The Entrepreneurial State in Developing Countries

uh thank you everyone for coming today um it's lovely to see many familiar faces including the students one um so today we will be discussing the entrepreneurial stage but in the context of developing countries uh and I would like to thank you uh thank our common Commons team Sylvia they have been doing a great job organizing all this so thank you again for your help so as you some of you probably know we are celebrating the 10th anniversary of the publication of Mariana's the entrepreneurial state but also the fifth anniversary of our Institute so all we have like seven talks celebrating uh this both anniversaries and each of the staff at UCL I'm sorry IPP had uh you know had the freedom to choose how to approach that discussion and I think that discussing the entrepreneurial state in the context of developing countries is something we need to do and I have three lovely lovely is because to do that so yeah we have uh five more events to come I think uh we go like the first one was last week and we're going to uh I think the last one is in June so please register to our mailing list so check our website um okay so basically the reason why I want to discuss that is because you know uh we all know how the entrepreneurs State criticized what Mariana calls a minimalist view of Economic Policy you know which is basically is the idea that public is painting uh from the part of the stage should be cut which and then there is no much room for an entrepreneurial shape and Innovation and there's also the entire discussion more economics terms of crowding out uh the private sector you know in that there is this belief of how the private sector is dynamic Innovative and competitive and so on so this is a challenge that we see in the book and I think my question is how that works for in context of developing countries where we have also uh limited fiscal capacity the problem of national savings finance the stage capacity the question of inequality the external external vulnerability High interest rates and so on so we need to discuss that and I have here I'm tired already ah so we have here three speakers should do that the first one is going to be uh Dr Lucia pradella so Lucia Lucia will discuss masukata's conceptualization of the entrepreneur is entrepreneurial and develop developmental state in a contest of U.S China trade Wars wow okay so Lucy is a senior lecture International political economy at King's College she has published extensively on internet in on the International Foundation of political economy imperialism migration in the new labor movement in and Beyond Europe she's the author of the actual the the actuality of capital and globalization and the critique of political economy and co-editor of polarizing development and there are many others a year that I'm just going to skip because you know too productive she sits on the console of the international Initiative for promoting political economy and coordinates uh in that initiative the world economy working group so please check Lucia's work that is is fantastic and next should I introduce no I'm gonna do the next one so next one's professors is here from UCL with us so Julio talk you focus on the local government and its capacity to innovate and reduce secular trains towards inequality drawing on examples from Latin America especially Colombia so Julio is a UCL professor of human policy International Development here at UCL obviously in the former director of the Bartley development Planet unit uh here as well Julie is a civil engineer development planner in urban economies of international experience in research in consultancy projects in 15 countries Latin America Middle East African Asia his research expertise focuses on the local government in Progressive social and political transformation governance of urban and peri-urban infra infra structure transport and so on and I think there's a lot here as well Julie so please check Julius uh publication in Academia academic journey and last one you have fawa Dr fawa Cell sorry so so far was a talk to speak to the content of the book an entrepreneurial state but in the context of development Finance development Finance policy and its impact on public interest and state sovereignty in the post-covered world so that's a very interesting panel as you can see so far is a political Economist working as a senior policy in a democracy officer in a development Finance at iridad her research expertise covers publicly funded development Finance at multilateral development Banks and developing Finance institutions with a particular focus on the role of private sector before joining your dad flower worked as academic lecturer in International Development in International Development consultant in the UK foxes focusing on political economy issues within heterodox and pluralists economics there's a lot to check on for as well so I will let you guys to do that to yourself so yeah so each speaker has from 15 220 minutes but as I mentioned to speakers I really would like this to be an informal conversation so interaction among the speakers of the audience is in order because all this is a work in progress and that's all from me thank you is it okay hi everyone and thanks for the invite Carolina and um well first of all it's it's great to be here to be discussing Mariana matsukatu's the entrepreneurial State because uh this book is surely one of the most important examples of an innovation policy a policy book that has made it made it to the mainstream political debates and the book in my opinion sought to answer the right questions at the right moment and particularly in the context of austerity and the fact that policies of austerity and fiscal consolidation miserably failed to promote growth and prosperity and in this context matsukato tried to criticize the very roots of these policies and in so doing she demolished the idea that weaker State intervention reduces fiscal deficit and enhances private sector Innovation and what she shows in the book is that behind many of the Innovations commonly attributed to the the private sector there is actually the intervention of the state and she combines schumpeter and case arguing for the centrality of government intervention Innovation systems and the banks meets a venture capital as risk loving and actually stresses for example that the United States government funded the riskiest basic and applied research often generating uh past-breaking Innovations and what she wrote in the book 10 years ago was that she aimed to change how we talk about the state and to defend its existence its size in a proactive way and I think that if it would be an exaggeration to say that she actually managed to achieve this goal on her own she undoubtedly contributed to a Renaissance of interest in industrial policy and 10 years after the publication of the entrepreneurial State many countries from the EU to the U.S to countries in Latin America and so on are investing heavily in economic recovery and Industrial policy so what we are discussing this evening is actually well this is me and this is from a pamphlet that she wrote two years before the entrepreneurial State also called entrepreneurial state and so we are here to discuss the relationship between the entrepreneurial State and the developmental State a state that plays a key role in development as a catching up uh process and uh to some extent I would say that the the entrepreneurial State build upon and so to expand upon the literature on the developmental State and in her pamphlet she actually argued that well if there is strong evidence that the state can be effective in pursuing targeted uh catch-up policies by focusing resources on being dominant in certain industrial sectors why is it not accepted that the state can have a greater role in the development of new technologies and applications Beyond simply funding basic basic science and having an infrastructure to support private private sector activity so um for matsukato like the developmental state that plays a key role in catching up development so should Western State acknowledge their own centrality in The Innovation process and in the struggle for Global competition and in her 2011 uh pamphlet she actually uh base the distinction between uh Developmental and entrepreneurial States uh on the nature of innovation on the idea that basically developing countries don't innovate but actually seek to replicate knowledge that exists elsewhere okay so this is uh a quote from the pamphlet where she basically says that unlike in a developing economy where the technology is already available elsewhere in the world an entrepreneurial state does not yet know what the details of the Innovation are but it knows a general area that is ripe for development or were pushing the boundaries of knowledge are desirable okay so um so there is this distinction based on this idea of innovation that basically developing countries wouldn't be innovators right uh but in her 2013 books a book actually the boundaries between Developmental and entrepreneurial State uh seem to be more blurred because in the wake of the global economic and financial crisis matsukato compared the disappointing records of the United States and the UK governments to actually the examples of States like Germany China and Brazil that used post crisis stimulus spending to invest in global clean industry through the state investment Banks or their developmental Banks and it's quite interesting because in 2013 matsukato warned that the United States and the UK actually risked to miss opportunities to season the energy transition because of their excessive Reliance on venture capital so the question I'm going to ask this evening is what happens when a developmental State seeks to become an entrepreneurial State okay and I think when we ask this question the first example that comes to our mind is actually the example of China because after a massive stimulus plan in 2009 China managed to caution itself from the global financial crisis and also began increasingly to diversify its economy and