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Global Futures Initiative

Global Future of Development

Global Future of Development

February 16, 2015

Week 4: Trends for Development

This week Kaushik Basu, the World Bank's chief economist, reflected on the history of and future trends for development. He focused on what he sees as core thinking behind development economics, looking especially to Adam Smith and his brilliant focus on division of labor as an engine of modern economies and on the "invisible hand" of the market. He highlighted the different experiences of China and India and launched a discussion of the live issue of inequality.

Highlights from Dr. Basu's Global Futures lecture, particularly the concept of shared prosperity and the rationale for addressing inequality, are captured in an animated video produced by Global Futures Fellow Manny Fassihi. A full recording of the lecture is also available here.

  • Jonas Bergmann took up the question of internally displaced people (IDPs), exploring the impact of silos that separate humanitarian, human rights, and humanitarian institutions. He argued for a more integrated, rights-based approached.
  • Claire Cullen rose to Basu's challenge as to whether income inequality can, with rigorous analysis, be considered "bad" for development. She argues that notwithstanding Basu's caution, IMF evidence and the debates unleashed by the Piketty book on the topic suggest that the time for robust advocacy on inequality has arrived.
  • Felix Obi reflected directly on the global trends that the Basu lecture addressed, focusing on what he sees as a central feature of development assistance driven by goals like ending global poverty: that is, conditionality. He highlights complexities that Basu discussed that differentiate countries and mean that simple indicators can be deceptive if taken too simplistically. He concludes that whatever the implementation strategy, successful development assistance requires that endogenous commitment must trump exogenous incentives.
  • Arunjana Das took Basu's comments on oil price volatility as a cue to reflect on the likelihood that many countries will look more closely at nuclear power as an option. Notwithstanding risks, the sure demand and central importance of energy clearly points in this direction. Focusing on the decision-making process involved, thus weighing risks and benefits carefully, is important.

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