Economic Growth – Page 2 – Building State Capability

A Problem-driven Approach to Complexity, Public Policy and Economic Growth

Guest blog written by Claudio Roberto Amitrano

This is a blog series written by the alumni of the Leading Economic Growth Executive Education Program at the Harvard Kennedy School. Participants successfully completed this 10-week online course in July 2020. These are their learning journey stories.

What is development? How is it driven? How can we get there? Who is it for? What do countries have in common? What are their specific problems? How do we identify them? How do we find solutions? Who will lead, authorize, design and implement them? Who are ‘We’ and how do we build the ‘Sense of us’? What can we learn from the policymaking process, working in multi-agent teams and doing things together?

These issues come to my mind when I think about the Leading Economic Growth (LEG) course from Harvard Kennedy School. However, those questions were presented not to show an absolute answer, but to teach us a way of thinking about them, a method to identify the important problems for our societies and to empower us to find and implement solutions that fix them.

Despite not providing definitive answers, the course touched upon some clues. Firstly, it seems that economic development is related to technology, which can be divided in three parts: 1) embodied knowledge (machines); 2) codified knowledge (books and manuals); 3) tacit knowledge (knowhow in people’s brains). While the first two are relatively easy to diffuse and absorb, the latest is not.

The way countries use technology to foster development is strongly related to complexity. The more diverse and less ubiquitous the set of goods and services a country produce and trade, the more complex and developed its economy is. In turn, diversity and ubiquity are conditioned by the amount of different knowhow a country can absorb and amass. Although each individual might know less, the society, as whole, knows more. The image of the scrabble game is quite interesting to exemplify this idea. A word to be written needs letters. The more letters one have, the more different and complex words one can write.

In this sense, growth is associated with the country’s ability to ‘jump’ to nearby activities, whose knowhow is similar to the ones already developed. On the other hand, it might be related to its ability to ‘jump’ to faraway activities, whose knowhow is quite different from the ones already learnt, but through strategic policies can be acquired. Notwithstanding, the ‘growth problem’ is not only connected to these issues. It also depends on the removal of the binding constraints that hinder progress and the policies countries develop to deal with them. It leads us to another way of thinking complexity.

Complexity can also be seen as problems with multiple moving parts and interdependent players, in which relationships, their properties of self-organisation and interconnections defines their trajectories. From the standpoint of public policy, identifying and finding solutions to complex problems requires a Problem-Driven Iterative Adaptation’ (PDIA) approach, instead of a ‘Solution-and Leader-Driven Change’ (SLDC), in which one can construct and deconstruct problems. From the perspective of economics, it requires a Growth Diagnostic approach, whose main objective is to find the binding constraint to economic growth. Based on the idea of complementarity between inputs, as well as between institutions, this methodology is able to avoid or at least minimize the second-best interactions problem.

Leading Economic Growth 2020: Moving Executive Education Online during a Pandemic

written by Salimah Samji

In March 2020, Harvard University decided to move all classes to online-only, in an effort to de-densify our campus and to slow the spread of COVID-19. It soon became clear that remote learning was going to be our new normal.

At the time, Leading Economic Growth, a longstanding 5-day residential executive education program co-chaired by the Growth Lab’s Ricardo Hausmann and BSC’s Matt Andrews, was scheduled for May 2020. Participants had already applied for this program, but we needed to make a decision: should we not offer it until next year or do we pivot to online?

We observed that the lockdowns and other measures that countries were employing in response to the pandemic were exacerbating the large economic disparities that exist around the globe, and the need to build public sector capability to meet this challenge had never been greater. We strongly believed that it was an important time to convene policymakers and practitioners around the critical economic issues all cities, regions, and countries were facing. Drawing on BSC’s past experience running both online programs and blended learning programs, we put our knowhow into action and pivoted a 5-day residential program into a 10-week online program.

The program used a three-part model: you learn the concept, practice by applying the concepts, then reflect on the application to your context. We designed the course to include two asynchronous content sessions and one live question and answer session with the faculty each week. Participants were required to identify an economic growth challenge in their city, region or country, that they would use to apply the concepts, frameworks, and tools they learned each week. Participants also attend a weekly peer learning group session where they could engage with each other and deepen their understanding.

