Because a modern government needs a multiplicity of able leaders and technicians to be effective, a nation must develop and maintain a large pool of individuals with the attributes required for those jobs. In the terminology of human resource experts, the public sector needs “human capital” of substantial quantity and quality. Without this human capital, no nation can provide effective governance and security on a consistent basis. Nevertheless, some nations and foreign donors devote much more attention to human capital development than others.

In the 1950s and 1960s, historians, social scientists, and development professionals placed high value on human capital in the advancement of nations, believing that large-scale social and economic development hinged on the quality of the indigenous elites. First world donors consequently spent heavily on human capital development. This “elite-centric” view of development fell out of favor in the 1970s, in part because of the belief that the persistence of poverty in many countries had discredited it, but mainly because of the proliferation of the view that human capital development benefited only the elites and hence foreign assistance should be funneled exclusively to programs directly benefiting the poor. Ever since, hostility to elite-centric development has been strong in development, governmental, and NGO circles. Of late, only a few prominent thinkers, such as Thomas Sowell, Ashraf Ghani, and Clare Lockhart, have stressed the importance of human capital and advocated reinstatement of human capital development at the top of the foreign assistance priority list.

THE HUMAN CAPITAL UMBRELLA

Some human resource experts define human capital as the accumulated capabilities and motives of individuals, which is how it will be defined in this book. Other experts refer to the culturally and socially influenced aspects of human motivation as components of “social capital,” since they are reflective of broad trends within society, whereas they consider human capital to refer exclusively to individual capabilities, particularly those conferred by training, education, and experience. I have opted to include motivation in the definition of human capital for several reasons. First, the cultural factors that determine a person's motivation are not always easy to separate from individual factors such as personality and character, and therefore attempts to differentiate between social capital and human capital can create more confusion than clarity.