# Development Economics

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Category: Economics
Slides: 32
Updated: 2026-05-17T20:51:56.007Z
Tags: economics, development

## Summary

Why are some nations rich and others poor? A journey through the theories, evidence, and policy experiments that seek to end global poverty. Key sections include: Development Economics; Table of Contents; The Scale of Global Poverty; The Great Divergence; Origins of the Field: 1940s-1960s; The Harrod-Domar and Solow Models; Structural Transformation; Import Substitution Industrialisation (ISI); The Washington Consensus (1989); Structural Adjustment: A Mixed Record.

## Slide Outline

1. Development Economics
2. Table of Contents
3. The Scale of Global Poverty
4. The Great Divergence
5. Origins of the Field: 1940s-1960s
6. The Harrod-Domar and Solow Models
7. Structural Transformation
8. Import Substitution Industrialisation (ISI)
9. The Washington Consensus (1989)
10. Structural Adjustment: A Mixed Record
11. Institutions: The Deep Cause of Development
12. Geography vs. Institutions vs. Culture
13. The RCT Revolution
14. The Aid Debate
15. The East Asian Miracle
16. Industrial Policy: Back in Fashion
17. China's Development Model
18. The Middle-Income Trap
19. Human Capital: Education
20. Human Capital: Health
21. Microfinance: Promise and Reality
22. Cash Transfers: Just Give Money
23. Trade and Development
24. Natural Resources: Curse or Blessing?
25. Gender and Development
26. Climate Change and Development
27. Technology Leapfrogging
28. Migration and Remittances
29. The Sustainable Development Goals
30. Africa Rising? The Next Development Frontier
31. Key Thinkers in Development Economics
32. Reading List

## Slide Transcript

### Slide 1: Development Economics

- Why are some nations rich and others poor? A journey through the theories, evidence, and policy experiments that seek to end global poverty.
- 32 slides • Scroll or use arrow keys
- 1 / 32

### Slide 2: Table of Contents

- The Scale of Global Poverty
- Origins of the Field
- Classical Growth Theories
- Structural Transformation
- Import Substitution & Its Legacy
- The Washington Consensus
- Institutions and Development
- Geography, Culture, and Luck
- The Microeconomic Revolution (RCTs)
- Aid: Does It Work?
- Trade, Industrialisation, and the East Asian Miracle
- Human Capital: Education & Health
- The China Development Model
- Climate Change and Development
- The Future of Development
- Reading List
- 2 / 32

### Slide 3: The Scale of Global Poverty

- ~700MPeople below $2.15/day (2024 World Bank extreme poverty line)
- 3.5BPeople below $6.85/day (lower-middle income threshold)
- $63K vs $500GDP per capita: Luxembourg vs Burundi
- 126:1Ratio of richest to poorest country GDP per capita
- The good news: extreme poverty has fallen dramatically -- from ~36% of world population in 1990 to ~9% today. The bad news: progress has stalled since 2020 (COVID, conflicts, climate shocks), and sub-Saharan Africa now accounts for over 60% of the world's extreme poor.
- 3 / 32

### Slide 4: The Great Divergence

- For most of human history, living standards were remarkably similar across civilisations. Then, starting around 1800, a subset of countries pulled radically ahead.
- In 1820, the richest region (Western Europe) was about 3x richer than the poorest (sub-Saharan Africa)
- By 2020, that ratio had widened to roughly 20x
- The Industrial Revolution (starting ~1760 in Britain) was the inflection point, but why it happened there and then remains debated
- Kenneth Pomeranz's "Great Divergence" thesis argues that Europe and China were similarly developed until ~1750; coal and colonies tipped the balance
- Development economics essentially asks: can the divergence be reversed, and how?
- "The consequences for human welfare involved in questions like these are simply staggering: once one starts to think about them, it is hard to think about anything else."
- -- Robert Lucas Jr., "On the Mechanics of Economic Development" (1988)
- 4 / 32

