Open Philanthropy commissioned a report from Stefan Dercon on economic growth as the main driver of poverty reduction. In the report, Dercon highlights a set of overlooked policies that can help boost economic growth in developing countries, as well as key reasons why these policies aren’t always pursued.
Abstract
Starting from the premise that growth is essential for some of the poorest countries, this note suggests some less obvious investments complementary to the usual approaches that encourage capital transfers and technical assistance in specific areas (e.g., by private foundations or the World Bank). It uses a framing that places a key reason for lagging growth in the agency of those with power and influence — the elite — and the coalition among them — their elite-bargain — that is not conducive to growth. Proposals are articulated that try to increase the upside of growth and reduce downside risks from a commitment to growth, that make power coalitions that go against growth harder, and that foster the formation and sustainment of growth coalitions.
You can read the full report here.