Justine Greening sounded very pleased with herself this morning for discovering this thing called "economic development." Very impressive stuff from an "International Development" Minister. Actually the policy changes all sounds pretty reasonable and balanced. I like the talk of new partnerships between UK accountants, insurers, Stock Exchange folks, major retailers, and their counterparts in developing countries. Perhaps just a few things rankled:
"For the first time we have financed business projects in developing countries through returnable loans…which means our money comes back when businesses are successful."Isn't that what the CDC has been doing since 1948?
"Smart aid can take the form of building a better tax regime, helping to reduce trade barriers, or giving entrepreneurs and small businesses an economic launchpad.
It can also be focusing on what the Prime Minister calls the Golden Thread. In other words, helping to build the institutions, the values by which individual rights to liberty and property are safeguarded…elements that represent a green light to companies thinking about investing in a frontier economy."I buy that aid can help improve tax regimes (look at Rwanda and Burundi) and reduce trade barriers. But build institutions? If the lesson you got from Acemoglu and Robinson is that aid can build institutions, I'm pretty sure you're reading it wrong.
"I’m acutely aware that Britain’s future economic strength depends on us increasing our global exports ... We all recognise the importance of the world’s new emerging powers ... But what about tomorrow’s BRICS and MINT countries? ... we could wait until these markets have grown, until they are less risky and the opportunities are more obvious. ... But how much better to start our relationships with these countries sooner rather than later."Which is basically fine in practice, but perhaps we should be careful about our language given that actually we started our relationships with most of these countries some time ago ...
... and that in many cases our self-interested engagement with developing countries didn't work out so well for them (see for example the mysterious case of the disappearing Indian colonial-era textile industry).
"As the Prime Minister has said, we’re in a global race and if we want to be ahead of the game, we can’t simply follow the crowd."TOO MANY METAPHORS. And finally:
"Smart"Does repeating the word 11 times make it so?