How the world works: jobs and structural transformation as keys to development.

Author:Williamson, Roger

27 August 2014

The themes of the new UNU-WIDER work programme--transformation, inclusion, and sustainability--were the focus of the WIDER Development Conference held in Vietnam in June this year. Each represents a formidable challenge. Taken together, they seem an almost impossible set of conundrums for development. How to transform economies so that labour is employed in productive and fulfilling jobs? How to ensure an inclusive economy that works for the many and not just for the few? How to ensure that sustainability is achieved? Not just that the economy runs without recession and massive dislocation, but that it is also environmentally viable in the long term? This is particularly crucial as the impacts of climate change become more pressing.

Add to these challenging questions the attractions of a top line up of international speakers and a location in one of the most dynamic economies of recent years-plus the drawing power of a top Vietnamese think tank and the UNU-WIDER network--and all the key elements were in place for a top-class conference.

And so it proved.

This article can only cover a few aspects of the event, and I want to focus on some of the research on jobs and structural transformation.

Economics is a social science

World Bank Chief Economist Kaushik Basu is an engaging presenter with a huge amount to tell us. He comes at economic problems with a fresh approach. As he spoke, I was reminded of the old joke that an economist is someone who sees something working in practice, and tells you why it cannot work in theory. Basu is not like that--he wants to find out how and why things work the way they do, what people's motivations are, and how to improve things. Just one example. He told us about a suggestion which he made which created a storm in Indian policy circles. He argued that there is a case for treating some sorts of bribe as non-symmetrical. He cited 'harassment bribes', where you go to a public official for something which you need (for instance, a passport or a licence to do business) and to which you are entitled and it is made clear to you that you will not get it without a 'little extra'. Basu suggested only punishing the bribe taker, the office holder, thereby breaking the incentive structure which otherwise sets up collusion between the bribe giver and bribe taker who would both be punished under the normal set up. He stressed the complexity of making laws which actually work for justice and economic...

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