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The PAEI model helps explain why developing nations are stuck in their development.

Through my field research, I discovered these four PAEI functions must be performed if a organic system, person, family, company or country, is to be healthy. I call them managerial roles:

The (P) role, which stands for the word productive, makes the system effective in the short run. The (A) role, the role of administration, makes the organization efficient in the short run by programing, systematizing processes. Entrepreneurship, which is the (E) role, makes the company effective in the long run -it addresses questions about the changes the company has to make to stay effective in the future, i.e. to satisfy future needs of its clients and of new clients. And integration, (I), makes the organization efficient in the long run. People support each other.

‍The (E) and (A) deficiency

‍In nomadic and agricultural society, one does not need (A), administration, or (E), entrepreneurship. One ploughs, seeds, harvests and sell. All (P). Also, it is an extended family, a tribe, supporting each other to survive. Thus, the pre-industrial revolution society was performing mainly the PaeI roles.

The (A) and (E) roles were born with the industrial revolution. In developing countries, the industrial revolution did not happen with the indigenous people. It was done by and large and managed by the colonialist powers.

The lack of (A) and (E) in the culture of developing countries, I found, is prevalent in all developing countries I have worked with, India, Ghana, Mexico, El Salvador. When I reorganized the Office of the President for Vicente Fox, President of Mexico, we classified all ministries and government agencies by the PAEI functions they were supposed to deliver. We found, not surprising, many ministries in (P): industry, transportation, etc. and many in (I), education, health, social development etc., but not one in (E) and very few in (A), like justice.

Developing nations will remain developing in spite of all the financial support that the World Bank etc. provides. They need to develop their educational system, starting with the nursery, to develop culturally the (A) and (E) functions.

The Impact on Management Education

‍Management and leadership development needs in developing countries differ significantly from the management development needs of developed countries.

Developing countries need to develop their entrepreneurial capabilities and the capabilities to follow order and systems.Developed countries, on the other hand, need to develop more the (I) role. They are in the transition from a society operating in scarcity to a society operating in abundance.

In developed countries the standard of living is up but the quality of life has gone down because of the rate of change. That means they need a change in focus. The change has to be from more is better to better is more. The focus should be on the quality of life. They need management, leadership that focuses on how well we live rather than how much we have. The focus in leadership development in the developed countries is and should be on (I).

‍The developing countries are in a different stage of the life cycle. They are still struggling to get more. And for them more is better rather than better is more. Their need for management education and leadership training should be on (E) and (A). They have culturally the (P) and the (I).

‍The Source of Corruption

‍Developing countries suffer from a high rate of corruption. I suggest it is because of high (I) and low (A). Both (A) and (I) integrate, make the system work. When there is low or no (A), the (I) serves as the process to make the system operate. That to me is the source of the corruption, or paying payola to get license and permits etc. You make the system work by knowing who needs to be connected etc... With more (A) the corruption could be reduced.

‍Bureaucracy

‍Many claim that developing countries have plenty of (A). There is a big bureaucracy.

I suggest that the bureaucracy is not from abundance of (A) but from lack of (A). Many side deals are made to make the system work, and the system behaves like a bureaucracy, but it is not bureaucracy. It is lack of order and systems that get honored.