Ideas Untrapped

Hello, everyone, and this is Ideas Untrapped podcast. In this episode, I explored the challenges of acceptance of free market ideas in Africa with my guest, Tinashe Murapata. We talked about how the struggles of free market ideas can be traced back to historical misinterpretations that link capitalism with colonial oppression. We also discussed the weaknesses of Africa’s electoral politics in prioritizing economic issues and emphasised the need for cultural change to embed economic freedom in public discourse. The conversation concludes with a vision for localized, community-driven solutions to reduce state dependency and encourage market-driven development. Tinashe Murapata is the Chief Executive Officer of Leon Africa, an investment holding company in Zimbabwe. he is also a former executive at Barclays Bank and host of a popular Youtube show called Friday Drinks about economics and policy. Episode Summary Introduction Tobi:Welcome to Ideas Untrapped. It's fantastic to speak to you. I love what you do so much—I’m a huge follower of your YouTube channel. It's nice to speak to a fellow ideas merchant on the continent. So, welcome to the show. Tinashe:Thank you very much. I really appreciate this. The Paradox of Free Markets in Africa Tobi:A couple of weeks ago, I was speaking to an Indian economist on the show, and he said something fascinating. He observed that in America, when he speaks to his colleagues about free markets, they claim the U.S. doesn’t have free markets. Instead, he tells them, “Come to Africa—where you can be in traffic for five minutes, and there are vendors all around trying to sell you one thing or another. That’s the real free market.” I found that interesting. But later that day, ironically—or unironically—I saw a news report that Nigeria’s communication agency was petitioning Elon Musk’s Starlink for increasing prices without government approval. And I laughed—so much for free markets! This got me thinking. Price control and general illiberalism in economic policy are deeply embedded across Africa. You’re from Zimbabwe, I’m from Nigeria, and we see this pattern across the continent. So, my first broad question is: What do you think is holding back the acceptance—or even tolerance—of free market ideas, particularly among the elites and economic policymakers? Historical Misconceptions and African Economic Thought Tinashe:That’s a very good question, Tobi. And thank you again for having me. The answer, I believe, predates us. It’s rooted in Africa’s transition from colonialism to independence. There were two ideological sides at play—the West and the East. Colonialism was associated with the West, which championed capitalism. Meanwhile, the East, which supported African independence, was viewed as the antithesis of capitalism, embracing socialism and communism. This led to the flawed perception that capitalism was the ideology of the colonizer, while socialism was the ideology of liberation. However, this is historically inaccurate. Both socialism and capitalism originated in the West. Karl Marx himself was European, and socialism predates him—it was fervently supported by Europeans. Unfortunately, the narrative that communism and socialism “freed” Africa while capitalism “oppressed” it became ingrained in our political and intellectual culture. That misconception remains a significant obstacle today. To move forward, we need to disentangle ourselves from these historical misinterpretations and critically evaluate which economic system actually leads to human flourishing. And without a doubt, capitalism—particularly from the 18th and 19th centuries—played a key role in advancing global civilisation. The Role of Economics in African Elections Tobi:My next two questions are related. Sometimes, it feels like the economic well-being of Africans isn’t a central issue in electoral politics. Electoral competition on the continent is still more about politics in the traditional sense—identity,...

Welcome to another episode of Ideas Untrapped podcast. My guest on this episode is Raymond Fisman, who is the Slater Family Professor in Behavioural Economics at Boston University. He is one of the foremost researchers on corruption and institutional behaviour in the last three decades, and I have been looking forward to talking to him. The main theme of our conversation was the re-election of Donald Trump as the new U.S president and his swift embrace of corporate oligarchs as his new inner circle and power proxies. We also discussed why corporate America is rushing to fall in line and "kiss the ring". This was an enlightening conversation for me, and I do hope you find it useful as well. I also hope to have Raymond back on the podcast for a more global exploration of the topics he covered. Transcript Tobi: Hi, everybody. This is Ideas Untrapped Podcast. My guest today is Professor Raymond Fisman. He's the Slater Family Professor in Behavioral Economics at Boston University. He's a brilliant, brilliant economist that I've been looking forward to talking to for a while. It's a pleasure to have you, Raymond. Raymond Fisman: It's a pleasure to be here. I'll tell my children that someone said I was brilliant. They'll find that very funny. Tobi: I think the interesting place I would say to start is what was your reaction to the inauguration two days ago? [This conversation was recorded on January 22, 2025 two days after Donald Trump was inauguarated for a second time as the President of the United States of America] I mean, in some kind of mildly amusing horror, like, I would say I was at the open blatant embrace of the core of American government of oligarchy and downstream of that, corruption. What were your thoughts? Raymond Fisman: Yeah, I think it's a little hard to know where to begin because there is so much to say and literally relevant news and so far as self-dealing is concerned, as well as obsequiousness of business elites in the U.S. is coming so quickly that if we had this conversation six hours from now, there'd probably be yet more to say about it. On the one hand, I would say that it was horror, not mildly amused, except that it does almost transcend satire, what's going on, like, you can't make it up sort of thing. But something that I want to be very careful to emphasise throughout is that I really don't want to pin this on a particular party or make this about partisanship, as opposed to we have an individual who has been elected to the highest office in the land, that I think is doing a lot that runs counter to good government. And those are the issues I want to emphasise. And I do think that we've seen a lot of troubling signs. I did not watch the inauguration. I'm following the advice of my friend, Marianne, who said that to stay sane, she just reads the news in a physical newspaper. Otherwise, it just comes at you too often and too fast. But some of the things that have emerged in recent days that are really quite troubling are signals that the U.S. is moving towards a much more, if you like, personalistic approach to policymaking. And there's always been a role for connections in the way the U.S. is governed. But it does feel like it's just going to a different scale. The most recent and high profile example is that of TikTok, where Trump had been in favour of a ban of the app, he met with the CEO and before that, a billionaire Republican mega donor, and he flipped his position on it. Now he is going to be TikTok's saviour. So that's on the one side. On the other side, you see TikTok entirely aware that they need to engage in flattery. So, you know, they personally thanked Trump for his intervention Monday morning after it was brought back from a very brief ban and now has a 90 day extension. But again, Trump has sworn to save it. So it's this kind of very personalised, very public favour trading is clearly sending a message to business that they need to fall in line in order to remain...

