Beating the Odds: Jump-Starting Developing Countries - Hardcover

Lin, Justin Yifu; Monga, Célestin

Hardcover

ISBN 10: 0691176051 ISBN 13: 9780691176055

Verlag: Princeton University Press, 2017

Inhaltsangabe

Contrary to conventional wisdom, countries that ignite a process of rapid economic growth almost always do so while lacking what experts say are the essential preconditions for development, such as good infrastructure and institutions. In Beating the Odds, two of the world's leading development economists begin with this paradox to explain what is wrong with mainstream development thinking - and to offer a practical blueprint for moving poor countries out of the low-income trap regardless of their circumstances. Beating the Odds shows how poor countries can ignite growth without waiting for global action or the creation of ideal local conditions.

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Justin Yifu Lin, former senior vice president and chief economist of the World Bank, is director of the Center for New Structural Economics and dean of the Institute of South-South Cooperation and Development at Peking University. His books include The Quest for Prosperity: How Developing Countries Can Take Off (Princeton). Célestin Monga is vice president and chief economist of the African Development Bank and visiting professor of economics at University of Paris 1 Panthéon-Sorbonne and Peking University. His books include Nihilism and Negritude: Ways of Living in Africa.

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"This powerful book brings encouraging news to developing countries. A nation does not have to be developed to achieve economic growth: Witness Israel's cultivation of the Negev Desert and Mali’s vibrant mango industry. History gives striking examples of takeoff into sustained growth with little education and not much infrastructure either."--Edmund Phelps, Columbia University, Nobel Laureate in Economics

“After the failure of Washington Consensus economic policies, Justin Yifu Lin and Célestin Monga draw on examples of successful economic development from all over the world to show us the way forward. Rather than focus on austerity and painful ‘reform' programs, Lin and Monga demonstrate that there is a role for government, industrial policy, and other measures that help business grow and create jobs. They forcefully show that another world is possible."--Joseph E. Stiglitz, Columbia University, Nobel Laureate in Economics

“Justin Yifu Lin and Célestin Monga draw on long experience and insightful analysis to show how successful economic development depends, first and foremost, on a pragmatic assessment of each nation's comparative advantages and a realistic understanding of how they can change over time"--Roger Myerson, University of Chicago, Nobel Laureate in Economics

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Beating The Odds

Jump-Starting Developing Countries

By Justin Yifu Lin, Célestin Monga

PRINCETON UNIVERSITY PRESS

Copyright © 2017 Princeton University Press
All rights reserved.

ISBN: 978-0-691-17605-5

Contents

Acknowledgments, vii, 
Introduction: The Art of Engineering Prosperity in Unlikely Places, 1, 
1 The Tyranny of Litanies, 20, 
2 Unpleasant Truths about Institutional and Financial Development, 44, 
3 The Economics of Chance: Policy Prescriptions as Laundry Lists, 75, 
4 The Mechanics of Failure and the Secrets of Success, 111, 
5 Ambitious Pragmatism: First-Order Economic Principles, 157, 
6 The Art of Performing Economic Miracles: Implementation Guidelines, 202, 
7 Reaping the Dividends of Globalization: A Winning Road Map, 254, 
Conclusion: Making the Most of Existing Circumstances, 310, 
Notes, 321, 
References, 341, 
Index, 367, 

CHAPTER 1

The Tyranny of Litanies

In some African cities, traffic police who engage in petty corruption by routinely stopping motorists to obtain cash from them are known for their ability to come up with endless justifications for doing so. The goal of these rogue cops is not to catch bad drivers who commit traffic violations but to find ways to squeeze money from whomever they stop. After randomly pulling motorists over and checking first that they do not have political connections or are not a high-level authority, they search for an infraction with which to cite the driver — if the driver is unwilling to give them cash. They usually start by requesting the registration and insurance for the vehicle. If this paperwork is in order, they will not hide their discontentment. They then request the driver's license. Again, they will not conceal their displeasure if the driver is able to provide a valid license. They then must find something else to justify a citation. After they go through a list of other nonmoving violations or infractions (defective or improper vehicle equipment, seat belt or child-restraint safety violation, etc.), their logical next request is to ask to see the pharmacy box. Yes, in many countries motor vehicles on the road are required to have a pharmacy box. No one knows what it must legally contain, and rogue police use its absence as an excuse to issue a traffic ticket.

