CGD Podcast: UK Election Reflection with Stefan Dercon and Laura Chappell

Center for Global Development
Recorded: August 29, 2024

Episode Overview

This episode features a timely and thoughtful discussion on the aftermath of the UK’s 2024 general election, which saw the Labour Party return to power in a landslide. Host Ronald Isanaiko is joined by Professor Stefan Dercon (Blavatnik School of Government, formerly Chief Economist at DFID) and Laura Chappell (Associate Director, IPPR) to assess what the new political landscape could mean for the UK's role in international development. The conversation centers on how the world has changed since Labour’s 1997 win, the global challenges ahead, and how the UK might craft a smarter, more coherent development policy.

Key Discussion Points & Insights

How Has the World Changed? (00:35–11:29)

• 1997 vs. 2024 Context

  • 1997 was a time of optimism, shared Western values, and the “end of history” sentiment amid global growth and falling poverty, especially in Asia (03:06–03:49).
  • Quote [Stefan Dercon, 03:06]:
    “This was a time of… unipolarity. The US, the West was rising… The beginning of the fruits of globalization… a lot of these countries, not least in Asia, started actually to show… engaging the global economy brought dividends for poverty reduction.”
  • In contrast, 2024 faces fragmented geopolitics. The era of easy growth is over; emerging economies face crises, and the public's support for development spending is weaker.

• Geopolitical and Economic Shifts

  • The rise of China as a strategic competitor complicates development approaches (07:26–08:36).
  • Globalization is receding, protectionism is rising, and it’s no longer clear how to promote poverty reduction as before.

• Complex Aid Landscape

  • There are more sources of finance now; in some places, aid is a “drop in the ocean,” while for others, it’s still vital (10:19–11:29).
  • Aid agencies must work in new ways, recognizing both political and economic realities.

The Three Big Agendas for UK Development Policy (11:29–15:40)

• Climate

  • Climate change is a primary concern, yet aid must support both long-term (mitigation/adaptation) and immediate development needs.
  • Quote [Stefan Dercon, 11:29]:
    “The easiest choice would be to do all the development on climate… but... countries need to deliver in the short run politically, economically…”

• Economic Growth for Development

  • Growth is essential for poverty reduction. The UK’s approach should support countries’ ambitions for inclusive and sustainable economic expansion.
  • Focus on supporting “productivity-based” growth and value-chain advancement (20:22–21:09).

• Fragility and Conflict

  • The UK should aim to defuse geopolitical dimensions in conflicts and act more as an intermediary, akin to Norway (15:08–15:40).
  • Quote [Stefan Dercon, 15:11]:
    “Find ways actively of defusing… geopolitical dimensions in these conflicts… Why can't the UK be a bit more like Norway… rather than a G7 Security Council… holder?”

Assessing Labour’s Approach: Optimism & Opportunity (16:52–21:09)

• Optimism about Labour’s Direction

  • Chappell points out the openness of Labour’s manifesto as an opportunity for creativity and fresh agenda-setting (16:52–17:24).

• Policy Coherence: Domestic and International

  • Labour’s growth and productivity focus at home is mirrored in their international agenda—supporting productive, transformative, and sustainable development abroad.

• Potential for Innovation

  • The new government could leverage the thinness/open-endedness of the manifesto to shape a modern, impactful approach that matches today’s challenges.

Growth, Betnets, and Development “Announceables” (21:53–29:33)

• Bet on Growth, but Don’t Neglect Basics

  • Dercon stresses being a “venture capitalist” in development: take calculated risks on transformative projects where opportunity exists, rather than just sticking to safe bets like distributing bed nets (22:36–25:17).
  • Quote [Stefan Dercon, 22:36]:
    “We do need to take these bets on growth… But in the end, these are the big transformative processes…”

• Integration of Tools

  • Chappell calls for leveraging diplomatic, development, and trade skills together, especially post-DFID/FCO merger (25:17–26:36).

• Decentralization versus Central Control

  • The panel highlights that program effectiveness is higher when decision-making is closer to the ground (29:33), and the need for less central “patronizing” control from London.

Labour’s Actual and Stated Priorities (30:05–33:22)

• Areas of Focus

  • Debt: UK’s track record and experience gives an opening, but the space is more complex due to the involvement of China and private sector creditors (30:05–31:23).
  • Economic Transformation: Support for value addition, productivity, and sustainable development.
  • Climate: Remains a top international priority, aligning with domestic missions.
  • Kleptocracy and Illicit Financial Flows: Labour wants to tackle global corruption and move toward a “beyond aid” approach where UK policy also supports development goals.