Happy New Year to our listeners. This is the first episode of the year, and I had a conversation with Oliver Harman about global value chains (GVCs), foreign direct investment (FDI), and regional governance in economic development. Oliver and I discussed how GVCs have evolved, the crucial role of multinational enterprises in knowledge transfer, and why regional governments—rather than national ones—are often better positioned to shape policies that maximize benefits from global trade. The conversation highlights the importance of GVC-sensitive policies, investment promotion agencies, and upgrading strategies to help economies move up the value chain and develop their economy. Oliver Harman is an economist. He specialises in spatial economics and economic geography. He is a Senior Policy Economist for the International Growth Centre at the London School of Economics and Political Science. He is also a Research Associate at the Blavatnik School of Government, University of Oxford. His book with Ricardo Crescenzi, which was the subject of this podcast, can be found here. Transcript Introduction Tobi:Welcome, Oliver, to Ideas Untrapped Podcast. It's wonderful to have you here. I have to say that your work, along with Riccardo Crescenzi, is one of the most refreshing things I've read in the last couple of years on global value chains. It's a wonderful book. I'll put up links to how people can access it in the show notes, and I think everyone should read it. I want to start with the basics. The phrase global value chain is frequently used in economic discourse, particularly in discussions about geopolitics. But what exactly are global value chains? How would you describe them? What are Global Value Chains? Oliver:Thank you for having me, Tobi, and for your kind words on the book—it is much appreciated. I can provide you with an open-access overview of the book for your listeners who may not be ready to purchase the e-book but want a taste of its content. To answer your question, global value chains (GVCs) have gained prominence academically since the 2000s. Before then, there was little academic literature on them, and even less in policy discussions. This book emerged from that gap. A useful way to conceptualize GVCs is through an evolution of economic thought. Traditionally, economists described trade in terms of final goods—like the classic example of England producing cloth and France producing wine, and then trading them. GVCs, however, break down final goods into intermediate parts. Take the bicycle as an example. Many think of it as a single product, but a Canadian photographer once disassembled one and found 571 intermediate components, all researched, designed, produced, packaged, and marketed in different regions across the world. The same applies to more complex products like smartphones, where an iPhone or Samsung device contains thousands of parts sourced globally. GVCs have completely reshaped how we think about trade—moving beyond final goods to the intricate networks of intermediate goods and services that contribute to production. Evolution of Global Value Chains Tobi:How have global value chains evolved over time? What key events have shaped their trajectory over the past 20 to 30 years? Oliver:That’s a great question. GVCs have gone through different stages of transformation. * 1990s-2000s Boom: Trade became more fragmented, and participation in GVCs surged. Nearly every industry saw increased participation, with 40-50% of trade occurring through GVCs. * Post-2008 Financial Crisis: GVC expansion plateaued. The crisis led to economic restructuring, stabilizing GVC participation at previous levels. * Recent Trends (COVID-19 and Beyond): The pandemic disrupted global supply chains, causing temporary shocks. While GVCs held steady, they are now evolving in response to technological advancements and geopolitical changes. This makes it more critical for economies to find the right GVC for their...

In this episode of Ideas Untrapped we discussed the challenges and complexities of education, economic growth, and public health systems in developing countries with two brilliant guests James Habyarimana and Jishnu Das. We started off with an example on the rapid expansion of tertiary education in India and its unmet promise of better jobs, which led to discussions on similar dynamics in African contexts. The conversation explored the balance between market-driven growth and government intervention, emphasizing the need for robust processes and inclusive dialogues to address inequality, improve infrastructure, and shape a collective vision for the future. James Habyarimana is the Provost Distinguished Associate Professor at the McCourt School of Public Policy. His research is focused on identifying low-cost strategies to address barriers to better health and education outcomes in developing countries. Jishnu Das is a distinguished professor of public policy at the McCourt School of Public Policy and the Walsh School of Foreign Service at Georgetown University. Jishnu’s work focuses on health and education in low and middle-income countries. Transcript Tobi: Welcome to both of you. This is actually the first time on the podcast that i'll be hosting two guests at the same time and i feel so lucky that it's both of you, so welcome to Ideas Untrapped it's fantastic talking to you. Jishnu: Great to be here, Tobi. Glad we're doing this. James: I feel privileged to be sharing this time with both of you. Tobi: Okay, thank you. You can take turn to answer as you choose. What inspired me to do this episode primarily was a very powerful article by Jishnu talking about (00:00:33): college education and how young people may have been shortchanged by the promises (00:00:40): and what the evidence suggests. (00:00:43): So briefly, (00:00:44): if you can just summarise for us, (00:00:48): Jishnu, (00:00:49): what inspired you to write that piece and what were the major findings? (00:00:54): Jishnu: Yeah, sure, Tobi. (00:00:55): And I'll ask James to talk about the African context. (00:00:58): I mean, I know India fairly well. (00:01:00): And one of the things that's so surprising and, you know, when people in the U.S. (00:01:05): or people elsewhere hear it, (00:01:07): they don't realise just how fast college education and college enrolment has (00:01:12): increased in the country. (00:01:14): Right. (00:01:15): So one of the statistics that I got wrong because I couldn't believe it is between 2003 and 2016, (00:01:22): India was building a new college every eight hours, right? (00:01:27): And you think about a number like that and you say, what happened here, right? (00:01:31): It's completely out of the experience that any of us has ever seen. (00:01:36): There's a real, real thirst for education among young people. (00:01:41): And it's not just a certain group. (00:01:44): We are seeing it in all kinds of socioeconomic status, girls, boys, men, women. (00:01:51): And it's interesting, (00:01:52): like in a country like Pakistan, (00:01:54): which is traditionally thought to be very patriarchal than it is, (00:01:58): there are more women in college now than men. (00:02:01): So there's this huge upsurge, (00:02:03): maybe a huge demand for college education that's being met by all kinds of places. (00:02:08): And, you know, education is a bit like looking at the stars. (00:02:11): You're going to see what happened in the past in terms of, OK, all these guys came into college. (00:02:16): What's going to happen to their lives after that? (00:02:18): And that part is not clear. (00:02:21): So India has grown a lot. (00:02:23): It's a huge success story on some fronts, kind of. (00:02:27): But really, more than 90 percent of the jobs are still informal. (00:02:31): And we keep thinking BPO, you know, business process outsourcing. (00:02:34): They're taking a lot of...

In this episode of Ideas Untrapped, I sit down with economist Oliver Kim to explore the complexities of African economic growth and the challenges surrounding industrialisation. We discuss why Africa has struggled to replicate the manufacturing successes of East Asia, touching on issues such as labour costs, political economy, and the global market environment. Oliver also shares his thoughts on the importance of state capacity and regional integration and how to rethink GDP statistics in development research. Oliver Kim is an economic historian and a research fellow at Open Philanthropy. He also writes excellent blog Global Developments. Transcript Tobi:Welcome, Oliver, to the show. I've been a fan for a while, and it's fantastic talking to you. So thank you so much for coming on Ideas Untrapped. My first question to you involves something you wrote a couple of months ago where you talked about African prices, which is always a puzzle that I've been interested in. So, to restate it as simply as possible, we know that manufacturing in Africa has not grown as much, at least relative to other sub-regions in the world. And there are some theories or findings that suggest that it’s because labour cost is too high. And there's a bit of back and forth in the debates about how unique that is to Africa as a continent. So can you shed more light [on that]? Because you see a lot of comparisons, maybe Ethiopia and Bangladesh…the unit labour cost and how high it is. So, is that really the constraints? What are the nuances based on what you discussed in that blogpost? Oliver:Yeah. Just to quickly summarise. Africa has kind of missed out on the manufacturing revolution that, for instance, propelled East Asia…so when you think of the East Asian tigers, China, to rapid rates of growth and poverty alleviation. And, i think in some countries, actually, the share of manufacturing value-added or the share of manufacturing employment is the same or lower than where it was in the 1970s immediately after independence. So, from a developmental standpoint, this is a bit of a puzzle and from a poverty alleviation standpoint, it's a tragedy because this is the only sort of way that we know how to lift large numbers of people out of poverty in a rapid sort of fashion. That’s how China did it; that's how earlier, Korea, Taiwan, and Japan did it. From a prices standpoint, the problem that economists have identified is that labour costs are too high relative to the level of productivity. That's an important qualified statement to make. So most developing countries are poor [and] as a feature of a developing country, one thing that's true is that incomes are relatively low, wages are relatively low, and so labour is relatively cheap. It's also true that if you're a foreign firm deciding where to site a factory, you don't just care about the labour cost. You also care about the productivity of the workforce. And so it works out that what you care about is like the amount of productivity divided by the cost of hiring additional worker. And on that metric, which is typically measured in something that's called a unit labour cost (the amount that it costs to produce one unit of output), a lot of sub-Saharan African countries turn out looking relatively poor, especially compared to their peers [at] similar sort of income levels. So there's sort of two dimensions of this problem. One is the productivity side, and then the other is the cost side. On average, it appears basically that African countries have wages that are actually relatively high for their level of development. And so this becomes a further mystery, like why is this the case? One hypothesis that's been put forward in a couple of papers by the folks at the Center for Global Development is that it's because prices are too high. So this is like one step up the causal chain. If prices are high and the goods and services that are to buy cost too much, then you have to pay people a higher wage...

