Rodrik’s many recipes

In his Sir Arthur Lewis Distinguished Lecture (Powepoint file, 26 March, 2009), Rodrik makes a weird comparison between economies intended to illustrate his claim that “countries that have performed the best in recenttimes are countries with ‘non-standard’ policies“. But his choice of comparator is the Heritage Foundation’s “Index of Economic Freedom” (who’d have thought DR would keep such company!). This seems to show (click thumbnail image) that you’re better off in Argentina or Bolivia—where I assume Rodrik says economic policies are ‘non-standard’, although it’s not clear to me how the management of Chile’s economy is ‘non-standard’—than in Vietnam or China.

Had he chosen a more objective measure of economic welfare, however, such as $PPP poverty indices, his comparison would look quite different. Just take a look at Vietnam’s economic performance on poverty, for example, as detailed in the table (click thumbnail) from this report of the World Bank’s International Development Association. Fifty-eight percent of the population at or below the $PPP 1/day poverty level in 1993; down to 16% in 2006. That’s an astonishing record and, if Rodrik thinks that Vietnam is just a ‘Washington Consensus’ dupe, then it’s a ringing endorsement of the Washington Consensus (of course, I don’t accept the premiss).

2 Comments

  • Dani Rodrik wrote:

    Dear Peter

    I am afraid you got my example upside down, which I must attribute to the lack of clarity of my slide (teaches me not to post these presentations!).  My point is exactly what you are saying: Vietnam, China, India have non-standard policies by WC criteria, and indeed they have done better than Latin American countries since the late 1980s. The chart aims to show that high-performers (China et al.) have “policies” according to WC standards.

  • Dear Danni,

    My apologies for this misunderstanding… I should have guessed from your choice of the Heritage index that you were being ironic in your illustration of ‘high performance’ in that chart.  (The last sentence of your comment is a bit puzzling. Did you leave a ‘not’ out of it somewhere?)

    I’m glad that you were invited to deliver the Arthur Lewis lecture. His “Evolution of the International Economic Order” was one of the first books I read on the so-called the ‘New International Economic Order’ when I worked on UNCTAD for the Australian government in the late 1970s. That book made a lot of sense, perhaps because Lewis had been personally involved in places like Ghana where the orthodox solutions seemed to fail badly (but were in any case subverted by a technocrat turned autocrat—Kwame). He was a great writer and an admirable man.

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