The University of Warwick gave Sir Nicholas Stern an honorary degree at the graduation ceremony held on July 10, 2006. This citation was written by Mark Harrison with the help of Alan Roe.
Nicholas Stern's life has been devoted to understanding economic development and promoting the global relief of poverty. His career has spanned scholarship and public service.
As an academic Nick has held positions at Oxford, Warwick, and the London School of Economics; he has taught in Cambridge, Massachusetts, Paris, Bangalore and Delhi, Tokyo, and Beijing. His scholarship is widely recognised. He is a Fellow of the British Academy, the Econometric Society, and the American Academy of Arts and Sciences.
In the world of policy Nick has been chief economist first at the European Bank for Reconstruction and Development, then at the World Bank. He is presently one of the permanent secretaries at the Treasury. He also leads the Government Economic Service, a body of more than a thousand professional economists, many of them Warwick graduates. As head of the GES he replaces one of Warwick’s most distinguished economics graduates, Sir Gus O’Donnell, who now heads the UK Civil Service. He has been director of policy and research at the prime minister’s Commission for Africa, and now leads the government’s Commission on Climate Change. Nick was knighted in 2005 “for services to economics.”
A landmark of Nick’s early academic career was the eight months of 1983/84 that he spent with Christopher Bliss in the north Indian village of Palanpur. The research they did was notable for their Spartan existence; their careful observation of the lives of the farmers; the rigorous analysis that they applied to local production, consumption, and markets; finally, the persistence with which they followed progress in Palanpur in succeeding years. The result was a milestone in the creation and use of micro-statistics to throw light on the concepts of economic theory and the lives of ordinary people in developing countries.
In their book, Bliss and Stern reported the story of a farmer who fell in love with a girl from a higher caste; despite her seclusion, he discovered that she loved him too. They commented: “The houses of Montagu and Capulet could be joined together with ease, in comparison with a marriage across this caste divide.” Bliss recounts that a sceptical editor at the Oxford University Press raised a query: “Would readers of a book on economics understand the reference?” Nick’s response was dismissive. “It will not cause our Indian readers any problem.”
Nick’s career in policy has followed a succession of issues at the centre of public attention and controversy. When Nick joined it, the EBRD was beset by the unprecedented difficulties of post-communist transition, and by controversial management practices. Nick and his colleagues brought about rapid improvement in the Bank’s performance, relying on what became known as the Troika Principles: sound banking; that EBRD funding should add to that available from other sources, and not replace it; and that EBRD loans and assistance should yield a demonstrable transition impact. When he left the EBRD his colleagues gave Nick a clock engraved with symbols of these three principles.
Moving to the World Bank, Nick again arrived in the midst of controversy. Economists divide, broadly speaking, over whether anti-poverty policies should tilt towards helping the poor through increased government benefits, or through improved market opportunities. The World Bank was at loggerheads with the U.S. Treasury over this, and with the IMF over its crisis interventions in South-East Asia. Nick’s predecessor, the Nobel laureate Joseph Stiglitz, had resigned. So, too, had Ravi Kanbur, another former Warwick professor, responsible for editing that year’s World Development Report entitled “Attacking Poverty.”
Nick helped to steady the ship and calm the crew. As chief economist, he had great influence over the programme of research, what implications would be drawn, and how these would be reflected in policy. In his time at the World Bank Nick rose to the challenge. His influence was reflected, for example, in successive World Development Reports that focused on “Building Institutions for Markets” (2002); “Sustainable Development in a Dynamic World” (2003); and “Making Services Work for Poor People” (2004).
At the Commission for Africa, Nick’s economic skills have again helped to steer a process fraught with controversy over governance in poor countries and debt relief. As for the Commission on Climate Change, the exercise is already being referred to as “the Stern Commission,” confirming the confidence that he commands in both media and government. For the sake of our long-term survival, Nick must again marshal his prodigious technical capabilities and well-honed diplomatic skills.
What Nick stands for, as scholar and public servant, is summarised in the title of his recent book: Growth and Empowerment: Making Development Happen. Another Nobel Laureate, Robert Solow, endorses it as follows, and we conclude with his words:
“Nick Stern and his colleagues blend theory, direct observation, statistical evidence, and experience into a coherent approach to economic development that is both analytical and humane. There is nothing mechanical or imposed in their emphasis on creating a favourable climate for investment in local farms and enterprises, while engaging the active participation of those with the biggest stake in development – the local population.”