Introducing the GPI
Why we think The Global Prosperity Institute can move the current development debate forward.
To the challenge of raising living standards, we know of only one solution: economic growth. For tens of thousands of years, humans suffered through lives that were “nasty, brutish and short”. Then, sometime between the 18th and 19th centuries AD, we figured out how to rapidly grow our economy, and everything changed.
Since then, on practically every measure that matters – be it child mortality, life expectancy, or education – human lives have improved beyond recognition. This golden age of unprecedented human progress was facilitated by economic growth.
But this fact is underappreciated and regularly forgotten. Critiques and criticisms of economic growth are popular right now; but they are nothing new. In 1968 Bobby Kennedy argued that GDP measures everything except that which makes life worthwhile – “the health of our children, the quality of their education or the joy of their play.” Yet the past couple of centuries have taught us that obtaining that which makes life worthwhile becomes considerably easier when GDP is rising.
A small, stagnant economy condemns its population to poverty. Without economic growth, we cannot improve the health of our children nor the quality of their education. And kids forced to work in fields or factories can’t experience the joy of play.
Tackling the causes of poverty, not their symptoms.
Too often anti-poverty programmes treat the symptoms of poverty, but don’t tackle the root cause. The income gains produced by even the best performing anti-poverty programmes in developing countries pale in comparison to those seen in countries that have produced strong and sustained economic growth.
The economist Lant Pritchett has powerfully illustrated this point. He compared the income boost achieved by a “terrific and cost-effective” anti-poverty programme in Niger (from $1.70 a day to $1.95 a day) to the growth in median income in Vietnam (from $1.87 a day in 1992/93 to $8.87 a day in 2018). The rapid economic growth enjoyed by Vietnam had an income effect 28 times larger than that of even a top-drawer anti-poverty programme.
As Pritchett acknowledges, we can and should do both. Targeted, cost-effective anti-poverty programmes have their place. But if we really want to eliminate poverty, economic growth must be the priority. It is important that development initiatives never lose sight of this.
Introducing the Global Prosperity Institute
The Global Prosperity Institute (GPI) is a new think tank committed to promoting prosperity and combatting poverty by stimulating economic growth. With the storm clouds of low global growth gathering, finding new and innovative ways to deliver economic development is only becoming more important.
Starting as a blog before growing its activities, GPI will focus on the issues at the forefront of economic development. It will also advance the debate with new research, building the evidence base on what works for economic growth in a range of contexts.
Of course, not all growth is equal. GPI will promote economic growth that disproportionately benefits the world’s poorest people. Nor should efforts to spur economic growth be blind to environmental considerations. Accelerating environmental degradation that disproportionately impacts the global south is inimical to the aims of GPI.
Yet the so-called ‘degrowth’ movement is wrong to believe that protecting the environment is incompatible with economic growth. Green growth is not only possible, it can be the driving force behind concurrent efforts to fight poverty and climate change as the 21st century progresses.
In the coming months, GPI will elaborate on these issues and tackle many more. Now is the time to put economic growth back on the agenda.
This is such a refreshing and inspiring initiative. Thank you for drawing attention to major issues to do with growth and global prosperity. I look forward to reading more. Best wishes to you all.