to strengthen its input substitution strategy by supporting the development and relying on its own domestic technology and it's quite interesting that at the last party Congress last year Xi Jinping actually abandoned the idea of a market-oriented system of innovation and emphasize National strategic strategic demands as the new direction right so basically affirming these kind of Center role of the state in Innovation and the process of upgrading has actually had an impact on companies like apple that matsukatos shows in her book were actually able to ride the wave of massive State investments in the internet GPS touchscreen displays and communication Technologies and were able actually not to innovate by themselves but to integrate Technologies and components developed by the US government and the military or through public private Partnerships so if we look okay this is a a kind of quite uh common uh picture we could look at the geographical distribution of the production and the appropriation of the value of an iPhone or whatever other product and what we see or there are studies that show not actually mine that if we compared the production and appropriation of the value of the iPhone in 2009 and in 2019 we see that firms based in China now perform more complex tasks in the production of the iPhone and capture more of its value in comparison to 2009 and from 2007 according to Andrea Ricci China has actually reduced the amount of value that it transfers to more developed countries through unequal exchange so this is a more General phenomenon but in my view it's important to highlight that this process of how upgrading cannot be understood by focusing only on China's so-called developmental state but it's also a response to the Revival of the labor movement in China especially after 2010 in this context the states and the capitalists responded to labor unrest with a mix of accommodation and repression and also by having recourse to both special and technological fixes this is an example actually from Foxconn that shows that after 2012 actually the number of employees at Foxconn has actually started to decrease and this is also in response to increasing Technologic application of Technologies and robotization as a response to labor unrest in Foxconn factories um so I think this example is important uh for five main reasons the first is that I think it pushes us to ask the question of where is value created and where is it captured right and I think that if we look at these these actually challenges methodological nationalism and what John Smith's called the GDP illusion so the idea that you can situate the creation of value where actually this value is captured and from my point of view this is what matsukatos actually reproduces in her book in 2013 when she says well there will never be a precise answer as to where profits are created but if the corporate tax is a tax on income it is reasonable to place products where value is created in Apple's case can there be any doubt that most of its value is created inside the United States so uh well I think there are quite a lot of doubts that this is the case and if we look at the Apple in this context then the role of the US government hasn't just been that of creating the technological conditions for Apple's success but it has also protected Apple's intellectual property rights and guaranteed access to foreign markets and a cheaper labor force for example in China and so I think this is also important because it pushes us to situate Innovation within exploitative production relations and also the effect and the impact of the class struggle if the super exploitation of Chinese workers is an important factor that propped up the profits of U.S companies like apple workers struggles in turn have played an important role in fostering Innovation within China and this has changed rather than reduce the forms of Labor exploitation within China but has also had an impact on the value transfers from China to the United States because it's decreased the share of value captured by Apple Innovation from my point of view doesn't therefore Foster the development of countries considered as separate economic units right but it must be conceptualized as key to capital's competitive struggle on a word scale and it must be understood by theorizing the structural link between economic and Military competition and the persistence and actually intensification today of interimperialist conflicts so to maintain a privileged position imperialist countries systematically seek to prevent others from encroaching Encore technological activities and so the distinction between entrepreneurial and developmental state is actually reproduced and enforced by any means by the dominant countries and in the light of these I I think it's important when we think about strategies to make the most of the fruits of innovation and share them in an equitable way because these strategies cannot take place at the national level so for example at the United at the level of the United States by supporting or you know a declining U.S Empire or you know um presupposing the exploitation of workers including the super exploitation of workers in the global South and this brings me to my next point which is oops where am I my slides all right okay I think the final the final slide uh disappeared okay so this brings me to the relationship between China and the United States so if we look at the Biden Administration today this Administration is definitely Reviving the U.S entrepreneurial State the chips Act and the inflation reduction act together for example include more than 400 billion dollars in tax credits grants and Loans designed to foster a domain domestic semiconductory industry and clean tech manufacturing base okay and if we if we look at these both of these acts which were passed last August in the United States we can see that I cannot be understood in in isolation from the trade Wars with China because they are both aimed at keeping China technologically dependent in key sectors the chips acts a guardrail provision for example stipulates that a company that seeks chips act funding will not engage in any significant transaction involving the material expansion of semiconductor Manufacturing in China or any foreign country of concern like North Korea Russia and Iran the IRA provides for the investment in energy security and climate change responses with the goal of strengthening U.S energy security and limiting its dependence on China and both Acts were just very immediately almost immediately in October 2022 were followed by a comprehensive sets of restrictions on China's cheap manufacturing Industries so this shows that these measures seek to reproduce and maintain a hierarchical international division of labor and this brings me to my final point in her book Mariana matsukato focuses on the positive aspects of innovation and state initiative without talking much about the military and surveillance Technologies and other things so she certainly acknowledges that military and series sectors are closely entangled Innovation systems for example the contribution of DARPA to technological innovation in the U.S and she argues I think at the end of the book it is of course important not to romanticize the state's difference and its ability the state feature fearing nukes from the USSR the sinking of Florida running out of oil may cause it to do what no one else can EJ use its ability to create money and risk wasting it on an inane idea solution such as War now what I want to ask this evening is whether in the context we are right now right uh increasing military spending in the wake of the war in Ukraine itself an expression of increasing interimperialist conflicts on a world stage so in this context is it still possible to discuss the nature of the entrepreneurial State without centering the question of War as Inseparable from the political economy system that engenders it so when we think about the entrepreneurial State yes we can think about the iPhone but we can also think about the technologies that survey the workers in China that actually produce the iPhone we can think about blind Clinton Technologies but we also need to think about Atomic weapons or the C4 explosive that may have destroyed the Nordstrom pipeline last September right so what I'm saying is we need to look at both aspects of Technology because this is the nature of technology in our society technology and Innovation and so what we need to ask ourselves is what we really need is an entrepreneurial state or a state that facilitates the transition to a more just Society where Innovation will finally serve human needs rather than profit thank you okay good afternoon everybody delighted to be here um my name is Julio Avila as Carolina said uh if this works I'm not sure how it works okay there you are that's my name uh I lost the the background picture unfortunately it was a lovely picture of Bangalore the metro in construction which is quite an impressive piece of of infrastructure so my my tack on this or my take on this is completely different I I will change completely from very heavy fascinating theoretical critique to a fairly empirical uh approach to to this discussion I will also change the scale from the national to the local and and focus focus more specifically on infrastructure so so these are these are very different premises but hopefully we'll it will it will take us to where where we want to go at the end of this session something that you've all seen heard about is the uh irreversible uh nature of urbanization and we've got a wonderful specialist here to companies in this but it's something that we look at the global picture yes societies are urbanizing but the important thing is to look at the a look at the the details later at the end actually because I changed the order uh of the slides um but the important thing is that to know where is it happening how is it happening and and who's bearing the the burden of managing this this transition uh Lucia very uh ably and and provokes us to think about Justice in the end uh or you