An encouraging Growth Report

I have had a chance only to skim the Introduction but I already like the Report from the Commission on Growth and Development. Its understanding of economic development testifies to the authors' deep experience. Examine a developing economy sinking into poverty and you will usually find difficult circumstances (geography, demography, history) but also, in every case, government that is mediocre at best; often self-serving and unaccountable.

Successful cases share a further characteristic: an increasingly capable, credible, and committed government. Growth at such a quick pace, over such a long period, requires strong political leadership. Policy makers have to choose a growth strategy, communicate their goals to the public, and convince people that the future rewards are worth the effort, thrift, and economic upheaval. They will succeed only if their promises are credible and inclusive…

The Introduction recognizes the intimate relationship of adjustment and growth, the role of cities, the attractions and limits of autonomous growth, the rich variety of successful management choices, the sterility of the 'reform for reform's sake' agenda and the triumph of pragmatic policies over dogma in turning growth into better lives for more people.

It also understands that the extent of the economic development we have seen in our lifetimes is a phenomenon without precedent due mostly to the globalization of learning and opportunity:

Growth of 7 percent a year, sustained over 25 years, was unheard of before the latter half of the 20th century. It is possible only because the world economy is now more open and integrated. This allows fast-growing economies to import ideas, technologies, and knowhow from the rest of the world. One conduit for this knowledge is foreign direct investment, which several high-growth economies actively courted; another is foreign edu- cation, which often creates lasting international networks. Since learning something is easier than inventing it, fast learners can rapidly gain ground on the leading economies. Sustainable, high growth is catch-up growth. And the global economy is the essential resource…

Tags for this entry: trade growth poverty world bank developing demography