Former Chief economists at the World Bank Francois Bourguignon, Kaushik Basu, Nobel laureate Joseph Stiglitz and Justin Lin are four of the world's leading economists behind the Stockholm Statement.
Photo: David Grossman
Leading economists call for inclusive and sustainable development in Stockholm Statement
Thirteen of the world's leading economists, including Nobel laureate Joseph Stiglitz and four former Chief economists of the World Bank, have summarized their accumulated know-how in the Stockholm Statement. Traditional economic thinking no longer applies. Inequality within countries is threatening social cohesion and economic progress and development needs to be seen in a broader perspective in order to achieve more equitable and sustainable results.
”Inclusive economic development is the only socially and economically sustainable form of development.” This sentence is taken from the ”Stockholm Statement”, developed by four former Chief Economists of the World Bank including the Nobel Laureate Professor Joseph Stiglitz and nine leading economists*.
Sida and the World Bank co-hosted a meeting in Stockholm 16-17 September 2016 with the purpose of discussing the challenges faced by today’s economic policymakers. The meeting gathered a distinguished group of the world’s leading thinkers and academics to discuss today’s most pertinent development challenges and the way forward. The outcome of the meeting is the ”Stockholm Statement”, which identifies a set of principles to help frame country-level policies in a rapidly changing and globalizing world.
The Statement emphasises the importance of policies that tackle inequalities. Trickle down growth policies where the state has a minimal role and the rest is left to the market are not sustainable. It is underlined that the trend towards “unfettered markets” of the last quarter century explains some of the recent crisis (financial crisis of 2008) and the current levels of inequality. GDP growth is needed as a means to achieve societal objectives. This requires a combination of a particular focus on the most deprived groups, deliberate interventions to eradicate oppressive norms and discriminatory practices as well as to attend to the impact of global technology on inequality.
Environmental sustainability is a requirement, not an option
The Statement is crystal clear on the importance of taking efforts globally and nationally for mitigation and adaptation. The 13 economists also emphasise the importance of incorporating social norms more consciously in policymaking and see the potential of e.g. curbing corruption by further emphasise on these issues.
Finally, official development assistance and the role of the international community to advance development opportunities for the most deprived citizens are underscored.
This is a landmark statement that Sida will actively use and relate to in the Swedish development cooperation, at Sida and in dialogue with partner countries. The principles of the Statement address the core of the Agenda 2030 of an environmentally, economically and socially sustainable development including an emphasis on the joint responsibility of all countries in this globalised world, whether developed or developing, to reach an inclusive and sustainable development.
The five central perspectives in Swedish development cooperation: poor peoples’ perspectives, rights, gender, environment and climate, and conflict sensitivity, are emphasised through-out the Statement, confirming their importance as underlying development challenges.
It clearly shows that development needs to be seen holistically to reach more equal and sustainable outcomes. “We can achieve a world with shared prosperity.”
* Professor Sabina Alkire (Oxford), Professor Pranab Bardhan (Berkeley), Professor and former Chief Economist of the WB Kaushik Basu (New York), Professor Haroon Bhorat (Cape Town), Professor and former Chief Economist of the WB Francois Bourguignon (Paris), Professor Ashwini Deshpande (Delhi), Professor Ravi Kanbur (Ithaca), Professor and former Chief Economist of the WB Justin Yifu Lin (Beijing), Professor Kalle Moene (Oslo), Professor Jean-Philippe Platteau (Namur), Professor Jaime Saavedra (Lima), Nobel Laureate Professor and former Chief Economist of the WB Joseph Stiglitz (New York), and Professor Finn Tarp (Helsinki and Copenhagen)