Some Wisdom on Development Economics

While at this conference, I saw some quite interesting presentations on the recent developments in protectionist measures. However, one of the most striking statements I heard was only indirectly related to the conference’s topic. The argument was roughly the following:

Development agencies have to be risk averse when conducting their business since they use taxpayers’ money. Hence, developing countries which receive the donations form these agencies are subject to very stringent rules in the way they make use of the money. But if developing countries are not allowed to make mistakes throughout their development process the whole idea of development is put ad absurdum. It is only through trial and error and learning that countries can find their particular way to develop.

Now this seems like a well informed critique about the whole way that development aid is organized in most Western countries. But it comes even better: The argument was made by Pierre Jacquet, director and chief economist of the French Development Agency!

Maybe I should have asked him to give his money to the RDB!