Some motorists heroically resist complying with such extortion and are well prepared for encounters with the police by keeping a pharmacy box in their car. When confronted with such drivers the disgruntled police ask a final, unanswerable question: "Can you prove that you were driving at the appropriate speed limit when I pulled you over?" adding with a sarcastic smile, "I stopped you because you were driving too fast!"

In such bad-luck situations it is impossible to escape punishment. The only remaining question is whether the motorist will choose to play the game, plead guilty to a phony charge, and pay the bribe or will pursue the heroic fight to prove compliance with laws and regulations. If the motorist wishes to contest a traffic infraction, the police will take away the vehicle's registration and promise a hearing to be set by the court. The hearings are supposed to take place before a magistrate or judge. Of course, no motorist wants to take the chance of relinquishing important documents to rogue police, so the rational (less risky and frankly less costly) option is to plead guilty to whatever traffic violation the driver is being accused of and then make a deal with the police, often in the form of a couple of dollars paid as a ransom to avoid further harassment.

The discourse on economic development is often reminiscent of this kind of uneven interaction. When asked why only a handful of countries have managed to perform well since the Washington Consensus policies were launched in the 1980s, many experts tend to behave like the rogue police on the streets of Africa. They offer ever-changing explanations that they present as irrefutable truths. Defending their intellectual agenda even in the midst of obvious failure and disappointments, they come up with a litany of reasons for the failure of their prescriptions — typically a wide range of reasons about poor implementation — that policy makers in developing countries cannot dispute. This justification strategy of constantly putting the blame on the recipient allows the proponents of the Washington Consensus to require further compliance by poor countries. Like the helpless motorists on some African streets, policy makers must accept whatever recommendations are imposed on them.

Of course, it would be unfair to characterize the honest but difficult search for answers that motivates most development economists and experts as equivalent to the immoral and illegal behavior of renegade police. But the fundamental tactics often used to justify a predetermined and liturgical discourse and to enforce a priori decisions are similar. They are often based on false diagnostics and rely on rhetorical sophisms. This is why policy makers in low-income countries often confess that they constantly feel pressure from powerful development experts whose opinions carry weight and can determine whether a small economy has access to external funding. In many such countries, Washington Consensus policies still represent the dominant intellectual framework for policy analysis and justify all prescriptions for reforms (Monga and Lin 2015; Mkandawire 2014; Mkandawire and Soludo 1999; Mkandawire and Olukoshi 1995). Questions about the sources of low growth, low employment creation, and persistent poverty are given successive answers that are meant only to reflect and validate a predetermined truth. After trying in vain to offer alternative views of the problems of development, government officials find themselves in the same situation as the African motorists. The opportunity cost of asserting different opinions and of taking the chance to pursue different strategies is simply too high. It becomes rational to just go along with the prevailing truth and conventional thinking — and to accommodate policies that have little chance of yielding the expected positive results.

This chapter examines some of the policy issues often presented as the causes of poor economic performance and underdevelopment. It identifies the most commonly posited causes — insufficient physical capital, bad business environment and poor governance, weak human capital and absorptive capacity, low productivity, and bad cultural habits (laziness) — and explains why they are inconsistent with both the historical and the empirical evidence.

INFRASTRUCTURE: A REAL CONSTRAINT BUT A CONVENIENT CULPRIT

The most common policy precondition given by many economists for improved economic performance in developing economies is the quantity and quality of infrastructure. Since at least Adam Smith, economists have known that transport infrastructure plays an important role in economic growth and poverty reduction. Starting with the work of D. Aschauer (1989), B. Sanchez-Robles (1998), and D. Canning (1999), researchers have offered compelling theoretical and empirical analyses to support infrastructure's role. While the empirical arguments about the specific conditions under which infrastructure is beneficial are far from being fully settled, there is broad consensus that under the appropriate conditions, infrastructure development can induce growth and equity, both of which contribute to poverty reduction. Infrastructure services increase total factor productivity...

Details zur Ausgabe

• Verlag: Princeton University Press
• Erscheinungsdatum: 2017
• Sprache: Englisch
• ISBN 10: 0691176051
• ISBN 13: 9780691176055
• Einband: Gebundene Ausgabe
• Anzahl der Seiten: 384
• Kontakt zum Hersteller: Nicht verfügbar
• Verantwortliche Person: Buchbär; info@buchbaer.de; ; Weberstr. 67; Osnabrück; 49084; Deutschland