Promoting Economic Development in a Volatile World

In 2015, for the first time in history, the number of extremely poor people dropped below 10 percent of the world’s population. The world also adopted 17 new Sustainable Development Goals, and more than 180 countries agreed to curb carbon emissions. Hardly ever before have so many governments, businesses, international organizations, and civil society groups agreed on such ambitious targets. However, the global economic environment is weak and fragile and getting more volatile. Emerging economies and developing countries are underperforming, commodity prices will likely stay low, climate change is an additional threat, and the geopolitical situation is tense. These risks are global in nature and therefore need global, coordinated responses. countries need to build stronger foundations to be able to withstand shocks and volatilities. We should not just care about the level of growth, but also the quality and inclusiveness of the growth process. There is a strong and positive correlation between the quality of institutions and a country’s prosperity.