In the episode, Tobi talks to Dmitry Grozoubinski about the politics and complexities of global trade, emphasizing the tension between free trade and protectionism. Dmitry explains how trade policy decisions involve difficult choices that impact both producers and consumers, using Nigeria's food inflation as an example. They explore the balance between national interests and global commitments, highlighting how protectionist policies are often rooted in political concerns rather than economic efficiency. The conversation also touches on the challenges of multilateral trade agreements like the WTO and AfCFTA. Dmitry served as an Australian diplomat and trade negotiator at the World Trade Organisation and beyond. He has negotiated complex agreements in Geneva, at WTO and UN Ministerial Conferences in Kenya, and as part of the MH17 task force in Kyiv, Ukraine. Before joining the Department of Foreign Affairs and Trade, he was a lecturer and tutor at the Monash Graduate School of Business and with the Australian trade consultancy TradeWorthy. He is the lead trainer of ExplainTrade and a Visiting Professor at the University of Strathclyde’s School of Law. Transcript Tobi: The complexity of trade agreements, the bargaining, the negotiation, and everything that surrounds the politics of trade generally does not get covered so much. It's always about the economics of it. And that's what I love about what you do, your project, your book, and everything. So my first question to you is that I know you wrote this basically from the perspective of global trade, and with everything that has been happening, I would say, basically, since the Trump presidency, which, like, brought trade into the headlines, particularly with the US-China “trade war”, quote unquote. And, of course, COVID is what we see with supply chains, decoupling, and so forth. But, I would also say to you that in development, the sub-field of economics that we call development, which is what we try to cover here on the show, trade is also a huge deal. I'll give you a bit of a background. In Nigeria, currently, one of the biggest policy issues is the government trying to decide whether or not to allow the importation of food, basically rice, wheat, and all this other basic stuff. Primarily because food inflation is way above 40%. There's basically a cost of living crisis that has been going on for a few years. People are hungry, people are starving, people are angry because their incomes can no longer even feed them, you know? And so it generates this intense debate because on the other side of that, you have the producer class - the farmers and various lobby groups and political interests who say that, “oh, you really can't import, you're going to turn the country to a dumping ground, we're going to de-industrialise and so many other things.” So one practical question I'll start with you is, if I were a politician, for example, and you know, with the title of your book, let's say that I am an honest politician. Let's assume that I'm an honest politician and I'm asking you that, Dmitry, how do I make this decision? What practical advice would you give me when considering trade policies generally? How do I make trade policy? Dmitry: I think that's a really good question, and I think it kind of goes to the heart of what trade policy is. Anytime you're doing trade policy, you're making choices, and they're often hard choices. You just laid it out perfectly there. You have farmers and other producers of food in Nigeria that are benefiting from very high prices. And you have consumers that are effectively suffering because a substantial part of their weekly budget is going to food, and more than was going before. You mentioned inflation at 40%. That is hugely unsustainable. So as a politician, when you are talking about the choice of bringing in more food, the first thing to do is you have to be honest. And you have to say that, yes, if you allow more food into Nigeria,...

Manuel Hinds shared his experience reforming El Salvador's economy post-civil war, highlighting the importance of stabilising the fiscal situation, reducing tariffs, and privatising inefficient public companies to introduce competition. He emphasised the necessity of cutting the central bank's direct financing to the government to curb inflation. He suggested that investing in human capital and education is crucial for long-term economic growth. Hinds also discussed the need for practical and disciplined policy implementation, cautioning against reliance on populist promises and advocating for a pragmatic, reality-based approach to economic management. Manuel Hinds has served as minister of the economy (in 1979) and of finance (in 1995-1999) in El Salvador, as division chief at the World Bank (in the 1980s and early 1990s), working with more than thirty countries, and as the Whitney H. Shepardson fellow at the Council on Foreign Relations in New York (in 2004-2005). Transcript Tobi: Let me get a little background into your period during the reform in El Salvador. I know you spearheaded the reform of the economy, the currency regime, and a lot of things. What was the situation like when you came into the picture? What were the problems, and how did you approach it, especially on the political economy side, you know, getting the buy-in of the elites or entrenched interests who might be opposed to the reforms? Manuel: El Salvador, when I came into the picture, I came into the picture in two stages. First, I was working with the World Bank, and then I went back to El Salvador and started as a consultant to the board of directors of the Central Bank. It was just one meeting a week, and that was it. Later, I came in as the Minister of Finance. The situation was this: El Salvador had been in a civil war. We are a small country, 6 million inhabitants, but the civil war was very bloody. We had 80,000 deaths and the country was, for 10 years, in this terrible division. But then, you know, the people became tired of the war and all the population made it clear that they wanted peace. And then with the help of several friendly countries and the United Nations, we had a peace accord in which there was no winner in the war; the winner was the people. We reformed the constitution and we had free elections. And then, the country started on the right foot, i’d say, because everybody in the different political parties were willing to go the extra mile so that things could be done very well. In El Salvador, the period of the president is five years. I came in the second, after the peace accords. The peace accords were in 1992 and I came to the government in 1995, January 1995. El Salvador was very similar to many Latin American countries, and actually many African countries as well. We had a lot of protection. The protective tariffs went up to 100 and something. We had Central American common market, but that was a very small market still. And also we had a problem with the pensions. We were accumulating a lot of liabilities for the government without enough income. And also we had very ineffective public companies. So when I came in, the president invited me to give him a presentation of what I thought we should do. And when I made the presentation, he said, "Well, I'm prepared to do this, but if you are the minister of finance." So he put me in a corner, you know, and then I said, OK, I'm going to do it. And then we started with number one: we had to stabilise the country, which meant that we have to stabilise fiscally the country because we have been spending a lot, particularly, but not only, in the war, the war effort. So when I came in, I had the advantage that we could reduce substantially expenditures just by reducing the army. So the first one was we were up because the inflation at the time was something like 28%. It was between 20 and 30%. It had started to go down in the first period after the war. So when I came in,...