### Slide 5: Origins of the Field: 1940s-1960s

- Development economics emerged as a distinct discipline after World War II, shaped by decolonisation and Cold War rivalry.
- Rosenstein-Rodan (1943)
- "Big Push" theory: poor countries are trapped in low-level equilibria. Coordinated, large-scale investment across sectors is needed to overcome the poverty trap.
- W. Arthur Lewis (1954)
- Dual-sector model: development = shifting surplus labour from low-productivity agriculture to high-productivity industry. Lewis won the Nobel Prize in 1979.
- Walt Rostow (1960)
- "Stages of Growth": all societies pass through 5 stages from traditional to mass consumption. Explicitly anti-Marxist ("A Non-Communist Manifesto").
- Albert Hirschman (1958)
- "Unbalanced growth": development doesn't need to be simultaneous across sectors. Strategic imbalances create incentives for further investment ("linkages").
- 5 / 32

### Slide 6: The Harrod-Domar and Solow Models

- Harrod-Domar (1946)
- Growth = savings rate / capital-output ratio
- Implication: poor countries need more capital (savings or aid) to grow
- Dominated development thinking for decades
- Problem: the "financing gap" model predicted that aid should produce growth proportionally -- it didn't
- William Easterly showed that the model's predictions failed spectacularly across 138 countries
- Solow-Swan (1956)
- Added diminishing returns to capital and technological progress
- Predicts convergence: poor countries should grow faster than rich ones
- The "Solow residual" -- the part of growth not explained by capital or labour -- is technology
- Problem: convergence hasn't happened for most poor countries (only for a select club)
- Led to "endogenous growth" models (Romer, Lucas) in the 1980s-90s
- 6 / 32

### Slide 7: Structural Transformation

- Economic development is fundamentally about shifting an economy from agriculture to manufacturing and services.
- SectorLow-Income CountriesHigh-Income CountriesShift
- Agriculture (% GDP)~25%~1-2%Declining
- Industry (% GDP)~20%~20-25%Rises then falls
- Services (% GDP)~50%~70-75%Rising
- Agriculture (% labour)~55%~2-3%Dramatic decline
- Key challenge today: "premature deindustrialisation" (Dani Rodrik, 2016) -- many developing countries are seeing manufacturing's share peak at much lower levels than East Asia achieved, potentially closing off the pathway that powered the most successful development stories.
- 7 / 32

### Slide 8: Import Substitution Industrialisation (ISI)

- From the 1950s through the 1980s, many developing countries pursued ISI -- protecting domestic industry behind tariff walls.
- The Logic
- Raul Prebisch and Hans Singer argued that commodity exporters face declining terms of trade
- Infant industries need protection to develop before competing globally
- Economic sovereignty requires domestic industrial capacity
- Major practitioners: Brazil, Argentina, Mexico, India, Turkey, Egypt
- The Results
- Initial success: Latin American GDP grew 5.5%/year in the 1960s-70s
- But: protected firms became inefficient, rent-seeking increased
- Chronic fiscal deficits and balance-of-payments crises
- Latin American debt crisis (1982) effectively ended the ISI era
- India's "License Raj" constrained growth to the "Hindu rate" (~3.5%/year) until reforms in 1991
- 8 / 32

### Slide 9: The Washington Consensus (1989)

- Economist John Williamson coined this term to describe 10 policy reforms that Washington-based institutions (IMF, World Bank, US Treasury) recommended for developing countries.
- Fiscal discipline (reduce deficits)
- Redirect public spending toward education, health, infrastructure
- Tax reform (broaden the base, lower marginal rates)
- Market-determined interest rates
- Competitive exchange rates
- Trade liberalisation
- Openness to foreign direct investment
- Privatisation of state enterprises
- Deregulation
- Secure property rights
- Legacy: Became shorthand for "neoliberal" reforms. Some elements sensible (fiscal prudence, property rights), others controversial (rapid privatisation, financial liberalisation). The "one-size-fits-all" approach was widely criticised.
- 9 / 32