know all throughout and I'm I'm also using a Justice and social justice lens to look at this and I think we need to sort of really delve into the local to see what where they the problems are happening first issue that I want to highlight is this these old stylized facts the fact that there is a major I'm not sure whether I can point with this not really no no maybe not okay so anyway I we've got this well this shows for people who are too far to see it it's it's infrastructure investment 100 and these are percentages uh in uh 2015 and then a projection which is a little old now done by Mackenzie between 2016 and 30 and 2030. what it shows essentially that this is if you like the developing world this is the developed world to use these broad terms of course Ukraine will feature here at some point when somebody Updates this but essentially what we need is about three trillion dollars in investment in infrastructure to keep things going and where is that money going to come from so that's a first stylus fact we need loads of money to keep development going to give access to basic infrastructure and and transport infrastructure with telecommunications infrastructure education infrastructure housing and so on ports to to the the number of people that are coming second style as fact is the fact that and this is where there is some reference to Mariana's book in some extent to some extent into discussion here so uh apologies for that the fact that a lot of people forget is that in developing countries or middle and low-income countries the state is the major investor in infrastructure people think that it's a it's a private sector there's no money to be made in many parts of the world and if you look at at where the money is so this is what just to explain to people who can't see at the back this estate on Enterprises this is public entity so this is the public sector and this bit is a private sector so this is this is very painstaking work done by the World Bank who looked at hundreds and hundreds of documents or thousands of documents and it's obviously mythologically possibly flawed but they did do their job well to try and measure to what extent the private sector and the public sector work the the region where the public sector has a smaller share but the private sector four has a larger sir is Latin American that's only 40 the rest is built by the state through different means by borrowing by by taxation by different means but essentially this is something that we should not forget the state is essential for to for keeping things going and to for now and in the future quick one which is uh um something that I've been working on a place that I've been working on for many many years which is Meridian not my city I come from Bogota but it's a fascinating City in the sense that it's a city that I think has innovated against all adversities you've all heard about Pablo Escobar you've all heard about the violence of alien but what is interesting about Meridian is that it's a it's as near as close to her not quite an entrepreneurial state but a local state that has actually has used and leveraged um all sorts of old manner of resources human land but of course fiscal and financial resources to do amazing things uh still a very divided very violent pause City with huge uh diversity between the rich and the poor and especially but it's some it's a city that has actually used that power of the local state to um to reduce poverty levels to reduce uh differences between the poor and the rich and to actually innovate and I would argue that it is a degree of innovation that is very interesting to look at so I'll be looking at this for for many years just for those of you who are not familiar with either Meridian or the issues of of the reality in the ground of developing country cities I hate that term but you know there's not a fantastic term well this shows this is work we did back in in the 2000s um which was to try and look at to what extent the city has developed along informal lines if anybody wants an explanation what informality means I'm happy to give it to you but essentially these are not in the plan anything that is yellow or light yellow was not in the plan because they were not meant to be there people who develop these areas as residential areas and you'd see a picture in a minute we're not meant to be there because of topographical reasons because of environmental reasons and so on so you can see and these are areas which are very very dense so there are other invasions of what we call in Colombia um pirate urbanizations this picture looking like this way no sorry looking that way so what you can see this is a very interesting cross-cutting picture that looks at um Carolina keep an eye on on my time I'm I'm keeping an eye on it but so what this shows is is how a lot of Latin American cities have developed over time and this mayin by the way is three and a half million people so it's not a mega City by any by any means but it's it's a second largest city in Colombia what do you see here is a recent Invasion it's a it's a it's people have taken because the state cannot produce them the market cannot produce enough housing for them they've taken over this area which is fairly Steep and therefore liable to um landslides and build these precarious temporary temporary housing that's how a lot of probably easily sixty percent of people in in cities in Latin America started out life like that then what you see here is is this but projected 20 years later in other words people have managed to get some security of tenure I've started building and you can see this is three three stories and this is investment by people themselves this is their future this is their pension right this is what I can leave through the kids they rent out this this or this floor or maybe both floors they live in the bottom floor whatever it is but this is an asset that they keep and you can see all the layers of history in just this picture which is what I I like it when I took it I didn't realize this was I had full history of housing in Meridian or in any City and the same goes well so but you can see also the topography it's very precarious very difficult and and therefore because it's illegal or informal the state initially did refuse to go there refused to provide them with with basic Services transport and so on but Medellin and you know when you've got something and the chair was talking about this these huge gaps between the rich and the poor when you've got people who are live very precarious existence and livelihoods you've got a danger of a revolution right and and in the 1960s this was very present in America uh thanks to Cuba so the states start to act in initially in the 1960s I'm not going to go into history here the U.S was involved in I think all the alliance for Progress which was about 16 billion dollars invested in precisely upgrading places like that in the 1960s and Colombia was the main recipient of that of that aid but it was run through what I find fascinating about Meridian which is you know people despair you know cities are in a terrible State there's no transport what I find fascinating about a million bearing in mind also it's a relatively small City three and a half million is how Innovative they have been in using public transport I trained as a civil engineer I work in in transport largely and and water and sanitation and areas like that but my interest is to what extent local governments can actually do something about this this is what in in transport we call multimodality which is there are several modes here there's a bus rapid transit system which was developed in Brazil in kurichiva there's a French Tramway which sort of is appropriate for a dense area because it's quiet there is free cycle for anybody to use you have to register there's an overground system which is the only one in Colombia in fact but rapid rail Transit and there is my favorite Innovation which is which is the cable car so I wrote a whole book and did research for two years two and a half years on the cable cars their social their Urban impact and and we found fascinating things which I'm not going to bore you with but this is what we looked at this was created in 24 so 2004 so what it is is an old technology which has been in existence for well over a century used in many cities around the world including London for tourist purposes right and repurposing it to meet the challenges of density poverty certain difficult topography and and it does it with a very very minimal footprint if you look at this in this case I don't know the exact story of this pylon but probably no houses were knocked down it's a it's a technology that's it's it's very good to reach or fit in in context like this now eight countries in Latin America taken this example and have copied it why because it was a good Innovation because they developed it well because they managed it well in Brazil it failed in Rio it failed and after six years it closed down and the state Governor who sort of was involved in this ended up in jail so but it doesn't always work but in La Paz in Bolivia they have eight lines and they work this is the public transport in La Paz for example but it all started with this this is a grandmother of all the cable cars commuting Cable Car lines then came that one so we did a study on that several years ago um what was interesting about this is that it didn't just come as as a public transport intervention it came with what we in the in the jargonoas upgrading right so this is what they did and that's that won all sorts of prices the issue is can you scale up this to a much bigger area but that's a that's a different discussion which we can have later but this is what a precarious Invasion land Invasion look like from a from a close close um close look so every time it rained and it rains very heavily because it's a tropical country this stream would swell up and take everything in its way you know cats dogs kids everything right and and housing so what they did was to intervene in income in conjunction and participation with the people to