Tiago Santos joins Tobi on this episode of the podcast to discuss Parliamentarianism. Tiago believes that if African countries had adopted parliamentary systems during their democratization wave, they would have likely seen better development outcomes, citing the success of Botswana and the economic growth seen in parliamentary countries. He also highlights four main flaws in presidential systems according to political scientist Juan Linz: lack of clarity in authority, rigidity, winner-takes-all nature, and personalism. These issues often lead to ineffective governance, coups, and excessive polarization, which hinder development and political stability. Tiago further argues that better governance structures, like those provided by parliamentary systems, are crucial for economic development. He emphasizes that parliamentary systems lead to greater political stability and more inclusive decision-making, essential for fostering long-term growth and escaping the "Malthusian Trap." Tiago Ribeiro dos Santos has been a Brazilian career diplomat since 2007. He has a law degree from Pontifícia Universidade Católica in Rio de Janeiro, a professional degree from Instituto Rio Branco (Brazil’s national diplomatic academy), and a master’s degree from the University of Chicago Harris School of Public Policy. He is the author of the excellent book Why Not Parliamentarianism. None of the opinions in the interview reflect the views of any institution he has been associated with - and you can find the full transcript of the conversation below. Transcript Tobi; You're, I would say, a strong advocate of parliamentarianism. I wouldn't call myself a strong advocate, but I'm fairly biased towards your point of view and became even more convinced when I read your book. Particularly in Africa, a couple of countries went through long periods of military dictatorship. And around 20, 25 years ago, there came another wave of widespread democratisation on the continent. What happened was, maybe due to the influence of American foreign policy or some other global forces, a lot of these countries opted for the American-style presidential system. And in my own observation, maybe I'm wrong empirically, a lot of these countries, my country, Nigeria included, struggled with the workings of this presidential system, such that there had been constant agitation for a kind of return to the parliamentary system that Nigeria had immediately after independence. My question to you then is that, are you willing to say or assert that perhaps if a bunch of these countries around 20, 25 years ago had opted for parliamentary system, would they have done better development-wise? Tiago; I don't think anybody can say for sure, but I'm convinced that they would probably, very likely, had done better. With respect to Africa, I think, yes, there is a strong influence from the American model because it's obviously a very successful country. So it's very easy to model after them. But I think that there is something else also in the choice of presidentialism by African countries. I've read a paper by James Robinson and Ragnar Torvik that argues that there is a tendency for endogenous presidentialism, which is that exactly because in presidentialism the leader has more chances to exert their powers without much resistance. So back in the 60s, a bunch of countries in Africa, I think most of them, had a parliamentary constitution, not only Nigeria, but many other countries had a parliamentary constitution and basically all of them switched to presidentialism at some point. If you look at Botswana, the economic performance that they had since the 1960s is very impressive. I wish Brazil had the rate of growth that Botswana has been experiencing consistently. So looking at the countries in Africa that have adopted parliamentary constitution, I think that it would be the case, yes, that had these countries adopted a parliamentary constitution back when they democratised again, they...

 In this episode, Tobi talks to David Pilling, Africa editor for the Financial Times. They discussed his book "The Growth Delusion", exploring the significance and limitations of economic growth, particularly in poor countries. David challenges the conventional reliance on GDP to measure economic success, proposing a more nuanced approach that considers wealth distribution, environmental impacts, and overall well-being. He argues for a balanced view that recognises the necessity of growth for development while advocating for policies that prioritise human and environmental health. The conversation also touches on broader development issues in Africa, including the misuse of resources and the political challenges hindering effective governance and equitable progress. The transcript of the conversation is below, and many thanks to David for coming on the podcast. Tobi; This is Ideas Untrapped podcast, of course, and my guest today doesn't need much of an introduction, anybody who reads the Financial Times knows David Pilling. He is currently the Africa editor of the Financial Times newspaper, he used to be the former Asia editor of the newspaper, and he has written many fantastic columns and essays covering a wide range of subjects. And recently he's been writing a lot about Africa, especially stories on development and other related matters. It's a pleasure to welcome David Pilling today. Welcome, David. David; Thank you so much. It's a pleasure to be here. Tobi; I want to talk about your book for a bit and one question that keeps popping into my mind as I kept reading, that was a couple of months back last year, the general tone of the book, which is called The Growth Illusion was, you know, one of skepticism, right?Also, the impression that jumps at me from reading your economics-focused stories about Africa is that growth is important. So has your work in Africa forced you a bit to reconsider some of the positions you take in the book? David; Yes and no. I mean, the book never said growth isn't important. It is called The Growth Delusion. It's true. And that is a, you know, deliberately, I suppose, provocative title to some extent modelled after The God Delusion by Richard Dawkins. So it was a kind of an echo of that. So, yes, you're right. It was a sceptical title and journalists ought to be sceptical. And what I was doing was I was prodding at the concept of growth, what it is that we measure, how we measure an economy's success. What I was not saying is that growth is not important. And I think growth is particularly important for poor countries. You know, we can put richer countries aside for one second, but in a poor country where there are not enough resources for people to have what Amartya Sen, the Nobel winning economist, calls sort of what we now know as agency, really. You know, choices over their lives, where they live, what work they do. And those choices can be denied by very simple things. Lack of food, lack of a roof over your head, lack of work, lack of safety and security. Unless those things are satisfied, then I believe that people aren't able to live their full potential. And for that, you need an economy that's firing at a certain level. In other words, you need to go from an economy that isn't firing to one that is. Then, of course, many other things need to happen, including the wealth that is therefore generated to be, you know, relatively equitably shared, for people have to have access to economic opportunities. But my book was never saying, you know, growth is bad. We need degrowth, which I know is a trend of thought out there. But my book, despite the title, was really looking at other things, which I'm happy to go into if you'd like more of a discussion. But just to make it clear, I was absolutely not saying that if you have an economy where people lack what I would consider the absolute sort of basic minimum to live a fulfilled life, you know, those economies absolutely need to...

