What seems to be the most popular theory of economic development these days are the ideas expressed in the book “Gambling on Development”. I have not read the book, but as I gathered from this review and other ones by different people on Amazon and Goodreads, the central point of the book is that development in nation states only happens when the entrenched elites decide to gamble on economic growth.
The theory: the elites who already are at the top of financial and social hierarchy supposedly normally have no need to pursue economic development. Attempting to pursue development is in fact likely to be damaging to their personal interests, since the status quo which keeps them at the top would have to undergo considerable change. Because of that, they usually don’t. On the other hand, some elites do decide that pursuing development could put them in even better position: even more wealth, power and influence. Sure, things could go very wrong. But they could also go very very right. Because of this, they decide to take their chances and ‘gamble’ on development.
I don’t buy this theory. Everyone seems to take it seriously and I’m not sure why.
The first problem I have with its fundamental point is the idea that elites are insecure by default and thence are unlikely to want to gamble on development since that might put their power in danger. That contravenes everything everyone knows about people who have things in abundance and their relationship with it. We do know that genuinely wealthy people do not worry about money, nor do genuinely smart people worry about intelligence. Why then would elites (with abundant power) worry about power?
I don’t think they would. Genuine elites feel and know that they are the elites. They aren’t in an existential panic about how they might lose their power. Sure they would be careful in managing their power (much like a wealthy person would be careful in managing their wealth), but it is unlikely that they would allow this be a big bad overpowering fear which dictates what they should or shouldn’t do.
So, what might be a better theory for why some elites never do gamble on development, or why the ones who do ever do?
It is all downstream of competence.
First of all, macro-competence(competence at major important things) is a monolith. An individual who is reasonably smart is also going to be reasonably healthy, and be in a reasonable financial position, averaged out over time (if they are poor at a time, it might be that they grew up poor but need some time for their good decisions to compound over a long-enough time to land them in a better position. This doesn’t mean that they will ever become wealthy. What it does mean is that they will be in a reasonably decent financial position given where they started from). It’s all downstream from their competence: it allows them to make good decisions in all aspects of their personal life.
The same thing is true of people with power (an elite) running a country. It is why countries that are well-run, are well-run on multiple fronts. The ones which are mediocre are mediocre, and the ones which are poorly run, seem to be incapable of getting anything done right.
Because of this, an elite coalition who are incompetent at running a country are likely going to be incompetent at being an elite too (keeping hold to power). Maybe this is what causes them all the terror and worry about losing their power if they did attempt to pursue development?
A genuine elite (competent at holding onto power) does as people with power do: whatever the fuck they want.
Why do the elite who do, ever work on development?
The same reason people who work on big, audacious goals ever do. For the same reason Elon Musk took his exit from Paypal and plowed them into an electric car company and a space company.
So the true reason that the elite ever work on long-term development of their country is that: taste for challenge, self-belief, and pining for self-satisfaction. Sheer… being absolutely the one who knocks.