create a buffer area left everybody who lived in this area here in these in these well tower blocks or these these areas which were financed by the state they still have to pay for them but the social fabric was not destroyed which is what happens when you evict people you know it was done so this is a fantastic case where the state is sensitive is kind and understands people and works with them but it's very heavy work and you need a fantastic bureaucracy that works in them and the people we interviewed the engineers The Architects the sociologists the teams working in these areas are amazing and and you need that but people forget that it's not really much for money it's a matter of the right incentives which can be monetary of course salary wise but it also needs to be you know is this the right narrative is this what people want to young people you know the the graduates of the master's degrees in UCL I'm very proud to say that a lot of my students end up working for the local government um is this this is uh a fantastic measure of the the capacity of local government to work you know somebody with a with a degree from London ending up in local government um so this is essentially what what it did then there's another Innovation just purposing a sort of standard shopping mall uh uh escalator because you couldn't fit a a cable car here they fitted these escalators which work sort of about 14 hours a day or something and you can't walk on them even the dog is Frozen uh there's there's a very very strong uh social control over the all these these pieces of infrastructure which is complicated it goes back to sort of the role of a Catholic church and the particular culture in the city and so on so forth now let me sort of zoom out a little bit and look at what can how can this be done I've got about three minutes yeah so how can this be done the trouble is do countries have the resources and let me emphasize the resources are not only about money it's also about people and that's much more complex than just money right and when we look at transfers fiscal transfers from national government to the municipal level and expenditures Africa and Latin America and Caribbean have amongst the highest interestingly Middle East and Western Asia have the lowest I'm not sure why but the average in oecd is 37 at 37 percent um but that means that the case of magazine is rather rare because Medellin is a large city it's very well managed and in Colombia the decentralization that happened which also happened in Brazil hasn't really happened in Chile and in Mexico uh meant that the smaller municipalities don't really have the resources human and otherwise Financial that Nadine has so it's on the other thing I wanted to show is okay so this this 60 for Africa how does it pan out if it's very varied that's why you know just grab this rather um sort of uh it's difficult to get something more systematic so just to show you that in Ethiopia the subnational level does better than definitely Uganda and Kenya in Mozambique which underwented uh decentralization process in the in the 2010s held by the World Bank we worked on a project with them it's a slightly higher but nonetheless a lot of the share is taken by the national government now the issue is so how do we do how do we deal with this phenomenon people think oh cities in the third world they're all mega cities and you know um people especially the media they're obsessed with mega cities there's only it this is an old projection so you know numbers may have changed a little bit there's only 41 mega cities of of 10 million or more in the world and they have a chunk of population projection there's 63 between 5 and 10. the vast majority more than half of population projected to 2030. we'll be in cities of 500 000 to 1 million and urban areas of less than five hundred thousand that's where the real challenge is that's whether the people the resources will need to be the legal Frameworks the Investments and the state and I can assure you that no private sector is going to be investing either domestic or not International in these cities they're going to be investing here because that's where the money is made so that's where the challenge we we Face anyway that's it thank you very much thank you very much second talk was so fascinating um so now we have uh fawa oh thank you that was your last life was missing oh here we go the last slide of Lucia oh is that so yeah so do you want to say something about your last slide okay well this is uh Joe Biden reading the entrepreneurial state of course and this is Joe Biden reading how to blow up a pipeline so he reads A Lot he reads both and we need both to understand the entrepreneurial state okay hi um thanks a lot for coming it was raining so if I wasn't speaking I wouldn't make it so really appreciate the effort from all of you um uh so it's also thanks to UCL to Carolina to the team for having me here and to be with such great panelists so the title of my presentation at States sovereignty public interest and development policy Finance policy uh so I'm Farva I work at the European Network for debt and development as a senior policy and advocacy officer I focus on development Finance um eurodad is a network of 60 Civil Society organizations operating in 28 European countries and also having so-called sister organizations in Africa Asia and Latin America and this today's topic is of interest to me because along with your dad I also participate in a few academic networks and my PhD was in South Korea so obviously its state capacity is is quite uh interesting to me so the two speakers have done a different kind of um picture which is that Lucia looked at the very concept of entrepreneurial State uh and before that actually I encourage you to read her paper review of the book which came out in 2015. the book I read the book in 2014 and I think your review came out 2015 for 15 or something like that but it was very fascinating to get the bigger picture of uh what is at stake with the concept of entrepreneurial State and what kind of other Concepts there could be um and so what I want to focus on now is to look at the really the macro pictures to sort of zoom out and look at the multilateral picture I will start with the brief uh a few stylized fact on the post-covet world and socioeconomic outlook for the global South today then I will look at International financial institutions and are they Solutions or problems it's a question I think you can have your take um and finally I want to make Take This Racist point that are we really talking about states of ranity in the global south or are we talking about State entrepreneurialism and then I have some policy recommendations which are evolving because we're talking about a really really vast topic here so the postcode world is is uh for the global South and I like the term Global South because it's based in a in a historic moment it represents something uh by which developed developed countries and developing countries became what they are so I have these three or four stylized facts here that I want to focus on first net Financial resource transfer from developing to developed countries and this is an angstad report 2022 and they say on net development countries are now financing developed ones and here net Financial resource transfer is the inflow of capital minus the inflow of net foreign of the income which is paid to foreign Capital so if you read these reports actually this trend is not New Year on year we see a very uh linear Trend where developing countries are financing developed ones but of course in the context of covet it became really really Stark at the same time we have the phenomena of dollar appreciation you must be reading about it a lot and in March to July only 32 billion uh flowed out of global South and finally of course there is the historic Capital flight and a lot of African academics have done work on this so This figure I thought was interesting 1970 to 2018 over 2 trillion was lost in capital flight and here of course we can talk about categories we can talk about illicit capital or we can talk about net income are going and the number would only become bigger as we add all these categories second there is the phenomena of sovereign debt and you may know that right now debt is a huge problem 54 countries will spend an average of 16.3 percent of government of government revenue on debt repayments in 2023 alone here I also have a Euro dad report called Riders on the Storm which is looking at small island developing small island countries such as Belize Dominic Republic Jamaica and their government revenue is even higher so 20 to 40 percent depending on how the climate and the debt situation coincides for them um and of course we have a very problematic issue of surcharges which is interest paid to the financial institutions like the IMF and if you calculate that the historic interest payments from Global South to Global North comes to 4. trillion and that's a figure since 1982. if you want I can forward all these sources of these figures I couldn't fit it in the slide then we have a very very start very very um imminent problem of food security so close to 193 million people are cutely food insecure um and across 53 countries this is world food programs 2022 report at the same time and this is an important figure big four big oligopolies have a threefold increase in their profits and they're called ABCD I forget their names but you can but you can look them up um climate change is is pretty dire so ipcc report calls it existential threat and planetary demise and the word irreversible if you just do a control F and search for it it's more than 10 times um finally there is the there is the issue of migration and this figure came up by the international organization of migration which is that 200 million climate migrants by 250. what that means is is that by 2050 one in every 45 people in the world will have been displaced by climate change and a complimenting figure for that is we have to remember that high income countries are almost always the main source of remittances so