The Global Financial Crisis: The Beginning of the End of the “Development” Agenda?

In this paper, written as the introduction to New Ideas on Development after the Financial Crisis (JHU Press, 2011), Nancy Birdsall discusses two themes. The first is the pre-crisis subtle shift in the prevailing model of capitalism in developing countries—away from orthodoxy or so-called market fundamentalism—that the crisis is likely to reinforce. The second theme is better framed as a question than a prediction: will the financial crisis, which is likely to be remembered as marking the end of Western economic dominance, be a trigger for a new twenty-first-century approach to collective action on global problems? Whether and how global collective action proceeds on key challenges—coordinated regulation of the financial services industry, climate change management, international migration, and correction of the global imbalance problem that helped precipitate the crisis in the first place—will matter tremendously for most of today’s developing countries. A future in which global collective action is effective implies ultimately that the very idea of a “development” agenda (and the implied asymmetry of power and influence between developed and developing countries) will yield to the idea of a shared “global” agenda—across nation-states that cooperate in their own interests and in the interest of shared global stability and prosperity.