#18 – Stefan Dercon: Gambling on Development - Why Some Countries Win and Others Lose
Stefan Dercon is Professor of Economic Policy at Oxford University, where he also directs the Center for the Study of African Economics. The author of 5 books and many studies, Stefan has had a distinguished career as an academic and policy advisor on economic development. His accomplishments are many. To name just a few: between 2011 and 2017, he was Chief Economist of the Department of International Development (DFID), the government department in charge with the UK’s aid policy and spending; between 2020-2022, he was the Development Policy Advisor to successive Foreign Secretaries at the UK’s Foreign, Commonwealth and Development Office.
Stefan is a virtuoso of development! His approach to our conversation was equal parts exciting and instructive, a style that also comes across in his writing, making his book very hard to put down.
We start by learning about Stefan: his experience growing up in Belgium, being taught by Catholic priests about African socialism, Ujamaa and Julius Nyerere, and Marx and discovering his interest in economics as a means of pursuing development. His early career in Tanzania and Ethiopia highlighted the relationship between risk and poverty and the need to consider uncertainty when engaging in policy advice or research. We then shift to talking about the four propositions that compete as diagnoses of core problems of poverty and development that Stefan outlines in his book: poor initial endowments, market failures that trap the poor in poverty, market failures that are costly for poor countries, weak institutions. He gives us an overview and tells us why the propositions fall short on explaining the successes and failures of development. We also talk about the most important trends in development in recent decades: the dramatic decrease in poverty globally, the Africanization of poverty, and the increasing concentration of poverty in fragile states.
The conversation then turns to the elites, what values drive them, and why would they gamble on a development bargain. We talk about the role of natural resources, political systems, and how external actors can influence the emergence of development bargains. We also discuss the role of Western and Chinese elites in development bargains and what is good policy advice.
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Stefan Dercon
Website: https://www.bsg.ox.ac.uk/people/stefan-dercon
X: https://twitter.com/gamblingondev
LinkedIn: https://uk.linkedin.com/in/stefan-dercon-45927b104
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Mihaela Carstei, Paul M. Bisca, and Johan Bjurman Bergman co-host F-World: The Fragility Podcast.
X: https://twitter.com/fworldpodcast
Instagram: https://www.instagram.com/fworldpodcast/
Website: https://f-world.org
Music: "Tornado" by Wintergatan. This track can be downloaded for free at www.wintergatan.net.
Video editing by: Alex Mitran - x.com/alexmmitran, linkedin.com/in/alexmmitran
EPISODE RESOURCES
Stefan Dercon, “Gambling on Development: Why some Countries Win and Others Lose,” Hurst, London, 2022. https://www.gamblingondevelopment.com
TIMESTAMPS:
00:00:00 Intro
00:01:24 Stefan’s background
00:02:49 Economics of poverty
00:04:16 Connection between risk & poverty
00:08:16 Brief overview of development thinking
00:14:57 Recent trends in development
00:19:55 The Africanization of poverty & What is fragility
00:25:39 The problem of fixed mental models of fragility
00:28:47 Who are the elites
00:41:11 The gambling in development bargains
00:47:24 What values drive the elites
00:54:25 Natural resource & political systems in dev. bargains
00:58:51 The role of Western & Chinese elites in dev. bargains
01:09:14 Are the elite bargains in the West still dev. bargains
01:19:09 Citizens’ role in dev. bargains
01:29:22 External actors & the emergence of dev. bargains
01:41:28 “Peace is ugly” – can international institutions accept it
01:51:20 Development is 50% history & 50% agency
02:00:40 Private sector role in the dev. bargain
02:09:48 What is good policy advice
02:19:56 Wrap-up
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