Berkley Center

The key message of the past two lectures has been the collective mission to promote shared prosperity. To some it may be awkward that the World Bank is setting such an agenda. To others, it may indeed give some hope. The concept of shared prosperity can have various definitions. For policymaking, clear definitions are the most useful. As Dr. Kaushik Basu stated, shared prosperity can be thought of as the growth in per capita income of the poorest 40 percent of the population. In the end, this is economic growth, measured only in terms of income, but this measure focuses on a particular sector. Some could claim that it is not only more resources flowing into this income group that is necessary, but also that such resources indeed go to improve their living conditions. While this issue could be material for further discussion, as it stands shared prosperity and the elimination of extreme poverty are now the focus points for the World Bank.

Numbers show that growth, defined as an increase of per capita gross domestic product, has been attained in some countries more than in others. When at some point certain countries’ GDP per capita were the same, within a few decades one significantly outpaced the other by an order of magnitude. What explains this uneven growth? Economists have given a wide set of responses to this question and Dr. Basu suggested the findings of important development economists and philosophers as a source of his response. Then he gave some cues: savings, investment, and technology make the difference. Linking technology, like the Internet, that may significantly foster labor productivity, does not imply huge transaction costs, and that adds flexibility to labor markets. This type of technology is one that developing countries may benefit from. We now need to seriously consider what factors are required to take advantage of low-cost, high productivity technologies so that each country can take advantage of them to improve the wellbeing of the poorest 40 percent of its people. The jobs we are seeking should be related to the concept of “decent jobs” that some agencies, such as the International Labor Organization, propose. Let´s make sure these jobs contribute to human dignity, have the deserved social protection, and are environmentally responsible. Only then can we approach a truly shared prosperity.