In this podcast episode, Tobi interviews Rasheed Griffith - who is the CEO of The Caribbean Progress Institute, and host of The Rasheed Griffith Show explores the adaptability and policy implementation in smaller countries compared to larger ones, noting that smaller nations can change more swiftly due to simpler institutional structures. Rasheed contrasts this with larger countries like China and India, where changes, although rapid, are often driven by cultural homogeneity and authoritarian governance, which may not be desirable in Western democracies. The discussion also touches on the impact of leadership and institutional capacity on economic development, emphasizing that the quality of governance often outweighs the mere structure of political systems in influencing a country's developmental trajectory. You can listen to episodes of Rasheed's brilliant podcast (The Rasheed Griffith Show) here. You can also subscribe to the Carribean Progress Institute newsletter here, where you can read many interesting and important writings. Transcript Tobi; Welcome to the show, Rasheed. It's great to talk to you. I want to start with something that you mentioned in our first conversation, which has stayed with me. I haven't been able to stop thinking about it since, which is that small countries are somewhat more amenable to change than big countries. You know, when we talk about ideas and policies and economic development, I just want you to expand on that a bit. I know I'm paraphrasing, but I want you to expand on that a bit. Why do you suppose that is? Rasheed; Small countries have less people to influence politically, economically, socially. So ideas can spread faster and ideas can spread deeper in small countries. So for example, if you have a country like Nigeria, you have over 200 million people, you have vast, vast institutions that are captured or incentivized in very radically complex ways. Compare that to a country like Saint Lucia that has 180,000 people. Very small institutions, very small number of schools, very small number of just social actors. For the difficulty of idea spread and idea capture, it's a lot less in a very small place, and yet these are still essentially independent sovereign UN vote countries that have as much rights in that league as Nigeria. You know, Walmart...Walmart in the US has more employees than all of Saint Lucia has population. Or even Saint Vincent, or even Trinidad, Walmart has more employees. So, when you talk about turning the ship of these small countries, it's a lot less complicated than trying to influence Nigeria or Ethiopia or the US or Canada. Tobi; I want to square that a bit with what we saw in China in the last 40 years. China is obviously a very large country and some people would say that it went through a process of rapid change, I mean, after the 1978 reforms. How did a country like China and to some extent what we are seeing in India recently, do you think that having, even if you're a big country, having a homogenous culture, language, ethnic population, does that also help speed up the process of change. China, obviously, communism being the central guiding ideology and of course, majority of the population is Han Chinese. And we're seeing Modi, you know, rally around Hinduism as the national identity of the country. So, how does homogeneity play in here? And you see some pretty screwed up small countries, you know, Haiti… What are the constraints and what are the catalysts? Rasheed; So China is obviously a good example, but China didn't just transform itself via ideas. It transformed itself via a dictatorship. And I think most people would not want that trade-off. You know you go to Shanghai, [which] I've been to many times, you go to Shanghai and you say “it's so great here, the transportation is fantastic the skyline is amazing, all this happened in 30 years” but then the problem is this; the way [and] how it's done, the effects, the results are...

In this episode, I had a conversation with economic historian Johan Fourie, who is a professor of economics at Stellenbosch University, and the author of one of the most enjoyable books on economic history called Our Long Walk to Economic Freedom. We spoke about the resurgence of economic history, particularly in Africa. Johan attributes this revival to multiple factors, including an interest in understanding past economic patterns, technological advancements enabling data analysis, and scholarly work drawing global attention to the field. We discuss Africa's economic development, noting the continent's reliance on primary goods and the impacts of political and economic policies on growth. Johan stresses the heterogeneity within Africa and warns against generalizing the continent's economic narrative. The discussion then delves into the role of ideas in shaping economies, with a focus on industrial policy. Johan highlights the importance of empirical evidence in policymaking and warns against the potential misuse of industrial policy for political gains. He emphasizes the need for a more inclusive research ecosystem in Africa, advocating for better representation and the promotion of economic history as a vital sub-discipline. Johan also addresses the importance of economic freedom, defining it in simple terms and discussing its implications in policy decisions. He touches on the challenges of racial history and representation in academia, emphasizing the need for diverse voices and a marketplace of ideas for better policy formulation. Finally, Johan discusses the optimism inherent in economic history, acknowledging the significant progress humanity has made while remaining cautiously hopeful about the future. He advocates for policies that ensure the equitable distribution of the benefits of increased productivity, highlighting the potential of new technologies to contribute positively to Africa's economic growth. Transcript Tobi; Welcome Johan. It's good to talk to you. I guess where I’ll start is economic history is enjoying a bit of a renaissance, I'd say. Personally, for me, I'll say in the last five years I've read more economic history books and papers than actual economics itself. So I just want to ask you, what was the turning point, at least in recent time, why does economic history seem to be having a moment or its moment right now? Johan; I think there are many answers to that question. I'll focus on African economic history because I think that's something, firstly, that I know a little bit of, and secondly, that the factors that affect African economic history might be slightly different than those that make economic history attractive to, kind of, global audience.Although I do think your sentiment is true also for for global economic history, that there's certainly been a resurgence in interest. Of course, they were previous episodes where this also happened in the 1960s there was a great interest in econometrics, but that kind of died down by the 80s and 90s. And certainly I think in the last decade or two that's made a comeback, but certainly in African economic history, also by the 60s and 70s, for different reasons, again, because of the end of the colonial period and many Africans being interested in their own economic pasts; it was, you know, certainly intended to improve the development outcomes of many of these countries. And so studying what had happened in the past became important. And then by the 80s, you know, for reasons like the shift in history towards more cultural aspects of African history and, perhaps, also, to some extent, the fact that economics became more technical, more mathematical. The fields really, economic history really, had kind of dialed down interest in Africa's past, but perhaps also to some extent, the fact that many African countries were struggling to grow. And so there was little interest in understanding of why these things had persisted. But by the 2000s, of...

In this episode, I had a conversation with Kurtis Lockhart who is the executive director of Charter City Institute - a non-profit that thinks and executes governance models for cities to power developing economies into growth and productivity. Our conversation started with an update on the concept of Charter Cities and how they differ from traditional models like Special Economic Zones (SEZs), particularly in the context of economic development. Kurtis describes Charter Cities as new cities with distinct governance models designed to drive sustained economic growth and alleviate poverty, primarily in lower-middle-income countries. This approach is seen as an alternative to the model first prescribed by the economist and Nobel Laureate Paul Romer, which involved a high-income country importing its governance to a low-income nation. Kurtis emphasizes a public-private partnership (PPP) model, where a host country collaborates with an urban developer, ensuring local involvement and sustainable development. The conversation addresses concerns about Charter Cities being enclaves for the wealthy, clarifying that the Charter City Institute (CCI) focuses on broad-based economic growth and poverty alleviation. Kurtis highlights the importance of political buy-in and stability, acknowledging the challenges of expropriation and policy consistency across different political regimes. He suggests mitigation strategies like revenue-sharing agreements, equity stakes for host countries in city developers, and political risk insurance. Discussing the geographical constraints, Kurtis acknowledges that location and economic geography play a crucial role in the success of Charter Cities. However, he argues that geographical advantages can evolve with changing technologies and transportation networks, as seen in historical examples like the Erie Canal. Addressing concerns about existing urban challenges and inequalities, Kurtis talked about CCI's involvement in upgrading existing cities and supporting secondary cities, especially in Sub-Saharan Africa, where most urban growth is anticipated. He shares plans to collaborate with Kenya's State Department for Housing and Urban Development to empower select secondary cities through the Special Development Zone initiative, leveraging their success as models for other cities. Transcript Tobi; Welcome to Ideas Untrapped. It's fantastic to talk to you, Kurtis. I've been wanting to do this for a long time. Kurtis; Yeah. Thanks, Tobi. I know we've been trying to do this for a while. It's good to finally be on with you. Tobi; So let's start from the absolute basics. I'm trying not to get carried away because Charter Cities are something that sort of excites me as well. I should also say it annoys me, possibly in equal measure. So I'll try not to get carried away, but if you can just give me an elevator pitch, so to speak, but you can go as long as you want. What are charter cities and how are they relevant to issues surrounding economic development, particularly in the 21st century? Kurtis; Yeah, so thanks again. And I'll start at the highest level I can, and then you can ask more specific questions as we go on. So at the very basic level, the definition of charter cities is new cities with new rules to improve governance. And so why do we think that that's really important? Zooming out, the best way to lift people out of poverty at scale is through sustained economic growth over one, two, three, four- decades. That's what happened in East Asia, in Japan, in Taiwan and South Korea. It's what happened in China, and I think it's what's happening in India now. You then have to ask yourself, how do we increase economic growth rates over sustained periods of time? Economists are pretty agreed that the single greatest determinant of long-run economic growth rates is governance, right? It's institutions. And the problem with governance and institutions and getting good governance is many countries,...

