University of Oxford Professor Stefan Dercon (centre) speaks at the Verité Research seminar. Former World Bank Senior Director for Development Economics and Georgetown University Practice of Development Professor Shanta Devarajan and Verité Research Executive Director Nishan De Mel are also present 

In a seminar hosted by Verité Research last week, University of Oxford Professor Stefan Dercon argued that one of the conditions required for economic prosperity is for “elites” of a country – not just political elites, but business leaders, civil society leaders, etc. – to be convinced that they should shift their focus from maximising their own wealth in the short-term to work toward collective goals of the nation (to “gamble” on the national development project).

This event, titled ‘Gambling on the Elite Bargain for Sri Lanka’s Development’, took place on 7 March, at the Lakshman Kadirgamar Institute, with the attendance of many business leaders, academics, political leaders and intellectuals.

Speakers at the event included former World Bank Senior Director for Development Economics and Georgetown University Practice of Development Professor Shanta Devarajan and Verité Research Executive Director Nishan De Mel.

The event explored Dercon’s recent book, ‘Gambling on development: Why some countries win and others lose’ and how it applies to Sri Lanka’s context.

Dercon identified an “elite bargain” as a necessary precondition of the economic success of various countries including China, Indonesia and Bangladesh, who otherwise followed rather diverse pathways to economic development. The key feature of the “elite bargain” is that it drives accountability to ensure an effective strategy for growth and development. 

Speaking on Dercon’s theory in the context of Sri Lanka, Devarajan highlighted that the “elite bargain” in Sri Lanka must consider some of the core demands of the Aragalaya, and occur in public interest – accountability from Government, empowering of the poor, and avoiding the elite capture of assets.

He also highlighted that cooperation and consensus among Sri Lanka’s elite groups are crucial, particularly in the context of structural changes such as reforming Samurdhi and devising an effective, targeted cash transfer program for the poor, expanding Sri Lanka’s higher education sector and challenging the Paddy Lands Act to economically empower farmers in the country.  In his remarks, De Mel emphasised that, in Sri Lanka’s recent history, the existing bargain driven by the elites has failed the national development project in four ways and if not corrected, will create further risk for the country.