Syndicate content

financial crisis

The Wisdom of Jacques Necker: A Note on "The Road from Ruin"

Sina Odugbemi's picture

If there is one historical personage that all finance ministers – or treasury secretaries – need to know, he is Jacques Necker (1732-1804). He was the finance minister of France in the 1780s. He was credited with popularizing the phrase ‘public opinion’ (opinion publique). What was his central insight? He noticed that the attitude of the French public to the king of France determined whether or not they purchased the treasury bills issued from time to time by the king. It they had a favorable opinion of the king they bought his bills; if not, they did not buy his bills. In other words, the financial health of the kingdom and the power of the king depended on opinion publique.

Necker pointed out that the same was true of the finance minister. He was clear that the finance minister ‘stands in most need of the good opinion of the people.’ He pointed out that fiscal policies needed to be pursued with ‘frankness and publicity,’ and that the finance minister must ‘associate the nation’ with his plans, including the obstacles he had to surmount.  Necker practiced what he preached, launching a systematic management of public opinion.  In 1792, he declared:

PPP Financing: Moving towards a "new normal"?

Editor's Note: Clive Harris is Manager of the Public-Private Partnerships program at the World Bank Institute. This is the first in a series of posts on PPP Days 2010, taking place March 22nd and 23rd at the headquarters of the Asian Development Bank in Manila.

Bureaucrats into bankers?

Ryan Hahn's picture

The World Bank's new chief economist for Financial and Private Sector Development, Asli Demirgüç-Kunt, has entered the blogosphere with the new All About Finance blog. In her first post, Asli considers whether the financial crisis ought to make us consider turning bureaucrats into bankers. She responds with a resounding "no"!

State Financial Institutions: Can They Be Relied on to Kick-Start Lending?

Editor's Note: Heinz P. Rudolph is a senior financial sector specialist in the Financial and Private Sector Development Vice Presidency of the World Bank Group.

This is the 12th in a series of policy briefs on the crisis—assessing the policy responses, shedding light on financial reforms currently under debate, and providing insights for emerging-market policy makers.

Right analysis, wrong conclusion?

Shanta Devarajan's picture

During my recent seminar in Geneva, where I was also meeting with the Africa Progress Panel, a couple of members of the audience (which consisted of ambassadors, U.N. staff, civil society and academics) said, “I liked your analysis, but not your conclusions.” 

The seminar summarized many of the points I have been making on this blog:

  • For the decade before 2008, Africa was experiencing sustained and widespread economic growth, thanks to aid, debt relief, private capital flows, high primary commodity prices, and improved macroeconomic policies
  • Despite being the least integrated region, Africa was perhaps the worst hit by the global crisis
  • Contrary to some people’s fears, African governments continued to pursue prudent economic policies during the crisis—even though the visible payoffs to these policies (growth and poverty reduction) had suddenly diminished
  • Conclusion:  Economic policy in Africa, which had been improving before the crisis, and either stayed on course or improved during the crisis, has never been better.

    Since my conclusion followed directly from the analysis, I had three possible explanations for the reaction mentioned above:


Pages