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Abstract
This important collection tackles the failure of neoliberal reform to generate long-term growth and reduce poverty in many developing and transition economies. As dramatically demonstrated in the collapse of the WTO's Seattle talks, there is increasing dissatisfaction, in both developing and developed countries, with the emerging neoliberal global economic order. The resignations of Joseph Stiglitz and Ravi Kanbur from the World Bank emphasize that this disillusionment with the orthodoxy now exists at the very heart of the establishment. Yet the increasing demand for an alternative to this orthodoxy is not being met. Over the last few decades, the older generation of development economists have been edged out of most major universities, particularly in the USA. The situation in most developing countries is even worse: although there is more demand for alternatives to orthodox development economics, these countries have even less capability to generate such alternatives. 'Rethinking Development Economics' is intended to fill this gap, addressing key issues in development economics, ranging from macroeconomics, finance and governance to trade, industry, agriculture and poverty. Bringing together some of the foremost names in the field, this comprehensive and timely collection constitutes a critical staging post in the future of development economics.
'Tackling the alleged failure of neo-liberal reform to generate long-term growth and reduce poverty in many developing and transition economies, this collection offers alternatives to the present orthodoxy advocated by the World Bank and the IMF.' —'Business Horizons'
'Impressive...provides a very good compendium of what are usually classified as "heterodox" development economics...an excellent volume.' —'Journal of International Development'
This book addresses key issues in development economics, from macroeconomics, finance and governance to trade, industry, agriculture and poverty. Bringing together some of the foremost names in the field, this comprehensive and timely collection constitutes a critical staging post in the future of development economics.
Ha-Joon Chang has taught at the Faculty of Economics and Politics, University of Cambridge, since 1990.
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| Front Matter | 1 | ||
| Half Title | 1 | ||
| Series Page | 2 | ||
| Title | 3 | ||
| Copyright | 4 | ||
| Table of Contents | 5 | ||
| Contributors | 9 | ||
| Main Matter | 11 | ||
| Rethinking Development Economics: An Introduction, by Ha-Joon Chang | 11 | ||
| Notes | 27 | ||
| References | 28 | ||
| Part I: Overviews | 29 | ||
| Chapter 1: Changing Perspectives in Development Economics, by John Toye | 31 | ||
| 1. The early Keynesian influences | 31 | ||
| 2. The Lewis model and its critics | 33 | ||
| 3. Practical applications: planning and project appraisal | 36 | ||
| 4. Trade regimes, international and national | 37 | ||
| 5. Neoliberalism: less state, more market | 40 | ||
| 6. From structural adjustment to poverty reduction | 42 | ||
| 7. Reintroducing institutions into economic development | 44 | ||
| 8. Conclusion | 46 | ||
| Notes | 47 | ||
| References | 48 | ||
| Chapter 2: The Market, the State and Insitutions in Economic Development, by Ha-Joon Chang | 51 | ||
| 1. Introduction | 51 | ||
| 2. The historical background: from the rise of capitalism to the early post-World War II years | 52 | ||
| 3. Neoliberal reaction and its limits | 56 | ||
| 4. An alternative view: an instituionalist political economy approach | 62 | ||
| 5. Concluding remarks | 67 | ||
| Notes | 68 | ||
| References | 69 | ||
| Chapter 3: Globalization and Development, by Deepak Nayyar | 71 | ||
| 1. Conception of development | 72 | ||
| 2. Contours of globalization | 74 | ||
| 3. Origins and foundations | 76 | ||
| 4. Historical parallel | 78 | ||
| 5. Uneven development | 80 | ||
| 6. Globalization, development and exclusion | 83 | ||
| 7. The state and development in the context of globalization | 86 | ||
| Notes | 89 | ||
| References | 91 | ||
| Chapter 4: Development and the Global Order, by Jose Antonio Ocampo | 93 | ||
| 1. Global historical disparities | 94 | ||
| 2. The global order | 98 | ||
| 3. National strategies | 102 | ||
| 4. Broader goals | 111 | ||
| Notes | 112 | ||
| References | 113 | ||
| Part II: Development Experiences | 115 | ||
| Chapter 5: The East Asian Development Experience, by Ha-Joon Chang | 117 | ||
| 1. Introduction | 117 | ||
| 2. The Definition Issue | 117 | ||
