Global Futures Initiative

But binary debate over conditionality obfuscates social and economic complexities that make prosperity normal in one country, and elusive elsewhere. Instructively, in his Global Future of Development lecture, WBG V.P. and Chief Economist, Dr. Kaushik Basu, identifies endogenous economic policy as critical to growth and development. Dr. Basu suggests that encouraging higher levels of savings and investment in developing countries can improve growth. 

Yet, growth as measured by GDP per-capita does not sufficiently capture a country's wellbeing. Dr. Basu suggests high levels of inequality can be more consequential. For instance, extreme poverty has declined from 36.4 percent in 1990 to 14.5 percent in 2011. Yet, 14.5 percent represent about a 1 billion people, and worse, income-inequality is on the increase. Consequently, the World Bank now tracks levels of shared prosperity, or growth rate of the per-capita income of the bottom 40 percent of the population. 

Dr. Basu cautions that passion and concern about poverty is not enough, it must be balanced with analytics, and this is where universities come in. And Georgetown University agrees. Knowledge created by the Global Future of Development Initiative should inform conditionalities. Consider that countries are not poor because of an absence of development assistance, but rather, endogenous factors that conditionalities are intended to address. Yet, caution must be taken to ensure development assistance does not become a de facto parallel state, but instead maintain a long-run goal of building local capacity. 

And there's more. Standardizing donor record-keeping requirements would reduce bureaucratic pressures on capacity-challenged donee countries, which are required to master multiple regulations. More broadly, lessons from Greece's on-going economic and political challenges, suggest awareness for the consequence of biasing financial rescue package towards development assistance, versus debt repayment. Notably, Dr. Basu acknowledges a consensus view in the development profession that excessive inequality is bad for growth.

He also identifies two disruptive technology driven labor trends. The first is labor saving technology which is changing the contour of business practice; and the other is labor linking technology, which is minimizing employment visa barriers. Dr. Basu concludes that countries that organize their labor market are likely to do very well over the next 20 years. But, whatever the implementation strategy, successful development assistance will require that endogenous commitment must trump exogenous incentives.  

O. Felix Obi is an Alumni Board Member at Georgetown’s McCourt School of Public Policy. His professional background is in economic and international trade development in Africa, especially innovation and entrepreneurship.