On May 13 and 14, 2010, UNU-WIDER invited around 200 development economists from all over the world to Helsinki to celebrate WIDER's 25th anniversary, assess the implications of the unfolding triple crisis--Food, Finance, and Climate Change--and correspondingly map its future role in development economics. This was an appropriate time as the crises and the responses to the crises are major turning points, contributing to the emergence of a new order for international economic development. This new order needs to be clearly understood by UNU-WIDER and the development economics profession if they are to effectively assist international economic development in the years to come.
What the anniversary presentations and discussions confirmed is that development economics--at least as represented by participants to the event--has importantly changed its focus away from the macro-market-public goods perspective that emerged in response to the debt crisis of 1985 toward giving greater attention to the structural transformation of the developing economies with a strong role for state guidance, regulation, and public-private partnerships. With the greatest development challenge today found in Africa, the main question discussed was how will countries in that continent diversify their economies away from agriculture and achieve sustainable industrialization?
This is, to a significant extent, the same fundamental question that was asked in the 1960s and 1970s by the pioneers in development economics such as Hirschman, Kuznets, and Chenery before the debt crisis led development economists to address questions of stabilization and adjustment under the guidance of the Washington Consensus. Structural transformation--the process through which countries transform from poor agrarian to wealthy industrial economies--calls upon recognizing that markets are essential for growth but have many failures, and that the state has a key role to play in complementing and guiding markets, though it may also fail in fulfilling this function. But how will this be done in the context of the triple crisis, and what is the likelihood of success for Africa? These were major questions debated in Helsinki, with answers that are still controversial and incomplete but that helped better understand where UNU-WIDER and the development profession should now be headed.
What is clear from the current situation is that the large emerging economies--mainly China...