Development economics thinks big but also gets practical—postcard from Paris

SUBMITTED BY JUSTIN YIFU LIN 

Development is about big systemic changes, complex tradeoffs, political choices and how the fruits of growth are channeled for the greater good. It is also about broadening opportunities – a goal that if neglected can result in frustrated citizens and tumult as we have seen in the North Africa and Middle East.

These were some of the many messages I took away from the ABCDE conference just held in Paris.

The arc of history and of social change were referenced often at this year’s conference, whether in terms of Amartya Sen discussing quoting John Stewart Mill and the need for ‘government by discussion’ or Daniel Cohen saying China would have had an industrial revolution in the 14th century if it weren’t for the Mongol invasion. Experts also presentedmodels of the world 30 years from now, by which time demographic shifts and a rising global middle class will have reshaped the economic power structure and where inequalitywithin countries may be a bigger source of perceived injustice than inequality between nations.

High joblessness, youth unemployment and gender inequality were topics treated with particular urgency, especially given the fact that youth unemployment is soaring in developed and developing countries alike. For this reason, the broadening opportunities theme of ABCDE 2011 was particularly appropriate.

I appreciated the humility shown by specialized researchers as well as by eminent policymakers and scholars. Angel Gurria, Secretary General of the OECD spoke at the opening and, during the question and answer session, said of the 2008 crisis, “we didn’t see the Mack truck coming.” The Korean Ambassador to the OECD, Kyung Wook Hur, noted at the Democratizing Development Economics event that Asian countries learned the hard way from the 1997 East Asia crisis that prudent banking requirements, fiscal probity and healthy reserves were needed to avoid a future crisis.  The searing lessons from 1997 buffered Asia from bigger fall out from the recent crisis.

Social protection experts gave important presentations on the evaluation of Cash Transfer and other social protection programs in Latin America, Indonesia, and Africa as well as on weather shock insurance for farmers and rural workfare programs for millions of poor people in Ethiopia .

In other words, there was an urgency to the proceedings and a sense that economists are steering away from theoretical modeling toward pragmatic field work, randomized control trials and projects and programs done in partnership with experts in developing countries.

Structural transformation in Africa in terms of labor reallocation from agriculture to service sector, the decline of manufacturing sector, and the productivity gap between agricultural and nonagricultural sectors were also explored.

The ‘Democratizing Development Economics’ round table [link to webcast] on the final day surfaced important views about how low income people can be more engaged in designing development solutions and it highlighted the knotty problems of data collection and ownership. The debate brought into high relief a dilemma that faces development practitioners every day. That is the reality of statistical agencies being underfunded, of ministries not sharing data with each other, and of some large countries – in developing and advanced countries alike – resisting sharing their data.

It was fascinating to hear the views of Mustapha Nabli, who now heads Tunisia’s central bank, regarding how transparency and accountability of governments to citizens is linked to the accuracy of country statistics. He highlighted how important this issue was for Tunisia as it moved through a wrenching revolution. People need to trust the growth numbers and have some say in how data are disseminated.

Desire Vencatachellum, Director for Research at the African Development Bank, stressed that the telling of development stories through data and knowledge can be even more compelling if the narrative comes from Africans themselves. In this sense, having African academics, researchers and policymakers heard at every level and empowering them to communicate is essential. As he said, the distance between work in the field and sophisticated development theory is still often too far.

Martine Durand, who heads the data and statistics team at OECD, spoke about the Better Life index and its potential for democratizing development economics as well. She talked about how the index grew out of an intensive consultative process and about how it allows users to compare well being based on 11 dimensions.

Breakthrough work deploying young people in India as part of an annual ‘Status of Education’  report to collect data on educational attainment in several states in India was described by Esther Duflo of JPAL at MIT. She explained how the pioneering work of the grassroots group Pratham, was successfully adapted and applied in a slightly different manner in several African countries.

Martin Ravallion, Director of Research at the Bank, talked about how Open Data is transforming the way we share statistics and research and about how important it is to get the tools for undertaking original research into the hands of a wider group of up and coming students and researchers in the developing world.

So the globalization of development thinking took a few more strides in the right direction and I hope readers will check out the rich ABCDE website where many new papers and presentations, as well as webcasts, can be downloaded.