Development in Transition

What’s the path to sustainable development?

Development Matters policy , , , ,

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By Mario Pezzini, Director, OECD Development Centre, and Special Advisor to the OECD Secretary-General on Development

This blog is part of an ongoing series evaluating
various facets of Development in Transition.
Perspectives on Global Development 2019: Rethinking Development Strategies
adds to this discussion

Cover-PGD_2019What’s the path to sustainable development? In this era of the Sustainable Development Goals (SDGs) — when all countries face both new challenges and new opportunities for improving the lives of their citizens in inclusive, holistic and environmentally sustainable ways – the question remains as relevant as ever.

Some may think the question was answered in the 2000s when we witnessed the transformation of the global economic geography. Whereas only 12 developing countries in the 1990s managed to double the OECD per-capita growth rates, 83 developing countries managed to do so a decade later. By 2008, developing and emerging economies made up 50% of the global economy for the first time. And the 15-fold surge in South-South trade linkages from 1990 to 2016 and the jump in development finance from USD 3.2 billion in 2003 go USD 15.6 billion in 2012 provided by large emerging economies, notably China, are clear proof points of this new economic geography.

Yet, this upswing in global economic growth masks two underlying issues that we cannot ignore on the road to sustainable development.

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What does it take for a Development Bank to succeed?

Development Matters Development finance, policy , , ,

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By João Carlos Ferraz, Instituto de Economia, Universidade Federal do Rio de Janeiro, Brazil

This blog is part of an ongoing series evaluating various facets
of Development in Transition. The 2019 “Perspectives on Global Development” on “Rethinking Development Strategies” will add to this discussion

bank-finance-growth-financePublic finance institutions, or development banks, have “development DNA”. But, can they effectively engage in financing “development in transition” or the call to rethink international co-operation to help countries at all levels of income sustain their development gains? What would it take for such institutions to succeed? How can they anticipate and effectively respond to societal and market needs and aspirations?

Political space for this does exist. A consensus exists that development banks must have at least four priorities: infrastructure, innovation, sustainable environment and firms of smaller size. That’s the easy part! No policy maker or analyst in their right mind would be against these priorities. But, consider the nature of these priorities: each one is time- and place-specific but evolving permanently; they are moving targets. More importantly, they are risk-intensive, given the duration and unpredictability of associated projects and/or the potentially low credit worthiness of economic agents pursuing these priorities.
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Africa: Time to Rediscover the Economics of Population Density and Development

Development Matters Africa , , , ,

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By Professor Erik S. Reinert, Tallinn University of Technology, and Dr. Richard Itaman, King’s College, London

Learn more about this timely topic at the upcoming
18th International Economic Forum on Africa

Africa-Industrialisation-Factory.jpgAt the OECD’s origin, we find the 1947 Marshall Plan that re-industrialised a war-torn Europe. At the very core of the Marshall Plan was a profound understanding of the relationship between a nation’s economic structure and its carrying capacity in terms of population density. We argue that it is necessary to rediscover this theoretical understanding now, in the mutual interest of Africa and Europe.

In early 1947, worries grew in Washington that an impoverished Germany – where manufacturing industry had been forbidden under the Morgenthau Plan – would fall an easy prey to the Soviet Union. US President Truman therefore sent former president Herbert Hoover on a fact-finding mission to Germany. One powerful sentence in Hoover’s Report of March 18 that year zeroed in on the basic problem:

‘’There is the illusion that the New Germany left after the annexations can be reduced to a ‘pastoral state’. It cannot be done unless we exterminate or move 25.000.000 out of it’.1 

Hoover understood that the population density of a country is determined by its economic structure: Industrialisation makes it possible to dramatically increase the population carrying capacity of a nation. ‘Exterminate’ was an extremely strong word to use after the horrors of World War II, and everyone understood that there was no place where 25 million Germans could be sent: Re-industrialisation was the only option. Continue reading →

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Development Matters policy ,

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Par Jacques Ould Aoudia, Chercheur en économie politique du développement et auteur de « SUD ! Un tout autre regard sur la marche des sociétés du Sud » (Ed. L’Harmattan, 2018)

This blog is part of an ongoing series evaluating various facets
of Development in Transition. The 2019 “Perspectives on Global Development” on “Rethinking Development Strategies” will add to this discussion

Sud-jacques-AoudiaVu du Nord, un mystère demeure dans les relations entre Nord et Sud de la planète en matière de développement. Les préconisations des pays du Nord à la plupart des gouvernements du Sud sur la démocratie, la bonne gouvernance, les droits de l’homme, le respect de l’état de droit… semblent d’une telle évidence ! Pourquoi les pays du Sud ne suivent-ils pas ces conseils qui leur sont déversés depuis tant d’années pour leur plus grand bien, afin de rejoindre l’état envié des pays du Nord ?