### Slide 10: Structural Adjustment: A Mixed Record

- IMF and World Bank "structural adjustment programs" (SAPs) conditioned loans on Washington Consensus reforms, particularly in Africa and Latin America during the 1980s-90s.
- Supporters' View
- Reforms stabilised economies after crises, reduced inflation, improved fiscal sustainability, and opened markets. Countries that reformed (e.g., Chile, Poland) eventually thrived.
- Critics' View
- SAPs slashed health and education spending, increased inequality, and prioritised creditor repayment over citizen welfare. Joseph Stiglitz called it "market fundamentalism."
- Africa's "Lost Decades"
- Sub-Saharan Africa's GDP per capita fell from 1980 to 2000 despite extensive structural adjustment. Many countries were poorer after decades of reform.
- Lessons
- Context matters enormously. Rapid liberalisation without institutional capacity can be destructive. Sequencing and local ownership of reforms matter more than any checklist.
- "Globalisation today is not working for many of the world's poor."
- -- Joseph Stiglitz, Globalization and Its Discontents (2002)
- 10 / 32

### Slide 11: Institutions: The Deep Cause of Development

- Daron Acemoglu and James Robinson's work (culminating in the 2024 Nobel Prize) argues that institutions are the fundamental driver of economic differences.
- Inclusive Institutions
- Secure property rights for the broad population
- Rule of law and contract enforcement
- Open markets with equal opportunity to participate
- Political pluralism and constraints on elites
- Examples: South Korea, Botswana, Costa Rica
- Extractive Institutions
- Power and resources concentrated in a narrow elite
- Weak property rights for most citizens
- Monopolies, corruption, and rent-seeking
- Political repression to maintain elite control
- Examples: colonial Congo, Zimbabwe under Mugabe, North Korea
- Historical persistence: Colonial institutions shaped modern outcomes. Countries where colonisers settled (US, Australia) got inclusive institutions; those exploited for extraction (Congo, Peru) got extractive ones -- and these patterns persisted for centuries.
- 11 / 32

### Slide 12: Geography vs. Institutions vs. Culture

- What explains development differences? Three competing (and complementary) theories.
- Geography (Jeffrey Sachs)
- Tropical diseases (malaria), landlocked location, poor soil, and distance from trade routes impose real costs. Africa's geography handicap may reduce GDP per capita by 30-50%. But geography doesn't explain everything: Singapore and Hong Kong thrive in the tropics.
- Institutions (Acemoglu et al.)
- Natural experiments support institutional causation. North/South Korea, East/West Germany, and the US-Mexico border show that the same geography produces vastly different outcomes under different institutions.
- Culture (Weber, Landes)
- Max Weber's "Protestant ethic" thesis. David Landes argued that cultural values -- trust, work ethic, openness to innovation -- matter for growth. Hard to measure and risks tautology ("rich cultures value wealth").
- Synthesis
- Most development economists today see these as interacting factors. Geography may influence institutional formation, which shapes cultural norms, which reinforce institutions. Path dependence makes initial conditions sticky.
- 12 / 32

### Slide 13: The RCT Revolution

- Abhijit Banerjee, Esther Duflo, and Michael Kremer won the 2019 Nobel Prize for bringing randomised controlled trials (RCTs) to development economics.
- The idea: treat development interventions like medical trials. Randomly assign villages or individuals to treatment/control groups and measure impact rigorously.
- Deworming: Kremer's Kenya study showed that deworming pills (~$0.50/child/year) increased school attendance by 25% -- one of the most cost-effective interventions ever found
- Microcredit: RCTs across 6 countries showed that microcredit has modest effects on poverty, challenging decades of hype around microfinance
- Conditional cash transfers: Mexico's PROGRESA/Oportunidades (1997) showed that paying poor families to keep children in school and visit clinics works. Replicated in 60+ countries
- J-PAL (MIT's Abdul Latif Jameel Poverty Action Lab, founded 2003) has run 1,000+ RCTs in 90+ countries, influencing policies affecting 600 million people
- 13 / 32

### Slide 14: The Aid Debate

- Pro-Aid
- Jeffrey Sachs: extreme poverty is a "poverty trap" that aid can break. The UN Millennium Villages Project aimed to prove this
- Aid has eradicated smallpox, nearly eradicated polio, dramatically reduced child mortality
- Global aid totals ~$210 billion/year (2023) -- less than Americans spend on pet food
- GiveDirectly's cash transfer studies show that simply giving money to the very poor produces lasting benefits
- Anti-Aid
- William Easterly: $5 trillion in aid over 50 years has failed to produce consistent growth
- Dambisa Moyo (Dead Aid): aid creates dependency, empowers corrupt governments, and undermines local markets
- Angus Deaton: aid bypasses the social contract between governments and citizens
- "Dutch disease" effects: aid inflows can appreciate currencies and harm exports
- "Asking whether aid works is like asking whether surgery works. It depends on the surgery, the surgeon, and the patient."
- -- Various attributions
- 14 / 32