• Partnership with the Global South

  • Emphasis on tone and mutuality—UK must act as a partner, not a patron.

Beyond Aid: Raising the Policy Bar (33:22–35:45)

• Labour’s priorities will require shifting beyond how much money is spent; real progress depends on influencing international policy (e.g., trade, financial flows).
• Quote [Stefan Dercon, 33:47]: “If you really want to be serious… it would put pressure on their diplomats as well… This is not simply things you, quote, unquote, can buy.”
• The risk: The bar is set high; success requires whole-of-government commitment, not just box-ticking or small funding pots.

What NOT To Do: Avoiding Pitfalls (36:11–38:59)

• “Announceables” and Policy Fads

  • Chappell warns against orienting everything to media-friendly “announceables,” which absorb resources and rarely matter to intended partners.
  • Quote [Laura Chappell, 36:11]:
    “The thing I would like to see this government try not to do at least too much of is announceables, gearing action towards a thing that you can announce… Is it worth putting all that effort into designing something which sort of hits a narrative that you care about but is probably quite short term?”

• Obsession with Money and Transactionalism

  • Dercon advises against focusing solely on money or using aid purely to advance UK’s commercial or migration interests.
  • Prioritize lasting relationships, partnership work, and system strengthening.

• Climate Mitigation as Development Policy

  • Only pursue climate mitigation within aid policy if it also delivers development benefits (38:59).

Magic Wand Policies: Guests’ Big Ideas (40:08–42:05)

• Dercon:
  “If I could force the US and Europe to take the entire burden of climate change on them, I would be delighted… I would give rope to a lot of low income and lower middle income countries…”
• Chappell:
  “If I could wave my magic wand, I would see that IMF and World bank boards agree on greater voice and meaningful steps for making more of their balance sheets.”
• Host (Isanaiko):
  Would make global movement easier for people, citing colleagues’ advocacy for global labor mobility.

Notable Quotes and Memorable Moments

• On Optimism in Development
  Stefan Dercon (17:25):
  “You can’t be in this business unless you’re an optimist. We can’t work on development without massive optimism and optimism bias.”
• On Development as More than Spending
  Stefan Dercon (38:59):
  “A lot of development is not about money… it’s actually policy-making and trying to do reasonable things.”
• On How the UK Should Position Itself Stefan Dercon (15:11):
  “Why can’t the UK be a bit more like Norway in these conflicts rather than a G7 Security Council veto holder?”
• On Policy Coherence Ronald Isanaiko (19:23):
  “If you haven’t read it… I would read the recent ODI piece… about an international securonomics agenda… mirroring what we say domestically in our international policy.”
• On Labour’s Opportunity Laura Chappell (16:52):
  “I’m going to say yes, I am optimistic because I think in quite a lot of senses it’s still all to play for… the manifesto was relatively open whilst committing to developments in principle…”

Timestamps for Key Segments

| Segment | Speakers | Timestamp | |-------------------------------------------|----------------------|--------------| | 1997 vs. 2024 Landscape | All | 00:35–11:29 | | Labour’s Policy Options | All | 15:40–21:09 | | DFID/FCO Merger—Integration Debate | All | 25:17–29:33 | | Labour’s Priorities: Debt, Growth, Climate| Laura, Ronald | 30:05–33:22 | | Beyond Aid/Illicit Finances | Laura, Stefan | 33:22–35:45 | | Pitfalls to Avoid (“Announceables”) | Laura, Stefan | 36:11–38:59 | | Magic Wand Policies | Stefan, Laura, Ronald| 40:08–42:05 |

Takeaways

• The world is more complex for development than in 1997: multi-polarity, fragmentation, and new sources of finance require fresh thinking.
• Labour’s open manifesto gives the party room to set a creative, modern development agenda focused on global partnership, economic transformation, and joined-up government action.
• Coherence between domestic and international policy is vital; growth, productivity, and sustainability are necessary at home and abroad.
• Avoidance of short-term “announceables” and a focus on partnership, not patronage, could improve the UK’s global standing.
• Truly impactful policies will require action well beyond simply restoring or increasing spending—they demand political will, partnership, and systemic reform.

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