| 3. Comparative Performance | 118 | ||
| 4. Debates on the East Asian miracle | 119 | ||
| 5. Explaining the East Asian development experience | 124 | ||
| 6. Japanese stagnation and the Asian financial crisis | 127 | ||
| 7. The Question of Replicability | 129 | ||
| 8. Concluding Remarks | 131 | ||
| Notes | 131 | ||
| References | 133 | ||
| Chapter 6: Latin America During the Second Half of the Twentieth Century: From the 'age of extremes' to the age of 'end-of-history' uniformity, by Gabriel Palma | 135 | ||
| 1. Introduction | 135 | ||
| 2. The rise and fall of the OECD 'Golden Age' | 138 | ||
| 3. The increasing diversity of peripheral capitalism | 139 | ||
| 4. The unique 1980s in Latin America | 141 | ||
| 5. The 1950s: postwar instability, ISI, regional diversity and accelerated inflation | 143 | ||
| 6. The economic boom of the 1960s and early 1970s | 145 | ||
| 7. The inter-shock period, 1973-81: the lead-up to financial crisis | 149 | ||
| 8. From boom to bust: Latin America's 'hyper' stagflation of the 1980s | 152 | ||
| 9. Latin America's Complex Political Economy: the 1990s and some concluding remarks | 153 | ||
| Notes | 158 | ||
| References | 161 | ||
| Chapter 7: Rethinking African Development, by Howard Stein | 163 | ||
| 1. Introduction | 163 | ||
| 2. Statistical dimensions of the crisis | 164 | ||
| 3. The development of a developmental state in Africa | 169 | ||
| 4. Conclusions | 181 | ||
| Notes | 182 | ||
| References | 186 | ||
| Chapter 8: Transition Economies, by Michael Ellman | 189 | ||
| 1. The political economy of transformation | 189 | ||
| 2. Economic developments in Russia under Yeltsin | 192 | ||
| 3. Russian economic policy and western economic advice, 1988-98 | 201 | ||
| Notes | 206 | ||
| References | 207 | ||
| Part III: Structural and Sectoral Issues | 209 | ||
| Chapter 9: New Growth Theory, by Ben Fine | 211 | ||
| 1. Introduction | 211 | ||
| 2. Old Growth Theory | 212 | ||
| 3. New Growth for Old? | 217 | ||
| 4. The broader context | 223 | ||
| Notes | 226 | ||
| References and Select Reading | 227 | ||
| Chapter 10: Structural Change and Economic Development: On the Relative Roles of Effective Demand and the Price Mechanism in a 'Dual' Economy, by Amit Bhaduri | 229 | ||
| 1. Structural Change and Development: some stylized facts | 229 | ||
| 2. Agriculture-Industry Interaction: Price and Quantity Adjustment in a Dual Economy | 231 | ||
| 3. The Terms of Trade as Policy Instrument | 237 | ||
| Notes | 240 | ||
| References | 242 | ||
| Chapter 11: Agriculture and Development: The Dominant Orthodoxy and an Alternative View, by Terence J Byres | 245 | ||
| 1. Introduction | 245 | ||
| 2. The 'old' and the 'new' neoclassical economics | 247 | ||
| 3. Questioning the dominant orthodoxy | 253 | ||
| Notes | 260 | ||
| References | 261 | ||
| Part IV: Trade, Industry and Technology | 265 | ||
| Chapter 12: Trade and Industrial Policy Issues, by Ha-Joon Chang | 267 | ||
| 1. Introduction | 267 | ||
| 2. Trade Policy: inward vs. outward orientation in trade policy | 267 | ||
| 3. Industrial Policy - Some Neglected but Important Issues | 270 | ||
| 4. FDI Policy | 273 | ||
| 5. The WTO and the New International Trading Order | 277 | ||
| 6. Intellectual Property Rights Issues | 279 | ||
| Notes | 283 | ||
| References | 285 | ||
| Chapter 13: Technology and Industrial Development in an Era of Globalization, by Sanjaya Lall | 287 | ||
| 1. Introduction | 287 | ||
| 2. The Emerging Setting | 288 | ||
| 3. Technology in developing countries | 292 | ||
| 4. Structural determinants of technology development | 296 | ||
| 5. Trade policy for industrial development | 302 | ||
| 6. Conclusions | 304 | ||
| Notes | 307 | ||
| References | 308 | ||
| Chapter 14: Industrial Policy in the Early 21st Century: The Challenge of the Global Business Revolution, by Peter Nolan | 309 | ||
| Introduction | 309 | ||
| 1. Features of the global business revolution | 310 | ||
| 2. The external firm | 320 | ||
| 3. Inequality in the regional distribution of firms that lead the global big business revolution | 324 | ||
| 4. Conclusion | 326 | ||
| Notes | 330 | ||
| References | 331 | ||
| Part V: Financial Markets and Corporate Governance | 333 | ||
| Chapter 15: International Private Capital Flows and Developing Countries, by Ilene Grabel | 335 | ||
| 1. Introduction | 335 | ||
| 2. Terminology | 336 | ||
| 3. Empirical trends | 336 | ||
| 4. Factors driving IPCFs | 338 | ||
| 5. Neoclassical theory: the benefits of unregulated IPCFs | 339 | ||