### Slide 15: The East Asian Miracle

- The most successful development stories in history -- Japan, South Korea, Taiwan, Singapore, Hong Kong -- share striking commonalities.
- 1960s-70s -- Japan leads the "flying geese" pattern, moving from textiles to steel to electronics to automobiles
- 1962 -- South Korea's per capita GDP ($87) was lower than Ghana's. Park Chung-hee launches export-oriented industrialisation
- 1965 -- Singapore gains independence; Lee Kuan Yew transforms a swamp-port into a global financial centre
- 1970s-80s -- Taiwan develops world-class semiconductor industry (TSMC founded 1987)
- 1997 -- Asian Financial Crisis tests the model; countries recover within 2-3 years
- 2024 -- South Korea's GDP per capita exceeds $35,000; Samsung, Hyundai, and SK are global giants
- Common elements: high savings rates, investment in education, export discipline, selective industrial policy, land reform, competent bureaucracy.
- 15 / 32

### Slide 16: Industrial Policy: Back in Fashion

- After decades of dismissal by mainstream economists, industrial policy is experiencing a global renaissance.
- What Is It?
- Government interventions to promote specific industries or economic activities. Includes tariffs, subsidies, tax incentives, state-owned enterprises, and technology transfer requirements.
- Historical Success
- Every successful industrialisation (Britain, US, Germany, Japan, Korea, China) involved significant state intervention. Ha-Joon Chang's Kicking Away the Ladder documents how today's rich countries used the very policies they now tell poor countries to avoid.
- The New Wave
- The US CHIPS Act ($52B for semiconductors), EU Green Deal, and India's PLI scheme represent a return to industrial policy even in rich countries. The development world is watching closely.
- Risks
- "Picking winners" often becomes "losers picking themselves" through political lobbying. Corruption, rent-seeking, and white elephant projects are real dangers. Success requires institutional capacity that many countries lack.
- 16 / 32

### Slide 17: China's Development Model

- China's rise is the most consequential development event in history: 800 million people lifted from extreme poverty in 40 years.
- 10%Average annual GDP growth, 1978-2010
- 88% → 0.2%Extreme poverty rate: 1981 vs 2020
- $156 → $12,500GDP per capita: 1978 vs 2023
- 1978: Deng Xiaoping begins "Reform and Opening Up" -- household responsibility system in agriculture, Special Economic Zones (Shenzhen)
- Township and Village Enterprises bridged plan and market, creating millions of jobs
- Gradualism: "crossing the river by feeling the stones" -- incremental reform rather than shock therapy
- State capitalism: heavy state direction of investment, technology acquisition, and industrial upgrading
- Questions: Is the model replicable? Can it survive the middle-income trap? What about political freedom?
- 17 / 32

### Slide 18: The Middle-Income Trap

- Many countries that successfully moved from low to middle income have stalled there for decades.
- CountryYear Reached Middle IncomeCurrent Status
- South Korea~1977High income (escaped by ~1995)
- Brazil~1975Still upper-middle income
- Mexico~1974Still upper-middle income
- Malaysia~1978Upper-middle (approaching high)
- Thailand~1988Upper-middle income
- China~2010Upper-middle; trajectory uncertain
- Why it happens: low-wage advantage erodes, but innovation capacity hasn't developed. The shift from imitation to innovation, from accumulation to productivity, is the hardest transition in development.
- 18 / 32

### Slide 19: Human Capital: Education

- Education is both a goal of development and a means to it. The "human capital revolution" places it at the centre of growth theory.
- Returns to schooling: each additional year of education raises earnings by ~8-13% globally (Psacharopoulos & Patrinos, 2018), with the highest returns in the poorest countries
- Quantity vs. quality: developing countries have achieved near-universal primary enrollment, but learning outcomes remain dismal. The World Bank's "learning poverty" measure: 57% of 10-year-olds in low/middle-income countries cannot read a simple text
- Girls' education: possibly the single highest-return development investment. Educated women have fewer children, healthier families, and higher earnings. Each year of secondary schooling reduces child marriage by 5-10%
- The PISA shock: international test scores reveal that students in many developing countries are 3-5 years behind peers in rich countries, even controlling for years of schooling
- Teaching at the Right Level (Pratham, India) -- one of the most effective educational interventions identified by RCTs, targeting instruction to actual rather than grade-level ability
- 19 / 32

