Nations that have achieved rapid growth and poverty reduction, such as Bangladesh and Ghana, are doing so thanks to their affluent elites and not to outside help, says Stefan Dercon. Stefan Dercon’s new book, Gambling on Development. Photo: PR In his new book, Gambling on Development, Dercon, a former chief economist at the most inactive Department of International Development (DfID), says that successful development requires “a development agreement” – a commitment from a country’s elite. Dercon credits growth in countries such as China, India, Vietnam, Indonesia and Rwanda not to an enlightened leader but to wealthy elites motivated to bring about change. His argument is that aid will bring little or no return to countries without it. “If you look at the bigger picture of change, help was almost irrelevant,” he said. “It simply came to our notice then. Take a country like India: it has never had more than 1.1% of its GNI [gross national income] as an aid. China got very little. That said, there are countries [with a committed elite] “where aid has played a constructive role, and if you think about Ghana and Bangladesh, aid has worked really well.” Dercon, a professor of economics at Oxford University and director of the Center for the Study of African Economics, was a political adviser to Secretary of State Liz Truss earlier this year, starting the day before DfID merged with the State Department. the Office of Foreign Affairs, Commonwealth and Development (FCDO). Arguing that a political and economic elite has far more actors than institutions, Dercon adds: “Many of the success stories described in this book did not necessarily have strong institutions at the time of takeoff. Think of Bangladesh, with its volatile rental policy, and ostensibly a “basket,” as Henry Kissinger’s advisers called it. We do not support enough countries where they want development and too much in countries where nothing happens “Even China, after the nationalist and Maoist eras, did not have strong institutions to offer the kind of take-off it achieved after 1979.” Ghana became successful because the political elites “learned quickly [in the 1990s] to respect democracy, which has created great stability. “ Ethiopia was also doing well, but “failed” after being “declared by the IMF as the fastest growing economy in the world between 2010 and 2019”. “Ethiopia’s progress was amazing at the time,” Dercon said, “but somehow they did not bring the elite together, so the bet was not made.” “The political agreement on which the development elite is based, this balance in Ethiopia, has disappeared.” By contrast, Nigeria and Malawi have remained poor. “If you look at Malawi, there is no objective reason why it should be as poor as this. He had 60 years of peace. “They have democracy and they make transitions of power, but all the time you return more or less the same people to the elite and the only thing that seems to interest them is, more or less, the status quo.” Poverty in Nigeria and the Democratic Republic of the Congo, he said, has been exacerbated by access to easy economic returns from oil and minerals to fund the elite, offering little incentive to commit to the more difficult pursuit of development. Dercon, who said he wrote the book not as an academic but as a professional, has hope for the future of Senegal, Cφανte d’Ivoire, Kenya and – more recently – Tanzania and Zambia. “We probably do not support enough countries where they really want to grow, and we are very supportive, probably, of countries where nothing is happening.” He said he was not worried about DfID disappearing. “I do not think merger alone is the problem – probably the downfall of DfID is not something that is highly regarded internationally because people have respected it. “Of course, the biggest damage has been caused by the huge cut in aid: the merger has become much more difficult to handle because of the double conflict of things we had to deal with.” Sign up for a different view with our Global Dispatch newsletter – a collection of our top stories from around the world, suggested readings and thoughts from our team on key development and human rights issues, delivered to your inbox every two weeks: Subscribe to Global Dispatch – check your spam folder for confirmation email
