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