what these facts tell us about the postcode world right now is not simply that they are in problem but the problems that they're in are not of their creation that is that they are in a position where they're recipients so there is a there is in a way it's like um you can put in all the financing so when you say there is the need for financing and so on and so forth if that financing is simply going out then it's not doing the job as we see uh but more importantly if you look at the the problem of Monopoly Capital which we are faced with globally not just um in the developed North or in the developed South the sources are in the developed North however it has repercussions for developing countries so in all of these I hope it's clear that uh developing countries are in a pretty bad situation right now and again none of this is off their making of course there are problems and issues which exacerbate these from these uh forces when you think about how these problems could be sold from a multilateral perspective or from the international financial institutions we find I've put in four of course there are Regional Banks there are other kinds of multilateral development Banks but these are very prominent actors so the World Bank is established with the explicit Mandate of poverty alleviation this is in in one of its constitutional documents um the international monetary fund that we as we know is a lender of Last Resort so if you're really really struggling you always go to the IMF um and then there's a un space which has a very interesting Forum called financing for development which um came up with all these interesting um platforms and instruments such as the disability action agenda I remember Carol wrote something for a long time ago and of course the the very concept of this the social uh the sdgs or the sustainable development goals if you remember which replaced the Millennium development goals and also I've put in the EU here because it's a very International Development player so what are the problems with these institutions and why are they not working I mean if you if you start going this is a very long history but some of the problems which are happening right now first of all the World Bank likes to say that the conditionalities have ended that there are no structural adjustment policies unfortunately that's not true so development policy financing which is just one example of conditionalities budget support to developing countries and the latest numbers I've posted them here it's also from a Euro dad report but basically 30 to 75 to 27 of total lending is subject to these conditions the IMF is also a keen on conditionalities and every uh loan or or trash with them which the IMF gives or is about to give is conditional upon certain factors so Pakistan right now uh just imposed Central Bank Independence legislation in the country and you know the central bank is is a very political and a central instrument of States sovereignty in uh in developed as well as developing countries um and you see a lot of protectionism a lot of politics around that in the EU however in Pakistan it was seen um wise or in Pakistan's interest to to have this legislation imposed there are many other examples which which are worthy to mention so lead um in Indonesia there was a labor flexibility law which really uh comes to take away the Constitutional labor rights which were in the country and I would encourage you to look at I think it's called the Omnibus law in Indonesia and this was also conditional on on loan so the loans and conditionalities are very much part of these Bretton Woods institutions and the UN financing for development space there is a lot of emphasis on private Finance the establishment of sdgs also came with the criteria that private Finance is a very important actor and therefore it needs an enabling environment with private sector at the expense of public sector I was just in in New York for the latest 2023 forum and it was interesting to see that there is a Relentless push for impact investment without adequate analysis of how that impact investment has gone so by impact investment I mean ESG I mean um all kinds of rainbow bonds or kinds of sustainability bonds and I think we will see a big push for them A Renewed push for them because they're already very dominant finally in the EU as a development player um there are some new policies such as the global gateway which has a strong role for eu's own private sector which means that there isn't actually enough concessional or developmental Finance but a redirection of existing funds at the same time there was team Europe which was launched during covet and and again once again a lot of their policies work in contingent on countries completing IMF programs um one of the big arguments against the global gateway is that it's just whale one way of introducing a green New Deal for Europe but at the expense of developing countries so the so the point remains is it's the eu's green deal or is it the global Green New Deal so this is where we find ourselves in terms of of international financial institutions and multilateralism now if we when we come to the question of State entrepreneurialism as uh lichi already said it's uh it was a a remarkable book in many ways because if you see the huge impasse in mainstream economics uh which saw the state as this entity which needs to be rolled back and so forth the book challenged the very premise and it brought a new kind of thinking which was really important however when we talk about the very concept of the entrepreneurial state in developing countries I think the question that we need to ask is are these states Sovereign enough to then impose any kind of capitalist entrepreneurialism or even State uh development or or developmentalism this is also a very contested topic developmental state so very basically what do strong States need they need capacity and autonomy to govern so you can talk about your MIT miti in Japan yeah the state bureaucracies you can talk about the Korean development Institute in Korea you can talk about State um sort of having leading this role where the banking and the private sector are enmeshed and you have carrots and sticks where you incentivize some people or or punish some people for not following a certain kind of public policy which is in the greater interest um at the same time you have public financing and infrastructure I think we we really need to think about this because in the in in all developed countries there is a very very strong sorry the spelling is wrong here public financing in infrastructure and at the same time you have strong welfarism this is a very fascinating um uh an area of research because when we think right now of what countries are doing well I guess we think of Scandinavia you know or some other developed countries but their strong welfare history also comes with a certain kind of capitalist model where they were not subject to any of the constraints that I've mentioned so far at the same time as I completely agree with Lucia that we have to have a very deep interrogation of what Innovation is you know innovation has to be a collective public good which could be National as well as Global so nationally it's it's it's a collective effort which in which certain bureaucracies come together to produce a good which is in the long-term interests of developed developing countries for their structural transformation so this has to be one of the measures but globally we can see and I think UCL has done very good work on this looking at the World Health Organization so if you if you think of a multilateral Institute which which could have worked in the pandemic for all countries that was a who with the vaccines but for that to happen the who has to let go of his private Contracting model it has to ensure that every country from a very least developed country to a very high income country has an equal r d budget where they can then develop these vaccines and therefore Innovation happens on a global scale um and all of this I think something which is not discussed at all uh and which has made a very strong comeback is the issue of imperialism um and what it means to be decolonized I I won't go a lot into that because Lucia has already mentioned it to an extent but I think something to mention is that you cannot have uh financing thrown into uh countries and then say there's there has been a spatial fix these countries have a history of historic as well as ongoing imperialism which cannot be fixed by more financing so the so-called financing Gap where you hear that countries need so much money and we need I mean every year a trillion increases and I think the figure right now is 4.5 trillion but throwing money into these things is not going to solve the problem unless the structural constraints are are are removed so this is something to really reckon with and see how a simple U.S led order leads to a very transformative Financial architecture which include includes policies which countries are willing to do but also policies which countries are not willing to do and you see that with for example in the case of global sanctions so these are some of the policy recommendations um and these are um as I said it's a very complex uh issue and and if we are to address these problems from a Global Perspective they move towards some semblance of States sovereignty and then towards uh entrepreneurialism whatever it may be I think the Three core starting points are financing role of public financing in public Banks and here we can learn from developing countries um I think this is a key to understand what partnership partnership means because we don't have to look at developed countries we can look at developing countries in the context of covet and how they responded it could be Regional Banks it could be National Banks or it could be some multilateral banks where it worked eurodad has a report on public Banks so I would encourage you to have a look at that a second issue which is very contentious but which is a really no-brainer is debt cancellation if you want to restart the