As we say goodbye to the “Naughties” I thought it may be interesting to step back and reflect on some of the significant books of the last decade that really did change the way we thought about PSD and its contribution to development. Given the “decade” theme, I’ve limited the selection to ten, although the books don’t map to each year of the decade. Obviously such an exercise is pretty subjective so please feedback any glaring omissions/personal prejudices. So, in order of publication date, rather than magnitude of contribution we have:
- De Soto, Hernando (2000) The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. The central idea that the poor in developing countries with weak systems of property rights and stifling bureaucracies are unable to leverage the value of their (informal) assets has been a big influence on donor PSD programmes.
- Easterly, William (2002) The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics. Here at the World Bank, the battle between “planners” and “searchers” shows no sign of abating.
- Yunus, M. (2003) Banker to the Poor: Micro-Lending and the Battle Against World Poverty. The nobel prize winner who made micro-finance mainstream. I was tempted to include the more recent Portfolios of the Poor for its more hard edged analysis of how the poor spend their money. Yunus’s more recent work focuses on the concept of social entrepreneurship.
- Kay, John (2004) The Truth about Markets: Why Some Countries are Rich and Others Remain Poor. Everything you need to know about incentive compatability, disciplined pluralism and embedded markets.
- Wolf, Martin (2005), Why Globalisation Works. Some might question whether it actually does after the last couple of years. But setting out the merits of global integration is an intensely competitive space occupied also by Stigtitz (2005) “Fair Trade for All” and Bhagwati (2004) “In Defense of Globalisation” amongst others.
- Prahalad C.K (2005) The Fortune at the Bottom of the Pyramid. Although many have questioned whether there really is a fortune there or not, this book shows how the poor can be treated as a serious market players making rational economic decisions, rather than being passive aid beneficiaries. I think much more PSD work can usefully be done in relation to wealth creation at the base of the pyramid (BoP). Stuart Hart’s “Capitalism at the Crossroads: Aligning Business, Earth, and Humanity” is also a close contender in the BoP space, as is Al Hammond’s “Bottom Four Billion”.
- Levitt and Dubner (2006) Freakonomics: A Rogue Economist Explains the Hidden Side of Everything. The original thought-provoking book that put Pop Economics on the map and spawned lots of imitators including this blog’s own Undercover Economist (Tim Harford) as well as the Armchair Economist (Landsberg); and the Economic Naturalist (Frank).
- Collier, Paul (2007) The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It. The four traps that show how development for the world’s poorest means more than just more aid.
- Stern, Nicholas (2007), The Economics of Climate Change: The Stern Review. Depicting climate change as the “greatest and widest-ranging market failure ever seen” was a huge conceptual step forward. This perspective makes it much easier to devise and justify PSD or market based contributions to low-carbon growth. However, recent events in Copenhagen show we’re still some way away from establishing a clear global price for carbon.
- Tett, Gillian (2009), Fool’s Gold: how unrestrained greed corrupted a dream, shattered global markets and unleashed a catastrophe. Do you still need to know what this book is about?
Update: An anonymous publishing detective has drawn my attention to the fact that Tim Harford's Undercover Economist came out in 2005 (see book 7 in my list). Therefore he can't be an "imitator" of Freakonomics which came out the following year. My apologies to Tim for this mis-representation. Needless to say, his book - as well as his newer "logic of life" - is an excellent read!