Welcome to another episode of Ideas Untrapped podcast. In this episode, I spoke to Portia Roelofs who is a Lecturer in Politics at the Department of Political Economy at King's College London, and also a research associate at the African Studies Centre in Oxford. She is the author of a fantastic book titled Good Governance in Nigeria; Rethinking Accountability and Transparency in the Twenty-First Century. Portia critiques the "good governance" agenda, arguing it's a continuation of structural adjustment programs from the '80s and '90s, which focused on market-driven development, privatization, and state withdrawal. She asserts these reforms didn't consider the social and political realities in African countries, leading to significant challenges, including a narrowed policy scope and "choiceless democracies." Portia proposes a more socially embedded approach to governance, emphasizing the need for government officials to be accessible and accountable in more culturally resonant ways, beyond just transparency and efficiency. She suggests practical steps like politicians residing in their constituencies and being directly reachable. The conversation also explores the tension between technocratic and populist approaches in Nigerian politics, highlighting the importance of addressing immediate social needs alongside long-term developmental goals. Despite the critique of current governance models, the conversation acknowledges the complexity of governance in Nigeria and the need for nuanced solutions that consider both the efficiency of the civil service and the broader economic and social goals of the state. The discussion concludes by reflecting on the need for a more comprehensive discussion on the role and aims of the state in Nigeria, beyond just improving civil service efficiency. Transcript Tobi; I'll start with where you started your book. I should say I enjoyed your book very much. Portia; Thank you. Tobi; It's very interesting, and I really connected with it as a Nigerian. So, what you described as the good governance agenda and its challenges, its failures, and way it has come short in the context of Africa and Nigeria, in this case, is where I’ll like us to really start. So just give me a brief rundown of that, because what you call the good governance agenda or the technocratic World Bank-type description of what good governance is, is still the popular and, I should say, acceptable form of discourse in the popular mind about how we think governance should be. So, just give me a brief rundown of your critique of that. Portia; Okay, sure. So, I think to understand a good governance agenda you really have to understand what it was a response to and, kind of, the immediately preceding history. So in the 1980s and the 1990s, you have the structural adjustment programs which are promoted by the World Bank and the IMF and adopted by many, many countries both in Africa and in the global south. And these are programs that take aim at the kind of bloated state and too much state intervention in the economy. And they say the economy needs to be structurally changed to allow market forces to drive development. So you see a kind of consistent pattern of privatization, liberalization, devaluation, removal of capital controls. And that was driven by a strongly ideological belief that the market is the best allocator of resources and the best driver of development. And Nigeria, in 1986, under Babangida adopted something that was basically the structural adjustment programs, albeit not quite in name. And then by the kind of 1990s, the early 1990s, the late 1980s, people were starting to realize, actually, these structural adjustment programs don't work. They don't achieve what we wanted them to achieve. In many places, they had absolutely disastrous results. And a lot of the critique of that is coming from places like CODESRIA (Council for the Development of Social Science in Africa). So African scholars, from a more...

Hello everyone, and you are listening to Ideas Untrapped podcast. This episode is a continuation of my two-part conversation with Lant Pritchett. It concludes the discussion on education with the five things Lant would recommend to a policymaker on education policy, how to balance the globalized demand for good governance with the design of state functionalities within a localized context - along with RCTs in development and charter cities. I also got an exclusive one of his infamous ‘‘Lant Rants’’. I hope you find this as enjoyable as I did - and once again, many thanks to Lant Pritchett. Transcript Tobi; Yeah, I mean, that's a fine distinction. I love that, because you completely preempted where I was really going with that. Now, on a lighter note, there's this trope when I was in high school, so I sort of want us to put both side by side and try to learn more about them. There's this trope when I was in high school amongst my mates, that examination is not a true test of knowledge. Although it didn’t help the people who were saying it, because they usually don't test well, so it sort of sounded like a self serving argument. But examination now, or should I say the examination industry, clearly, I mean, if I want to take Nigeria as an example, is not working. But it seemed to be the gold standard, if I want to use that phrase. It's as bad as so many firms now set up graduate training programs. Even after people have completed tertiary education, they still have to train them for industry and even sometimes on basic things. So what are the shortcomings of examination, the way you have distinguished both? And then, how can a system that truly assesses learning be designed? Lant; Let me revert to an Indian discussion because I know more about India than Africa by far. There are prominent people, including the people around JPAL and Karthik Muralidharan, who say, look, India never really had an education system. It had a selection system. And the ethos was, look, we're just throwing kids into school with the hopes of identifying the few kids who were bright enough, capable enough, smart enough, however we say it, measured by their performance on this kind of high stakes examination who are going to then become the elite. So it was just a filter into the elite, and it really meant the whole system was never really in its heart of heart geared around a commitment to educating every kid. I've heard teachers literally say out loud when they give an exam and the kids don't master the material, they'll say, oh, those weren't the kind of kids who this material was meant for. And they leave them behind, right? There's a phrase “they teach to the front of the class.” You order the class by the kid's academic performance, and then the teachers are just teaching to the front of the class with the kind of like, nah, even by early grades. So the evils of the examination system are only if it's not combined with an education system. So essentially, an education system would be a system that was actually committed to expanding the learning and capabilities of all kids at all levels and getting everybody up to a threshold and then worried about the filter problem much later in the education process. So if they're part of an education system like they have been in East Asia, they're not terribly, terribly damaging. But if they're part of a selection system in which people perceive that the point is that there's only a tiny little fraction that are going to pass through these examinations anyway and what we're trying to do is maximize the pass rates of that, it distorts the whole system start to finish. My friend, Rukmini Banerjee, in India started this citizen based assessment where it was just a super simple assessment. You need assessment in order to have an effective education system, because without assessment, I don't know what you know or don't know, right? And if I don't know as a teacher or as a school what my kids actually know...