financial system and put developing countries in a position where they are in charge of their domestic policy space you have to cancel the debt this happened in the 1980s and there is no reason why it cannot happen now although we have the problem of private creditors now which makes it even more complicated and finally we have to Center local and Community rights and this by this I mean people who are being affected so you can't have a bank going into a a very um you know somewhere far away in Africa as they like to say and then bring hydroelectric power or something if you're displacing the entire Community there are no rights and there are no accountability for that so you have to ensure that this is within within that mandate from a policy advocacy level at the multilateral level I think the first thing we have to look at is legislative reform not multi-stakeholder Partnerships and here I mean the legal policies which are enshrined for example at the un uh the role of IMF which is legally binding and not the role of multi-stakeholder Partners which are private sector for example or uh entities which are not accountable to anyone that they actually have a policy say on a global level it should be shocking for all of us second you have to Define and regulate the private sector the private sector could be a a partner but a subordinate partner and it can play a role in development but in the same way as it played in the history of developed economies we have a very good example from the U.S in the so-called uh Robber Baron era where you had Monopoly capital and now we're reaching that level right so the U.S had to go through certain regulation to get rid of that Monopoly and to get back to on its feet it would need that even now but why are we doing that on a multilateral and a global level and finally you have to transform multilateralism where countries of ownership accountability and equal representation by this I mean for example the IMF quota reforms that is countries should have votes according to their sizes and you know right now African countries are being represented by very small European countries for example or in the if or in the U.N the voting power is not equal so there is a there is a very strong case for uh multilateralism to work in the interest of states of reality and then we can talk about entrepreneurialism once we have these uh this toolkit in play and of course as I said this is these are evolving and we can have a discussion on that thanks [Applause] yeah yeah so thank you very much fawa that's uh was another fascinating talk so yeah there was a you know amazing partner in the same so we started from this um uh contosalization of the entrepreneurial state within this uh the conflict between labor and capital at the global level we got very empirical regarding cities and and urbanization to then uh discuss the inter the role of international organizations and the International System in in in thinking how the entrepreneurial State should should be or the nature of the the entrepreneurial state in developing countries so now we have uh probably over 20 minutes for questions uh wow okay we have online wonder how is going there okay sure so I will get should we do groups of three yeah okay so let's go group of three I really would like to go woman first but um so okay so have Miriam I forgot your name Shereen and then Giovanni I saw some ah yes I don't know your name but you can introduce yourselves when you're speaking right okay so Jose hold do you want do you have a third mic no I uh thank you so much for a great uh set of talks and my question is too far one I really like the idea about sovereignty and how it fit and how it fits with the entrepreneur State and and your your Reflections are both covered and I was wondering what's your uh your take on issues like water or climate change where there is no current pandemic happening or some sort of Crisis or there are crisis but not as urging as as we perceive as we perceived kovid how would you say that cooperation between the developed and developing countries while there's no sovereignty in one side while the other but then we keep talking about Collective action and this Narrative of collective action where it can what's the accent of this Collective action when there's two different unequal systems thank you hi um thank you thank you for the amazing presentations I have a question from you well first of all it was amazing that you highlighted the importance of real resources because normally the the problem is framed as a monetary problem which is not a monetary problem as we know my question is like more is like a question suggestion at the same time um so I mean do you think that isn't it better to uh frame the question that instead of talking about where the money comes from because at the end Colombian Peso is coming from Just One Source I mean your Central Bank probably treasury combination of them so even though it might be um after that in the in the pocket of private sector and then uh but but it has one source at the end so isn't it better to frame it uh from this way that instead of asking where to uh how to finance or how to raise money or where the money comes from I mean asking that how would be how to mitigate the probable inflationary pressures because these two I mean the first one will open this path to okay we have to increase taxation we have to increase borrowing and then there is a huge uh resistance against that okay no one wants to pay extra taxes but if we frame it from the point of view of how to uh mitigate how to alleviate that the probable inflationary effects wouldn't be useful and also like other aspects like ecological effects and so on so forth so one more can I keep you for the next one thank you my name is the Institute of Commonwealth studies I think if I were a lot of Rich content in what you presented can I ask you to elaborate a bit on when you talked about um multi-stakeholder Partnerships and you you seem to reject or certainty wanting to scrutinize that more and I I don't dismiss that out of hand but I'd like you to elaborate on it in the context of two or three examples there's obviously I mean the U.N under sometimes criticized but has a whole range of those un Global compact comes to mind but there are also others but also one of the things that people seem to talk about coming out of Glasgow cop was the this private sector coming in bringing financing with them there was a sustainable markets initiative other initiatives so in the context of some of the scale of the challenges what kind of model would you look to if you're somehow trying to devise or develop a more inclusive um more balanced model for multi-cycled Partnerships that doesn't dilute some of the rent seeking Behavior or Worse CBI comes to mind there are other examples but I'd be interested in your thoughts on this thank you okay should we go back to the panel I should reverse the order oh oh actually it took very long so here you go first no you don't do anything you want to comment no okay um do you do you want to go first or straight I have two questions so do you want me to take no no it's okay it's okay I'll be quick so yes I'm from Miriam's question on Collective action on climate for example climate and water I think there was a very big water conference not very long ago um and um I mean these these issues did arise even there what do you mean by Collective action when when the water problem or or the lack of water for example in many countries is not ex not shared it's not a shared experience obviously and similarly for climate action so I mean I think that this is the this is the point right in Collective action you need to have a space where everybody is equal or has an equal power and how do you do that you do that by voting for example and even with voting of course you can have alliances where you as countries you have differing interests but in terms of climate which is a key problem right now the World Bank for example is called itself the world's biggest funder of climate at the moment and you have all these funds like Lawson loss and damage or mitigation funds which uh sort of fragment the climate problem into little pieces and some funds are for loss and damage which is a very particular term some funds are for saving biodiversity some funds are for climate disaster or catastrophe but the point is that unfortunately all of these are simply following the path of private Finance so whereas you has where you had private Finance previously you have private Finance for climate now so the problems that you had for private Finance which is a lack of development additionality because why do you need the private sector you need it a because there is a problem of scales and that problem has to be investigated more holistically um because you know I mean we need to ask ourselves why does the financing Gap only exist for developing countries now why did it not exist for the developed North and what does the financing Gap actually mean and and similarly in that way the second point is efficient and that you know is a myth so there is no economic logic to tell you that the private sector is more efficient therefore when you investigate all these instruments they collapse but what you have is a huge frenzy for water for climate action and and all these gaps there's a gender gap there's now a schooling Gap because of code and there is a financing Gap and we need to interrogate these topics more closely to then see what Collective action is on the table um and second on your point on multi-stakeholder uh Partnerships I think I would ask you the question to show me when it has worked because um I think un Global uh compact has a lot of issues and we can say actually say this about uh Public Finance as well it's not to just say that the private Finance or the private sector is is problematic but the problem with these initiatives is that then there is no lack of there is no accountability so if for example the UN has the private sector and this is what I mean by regulating it if the UN has a very specific and defined role for