learn from past experiences
An alternative perspective on non-linearities was the Growth Diagnostics
or Decision Tree approach suggested by Hausmann, Rodrik, and
Velasco (2005). They recognized the central role of structural change in
economic development and argued that there are “binding constraints” on
growth in each country. These authors suggested that binding constraints
can vary over time and across countries. They concluded that identifi cation
of the binding constraint was therefore key in practice. This framework
highlighted pragmatically the inability of governments to reform
everything and stressed the need to prioritize reforms, which should be
done through the information revealed by shadow prices. It should be
noted that the Growth Diagnostics approach is not operational unless
one assumes away reform complementarities, which is the feature of
linear growth regressions.
The divergence in growth performance between developed and developing
countries, despite predictions of convergence from mainstream
economic theory, has led to controversy. Some have concluded that the policy
prescriptions, or expectations about their effectiveness, or both, were
wrong. Others have observed that growth researchers had paid limited
attention to heterogeneity (the specifi c characteristics of each country). The
suggestion that cross-country distribution may be multimodal (with the
existence of “convergence clubs”) did not settle the debate about which
new directions were needed for growth research. Instead, many basic questions
have come back on the agenda: Are development economists looking
in the wrong place in their quest for the determinants of growth? Should
the focus be on institutions (institutional outcomes), instead of or in addition
to policies? And, assuming that they are not refl ecting other factors,
how can good institutional outcomes be generated?
These unanswered questions were on the agenda for a long time. Starting
in the 1980s, many development economists tried to understand
better the causality of relationships and the various transmission channels
through which policies, institutional changes, or foreign aid affect
growth. They were also the rationale for an increased focus of growth
research on microbehavior issues at the household and fi rm levels, with
two goals: (i) allowing for heterogeneity in the economy (across and
within countries); and (ii) investigating how constraints to growth operate
at the microlevel.
The growing disappointment and disillusionment with aid effectiveness
also led to the quest for rigorous impact evaluation of development projects
and programs. This has generated a new approach to development
led by economists at the MIT Poverty Lab, whose goal is “to reduce poverty
by ensuring that policy is based on scientifi c evidence” through the
use of randomized control trials (RCT) or social experiments. Although
RCT are good tools for understanding the effectiveness of some specifi c
microprojects, they often do not start from a clear strategic assessment of
how a particular method would fi t the knowledge gaps of highest priority
(Ravallion 2009). All too often, research looks for topics “under the light.”
The positive outcomes for policymaking are more often the occasional
by-products of research than its objective from the outset.
Recent microempirical studies may have indeed shed light on some
important problems, such as the impact of the investment climate
on fi rm performance or the impact of household behavior on productivity
( Rosenzweig and Wolpin 1985). But “there is a risk the bulk of
present-day research in development economics appears to be too narrowly
focused and/or of too little generalizability to help much in the fi ght
against poverty and to facilitate structural change and sustained growth”
(World Bank 2010).
The time has come to reexamine the state of development economics,
to learn from past experiences and previous knowledge, and to offer new
thinking and a new framework. Drawing lessons from past experience and
from economic theories, the next section presents the key principles of a
new structural economics, which is a neoclassical approach to economic
structure and dynamic change in the process of economic development.1
Economic development is a process of continuous technological innovation and structural transformation. Development thinking is inherently tied to the quest for sustainable growth strategies. This book provides a neoclassical approach for studying the determinants of economic structure and its transformation and draws new insights for development policy. The market is the basic mechanism for effective resource allocation at each level of development. However, economic development as a dynamic process entails structural changes, including industrial upgrading and diversification and corresponding improvements in hard and soft infrastructure. Such upgrading and improvements require coordination and go hand in hand with large externalities to firms transaction costs and returns to capital investment. Thus, in addition to an effective market mechanism, the government should play an active role in facilitating structural changes. The book provides empirical evidence in support of this framework as well as concrete advice to development practitioners.
or Decision Tree approach suggested by Hausmann, Rodrik, and
Velasco (2005). They recognized the central role of structural change in
economic development and argued that there are “binding constraints” on
growth in each country. These authors suggested that binding constraints
can vary over time and across countries. They concluded that identifi cation
of the binding constraint was therefore key in practice. This fr
highlighted pragmatically the inability of governments to reform
everything and stressed the need to prioritize reforms, which should be
done through the information revealed by shadow prices. It should be
noted that the Growth Diagnostics approach is not operational unless
one assumes away reform complementarities, which is the feature of
linear growth regressions.
The divergence in growth performance between developed and developing
countries, despite predictions of convergence from mainstream
economic theory, has led to controversy. Some have concluded that the policy
presc
wrong. Others have observed that growth researchers had paid limited
attention to heterogeneity (the specifi c characteristics of each country). The
suggestion that cross-country distribution may be multimodal (with the
existence of “convergence clubs”) did not settle the debate about which
new directions were needed for growth research. Instead, many basic questions
have come back on the agenda: Are development economists looking
in the wrong place in their quest for the determinants of growth? Should
the focus be on institutions (institutional outcomes), instead of or in addition
to policies? And, assuming that they are not refl ecting other factors,
how can good institutional outcomes be generated?
These unanswered questions were on the agenda for a long time. Starting
in the 1980s, many development economists tried to understand
better the causality of relationships and the various transmission channels
through which policies, institutional changes, or foreign aid affect
growth. They were also the rationale for an increased focus of growth
research on microbehavior issues at the household and fi rm levels, with
two goals: (i) allowing for heterogeneity in the economy (across and
within countries); and (ii) investigating how constraints to growth operate
at the microlevel.
The growing disappointment and disillusionment with aid effectiveness
also led to the quest for rigorous impact evaluation of development projects
and programs. This has generated a new approach to development
led by economists at the MIT Poverty Lab, whose goal is “to reduce poverty
by ensuring that policy is ba
use of randomized control trials (RCT) or social experiments. Although
RCT are good tools for understanding the effectiveness of some specifi c
microprojects, they often do not start from a clear strategic assessment of
how a particular method would fi t the knowledge gaps of highest priority
(Ravallion 2009). All too often, research looks for topics “under the light.”
The positive outcomes for policymaking are more often the occasional
by-products of research than its ob
Recent microempirical studies may have indeed shed light on some
important problems, such as the impact of the investment climate
on fi rm performance or the impact of household behavior on productivity
( Rosenzweig and Wolpin 1985). But “there is a risk the bulk of
present-day research in development economics appears to be too narrowly
focused and/or of too little generalizability to help much in the fi ght
against poverty and to facilitate structural change and sustained growth”
(World Bank 2010).
The time has come to reexamine the state of development economics,
to learn from past experiences and previous knowledge, and to offer new
thinking and a new fr
from economic theories, the next section presents the key principles of a
new structural economics, which is a neoclassical approach to economic
structure and dynamic change in the process of economic development.1
本文摘自《新結構經濟學》
Economic development is a process of continuous technological innovation and structural transformation. Development thinking is inherently tied to the quest for sustainable growth strategies. This book provides a neoclassical approach for studying the determinants of economic structure and its transformation and draws new insights for development policy. The market is the basic mechanism for effective resource allocation at each level of development. However, economic development as a dynamic process entails structural changes, including industrial upgrading and diversification and corresponding improvements in hard and soft infrastructure. Such upgrading and improvements require coordination and go hand in hand with large externalities to firms transaction costs and returns to capital investment. Thus, in addition to an effective market mechanism, the government should play an active role in facilitating structural changes. The book provides empirical evidence in support of this fr