Ideas Untrapped

Tobi Lawson
Ideas Untrapped

a podcast about ideas on growth, progress, and prosperity www.ideasuntrapped.com

  1. -5 ДН.

    Moving from Promise to Progress

    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 outsourcing jobs. (00:02:36): You know, (00:02:37): there's so little of

    1 ч. 12 мин.
  2. 25 НОЯБ.

    Learning from East Asia

    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 b

    46 мин.
  3. 11 СЕНТ.

    Trade-offs and Tensions

    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 Nigeri

    51 мин.
  4. 22 ИЮЛ.

    Inside the Mind of a Reformer

    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, inflation

    51 мин.
  5. 28 ИЮН.

    The Case for Parliamentarianism

    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

    48 мин.
  6. 10 МАЯ

    Beyond GDP

    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 grow and t

    1 ч. 4 мин.
  7. 27 АПР.

    The Dynamics of Growth

    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 quite spectac

    48 мин.
  8. History and the Future of Prosperity

    20 МАР.

    History and the Future of Prosperity

    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

    57 мин.

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