the private sector and it does not deliver then there has to be an accountability or a penalty at the moment we see nothing of the sort um and this Glasgow and cop I mean we see the Bridgetown initiative right now which is being proposed by Barbados which is basically trying to put developing countries uh at the helm by saying that we are going to hold this new fund but once again we don't know what is the governance of that fund does it actually challenge the existing framework of the IMF and the World Bank actually it stays within that so there is that something to think about and once again it it is a fund which is Rife for problems of financialization so the same problems with developing countries in ownership and I think it's very it's actually the whole document is not out yet from what I know but it's very it's very Progressive in the sense that this is the first time a country from the global South has proposed something but I think it's too early to see where it goes in the long term yeah thank you Father okay thank you uh before I forget let me plug something in which is that I've got a very few copies of this which is our uh six monthly newsletter to our alumni and so on and there's a there's an article by a colleague of mine Daniel on on transport so we reflect on the social dimensions and special dimensions of Transport um I'm not sure I understood your question uh because you talked about uh instead of asking the question where does he come from where does the money or funds come from uh we should think about mitigating the inflationary pressures I think local governments have very little capacity to to sort of stir up inflation to be honest I mean the investment capacity of our local governments is very very small to sort of change the macro economy at that level but also remember we haven't had you know massive inflation for the last generation or so until now but I would turn the question around and say or other ask the question where does it come in money come from in case of Medellin which is why I made it a case study that I find very interesting part of it is a good management of land and Taxation and having the people to sort of raise taxes or raise income locally but also with uh if you're like I'm not trying to romanticize the case of Beijing but but there is a redistributional limit in all that but more interestingly what I I think is um valuable in the case of alien in a in a context in which for a generation or more 40 years starting in the 1980s with all the shift in the Washington consensus governments were ordered more or less through structural adjustment to privatize to give up their functions because they were seen of us over bloated a few countries and a few cities and merely in amongst them resisted that not for ideological reasons that they're very they're not particularly Progressive I would say in that sense they're just very protective of their their things and one of them was uh an institution which is essentially the utility company owned by entirely 100 by the municipality which at the last because I haven't looked at the recent figures but the last figures I looked at was worth about 10 billion dollars entirely owned by municipality which is effectively a multinational that not only produces generates electricity distributes it in the city but also in other places and even internationally so the money that is made by this municipally owned organization is actually reinvested in things like the ones I mentioned but they also have other functions in utilities so that's what I find fascinating is that regardless of the reasons they refuse to privatize what is a very lucrative institution and I wish other cities around the world had done the same uh because yes you can actually manage it as long as you manage it cleanly openly accountable and with accountability you can actually do what Nadine has done which is to use the profits I don't like them to be called profits but um or the revenues to reinvest in Social programs all the kinds I I mentioned so okay we have how many so we have four five six Okay so okay hold Manuel how we're doing there one oh here we go so we have a couple of questions around depth cancellation um like different questions about like is how feasible is it and how much space are for developing countries to implement a policy instrument because of the limited fiscal space because of the conditionalities and how feasible is the cancellation in practice right so let's do Giovanni Ingrid uh Tom no oh sorry Jose first okay and then there's someone here right yes that's it oh okay so let's do let's get all questions I'll try to be very quick um so I Professor a question for Professor Davila I um I think most of us wish to have a more spread out uh distribution of power and more inclusive Democratic governance also through local through decentralization and local government however I'll try to be a bit Devil's Advocate because uh this is also something I encounter in my research which is a comparative research between a highly centralized country and uh more decentralized one um my understanding of development economic is that most countries in the development were either very centralized or the decentralization didn't play that particular developmental role I think about East Asia or even recent example of good development track record like in China in terms of Economic Development or even in Europe most countries in Europe that even now have decentralized wears the highly centralized during the development so what is your view of the relationship between decentralization and and economic development and uh and and the other question is something we are also struggling a bit in Italy is why is collecting revenues at the local level better than National transfers especially in terms of um inclusive inclusiveness if we want all citizens in one country to have the same rights you would like to have the same type of resources everywhere so that would be for National transfers so what would is it better to have it uh collected at local level hello I'll be short as well so I think my question is uh for all of you maybe maybe mostly foreign so I just wanted to kind of take it back to the entrepreneurial State book uh and I wonder because um several of you kind of contextualize it in a Global Perspective and added things that go beyond the book right like unequal exchange or net Financial transfers like pharah was talking about um so I wonder what you think is the most uh important or fruitful aspect of the book that actually is helpful for understanding how Innovation can be a force for good or can be a public good I think far around Lucia both mentioned kind of this at the end like how can we make Innovation happen uh in a way that that benefits everyone um so is there anything in the book that is like really important for this understanding and then on the flip side is there something like what do you think is the biggest weakness or is there something that fundamentally kind of contradicts um Innovation for public good from a global South perspective um my questions were forward um I wondered where China might fit in that narrative as a huge development lender the sex is going into but also the idea of um South South cooperation and whether that so-called cooperation as a chance to challenge the kind of structural factors that you highlighted and this is Lucia the graph that you showed um that the declining workers and increasing profits was that Foxconn so one of the things that came to my mind though is the is is innovation there can maybe contrary to the theory of value being used in this book these Innovation they're actually driving down the production of value by increasing production of relative surface value I'm just I'm wondering whether there's a kind of there's a difference in the value um concept at play in in the kind of the narrative you were telling there than the one used in the book thank you for the talk uh my question is for Julio um so I want to piggyback a little bit of what uh was said before regarding centralization my understanding is is interesting because the debates that we have in the country I'm also Colombian by the way uh so if you look at if you've got presidential debates actually people demand decentralization more than what we actually have and the stack system in general is quite centralized uh based on not only the tax system but the real royalty system of the coal and oil sectors so I was wondering if you could elaborate about what do you mean by the fact that there was this centralization in the country I mean there was political decentralization for sure but um fiscal like you know in terms of budgetary constraints for local governments are not 100 sure um or maybe I just I'm not knowledgeable enough um and the other thing is precisely related to that I was wondering if you could elaborate a little bit on what how is it that Medellin was able to leverage um and you know other other public companies in order precisely to Spur uh these changes because it hasn't happened in the rest of the country um Bogota for example did not do that and actually did actually the opposite and the transportation systems are quite a fake but not a failure but lacking compared to what Medellin is um yeah thank you very much sorry to kind of trying to address these questions as quick as possible we have we can go a little bit extra time and then we can go to the last round of questions yep okay okay so so essentially it's two questions in one in a way oh gosh how do I do this um very difficult questions big questions man and we've got three minutes so that's my excuse but there are in this um I I'll have to think about the your very very good question about decentralization and economic development I haven't thought about that I haven't studied it but I'm sure there are very good analyzes there um but your question about collecting taxes at local level I don't think that you see the if you look at the graphs and you look at the sources taxes is only one element of the revenue of local governments there's user charges uh in a way and there's