Welcome to the Ideas Untrapped podcast - and my guest today is Development Economist Lant Pritchett. He is one of the most incisive and insightful scholars in the field, and his influence at the frontier of development research cannot be overstated. His research mostly focuses on economic growth, its contributing factors, and the development implications for peoples and countries. It was a privilege for me to talk to Lant, and I took the chance to ask him questions about some of the big themes of his research like Migration, Education, and State Capability. This is a two-part conversation. In this episode, we discussed Migration and Education. Lant provides insights into how the demographic transition in many rich countries has now pushed the migration debate to the forefront, as opposed to when he was writing about it two decades ago. How the Solow model might explain the absence of migration on the development agenda, and why he thinks the ‘‘brain drain’’ is ‘‘mostly a myth’’. He also explained to me how we ended up with the wrong dashboard in education policies and the distinction between assessment and examination in measuring learning. I want to thank Lant for talking to me, and thank you all for always listening. I hope you enjoy it. Transcript Tobi; My guest really needs no introduction. There's nowhere in the world of development, global development, and development economics, where Lant Pritchett is not a household name. So I’ll like to say welcome, and it's a pleasure to talk to you. Lant; Thanks for inviting me. Tobi; On a light note, let's start on a very light note. What have you been working on recently? Lant; So recently I've been doing two things. I've been wrapping up a large research project on basic education in the developing world, sort of K to twelve, and that had been an eight year research project that's just wrapping up. But more recently, I'm trying to ramp up my engagement on labour mobility. The world is facing a real demographic transition point, with the rich industrial world, particularly workforce age populations, just in constant decline while their aging population is increasing. And at the same time we have this massive youth bulge in parts of, not all of, but in parts of the developing world. And, you know, I'm an economist, whenever you see huge differences, you think, well, here's an opportunity for exchange. So the world's biggest opportunity for exchange right now is the West, as we call it, desperately needs workers, Africans definitely need the hide productivity income and jobs. And it's a great opportunity for exchange, but it's blocked by laws and policies that just make migration next to impossible. And I'm working to break that gridlock and get some sensible ways in which we can put willing workers into needed jobs. Tobi; I think that's a good launchpad to start the conversation on migration, which you've worked quite a lot on. I read your book Let Their People Come a couple of years ago. As a general question, what do you think we have learned from the time you wrote that book and you were compiling that research and now? Because definitely to me, it doesn't feel like much has changed in terms of the debate. And like you said, migration is such a big issue with economic and political consequences on both sides of the Atlantic. So what have we learned? And if nothing, why is that so? Why is there such a resistance to thinking differently about migration? Lant; What have we learned is a great question. Let's start with the demography of this. That book was written in 2006. One thing about demography is you can predict it very far into the future, right? Everybody who's going to be a 30 year old worker in 20 years is ten years old today. And so it's really not that hard to know what the future, the 20-, 30-year future of the labour force is going to look like, because everybody gets a year older. So on one level, we've learned nothing. But on another level, I think...

Hello everyone, and welcome to Ideas Untrapped podcast. My guest for this episode is Decision Scientist, Oliver Beige - who is returning to the podcast for the third time. Oliver is not just a multidisciplinary expert, he is one of my favourite people in the world. In this episode, we talk about scientific expertise, the norms of academia, peer review, and how it all relates to academic claims about finding the truth. Oliver emphasized the importance of understanding the imperfections in academia, and how moral panics can be used to silence skeptics. I began the conversation with a confession about my arrogance about the belief in science - and closed with my gripe about ‘‘lockdown triumphalism’’. I thoroughly enjoyed this conversation, and I am grateful to Oliver for doing it with me. I hope you all find it useful as well. Thank you for always listening. The full transcript is available below. Transcript Tobi; I mean, it's good to talk to you again, Oliver. Oliver; Tobi, again. Tobi; This conversation is going to be a little bit different from our previous… well, not so much different, but I guess this time around I have a few things I want to get off my chest as well. And where I would start is with a brief story. So about, I dunno, I’ve forgotten precisely when the book came out, that was Thinking Fast and Slow by the Nobel Laureate Daniel Kahneman. So I had this brief exchange with my partner. She was quite sceptical in her reading of some of the studies that were cited in that book. And I recall that the attitude was, “I mean, how can a lot of this be possibly true?” And I recall, not like I ever tell her this anyway…but I recall the sort of assured arrogance with which I dismissed some of her arguments and concerns at the time by saying that, oh yeah, these are peer-reviewed academic studies and they are most likely right than you are. So before you question them, you need to come up with something more than this doesn't feel right or it doesn't sound right. And, what do you know? A few years, like two or three years after that particular experience, almost that entire subfield imploded in what is now the reproducibility or the replication crisis, where a lot of these studies didn't replicate, a lot of them were done with very shoddy analysis and methodologies, and Daniel Kahneman himself had to come out to retract parts of the book based on that particular crisis. So I'm sort of using this to set the background of how I have approached knowledge over my adult life. So as someone who has put a lot of faith naively, I would say, in science, in academia and its norms as something that is optimized for finding the truth. So to my surprise and even sometimes shock - over different stages of my life and recently in my interrogation of the field of development economics, people who work in global development - [at] the amount of politics, partisanship, bias, and even sometimes sheer status games that academics play and how it affects the production of knowledge, it's something that gave me a kind of deep personal crisis. So that's the background to which I'm approaching this conversation with you. So where I'll start is, from the perspective of simply truth finding, and I know that a lot of people, not just me, think of academia in this way. They are people who are paid to think and research and tell us the truth about the world and about how things work, right? And they are properly incentivized to do that either by the norms in the institutional arrangements that birthed their workflows and, you know, so many other things we have known academia and educational institutions to be. What is wrong with that view - simply academia as a discipline dedicated to truth finding? What is wrong with that view? Oliver; There's many things. Starting point is that it was not only Daniel Kahneman, behavioral economics has multiple crises also with Falsified work. Not only with wrong predictions, wrong predictions are bad but...

Welcome to Ideas Untrapped. My guest today is Vincent Geloso who is a professor of economics at George Mason University. He studies economic history, political economy, and the measurement of living standards. In today's episode, we discuss the differences between democracies and dictatorships, and their relative performance in socioeconomic development. The allure of authoritarian governance has grown tremendously due to the economic success of countries like China, Korea, and Singapore - which managed to escape crippling national poverty traps. The contestable nature of democracies and the difficulty many democratic countries have to continue on a path of growth seems to many people as evidence that a benevolent dictatorship is what many countries need. Vincent challenges this notion and explains many seemingly high-performing dictatorships are so because their control of state resources allows them direct investments towards singular objectives - (such as winning Olympic medals or reducing infant mortality) but at the same time, come with a flip side of unseen costs due to their lack of rights and economic freedom. He argues that the benefits of dictatorships are not as great as they may seem and that liberal democracies are better able to decentralize decision-making and handle complex multi-variate problems. He concludes that while democracies may not always be successful in achieving certain objectives, the constraints they place on political power and rulers mean that people are better off in terms of economic freedom, rights, and other measures of welfare. TRANSCRIPT Tobi; You made the point that dictatorships usually optimise, not your words, but they optimise for univariate factors as opposed to multiple factors, which you get in democracy. So, a dictatorship can be extremely high performing on some metric because they can use the top-down power to allocate resources for that particular goal. Can you shed a bit more light on that? How does that mechanism work in reality? Vincent; Yeah, I think a great image people are used to is the USSR, and they're thinking about two things the USSR did quite well: putting people in space before the United States and winning medals at Olympics. Now, the regime really wanted to do those two things. [That is], win a considerable number of medals in [the] Olympics and win the space race. Both of them were meant to showcase the regime's tremendous ability. It was a propaganda ploy, but since it was a single objective and they had immense means at their disposal, i. e. the means that coercion allows them, they could reach those targets really well. And it's easy to see the Russians putting Sputnik first in space, the Russians putting Laika first in space. We can see them winning medals. It's easy to see. The part that is harder to see, the unseen, is the fact that Russians were not enjoying rapidly rising living standards, they were not enjoying improvements in medical care that was commensurate with their level of income, they were not enjoying high-quality education. You can pile all the unseens of the ability of the USSR as a dictatorship to allocate so much resources to two issues, [which] meant that it came with a flip side, which is that these resources were not available for people to allocate them in ways that they thought was more valuable. So, the virtue of a liberal democracy, unlike a dictatorship, is that a liberal democracy has multiple sets of preferences to deal with. And in a liberal democracy, it's not just the fact that we vote, but also that people have certain rights that are enshrined and which are not the object of political conversation. I cannot seize your property, and it's not okay for people to vote with me to seize your property. And in these societies, the idea is that under a liberal democracy, you are better able to decentralize decision-making, and people can find ways to deal with the multiple trade-offs much better. Whereas a dictatorship can...

