Gambling on Development

Stefan Dercon argues that the answer lies not in specific policies but rather in a key ‘development bargain,’ whereby a country’s leaders shift from protecting their own interests to gambling on a growth-based future. Despite its imperfections, China is among the most striking recent success stories, along with Indonesia and Ethiopia.

This book is about these choices, in contrast to countries stuck in a bad equilibrium. I loved the global experience Dercon drew on, ranging from Ebola in Sierra Leone, scandals in Malawi, beer factories in the Congo, mobile phone licenses in Mozambique, and humanitarian aid in Sudan.

There is a lot of talk about why some societies are successful while others are not. Why do some remain poor while others stumble on a path to growth and development? Often the excuse it is someone else’s fault. Stefan Dercon’s is an unusual voice in this rather noisy crowd, with his simple claim that growth happens when its leaders want society to succeed rather than just profit themselves. To do so, they must gamble on increasing the size of the economic pie rather than carving up the one that already exists. This is risky. Politicians often claim that they… show more.