The inaugural Growth Academy brought the World Development Report to practitioners

The two-week intensive program at the UChicago campus and the World Bank headquarters has led to increased collaboration between researchers and policymakers to overcome the middle-income trap.

By Sarah Steimer

The World Bank has released its flagship publication, the World Development Report, each year since 1978. The report is filled with insights, data, and policy recommendations, and this year there was a new, groundbreaking effort to create an intimate dialog in a classroom setting to boost active collaboration between researchers and practitioners. With the publication of this year’s report, the authors moved in a new direction to bring the information directly to its audience: They created a transformative summer school format with the inaugural Growth Academy, kickstarting connections among global experts and policymakers that marked a paradigm shift in the delivery of and interaction with the report.

This intensive and transformative summer school program was presented by the University of Chicago and the World Bank. The program was hosted by the Global Center for Economic Growth — an initiative between UChicago’s Becker Friedman Institute for Economics and the World Bank — and focused on research and policy for economic development in middle-income countries. Over the course of two weeks, researchers and policymakers (particularly mid-career bureaucrats) came together to learn about the World Development Report 2024: The Middle-Income Trap.

Ufuk Akcigit, the Arnold C. Harberger Professor of Economics in the Kenneth C. Griffin Department of Economics, is the lead academic for the report. He says there are 108 middle-income countries. While these countries make up 75% of the world population, they only provide one-third of the world’s economic output.

“These countries, over time, do not perform as well as economic theory would predict,” Akcigit says. “We would normally expect these countries to grow faster than advanced economies; in the long run, we would expect them to converge to rich countries. But if anything — if you take China out — they even show some divergence, which means that the middle-income countries are experiencing serious problems.”

As the report reached its completion, Akcigit and Somik V. Lall, director of the 2024 report and senior adviser to the Chief Economist of the World Bank Group, started to consider how they could be more proactive in bringing the findings and recommendations to the intended audience and turn it into a living report. They landed on the creation of the Growth Academy.

The first week of the program took place at the UChicago campus: Academics from both within and outside the University were invited to discuss their research from their independent points of view. Akcigit referred to it as an all-star lineup: Represented were three Nobel laureates, professors from Harvard University, Yale University, Northwestern University, and Collège de France — in addition to UChicago faculty.

The goal was to delve into the report’s findings, such as examining the middle-income trap through the lens of Joseph Schumpeter’s creative destruction theory. This concept, introduced by the Austrian political economist, emphasizes the need for good practices to replace outdated ones in order to drive economic progress. Firms that come up with better products and new innovations should replace old, outdated companies. Unfortunately, in middle-income countries, creative destruction doesn't always take place because of advantages that many companies have — not due to the firms’ productivity, but often due to their connections to the government.

“We try to talk to the audience from an academic point of view: What are the facts? What are the most recent findings in the literature? And how do you use data to identify frictions?” Akcigit says. “We have to think about every economy like a human body: Whenever we have a problem in our body, we go to the doctor, and the doctor asks for a blood sample, does the MRI and X-rays and all that. We have to do the same. You need to first collect reliable data, you need to know how to process the data with well-trained people, and then you need to come up with recommendations. Every country has their own problems, and you cannot look at somebody else's blood sample and try to come up with the solution for anybody else's headache.”

The second week of the program was held at the World Bank headquarters in Washington, D.C., featuring a remarkable lineup of regional experts, including several regional chief economists of the World Bank. The program included a lecture from the U.S. Patent Office Chief Economist, who discussed the advantages of having a solid patent system, as well as the World Bank economists who explained how this year’s report was developed.

“It's very hard to explain productivity to policymakers, and for policymakers to explain productivity to society, because it's not visible,” Akcigit says. “We’ve been talking about the productivity issue for so long. It made us go the extra mile, in some sense, and really bring in the policymakers and discuss, face-to-face, what can be done.”

Akcigit says that solutions are often underexplored by many policymakers in middle income countries, either because they are unaware of solutions or there are hurdles in play. For example, policymakers often seek public support by prioritizing visible projects like infrastructure development. While these investments can drive growth in lower-income countries, it’s more challenging to gain backing for less tangible investments in areas like knowledge, productivity, or research and development. However, for middle-income countries, infrastructure investment alone is not enough. It must be paired with productivity growth by infusing global ideas and adapting them locally to foster sustainable development.

On the final day, the event leaders and participants discussed how to collaborate in the future, which would include research agendas. Akcigit says the big picture became clear to the policymakers: They can't just stick to the same growth strategy and expect it to work. In the same way they expect firms to be dynamic, policymaking must also be dynamic and depend on the stages of development.

Akcigit noted that moving the World Development Report into a classroom setting proved highly effective. The open, productive dialogue ensured the authors' messages were clearly understood, while participants enriched the discussions by sharing real-life experiences. This exchange deepened researchers' understanding of the diverse perspectives and challenges faced by the represented countries. Participants left with ideas to approach the middle-income trap from fresh angles.

Both PhD and pre-doctoral students — themselves emerging experts in the field — collaborated closely in the programming, returning to campus with innovative research ideas.

“We are talking about a problem that applies to 108 countries, and this is not a new problem,” Akcigit says. “Every policymaker who wants something good in their country will come to realize that productivity is the way to go.”

The Growth Academy triggered an immediate and powerful reaction, setting off new and ongoing collaborations among researchers and policymakers. A smaller version of the Academy was held in Indonesia following the inaugural event, and more programming is imminent — including an AI-focused conference later this fall. The summer course served as the catalyst for a far-reaching chain reaction.