there's revenues from for example running a Metro system or a public transport system so that gets reinvested in the system so it's not only just taxes and and I think I yes the the issue that of looking at a city like Meridian which is largely well managed and this is only one municipality out of 10 in our conversation although it has you know and 80 percent of the population is that uh it probably distorts the image and it goes back to Jose's question two but I think the fact that it is unique it does mean that we can't learn from it and I'll come back to because that's question and that's why I I've studied it and that's why I looked at it I think the the capacity of a million to sort of Leverage those additional um sources of revenue for example from having an updated cadastral survey which allows you to charge the rich for what the property is worth um then allows you to invest it in other things and that can only be done at local level a larger level is rubbish and that I can say that by looking at uh several countries that I've looked at in sub-Saharan Africa for example in Indonesia and India in India a lot of the um the Investments are managed by the state not by the local government and and that misses out the the smaller more granular picture so that's a that's a quick uh sort of um sketchy response unto Jose um again it's it's it's a very specific issue there's an issue of of a very closed Elite a very conservative Elite which held on to power for a long long time they know each other they transit in between local government uh national government universities and private sector and they're all they're all very very very tightly knit and it's that sort of sense of of regional identity very strong it reminds me in some ways of rivalry between Barcelona and Madrid the Rivalry between Merlin is pretty much the same one you can actually see similar similar patterns but it's that sort of sense that we're all this this is ours we don't want anybody to mess around with this and that's what allowed EPM the utilities company that I was mentioning in my earlier response to not be privatized it wasn't an ideological issue that we've got a you know the IMF and the World Bank suck because they've introduced structure adjustment they didn't need that they had enough sources of revenue anyway it's a huge question so we don't have time okay but thanks for those questions yes okay so uh thanks for the questions um the most fruitful aspect of the book uh in our understanding of innovation um well I think that the most fruitful aspect of the book is that it challenges the idea that the private sector is the main driver of innovation and so it raises the question of the state you know and the priorities of the state and so looks at Innovation as a political issue and so this could bring in the question of social actors but I don't think this is a uh done sufficiently in in the book maybe also because of the theory of value but I think that like the literature on the developmental State the books reproposes the idea of the autonomy of the state from social relations and therefore doesn't embed the analysis of the state in the relations of production and also doesn't look at the role of Labor I don't think there is anything really about labor but there isn't anything else about workers as subjects that can shape the developmental the developmental project process and so I think that it ends up reproposing the same dichotomy between State and market and also because between domestic and international domains of neoclassical economics so there isn't really a real Breakaway from neoclassical economics and this leads to an underestimation of imperialism and an even and combined development and leads to think about thinking about Solutions in in National terms right uh at basically at the level of Western countries mainly so I think um yeah so it would be interesting to understand if it can really offer solutions for the develop developing world and or the global South and yes about value I I haven't read matsukatos the value of everything so I haven't really engaged with their value Theory um I I I I don't think there is um a laboratory value for sure and in terms of the graph from Foxconn how I interpret it is that after the waves of suicides in 2010 and the kind of uh Revival of the labor movement in China after 2010 and also kind of first attempts to coordinate it in the river Delta Region um so in in response to this labor militancy Foxconn has basically um tried to replace workers by introducing new technologies and so what we see is that profits have gone up but um workers have the kind of a number of people have actually gone down because they have been replaced also and so there has been a response to the kind of claims for you know better conditions uh shorter hours Etc and also some concessions but at the same time there has been an intensification of exploitation through mechanization and so we see an example of how technological innovation can actually has as it has historically been also in in the UK I mean during the Industrial Revolution that you respond to work as struggles through the machines right by introducing replacing workers and basically maybe reducing forms of absolute exploitation but at the same time extracting uh more more labor from from the workers something that's interesting to go go towards these like value creation and the labor theory of value because it's interesting that together that discussion Mariana is going to push the idea of public value and that value is created by different actors in society and one of these actors would be the state and I think what you're saying as well is Rage two okay if fair enough so value can be created by different acts of society but then how this you know furthermore Marxist framework how that that conflict between labor and capital then works there in the extraction of surplus now what would be the discussion of this public value from a Marx's perspective I think that would be something to explore far away is you yeah I had three questions one was on that and then there was the question by Ingrid on the book and finally there was China so on the feasibility of debt cancellation well I mean uh it happened for Germany in the 1980s I think and it can happen for these countries as well so um it's a it's a question of political will but we also can look at the 1980s highly indebted countries initiative the hippoc and I think you have to understand that at the at the time the initiative was not simply to because these countries were struggling but because the crisis was coming home so you have to also look at the current crisis in these terms but the problem here is that the role of private creditors and how to tame them becomes a bigger problem um and in this sense uh during covert there was a suspension uh not a cancellation but that suspension enabled countries to go back on their feet and therefore also become a sort of market economies which is in the interest a lot of private actors for example so we would need something similar so far every initiative is about debt restructuring but the momentum towards debt cancellation ultimately has to come from uh developing countries or the global South themselves and it's a matter of a political will but B how major players would uh would reshape the financial architecture and here I mean China which has taken very Progressive steps in doing that recently the second question on the book uh most important um role of the book in terms of innovation I think as I said earlier it came in a time when there was an impasse in understanding at least in mainstream economics after 2008 you know we were talking about financial capitalism and nobody was talking about the role of the state so in a way it the book takes us back to the early debates and the role of the state historically uh and allow the rethinking which was missing especially uh in the policy Circle so that was a very uh important role of the book creating space creating a dialogue um in terms of weakness uh yeah I would go with what lichi has already mentioned in terms of the problems of methodological nationalism looking at a very National framework uh of course since then things have exploded um and you have a lot of problems with financialized capitalism I think there's a chapter on financialization as well in the book but I think it does not account for the scale of the problem that is if the state was to move towards de-financialization how would it achieve that you know in in such a global context and then this question becomes even bigger for developing countries when we know that even the state is very much an active engineer for financialization itself um okay and the last one on China I think uh yes you're right I mean China huge development lender changing the landscape entirely and we can see that in fact in how countries are following are mimicking China as opposed to uh coming up with their own uh policies so for example the global gateway of the EU is complete replication of the Belt Road initiative as is abiding plan as is Japan's plan for infrastructure investment and so on and so forth but I think I think I'm optimistic about China not in terms of what China is or what China does but in the in the space that it creates for other countries so whereas there was no bargaining space no uh space to re to to to to negotiate debt for example or to negotiate investment the China brings in that but actually we can also look at other brick countries for example and it's uh surprisingly for example nobody talks about it but India is now giving something like um a very I forget number but it's it's a very huge number and they claim for the loans to be concessional so there are different actors and we're we're moving towards a multi-polar world uh and it's uncertain but I think it's certainly different from the unipolar world that we had yeah thanks

Channel: UCL Institute for Innovation and Public Purpose

Views: 4,091

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Id: 5aqAVx6EWMg

Length: 93min 9sec (5589 seconds)

Published: Thu May 04 2023