be impeached is wishful thinking. We must mobilize support for efforts needed to make the world a better place. In addition to being more effective in government and multilaterals, development practitioners must learn to work with and within the private sector (both businesses and NGOs), and NGOs need to become more self-sufficient.

I think that the MDP and the Beahrs ELP, two innovative programs that epitomize this multi-sectorial, entrepreneurial approach, are more important now than ever.  And now is the time for affluent people in Silicon Valley and elsewhere who are for progress and want to face climate change head on to step up to the challenge and join us.