Once upon a time, development seemed straightforward. Sound technical analysis identified what to do– and the rest followed. But experience has taught us that it is harder than that. As Shanta’s recent post signals, there are three competing camps – the ‘whats’, the ‘hows’ and the ‘whys’. I wonder, though, whether in clarifying the differences, we might be missing the chance to learn across these different perspectives?
Certainly, the differences are large. At one end are the old-time-religion ‘whats’, who confidently prescribe ‘best practices’ to help countries stay on the right path – and who sometimes turn to the ‘whys’ to identify the political and institutional blockages to good policies. At the other end, the ‘hows’ argue that every country is unique, that the crucial knowledge for shaping and implementing policy is local, and tend to be dismissive of efforts (especially by outsiders) to analyze political and institutional obstacles.
My new book, Working with the Grain tries to steer a middle ground. The book explores a small number of alternative development pathways that are very different from each other – with each characterized by a distinctive set of political and institutional incentives and constraints, and thus distinctive options for policymaking and implementation.
The Skills and Training Enhancement Project (STEP), since its inception in 2010, has supported vocational training institutions to improve the quality of training and expand access for disadvantaged youth in Bangladesh. 33 polytechnics are currently receiving financial assistances from STEP for their institutional development. Vocational training institutions in Bangladesh have plenty of investment needs that are long overdue – degraded facilities, obsolete instructional machineries, outdated ICT tools, absence of qualified instructors, to name but a few. Such neglects are no longer tolerable in the face of growing concerns over technical skills gaps in the Bangladesh’s labor market, and the government is committed to expanding and improving skills development training in Bangladesh. STEP’s support has proven very effective to help the institutions to improve their training services.
In the last couple of days, I was struck by two pieces of news. They were small but surprising, and both affect the way we think about how to strengthen an economy in a developing country.
One news item concerned shifting intellectual currents. Faculties of economics in seven cities announced last week that they will be revising their curriculum. They are responding to demands from students, such leading academics as Joseph Stiglitz and such policymakers as Andy Haldane at the Bank of England. Their goal is to reduce the dominance of neoclassical models and to have economics courses that will focus on the real-world responses to financial crises, inequality and other problems. This is no ordinary student rebellion: On Friday, the Financial Times published an editorial in their support. On the heels of Ha Joon Chang’s book launch (“Economics: The User’s Guide”), I found this news interesting. Is there one way to look at an economy, and can we afford to rally behind one school of thought?
The other story was more depressing. It concerned what former U.S. Treasury Secretary and former Harvard President Larry Summers and others are calling “secular stagnation.” It showed that U.S. firms’ net capital expenditure was the exact same in 2013 as it was in 2000. So, even smoothing out the global financial crisis, even in the largest economy in the world – with one of the best business environments and all the innovation of places like Silicon Valley – investment has been flat for more than a decade. Summers’ argument, which he advocates in textbooks, essays and speeches, is that we have entered a period of permanently lower private-sector investment.
Global stock markets retreated on Monday as civil unrest in Hong Kong SAR, China increased risk aversion among investors, while U.S. Treasuries advanced on safe-haven appeal. The benchmark MSCI world stock index fell 0.5% in early trading, but it recovered slightly after strong U.S. economic data pushed U.S. equities higher. The benchmark 10-year Treasury note yield slid 4 basis points (bps) to 2.49% in morning trade.
From my seat as an Education economist at the World Bank, I go through a number of strategies from countries and sectors in Africa outlining how best to achieve economic growth and development. I am repeatedly struck by a key question: Who will do it? Who will add value to African exports? Who will build? Who will invent? Who will cure? The answer is, of course, that graduates from African universities and training institutions should do it. But the problem is one of numbers and quality—there are simply not enough graduates in science, technology, engineering and math (STEM), and programs are of uneven quality.
Sitting on the train heading back from New York to Washington D.C., gazing out of the window at stressed watersheds, I had some time to reflect on a very special Climate Week. What does it all add up to? Where does it leave us as a global community needing speed and scale in our climate action?
Much is being written. Let me add a perspective. Here are three thoughts amid my swirl of memories, moments and impressions.
Climate osmosis – the street reaches the hallowed halls
It was difficult to stand in the canyon that is 6th Avenue, with a sea of people stretching in both directions – environmental activists, nurses, pensioners, business people, every possible faith community, moms, a sprinkling of celebrity and a dash of statesmen – and not be moved. On the Sunday before the Summit, more than half a million people took to the streets in People’s Climate Marches in New York and more than 160 countries across the globe. The marchers demanded climate action from their leaders, suggesting that the politics of climate action, once considered too hard to handle, might no longer be as difficult as leaders think.
The reverberations continued for 48 hours and became a point of reference in almost every speech at the UN Secretary-General’s Climate Leadership Summit. More than 120 heads of state and government came to hint and in some cases pledge action on climate change. New coalitions of governments, businesses, investors, multilateral development banks and civil society groups announced plans to mobilize over $200 billion for low-carbon, climate-resilient development. Forests and cities were big winners, landing pledges of around $450 million for forests and bringing together more than 2,000 cities in a new Compact of Mayors to help improve accounting of urban greenhouse gas emissions and the actions cities are taking to reduce them.