I have always been very interested in development economics. Institutions such as the World Bank and the International Monetary Fund have bedazzled me, and to that extent I took up subjects such as Development Studies and Development Economics. As my degree comes to an end, and now that I have started looking for internships and jobs, I have realized one thing: there are no jobs in development economics, and moreover, there is no such thing as development economics.
To illustrate what I am saying, let me compare a country to a human body. A body has different parts; accordingly, a country has different sectors. Doctors who specialize in specific organs can find jobs. Imagine a doctor who specializes in “human body betterment”, he would turn out to be a jack-of-all-trades, yet, a master of none. Similarly, as an economist, if we as economists do not specialize in a particular sector when it comes to development-related work, then we end up like that useless doctor as well.
Moreover, foreign aid as part of a country’s Gross National Income is going down in much of the advanced countries. At the same time, the total amount in aid has been rising because of economic growth in donor countries. The following graph, which was taken from the OECD (Organisation for Economic Co-operation and Development) website summarizes this clearly:
At the same time, the very theory of development economics is not without its flaws. In a competitive, cut-throat world, latest information is key to success. In the world of finance and trading, information is churned out and consumed at the very instant. In development economics, it takes a few months, even years before the impact of a program can be fully assessed, which in turn results in inefficient allocation of resources and implementation. There is a learning curve with each particular experiment and project, and there are hardly any golden rules that could be applied to all the projects; i.e. there is a serious lack of external validity in the theory.
Most importantly, governments and organizations have dwindling faith in this subject of late. There have been scathing reviews on the neo-liberal policies undertaken by the World Bank and the IMF, which are considered to be the premiere institutions to foster economic growth and promote a global development agenda (I am not even bringing up the blow to the IMF due to the whole Dominique Strauss-Kahn case). Numerous studies have shown that the aforementioned policies have actually worsened conditions in the recipient countries, and its citizens have lost faith in the states’ ability to manage aid funds and run a nation. Plus, the politics of these organizations also need to be taken into account. The World Bank has been accused of predominantly submitting to US interests, and the US has veto power over policies. Although it made sense when these institutions were created (US stock amounted to 74% in the bank, in 1950), the times have changed now. However, the politics still echoes the Cold-War Era power dynamics. The following graph taken from Politico illustrates the share of the US in the Bank:
However, this is not to say that development economics is outdated or bad, or anything of the sort. For me, the nobility of the subject and the work is alluring. Coming from a developing country myself, I have seen the struggles of the laborer who works 12 hours a day at 1.5 euros per day, to feed his family. I am not trying to be a gospel or a messiah, it is about being empathetic, and helping the world become a better place. There are many other ways to apply your knowledge, maybe in the field of finance or business. It is important to realize that your means to an end will change over the years, but the end will be what your goals are, and what motivates you as a person.