The Economic Development of Bangladesh: Identifying Pragmatic Policy Responses

This paper does not intend to summarize all the achievements and problems of the Bangladesh economy or the economic challenges facing us in the future. I presume readers will be well-informed of the contours of our economic development and the challenges we face. Instead, I wish to argue that we need to think both radically and pragmatically to identify the critical strategies and policies that can help take Bangladesh into the ranks of middle income countries, and indeed to transform the country into a self-confident regional player enjoying broad-based development. The challenges we face have common features with other developing countries. We need to learn from the experience of other countries as well as our own experiences with growth and development. In particular, I want to argue that finding sustainable solutions in developing countries often requires identifying a small number of potentially implementable institutions and developing agencies that are most likely to make an impact given our understanding of the political economy constraining the development process. Reform efforts are most likely to work if they focus on a small number of areas and if the political leadership focuses on building a national consensus supporting the importance of building the institutional and political capabilities for addressing a small number of core developmental issues. The analytical challenge is to identify the implementable solutions that may make an impact on the potentially significant problems that a developing country like Bangladesh faces. In this paper I suggest as examples a number of areas where the development of institutions and institutional capacity is vital and could make a significant difference to development outcomes. These areas are not necessarily exhaustive but give an idea of the type of thinking we need to engage in based on international experiences.