2 posts tagged “economic development”

Background Readings on Topics We're Not Covering Right Now:

DeLong/Olney, chapters 13 (monetary policy) and 14 (fiscal policy)

DeLong/Olney, chapter 15 (International Monetary Systems)

C. Fred Bergsten (2006), "Clash of the Titans," Newsweek http://www.iie.com/publications/papers/paper.cfm?ResearchID=620

Jeffrey Williamson (1985), "The Historical Content of the Labor Surplus Model" http://www.jstor.org/view/00987921/di961996/96p0248f/0

Readings on Financial Crises:

Wikipedia's GDP per Capita page: http://en.wikipedia.org/wiki/GDP_per_capita

Robert Wade's thoughts in Foreign Affairs: http://www.foreignaffairs.org/20060901fareviewessay85512/robert-h-wade/questions-of-fairness.html?mode=print

In thinking about these issues, we should also give up talk of "the developing world" in contrast to "the developed world," and talk instead of a "1:3:2 world" (one billion people live in the rich countries, three billion live in countries where growth rates are faster than those of the rich countries, and two billion live in countries where they are substantially slower)...

The Princeton political scientist Atul Kohli has proposed a threefold typology. A "neopatrimonial state," in which the ruler treats state resources as his own (such as Nigeria and many other countries in Africa and the Middle East), is likely to make a mess of many instruments of industrial policy if given the latitude. A "cohesive-capitalist state" (such as South Korea and Taiwan up to around 1990) is likely to be much more effective at using dirigiste methods to upgrade and diversify the structure of its economy (although it may be no better at protecting human rights). In between these two types is the "fragmented-multiclass state" (such as many in Latin America and Southeast Asia), the capacity of which to implement strong industrial policy is more varied and more contingent.

Should the boundaries of policy space -- defined by WTO rules and World Bank and International Monetary Fund loan conditions -- vary according to the type of state, on the grounds that neopatrimonial ones are more likely to abuse policy space than cohesive-capitalist ones are? How could such rules be accommodated in the regimes of international organizations and in international agreements when there is such pressure to treat all states, or at least all developing economies, equally? Nigeria, after all, would not appreciate the World Bank's refusing to give it help with industrial policy on the grounds of its neopatrimonialism while the bank helped another country on the grounds that it had a fragmented-multiclass state moving toward cohesive capitalism. Such questions deserve more extended discussion. But the main point is simply that a typology of developing states should be fundamental to how we think about development policy.