Economic Development: What Everyone Needs to Know® 2nd Edition

Book Preface

Imagine that you want to get a feel for modern surgery. You may be an undergraduate student pondering medical school. Or a journalist researching a story about the new, cool things medicine can do. Or a politician trying to sound credible on healthcare reform. You may be one of those patients who wants to understand what the doctors are about to do to her. You could also be an experienced family physician who needs a quick refresher on the latest surgical techniques— which you may rarely practice. What is the best and fastest way to go about it? Simple: you get a friendly surgeon to lend you scrubs, take you inside the operating room, and let you witness a few actual operations. No lectures, no theories, no jargon— just a direct glance at the real thing. Well, that is in essence what this book does for those who are interested in economic development.

A series of short questions and answers, written in kitchen- table language, explain the issues that policymakers face, tell what the most promising instruments are in helping societies prosper, and show the limits of what we know. In fact, the idea is to get you to the frontier of the development profession, the point at which knowledge stops and ignorance starts, and to share with you what we don’t know and make you think for yourself.

That frontier of knowledge changes all the time. Which is why this is the second edition of this book. The first was published in early 2014, and already much has been newly learned from practice. So I added twenty new questions and updated many of the answers to the questions we had before.

Like its predecessor, this second edition will have no master conceptual framework. There will be no formulae, tables, or charts either. Rather, we will talk, first about governments— after all, they are the ones who make decisions on policy— and about how they so frequently fail at what they do. We will then turn to the kind of economic policies without which no country can make it. Here is where technical orthodoxy will be translated into common sense— think about “macroeconomic consistency,” “balanced budgets,” and “monetary stability” as making ends meet for a country as a whole. From there, we will look at the excitement and the frustration that new tools and new realities are bringing to poverty reduction, social inclusion, education, health, technology, infrastructure, foreign aid— you name it. In the end, we will see all these tools in action in the region that represents development— and the need for it— better than any other: Africa. If, after all that, you are thirsty for more information, you will find a bibliography of suggested further readings. Some of them are classic, must- read books. Some are journal articles that changed the way economists think. And many are available online for free.

Three disclaimers before we go into the operating room. First, earlier versions of these essays have been published as blogs, opinion editorials, or both, in print or online. And I have tested the ideas in this book during dozens of lectures and speeches at universities in Africa, Asia, Europe, Latin America, and the United States. This allowed people to comment and allowed me to learn from those comments.