### Slide 20: Human Capital: Health

- Health and development are deeply intertwined -- in both directions.
- Disease Burden
- Malaria alone reduces GDP growth in affected African countries by an estimated 1.3 percentage points per year. HIV/AIDS reduced life expectancy in Southern Africa from 62 to 49 years in two decades.
- Child Mortality
- Under-5 mortality has fallen from 93/1000 (1990) to 37/1000 (2022) -- one of development's greatest achievements. Simple interventions: oral rehydration therapy, vaccines, bed nets, clean water.
- Nutrition
- Stunting (low height for age) affects 148 million children under 5. It permanently reduces cognitive ability and lifetime earnings. The first 1,000 days (conception to age 2) are critical.
- Demographic Transition
- As health improves, mortality falls before fertility, causing a population boom. If fertility then falls (with education and contraception), a "demographic dividend" of working-age adults can accelerate growth -- as happened in East Asia.
- 20 / 32

### Slide 21: Microfinance: Promise and Reality

- Microfinance -- tiny loans to the poor, pioneered by Muhammad Yunus and Grameen Bank (Bangladesh, 1983) -- was once hailed as the silver bullet for poverty.
- Yunus won the Nobel Peace Prize in 2006; by then, microfinance served 100+ million borrowers worldwide
- The promise: give poor entrepreneurs access to credit, and they'll lift themselves out of poverty
- The evidence: Six landmark RCTs (2015) across India, Bosnia, Ethiopia, Mexico, Mongolia, and Morocco found that microcredit has some positive effects on business investment but no measurable impact on poverty, income, education, or women's empowerment
- The Andhra Pradesh crisis (2010): aggressive lending by for-profit microfinance institutions led to over-indebtedness and farmer suicides
- The pivot: the field has shifted toward microsavings, microinsurance, and mobile money -- which RCTs show have clearer positive effects
- "Microcredit is a useful tool, but it is not the transformative miracle its advocates claimed."
- -- Esther Duflo
- 21 / 32

### Slide 22: Cash Transfers: Just Give Money

- A growing body of evidence supports one of the simplest interventions: giving cash directly to the poor.
- Conditional Cash Transfers
- Mexico's PROGRESA (1997): payments to mothers conditional on children's school attendance and health check-ups. Increased enrollment, reduced stunting
- Brazil's Bolsa Familia (2003): reached 14 million families; credited with halving extreme poverty
- Now operating in 60+ countries
- Unconditional Cash Transfers
- GiveDirectly (founded 2008): sends cash via mobile money to extreme poor in Kenya, Uganda, Rwanda
- RCTs show: recipients invest in assets, start businesses, improve nutrition. No increase in alcohol or tobacco spending
- Cost-effectiveness: ~90 cents of every dollar reaches recipients (vs. ~30-50 cents for traditional aid)
- The evidence suggests that the poor generally make good decisions about how to spend money -- challenging paternalistic assumptions that have long dominated development aid.
- 22 / 32

### Slide 23: Trade and Development

- The relationship between trade openness and development remains one of the most debated questions in economics.
- The Orthodox View
- Trade is good for growth. David Ricardo's comparative advantage; Sachs & Warner (1995) found that "open" economies grew 2.5 percentage points faster. The WTO and bilateral trade agreements aim to liberalise.
- The Heterodox View
- Dani Rodrik: "trade rules of the game are set by rich countries for rich countries." Commodity-dependent countries face volatile prices and declining terms of trade. Agricultural subsidies in the US and EU undermine developing country farmers.
- Global Value Chains
- Modern trade is about tasks, not goods. A single iPhone involves 43 countries. Developing countries can plug into GVCs without building full industries -- but they may be locked into low-value assembly.
- AfCFTA
- The African Continental Free Trade Area (2021) creates a single market of 1.4 billion people. Intra-African trade is only ~15% of total (vs. 60% in Europe). Potential to boost African GDP by $450B by 2035.
- 23 / 32