Mais… sommes-nous sûrs d’avoir les bons outils pour comprendre la marche des sociétés du Sud ? Les connaissances sur les sociétés du Sud qui servent de fondements aux politiques de la plupart des bailleurs de l’aide au développement, sont basées sur l’idée que ces sociétés sont des répliques défaillantes et pathologiques de celles du Nord. D’où la nécessité de les aider à réparer les carences, à combler les manques qui les affectent (manques de routes, d’hôpitaux, de démocratie, de droits…) en cherchant à transférer au Sud les techniques et les institutions du Nord. La tentative d’exporter au Sud, pendant les années 2000, la « bonne gouvernance » est emblématique de cette démarche. Or la Chine, qui arbore de très mauvais indicateurs de gouvernance selon les critères du Nord, a réussi à s’arracher au sous-développement, avec d’immenses erreurs (Grand Bond en Avant, Révolution Culturelle), mais aussi les immenses succès qu’on lui connait.

Et si ces sociétés du Sud suivaient leurs logiques propres ? Avec leurs forces, leurs capacités, leurs règles, leurs imaginaires, mais aussi leurs difficultés, leurs craquements devant l’offensive de la modernité que la mondialisation conduite par le Nord répand partout ?

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Why do some countries reduce poverty faster than others?

Development Matters policy, SDGs , ,

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By Antonio Savoia, Global Development Institute and Effective States and Inclusive Development Centre, University of Manchester and M Niaz Asadullah, Faculty of Economics and Administration, University of Malaya; Global Development Institute, University of Manchester

This blog is part of an ongoing series evaluating various facets of Development in Transition. The 2019 “Perspectives on Global Development” on “Rethinking Development Strategies” will add to this discussion

poverty-DiT.jpgCan poverty be eradicated is the biggest question for development. Progress in poverty reduction was a central success with the Millennium Development Goals (MDGs): Estimates suggest that as many as one billion people were lifted out of poverty. Since poverty reduction remains important for the more ambitious Sustainable Development Goals (SDGs), it seems that the time is right to identify why poverty has been reduced so much and why some countries have seen a greater reduction than others.

Our research1 presents new evidence on what facilitates poverty reduction. We find that in more effective states, or in countries with greater state capacity, income poverty has been reduced at a significantly faster speed, and those countries are much more likely to achieve MDG 1 of halving poverty. Our estimates suggest that countries with the highest state capacity can reduce income poverty at up to twice the speed of countries with the weakest capacity.

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Upgrading International Development Cooperation

Development Matters Latin America/Caribbean, policy , , ,

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By Alicia Barcena, Stefano Manservisi and Mario Pezzini

Dev-in-Trans-Barcena-Manservisi-PezziniIn an era when the benefits of multilateralism are being questioned, income inequality is growing, and innovation and technology are transforming how people learn and work, the world needs a more equitable approach to globalization. Can Latin America and the Caribbean offer a way forward?

PARIS – These are hard times for international cooperation. With rising protectionism, burgeoning trade disputes, and a troubling lack of concern for shared interests like climate change, the world seems to be turning its back on multilateralism.

And yet cooperation remains one of our best hopes for addressing humanity’s most complex development-related challenges. Just as the Marshall Plan rebuilt a war-ravaged Europe and the Millennium Development Goals lifted some 471 million people out of extreme poverty, the international development agenda can still deliver results thanks to the combined potential of the 2030 Agenda for Sustainable Development, the Addis Ababa Action Agenda, and the Paris climate agreement.
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It is time for a new finance paradigm in development

Development Matters Development finance, policy, SDGs , ,

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By Arthur R Wood, Founding Partner, Total Impact Advisors; Convenor, Project1800.org

This blog is part of an ongoing series evaluating various facets of Development in Transition. The 2019 “Perspectives on Global Development” on “Rethinking Development Strategies” will add to this discussion

On 27 November 1095, Pope Urban declared the crusades ostensibly a religious call, but one that reinforced the power of the spiritual over the temporal. To support the crusades, the church built a financial institution by leveraging the Templars under the Papal bull Omnes Datum Optimum, creating a monastic banking system that gave birth to such financial innovations as letters of credit, banking and, by extension, fiduciary products like trusts.

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