Welcome to another episode of Ideas Untrapped. My guest today is Charlie Robertson, who is the chief economist of Renaissance Capital - a global investment bank - and in this episode we talked about the subject of Charlie’s new book, "The Time-Travelling Economist''. The book explores the connection between education, electricity, and fertility to economic development. The thrust of the book's argument is that no poor country can escape poverty without education, and that electricity is an important factor for investors looking to build businesses. It also explains that a low fertility rate helps to increase household savings. Charlie argues, with a lot of data and historical parallels, that countries need at least a 70-80% adult literacy rate (defined as being able to read and write four sentences in any language) and cheap electricity (an average of 300 - 500 kWh per capita) in order to industrialize and grow their economies rapidly. Small(er) families (3 children per woman) mean households are able to save more money, which can improve domestic investments by lowering interest rates - otherwise countries may repeatedly stumble into debt crises. We also discussed how increasing education can lead to higher domestic wages, but that this is usually offset by a large increase in the working-age population - and other interesting implications of Charlie's argument. TRANSCRIPT Tobi; The usual place I would start with is what inspired you to write it. You mentioned in the book that it was an IMF paper that sort of started your curiosity about the relationship between education, electricity, fertility, and economic development. Generally. So, what was the Eureka moment? Charlie; Yeah, the eureka moment actually came in Kenya, um, because I'd already done a lot of work showing how important education was. It's the most important, no country escapes poverty without education. So I'd already made that clear and there wasn't much debate about that. Perhaps there was a debate about why some countries have gone faster than others, but there wasn't much debate about that. The second thing I was very clear on was electricity, which kept on coming up in meetings across Sub-Saharan Africa, Pakistan, [at] a number of countries, people kept on talking about the importance of electricity. But the eureka moment came when somebody pointed out to me that Kenya, where I was at the time, couldn't afford to build huge excess capacity of electricity, which I was arguing you need to have. You need to have too much electricity, so that it's cheap and it's reliable. And then investors come in and say, "great! I've got cheap educated labour, and I've got cheap reliable electricity. I've got the human capital and the power I need, that then enables me to invest and build a business here." And the question then was, well, why was it so expensive in Kenya but so cheap in China? Why was the cost of borrowing so high in Nigeria but so cheap in Morocco or Mauritius? And when I was trying to work out where did the savings come from in China, uh, well I was looking globally, but China's the best example of economic success and development success we've seen in the last 50 years. Over half the answer came from this IMF paper saying, actually it came from their low fertility rate. That's over half of the rise in household savings, which are massive in China, came about because the fertility rate had fallen so dramatically. And I then thought, could this possibly be true for other countries as well? Could this help explain why interest rates are so high in Nigeria or Kenya and so low elsewhere? And the answer is yes. So this book, The Time Travelling Economist is bringing all of these three things together - the fertility rate, the education rate, and electricity - to say not just how countries develop, cause I think I've answered that, but when they develop. Because once we know those three factors are key, we can then work out the when. Not just in the...

Bangladesh has transformed tremendously in the last twenty-five years. Average incomes have more than quadrupled, and many of its human development indicators have improved alongside. It has also become an export powerhouse with its garment industry, and generally a shining example of development - though things are far from perfect. Five decades ago, when Bangladesh became an independent country, many were not hopeful about its chances of development. So how did Bangladesh turn its story around? Well, it turns out the history of its transformation is longer than credited - and the process is more complex than what is cleanly presented. I could not think of a better person to help me unpack the Bangladeshi miracle than Dr. Akhtar Mahmood. He is an economist and was a lead private sector specialist for the World Bank Group - where he worked in various parts of the world for three decades on privatization, state enterprise reforms, investment climate, competitiveness, and more broadly private sector development. He has written some excellent books (see embedded links), and his column for the Dhaka Tribune is one of my wisest sources of economic development commentary. Transcript Tobi; Welcome to the show Akhtar Mahmood. It's a pleasure talking to you. I am very fascinated and curious about Bangladesh, and you are my number one option for such a journey. It’s a pleasure, personally, for me to be having these conversations. I've been reading your column for about a year now with the Dhaka Tribune, and I've learned so much. They are very perceptive, and I'm going to be putting up links to some of my favourites in the show notes for this episode. Welcome once again, and thank you so much for doing this. Akhtar; Thank you very much for having me. Thanks, Tobi. Tobi; There's so much that I want to talk to you about, as you'd imagine, but let me start right at the end, which is now. There has been a lot of attention on Bangladesh, recently, at least in my own orbit, there have been two quite detailed and interesting columns in the Financial Times about Bangladesh. There is also Stefan Dercon’s book, which used Bangladesh as a positive case for what he was describing about the development process. But also, there's the issue of what's going on right now with the global economy. First, it started with COVID and how the economy suddenly stopped, and all the reverberation that comes with that - the supply chain, and now, a lot of countries are going through a sort of sovereign debt crisis and Bangladesh, again, is in the spotlight. So, I just want you to give me an overview, and how this, sort of, blends with countries that put so much into development…you know, in terms of policy, in terms of the things they are doing right, in terms of investment and attracting investment, and the exposure to these sorts of global economic risks and volatility. [This is] because, usually, what you get in Western discourse is that a lot of countries are victims of some of these risks because of some of the wrong policy decisions they make. But in the case of Bangladesh, at least to my knowledge, nothing like that is going on. And yet, it is usually talked about as a very exposed country in that regard. I know you wrote a column recently about this. So I just want you to give me a brief [insight]—is there anything to worry about? How do countries that are trying to get rich, that are trying to do things right, how do they usually manage these sorts of global risks? Akhtar; Right? I think, inevitably, we'll have to go a bit into the history of how we came here. But since you started with the current situation, let me briefly comment on that, and then maybe I'll go to the history. Right now, yes, like most other countries, we are facing challenges, but I think there has been a bit of hype about how serious the challenge is, in terms of the risk of a debt default, the risk of foreign exchange reserves going down very sharply. And I think there is...

This is a free preview of a paid episode. To hear more, visit www.ideasuntrapped.com Bangladesh has transformed tremendously in the last twenty-five years. Average incomes have more than quadrupled, and many of its human development indicators have improved alongside. It has also become an export powerhouse with its garment industry, and generally a shining example of development - though things are far from perfect. Five decades ago, w…