The subtitle is Thinking Big and Thinking Small and the editors are Jessica Cohen and William Easterly. Usually essay collections are of low value but this is the single best introduction (I know of) to where development economics is at today. Contributors include Dani Rodrik, Simon Johnson, Michael Kremer, Lant Pritchett, Ricardo Haussmann, and Abhijit Banerjee, among others. Even better, there are two published (short) comments on each essay, a practice which should be universal in every collection, if only to establish context. My favorite piece was Banerjee's on why development economics should "think small" rather than just doing macro issues. Recommended.
Neoliberalism is dead.
HC
I strongly criticize Dani Rodrik’s neoactivism in my recent book ‘Capitalism, Institutions, And Economic Development’. I’m relatively more sympathetic to neoliberalism.
On a separate point, the debate in Thinking Big and Thinking Small revolves around a research technique – - randomized evaluation – - employed controversially to discover what works in micro, especially in health and education. (When you get tired of climategate, fear not, there will be a developmentgate in some shape or form.) And yet… the fundamental problem I deal with in my book rears its ugly head even before shaky evidence has been interrogated. Easterly parodies the paradox on his blog in this way – “even if you do show something ‘works’, is that enough to get it adopted by politicians and implemented by bureaucrats?”. That’s a macro political-economy problem, no getting away from it.
The solution I propose is a crisis-induced macro policy sequence for constructing the right institutions – - markets to law, law to bureaucracy, bureaucracy to democracy. This replicates the original transitions to capitalism. As far as we know, none of the original transitions to durable prosperity started with health or education. They started with markets, then law, then public administration. Health and education followed rapidly in their wake. But of course evidence and modeling may eventually cause us to change our minds about that sequence.
I haven’t read the book. But I think “development economics” is a waste of time. Like everywhere else, it’s all about proper incentives, proper environment, and as little corruption as possible. There’s hardly any need for a separate field of study for this. a lot of economists earn a comfortable living giving prescriptions to developing countries. Usually these prescriptions end up as reports on the shelves of various development organizations, or, if they’re implemented, end up wasting a lot of money. That doesn’t mean there aren’t a lot of success stories of government, private sector, and NGO-driven efforts. But I doubt if the people involved consulted development economists.
http://www.commonsense-isnt.com
Ricardo,
My self-recommending probably terminates on 31 Dec 2009. Today I urge you to read my book. All these issues are dealt with. But I can say a bit more.
1. If we use the adjective ‘good’ to describe the quality of markets, law, bureaucracy, democracy, then it’s absurd to say India or the Philippines have them (not even in trowels, let alone spades).
2. Assuming you want the can opened by dinner time, what is the can-opener? Obviously it is usually the policy a technocrat implements in the decisive moments of recurrent crises. Great pioneers of developmental social science supplied the insight that persuasive knowledge-based ideology *overcomes* interests and culture. The war against poverty is waged in the domain of ideas. For example, is the policy priority to be literacy and health, or markets and law?
3. Another can-opener is the demonstrated *lever* of economic history — the transformational role of market expansion in institutional development. From thence the argument that imperfect and institutionally-myopic neoliberal reform (market expansion) is nevertheless closer to being an effective can-opener than neoactivist reform. There is strong causation at work.
3. There’s no denying that it’s worthwhile for citizens in rich countries to pay for better education and health in developing countries. There are urgent needs. But I worry very much that history will judge the focus on ‘small’ solutions to have been patronizing and counter-productive if it displaces first-order energies and resources that should go towards improving macrolevel economic governance. Underdevelopment is the world’s single biggest problem. It demands big ‘thoughts from outside’ about the universalistic architectural elements of big ‘solutions from within’. I get sad when I see that high-profile theorists of development who claim to know the writings of Hayek, Schumpeter, and Weber are in fact only borrowing slogans selectively, i.e. marketing. Every new generation has an interest in appearing to reinvent the wheel. There is deep poverty in development theory.
A closing thought links up conveniently with another of today’s MR posts. Ferreting away on *small-level* social policy in education and health is akin to the incremental progression of medicine that produces more-or-less successful drugs to cure or slow cancer. It’s gotta be done. *Big-level* public policy should deal with discontinuous reforms that foster the conditions that will eliminate the causes. To pursue the analogy, we eliminate the carcinogens (i.e. the governance problems). That’s gotta be done too. It can be done in one generation (30 years). This message used to be found — tentatively — in the WB World Development Reports. Let’s retrieve it. It was the right message.
@Michael Heller
How on earth can you expect anyone to read your book when your publisher charges such an obscene amount ($125!!!) for it?
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