| 6. Heterodox theory: the problems with unregulated IPCFs | 340 | ||
| 7. The necessity of controls on IPCFs | 343 | ||
| 8. Strategies for Controlling IPCFs | 344 | ||
| 9. Policy considerations and opportunities | 351 | ||
| Notes | 353 | ||
| References | 354 | ||
| Chapter 16: The 'Three Routes' to Financial Crises: Chile, Mexico, and Argentina [1]; Brazil [2]; and Korea, Malaysia and Thailand [3], by Gabriel Palma | 357 | ||
| 1. Introduction | 357 | ||
| 2. The three routes to financial crisis | 358 | ||
| Conclusions | 380 | ||
| Notes | 383 | ||
| References | 385 | ||
| Chapter 17: The New International Financial Architecture, Corporate Governance and Competition in Emerging Markets: Empirical Anomalies and Policy Issues, by Ajit Singh | 387 | ||
| 1. Introduction | 387 | ||
| 2. The Asian financial crisis and corporate governance | 388 | ||
| 3. Corporate governance in emerging markets: the facts | 389 | ||
| 4. Corporate governance and corporate finance in emerging markets 1990s versus 1980s | 393 | ||
| 5. Financing patterns in the 1990s | 396 | ||
| 6. Corporate finance, the stock market and corporate governance | 398 | ||
| 7. Intensity of competition in emerging and mature markets | 402 | ||
| 8. Competition and corporate governance: conceptual issues | 403 | ||
| 8. Product market competition in emerging markets | 404 | ||
| 9. Summary and conclusions | 406 | ||
| Notes | 408 | ||
| References | 410 | ||
| Part VI: Poverty and Inequality | 415 | ||
| Chapter 18: Rural Poverty and Gender: Analytical Frameworks and Policy Proposals, by John Sender | 417 | ||
| 1. Identifying the Poor | 417 | ||
| 2. Policy conclusions | 418 | ||
| 3. Identifying the poor: an alternative approach | 421 | ||
| 4. Dynamic processes and the determinants of rural poverty | 424 | ||
| 4. Contrasting perspectives and policy conclusions | 428 | ||
| Notes | 430 | ||
| References | 431 | ||
| Chapter 19: Globalization and the Distribution of Income Between and Within Countries, by Giovanni Andrea Cornia | 435 | ||
| 1. Introduction: the neglect of inequality as a key policy issue | 435 | ||
| 2. Changes in global and between-country inequality | 436 | ||
| 3. Changes in within-country inequality | 443 | ||
| 4. Sources of the recent changes in inequality | 447 | ||
| 5. Causes of the recent changes in inequality | 451 | ||
| 6. Conclusions | 456 | ||
| Notes | 457 | ||
| References | 460 | ||
| Chapter 20: Increasing Poverty in a Globalized World: Marshall Plans and Morgenthau Plans as Mechanisms of Polarization of World Incomes, by Erik S Reinert | 463 | ||
| 1. The Problem: Marshall Plans & Morgenthau Plans | 463 | ||
| 2. The two conflicting theories of globalization | 466 | ||
| 3. The mechanisms at work | 468 | ||
| 4. Enters taxonomy: how economic activities differ | 475 | ||
| 6. Systemic effects: globalization as a Morgenthau Plan for the third world | 480 | ||
| 7. Conclusion | 481 | ||
| Notes | 485 | ||
| References | 486 | ||
| Part VII: Institutions and Governance | 489 | ||
| Chapter 21: On Understanding Markets as Social and Political Institutions in Developing Economies, by Barbara Harriss-White | 491 | ||
| Introduction | 491 | ||
| 1. Markets and Institutions | 492 | ||
| 2. Economic Sociology | 494 | ||
| 3. The politics of markets | 496 | ||
| 4. Social Structures of Accumulation (SSA) | 500 | ||
| 5. In sum | 501 | ||
| Notes | 502 | ||
| References | 504 | ||
| Chapter 22: Institutional Development in Historical Perspective, by Ha-Joon Chang | 509 | ||
| 1. Introduction | 509 | ||
| 2. The history of institutional development in the new developed countries | 511 | ||
| 3. Institutional development in developing countries then and now | 522 | ||
| 4. Implications | 525 | ||
| 5. Concluding Remarks | 529 | ||
| Notes | 529 | ||
| References | 531 | ||
| Chapter 23: Globalization, Global Governance and the Dilemmas of Development, by Martin Khor | 533 | ||
| 1. Introduction | 533 | ||
| 2. Globalization and its differential effects | 534 | ||
| 3. The need for an appropriate approach to the integration of developing countries in the world economy | 536 | ||
| 4. The globalization of national policymaking and the influence of international agencies | 538 | ||
| 5. Global economic governance: the United Nations versus the IMF-World Bank-WTO trinity | 541 | ||
| 6. Governance of the global financial system and the IMF | 544 | ||
| 7. Trade, Development and Reform of the Multilateral Trading System | 547 | ||
| 8. The search for alternative development strategies | 552 | ||
| Notes | 553 | ||
| References | 553 |