### Slide 24: Natural Resources: Curse or Blessing?

- The "resource curse" (paradox of plenty) suggests that natural resource wealth often hinders development.
- Dutch Disease: resource exports appreciate the currency, making other exports uncompetitive. Named after the Netherlands' experience after discovering North Sea gas in the 1960s
- Rent-seeking: resource rents attract corruption and conflict. Oil-rich Nigeria has lower GDP per capita than in 1970 despite earning $600B+ in oil revenues
- Institutional decay: governments funded by resources don't need to tax citizens, weakening the accountability link. "No taxation, no representation"
- Volatility: commodity price swings make fiscal planning impossible
- Exceptions: Botswana (diamonds), Norway (oil), Chile (copper) managed resources well through strong institutions and sovereign wealth funds
- The key: resources are neither curse nor blessing -- institutions determine whether resource wealth is invested or squandered
- 24 / 32

### Slide 25: Gender and Development

- Gender equality is both a goal of development and a powerful accelerant of it.
- $172TGlobal loss from gender gaps in lifetime earnings (World Bank, 2018)
- 2/3Of the world's illiterate adults are women
- 40%Of women in South Asia are married before age 18
- Amartya Sen's "missing women": over 100 million women are "missing" from the world population due to sex-selective abortion, infanticide, and neglect in healthcare
- Women's labour force participation: closing the gender gap could increase GDP by 26% globally (McKinsey)
- Political representation: Rwanda leads the world with 61% women in parliament. Rwanda's post-genocide constitution mandated 30% women's representation
- Self-Help Groups (India): 85 million women in SHGs manage savings and credit collectively, demonstrating the power of women's collective action
- 25 / 32

### Slide 26: Climate Change and Development

- Climate change threatens to reverse decades of development gains, and it hits the poorest hardest.
- Unequal Burden
- The poorest 50% of the world's population produces 12% of emissions but bears ~75% of climate-related income losses. Sub-Saharan Africa contributes ~4% of global emissions but faces the most severe impacts.
- Growth Impact
- Burke et al. (2015): unmitigated warming could reduce global GDP per capita by 23% by 2100, with the poorest countries losing 75%+. Every 1C of warming reduces poor country GDP growth by ~1.2 percentage points.
- Adaptation Needs
- UNEP estimates developing countries need $140-300 billion/year for adaptation by 2030. Current adaptation finance flows are ~$21 billion. The gap is enormous.
- Just Transition
- Can developing countries industrialise without fossil fuels? Renewable energy costs have plummeted (solar down 90% since 2010), but baseload power and industrial heat remain challenges.
- 26 / 32

### Slide 27: Technology Leapfrogging

- Developing countries can sometimes skip intermediate technologies and jump to the frontier.
- Mobile phones: Africa went from 2% phone penetration (2000) to 80%+ (2023) without ever building landline networks. Mobile money, mobile health, mobile education followed
- Solar energy: off-grid solar home systems are bringing electricity to 150+ million people who may never connect to a centralised grid. Pay-as-you-go models make it affordable
- Digital ID: India's Aadhaar system (1.4 billion biometric IDs) enables direct benefit transfers, reducing leakage from welfare programs by an estimated 40%
- Fintech: Kenya's M-Pesa, India's UPI (Unified Payments Interface), and Brazil's Pix are creating financial infrastructure that leapfrogs traditional banking
- AI: early applications in crop disease detection (PlantVillage), medical diagnosis (Ada Health), and language translation could disproportionately benefit developing countries
- "The stone age did not end for lack of stone, and the oil age will end long before the world runs out of oil."
- -- Sheikh Ahmed Zaki Yamani, former Saudi oil minister
- 27 / 32

