A country’s level of development and its level of income are often seen as synonymous. Many, thus, understand development as poorer countries “catching up” with richer ones. Once the poorer countries catch up, they cease to be “developing” and become “developed”. A closer look, however, reveals a different story. First, development is more complex than getting from A to B: it is a continuous and never-ending process that is even reversible. It follows a wide diversity of pathways depending on a country’s specific geography and history. Second, the emergence of the Sustainable Development Goals (SDGs) reflects the fact that development has multiple economic, social and environmental dimensions, beyond income. Moreover, and as the COVID-19 crisis has illustrated all too well, shocks have become increasingly global in our hyper-connected world, reflecting the interdependence amongst national, regional and international levels.

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International co-operation practices and frameworks have not always recognised the multidimensional nature of development and the changing global context. We need a new approach to international co-operation and development, within a multilateral system that is able to take on increasingly shared global challenges whilst accounting for countries’ domestic realities and citizens demands. The global community must also support the design of national development strategies that are aligned with global goals and respond to the origins of increasing discontent. For several years now, the Development Centre has been pushing this paradigm shift forward through its work on Development in Transition (DiT), gathering countries at all levels of development around the same table and across a diverse range of policy communities, recognising the multidimensional and complex nature of development. A central premise of our work is that economic growth is not a good measure of human wellbeing and development. We need multidimensional indicators that enable us to measure what we treasure – people’s wellbeing and the health of our planet – beyond GDP.

The pandemic has exacerbated pre-existing inequalities and vulnerabilities among and within countries, exposing the flaws of a multilateral system that had already failed to address these issues after the global financial crisis of 2007-2008. We need a new model consisting in strategies and reforms that go beyond reconstruction and rebuilding, focusing instead on transforming globalisation and renewing the efforts and tools of our multilateral system to benefit the many rather than the few. We need to fundamentally rethink how countries – at all levels of development – interact with one another to design better policies, practices and partnerships adapted to the changing global landscape.

This compilation gathers a selection of blogs contributing to the Development in Transition framework since its emergence to lessons that we can begin to draw from the pandemic. The first blog sets the foundations of the approach, outlining the new metrics, partnerships and tools to shift from top-down, donor-recipient ties to inclusive co-operation among equals, reflecting the current global landscape. The second part of this compilation looks at the issue of graduation, demonstrating that the trajectories of developing countries are far from guaranteed linear paths. As countries are sometimes “rushed to graduate” from aid based on their GDP per capita, and despite still facing significant vulnerabilities, they are confronted with an array of challenges that can erode and even reverse hard-won development gains. The authors depict these challenges and offer solutions – through both national efforts and international support – to prevent countries from falling into the so-called “middle-income trap”. In the third part, the authors focus on the COVID-19 crisis, and its catalyst effect, exposing the failures of the multilateral system to respond to a crisis on a planetary scale and accelerating the need to reform and shift towards new sustainable and inclusive development models that strengthen
countries’ and communities’ resilience against systemic shocks, driven by principles of solidarity and co-responsibility among and between developed and developing countries.

Mario Pezzini
Director of the OECD Development Centre & Special Advisor to the OECD Secretary General on Development

1) What is Development in Transition?

Development in transition

By Alicia Barcena, Stefano Manservisi and Mario Pezzini

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The complexity of development calls for building more evidence- and dialogue-based policies, engaging with a wide range of countries at various stages of development as equal peers, embracing different skills and experience to help address the gaps and vulnerabilities that countries face.

Transforming top-down, donor-recipient ties into more inclusive partnerships built from the ground-up is increasingly part of ensuring local ownership of local solutions to global development challenges.

Existing development tools should be revamped to reflect the current landscape, global tools should be re-engineered to support sustainable development, and new tools should be created where they are needed and missing.

2) Development is a continuous process: no one-size-fits-all

Overcoming the Challenges of the Transition and Exit from Aid

By Annalisa Prizzon

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For a successful transition and exit from aid:

Governments should articulate and be clear on priorities for external development finance and develop a strategy for managing the transition from aid.

Governments should also prioritise tax mobilisation and tax administration as a key dimension of their financing strategy.

In the transition away from aid, government and development partners should coordinate decisions and actions, for example when a development partner intends to change their programme orientation, or decides to withdraw their projects from the country.

Middle-income countries should not be rushed to graduate

By Otaviano Canuto, Matheus Cavallari, and Tiago Ribeiro dos Santos

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The measures which can be taken to help middle-income countries (MICs) avoid or exit the middle-income trap include:

Accumulating human capital and developing high cognitive skills: multilateral development banks (MDBs) can help MICs design effective policies to increase the level of learning-adjusted school years (a metric that combines quantity and quality of schooling) for a relatively low cost.
Fostering entrepreneurship: MDBs can significantly help MICs by increasing the scope of evaluations like the Doing Business Report, to better and transparently reflect the business environment of the countries they examine.
Reducing greenhouse gas emissions: MICs are the cheapest environment where technologies can be used to reduce greenhouse gas emissions, while expanding economic activity. Reducing greenhouse gas emissions in MICs is in the interest of the whole world.

Upgrading International Development Co-operation

By Alicia Barcena, Stefano Manservisi, and Mario Pezzini

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Effective development planning requires participatory processes that capture inputs from regional and local actors and are sensitive to the collective global good.

To cope with decreasing flows of ODA, international co-operation should step in to support countries in designing and implementing fiscal reforms to maintain macroeconomic stability while improving socioeconomic health.

The world needs new forms of co-operation from South-South and triangular co-operation to knowledge sharing, technology transfers, and peer-to-peer policy dialogues, and more.

3) COVID-19: A wake-up call exposing the outstanding failures of and need to reform international co-operation

COVID-19: A game changer for the Global South and international co-operation?

By Debapriya Bhattacharya and Sarah Sabin Khan

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The narrative on the post-COVID world is once again characterised by the usual dearth of inputs from the global South.

Co-operation informed and inspired by Southern countries – irrespective of their level of development – has come to light through pandemic related assistance.

Southern scholars should be fully involved in the global knowledge ecosystem rather than limited to participation in pre-set agendas informed by the interests of dominant groups, in spite of general recognition that the Global South has a larger stake, and an enormous potential role and capacity to ensure global recovery post-COVID.

COVID-19 and the human development crisis: what have we learnt?

By Pedro Conceição and Mario Pezzini

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Investments in global public goods like communicable disease control demand appropriate financing frameworks. National resources pooled and coordinated at the global level, as the response to the HIV/AIDS pandemic shows, can be effective in making sure they go where they are needed the most, underpinned by processes that ensure transparency and accountability.

Beyond communicable diseases, approaches to improve the provision of global public goods call for collectively coordinated action and investment. This is also the case for a sustainable recovery, co-designed by developed and developing countries, involving the private sector and other relevant actors.

We must learn lessons from countries at all levels of development, for better and more innovative policies and forms of co-operation. They must combine different skills and capacities, focusing on building resilience and reducing inequalities among countries. The recovery must be embedded in multidisciplinary national development strategies that reflect the interdependency between the local and the international.

Beyond vested interests: Reforming international co-operation post COVID-19

By Imme Scholz

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To be truly global, international co-operation should take a shared interest in the global common good as its starting point, forging solid alliances and institutions that protect it.

In this system, all countries would make their contributions to the global common good by embracing domestic change and following international agreements and rules; by engaging in joint learning processes with others and mutually transforming trade and investment; and by supporting others in their own processes of change.

A renewed, differently shaped international co-operation system would need to put social, environmental and economic sustainability at the heart of government action and national development strategies, in the local and the global interest simultaneously.