Economics focus Development piecemeal

摘要

Over the past 15 years or so, economists have developed a long list of now-familiar remedies for developing countries hoping to grow their way to prosperity. This "Washington Consensus" includes the removal of trade protection and the introduction of deregulation, as well as fiscal and monetary discipline. And these are just for starters. The trouble is that many governments find it almost impossible to stick to these prescriptions. Meanwhile, other economists have suggested that development depends not on specific policies but on "institutional" factors, such as a respect for property rights, which constrain the powers of the state. This can sound like a counsel of despair, because such institutions and customs can take many years, even centuries, to become established. However, two new studies suggest that there is no need to be so gloomy. They argue that institutional overhaul and broad economic reforms are not necessary to spur economic growth. In fact, quantitative evidence that they do so is surprisingly difficult to find. Smaller policy changes may serve just as well, and pave the way for later reforms of institutions.