### Slide 28: Migration and Remittances

- International migration is one of the most powerful -- and politically contentious -- forces in development.
- $656BRemittances to low/middle-income countries (2023)
- 3xRemittances vs. total foreign aid
- 281MInternational migrants worldwide (2023)
- Remittances are now the largest source of external finance for many developing countries, exceeding FDI and aid combined
- For some countries, remittances exceed 30% of GDP: Tonga (44%), Lebanon (36%), Tajikistan (32%)
- Michael Clemens estimates that opening borders would roughly double world GDP -- the "trillion-dollar bills on the sidewalk"
- Brain drain vs. brain gain: emigration of doctors and engineers hurts sending countries, but diaspora networks also transfer knowledge, capital, and connections back home
- 28 / 32

### Slide 29: The Sustainable Development Goals

- The UN's 17 Sustainable Development Goals (2015-2030) represent the current global development framework, succeeding the Millennium Development Goals.
- Progress
- Child mortality down 50% since 2000
- Maternal mortality down 34%
- Access to electricity: 91% globally (up from 83% in 2010)
- HIV treatment: 29 million people on antiretrovirals
- Behind Schedule
- Only 15% of SDG targets are on track for 2030
- Hunger is increasing (735M undernourished in 2022)
- Climate targets far off course
- COVID reversed 3-4 years of poverty reduction progress
- Financing Gap
- Achieving the SDGs requires an estimated $4.2 trillion/year in developing countries. Current spending: $1.4 trillion. The $2.5 trillion annual gap dwarfs available aid.
- Critique
- 169 targets may be too many to be useful. No binding enforcement mechanism. Some goals conflict (growth vs. environment). William Easterly: "the SDGs are everything and therefore nothing."
- 29 / 32

### Slide 30: Africa Rising? The Next Development Frontier

- Sub-Saharan Africa's 1.2 billion people represent both the world's greatest development challenge and its greatest opportunity.
- Reasons for Optimism
- GDP growth averaged 4.6% from 2000-2014 ("Africa Rising")
- Youngest population on Earth: median age 19 (vs. 38 in Europe)
- Mobile technology adoption creating new economic possibilities
- AfCFTA creating a continental single market
- Democratic governance improving (though unevenly)
- Reasons for Caution
- Growth slowed after 2015 commodity price crash
- Population doubling by 2050 (2.5B) strains services
- Job creation lags far behind youth entering labour market
- Debt distress rising (60% of low-income African countries at high risk)
- Climate change impacts accelerating
- 30 / 32

### Slide 31: Key Thinkers in Development Economics

- EconomistKey ContributionNotable Work
- W. Arthur LewisDual-sector model; surplus labourNobel Prize 1979
- Amartya SenCapability approach; development as freedomNobel Prize 1998
- Dani RodrikGlobalisation's limits; premature deindustrialisationThe Globalization Paradox
- Ha-Joon ChangHeterodox critique; historical industrial policyKicking Away the Ladder
- Esther DufloRCTs for poverty reductionNobel Prize 2019
- Daron AcemogluInstitutions as fundamental cause of developmentNobel Prize 2024
- Jeffrey SachsBig Push; end of poverty advocacyThe End of Poverty
- William EasterlyAid skepticism; "searchers vs. planners"The White Man's Burden
- 31 / 32

### Slide 32: Reading List

- Foundational
- Amartya Sen -- Development as Freedom (1999): development means expanding human capabilities, not just GDP
- Acemoglu & Robinson -- Why Nations Fail (2012): institutions determine wealth and poverty
- Banerjee & Duflo -- Poor Economics (2011): rethinking poverty through RCTs
- Critical Perspectives
- William Easterly -- The Elusive Quest for Growth (2001): why development panaceas fail
- Ha-Joon Chang -- Bad Samaritans (2008): why free trade isn't always best for developing nations
- Dambisa Moyo -- Dead Aid (2009): the case against traditional aid
- Country Studies
- Joe Studwell -- How Asia Works (2013): land reform, industrial policy, and financial discipline
- Yuen Yuen Ang -- How China Escaped the Poverty Trap (2016): directed improvisation in Chinese reform
- Stefan Dercon -- Gambling on Development (2022): why some countries win and others lose
- Contemporary
- Branko Milanovic -- Global Inequality (2016): inequality between and within nations
- Banerjee & Duflo -- Good Economics for Hard Times (2019): applying evidence to policy debates
- Angus Deaton -- The Great Escape (2013): how the world became unequal
- 32 / 32


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