This was one of the first executive education programs to pivot online at the Harvard Kennedy School. We launched the program in early April with three weeks to market the program. Given the short time frame, we expected to seat a class of 50-60 participants. Nevertheless, there was a huge demand; we received over 300 applications and we enrolled 222 participants!

216 participants from 64 countries successfully completed the 10-week program.

82% of the participants rated the assignments as extremely or very useful, and 67% attended their first executive education program. We were able to leverage the disruption to not only continue training development leaders around the world, but also improve access to training by allowing more people to enroll and expanding representation from a greater variety of countries.

Here are some comments from participants:

Growth after the Coronavirus: Thoughts and Questions

written by Matt Andrews

A lot of people ask me how governments should support economic growth in the period ‘After Coronavirus’. It is a vital question that I wrestle with daily in preparing for the forthcoming Leading Economic Growth Online executive education program (which I teach with my amazing colleague, Ricardo Hausmann). Here are some of my personal thoughts on the issue.

1. I believe we must focus on future growth, even if it seems misplaced in the current crisis

At times in the last few weeks I have found myself asking if I am a little tone deaf focusing on how governments should be supporting growth tomorrow when many people are dying, starving or falling into deep poverty today. Then I remember that economic growth is actually key to helping those who are suffering today have better lives in the future. As my colleague Dani Rodrik wrote in One Economics, Many Recipes, ‘Historically nothing has worked better than economic growth in enabling societies to improve the life chances of their members, including those at the very bottom.’ Dani’s comments echo studies that find many connections between growth, jobs, prosperity and well-being. I can’t see why these connections will matter less tomorrow than they did in the past, so we need to keep focusing on growth as a key to getting lots of other stuff right. To keep motivated in this work, I recommend that everyone focused on growth scour the literature to identify how growth does connect to other improvements in their country, city, or region.

2. We should focus on growth as a means, not an end

We who work on growth should consider growth as a means to various ends, not an end in itself. Growth matters because it helps us achieve other ends we really care about—like ensuring our people have high quality work or access to education or better health care or (building on Dani Rodrik’s words) ‘improved life chances for our members’. When we develop our growth strategies it should be with these ends in mind, such that we promote the kind of growth that our society needs. This is really important because governments can foster growth in ways that undermine their real objectives. For example, I worked in a country where officials told me their biggest problem was that twenty-something university graduates were emigrating because they did not have good quality jobs (where the implied policy ‘end’ would be ‘more jobs for recent university graduates’ so that ‘college educated twenty-somethings emigrate less’). A consulting firm encouraged the country to pursue growth in tourism and mining, which it did, and which led to growth. Very few jobs in the newly expanded tourism and mining sectors went to the target population, however. As a result, the country’s growth did not achieve the needed objective or end. To ensure we focus our growth strategies on ends we really care about, I recommend developing an ends means growth chart that (i) lists the key problems we hope growth will help to solve; (ii) suggests a simple theory on how growth can help address each problem; and (iii) we use to guide our choice of which growth opportunities to pursue and which to pass on. Continue reading Growth after the Coronavirus: Thoughts and Questions

Register for our new Executive Education program: Leading Economic Growth (online)

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As the Coronavirus (COVID-19) pandemic continues to evolve in the US and around the world, we believe now is an important time to convene policymakers and practitioners around the critical economic issues all cities, regions, and countries are facing.

leg-graphic-v2-hr-01 In response, Harvard Kennedy School Executive Education is shifting its longstanding residential Leading Economic Growth program to a highly engaging 10-week online format for spring 2020. The online program will cover all of the content of the residential course.

As participants you will learn new ways to think about your country’s growth challenges and to develop a strategy for addressing these challenges—including ideas on what you can do, how you can do it, and in what kind of structures, just as you would have on campus. The online program will be delivered over 10 weeks, and each week will include two self-paced sessions and one live session with the faculty chairs Ricardo Hausmann and Matt Andrews. The design of the online program includes important team-based opportunities for robust peer engagement throughout.

Visit the course website and register here.

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