Here’s a central argument against focusing on growth per se that I find fairly plausible:
Obviously terrible growth-related policies are at historic lows. Our ability to produce more detailed/refined policy prescriptions is weak (see Pritchett’s acknowledgement of the lost decades and the transition depression). In fact, many of the greatest successes of development (China, Singapore, etc.) defied the economic orthodoxy in the details. Rather, they implemented policies that were tailored to and required deep understanding of local conditions. The key barrier to increased economic growth is not the absence of knowledge or advocacy but mundane implementation issues and the indifference or antipathy of the relevant political actors.
Thanks (strongly upvoted for trying to falsify a central claim). All opinions are mine.
1. While the interesting paper you cite shows that policies bad for growth are at historic lows and argues that much progress has been made, 20% of all countries still have bad policies, and 25% of SSA countries. Given the potential very high effectiveness of growth policy, that we tried to demonstrate in the piece, the value of information of looking into this further is high.
2. I do cite Rodrik in the Appendix who argues that these days, “standard prescriptions” (i.e. Washington Consensus) might not work any longer and we should be skeptical of top-down, comprehensive, universal solutions (though perhaps there are some more generalizable policy prescriptions to be discovered with further research—Rodrik for instance expands the Washington consensus with an additional 10 policy prescriptions).
However, technical assistance by more specialized agencies (e.g. DFID, USAID, GIZ as well as the World Bank’s country offices), and also NGOs such as the International Growth Center, the Copenhagen Consensus, etc. might be able to do “growth diagnostics” to find out where growth is bottlenecked and then help with tailor-made policies on a country-by-country basis.
They might also help with implementation issues, and even indifference issues.
A close thing I’ve seen to the “growth diagnostics” you describe is the country strategies & likely growth products sections of the Atlas of Economic Complexity (https://atlas.cid.harvard.edu/).
Yup, agree that the argument I outline is not definitive and thoughtful work in this area is worthwhile. I think I may be more pessimistic on the politics aspect (i.e. I may think it’s a more tightly-binding constraint and harder for outsiders to work on), but my sense of that is kind of inchoate and not worth much at the moment.
Here’s a central argument against focusing on growth per se that I find fairly plausible:
Obviously terrible growth-related policies are at historic lows. Our ability to produce more detailed/refined policy prescriptions is weak (see Pritchett’s acknowledgement of the lost decades and the transition depression). In fact, many of the greatest successes of development (China, Singapore, etc.) defied the economic orthodoxy in the details. Rather, they implemented policies that were tailored to and required deep understanding of local conditions. The key barrier to increased economic growth is not the absence of knowledge or advocacy but mundane implementation issues and the indifference or antipathy of the relevant political actors.
Thanks (strongly upvoted for trying to falsify a central claim). All opinions are mine.
1. While the interesting paper you cite shows that policies bad for growth are at historic lows and argues that much progress has been made, 20% of all countries still have bad policies, and 25% of SSA countries. Given the potential very high effectiveness of growth policy, that we tried to demonstrate in the piece, the value of information of looking into this further is high.
2. I do cite Rodrik in the Appendix who argues that these days, “standard prescriptions” (i.e. Washington Consensus) might not work any longer and we should be skeptical of top-down, comprehensive, universal solutions (though perhaps there are some more generalizable policy prescriptions to be discovered with further research—Rodrik for instance expands the Washington consensus with an additional 10 policy prescriptions).
However, technical assistance by more specialized agencies (e.g. DFID, USAID, GIZ as well as the World Bank’s country offices), and also NGOs such as the International Growth Center, the Copenhagen Consensus, etc. might be able to do “growth diagnostics” to find out where growth is bottlenecked and then help with tailor-made policies on a country-by-country basis.
They might also help with implementation issues, and even indifference issues.
A close thing I’ve seen to the “growth diagnostics” you describe is the country strategies & likely growth products sections of the Atlas of Economic Complexity (https://atlas.cid.harvard.edu/).
Explainers… https://youtu.be/2FeugaLv5Bo
https://youtu.be/5jjKDH6ijrQ
https://youtu.be/KQAarHByMTM
Yup, agree that the argument I outline is not definitive and thoughtful work in this area is worthwhile. I think I may be more pessimistic on the politics aspect (i.e. I may think it’s a more tightly-binding constraint and harder for outsiders to work on), but my sense of that is kind of inchoate and not worth much at the moment.