Tag Archives: development

Ingredients of trade success

OK, so I read World Bank doc­u­ments for the pic­tures. It’s true…I’m not ashamed to admit it. The prose in these tomes is often gluti­nous but the graphs are great! The chart shows why there’s much less inter­est, now, in tar­iff bind­ings, the cur­ren­cy of WTO agree­ments. The last big reces­sion (2007–9), unlike those of […]

Lawless streets of Port Moresby

Civ­il unrest is one of the biggest bar­ri­ers to devel­op­ment in the Pacif­ic. This is an excel­lent account.

Mores­by has had enough of its war-zone rep­u­ta­tion and there is the mer­est glim­mer that it is pick­ing itself up. As well, the place would improve expo­nen­tial­ly if Aus­tralians forced aside some of their jus­ti­fied scep­ti­cism and chose to revis­it their old PNG friends or find new ones.” Extract from a sto­ry by Paul Toohey in The Aus­tralian

Rodrik’s many recipes

Dani Rodrik's Sir Arthur Lewis LectureIDA's account of Vietnam's performance on poverty

Update:  Prof. Rodrik says that I’ve got his exam­ples exact­ly wrong (see his com­ment) and that he meant that the World Banks’ “glob­al­iz­ers” includ­ing Viet­nam have out­per­formed those high­er on the Her­itage Foundation’s index. Well… that cer­tain­ly makes more sense. My apolo­gies to him—and to you—for the mis­un­der­stand­ing. [2 April, 2009]

I am sym­pa­thet­ic to Dani Rodrik’s under­ly­ing the­sis in his ‘One Eco­nom­ics, Many Recipes’ pub­li­ca­tions because, like most who’ve wit­nessed devel­op­ment poli­cies go off-the-rails, I’ve blamed the fail­ure of sim­ple-mind­ed eco­nom­ic ‘ortho­doxy’ to account for the com­plex imper­fec­tions of real mar­kets.

But ‘sym­pa­thet­ic to’ doesn’t mean ‘agree with’. I think Rodrik fails to explain how a’ sol­id appli­ca­tion of sec­ond-best thinking’—by which he means, rough­ly, ‘non-lais­sez-faire’ intervention—can be dis­tin­guished from man­age­ri­al­ism (by tech­nocrats) and dirigism (by auto­crats). I’ve seen plen­ty of exam­ples of that kind of pol­i­cy derail­ment, too.

The Rodrik the­sis about the val­ue of plan­ning based on ‘sec­ond-best’, it seems to me, can be test­ed only by ref­er­ence to exam­ples. It’s an empir­i­cal, rather than the­o­ret­i­cal, ques­tion. But his exam­ples are often at best arguable and, in his most recent pre­sen­ta­tion of his case, bizarre.

Easterly vs the Growth Commission

The Growth Com­mis­sion report has been described by David Warsh as an orphan of the World Bank’s for­mer regime (under Wol­fowitz). Now Bill East­er­ly claims its reduc­tion­ist exper­tism—aban­don­ing all grand the­o­ries of development—is also an emp­ty promise. There is at least one gen­er­al prin­ci­ple that can be dis­cerned in every case of suc­cess­ful devel­op­ment:

Con­firm­ing Hayek, sys­tems that give more lib­er­ty to indi­vid­u­als – fea­tur­ing both more eco­nom­ic and polit­i­cal free­doms – are asso­ci­at­ed with much less pover­ty. The evi­dence for this comes from both his­to­ry (for exam­ple old, despot­ic, poor Europe com­pared with mod­ern, free, rich Europe) and cross-coun­try com­par­isons (for exam­ple South Korea com­pared with North Korea, for­mer West Ger­many com­pared with East, New Zealand com­pared with Zim­bab­we). This alter­na­tive par­a­digm has a much small­er role for experts, because experts can­not direct or impose free­dom from the top down (or else it would not be free­dom).”  extract from: Bill East­er­ly in the Finan­cial Times