dec06_Article3 11/15/06 9:23 PM Page 973

Journal of Economic Literature Vol. XLIV (December 2006), pp. 973–987

Goodbye Washington Consensus, Hello Washington Confusion? A Review of the ’s in the 1990s: Learning from a Decade of Reform

∗

Proponents and critics alike agree that the policies spawned by the Washington Consensus have not produced the desired results. The debate now is not over whether the Washington Consensus is dead or alive, but over what will replace it. An important marker in this intellectual terrain is the World Bank’s Economic Growth in the 1990s: Learning from a Decade of Reform (2005). With its emphasis on humil- ity, policy diversity, selective and modest reforms, and experimentation, this is a rather extraordinary document demonstrating the extent to which the thinking of the development policy community has been transformed over the years. But there are other competing perspectives as well. One (trumpeted elsewhere in Washington) puts faith on extensive institutional reform, and another (exemplified by the U.N. Millennium Report) puts faith on foreign aid. Sorting intelligently among these diverse perspectives requires an explicitly diagnostic approach that recognizes that the binding constraints on growth differ from setting to setting.

1. Introduction which poor nations had succumbed, any well-trained and well-intentioned economist ife used to be relatively simple for the could feel justified in uttering the obvious peddlers of policy advice in the tropics. L truths of the profession: get your macro bal- Observing the endless list of policy follies to ances in order, take the state out of business, give markets free rein. “Stabilize, privatize, ∗ Harvard University. I am grateful to Roger Gordon for and liberalize” became the mantra of a gen- his encouragement and comments; to Ricardo Hausmann, eration of technocrats who cut their teeth in Lant Pritchett, and John Williamson for their reactions; and to Roberto Zagha for the many insights he has shared the developing world and of the political with me over the last few years. John Williamson remind- leaders they counseled. ed me that my title is far from original, having been used Codified in John Williamson’s (1990) well- in almost identical form by Moises Naim (1999). In its present form, the title also makes allusion to the classic known Washington Consensus, this advice paper by Carlos Diaz-Alejandro (1985). inspired a wave of reforms in

973 dec06_Article3 11/15/06 9:23 PM Page 974

974 Journal of Economic Literature, Vol. XLIV (December 2006)

and Sub-Saharan Africa that fundamentally between, but the -oriented reforms of transformed the policy landscape in these the 1990s proved ill-suited to deal with the developing areas. With the fall of the Berlin growing public health emergency in which Wall and the collapse of the Soviet Union, the continent became embroiled. The critics, former socialist countries similarly made a meanwhile, feel that the disappointing out- bold leap toward markets. There was more comes have vindicated their concerns about , , and trade liberal- the inappropriateness of the standard reform ization in Latin America and Eastern Europe agenda. While the lessons drawn by propo- than probably anywhere else at any point in nents and skeptics differ, it is fair to say that economic history. In Sub-Saharan Africa, nobody really believes in the Washington governments moved with less conviction and Consensus anymore.2 The question now is speed, but there too a substantial portion of not whether the Washington Consensus is the new policy agenda was adopted: state dead or alive; it is what will replace it. marketing boards were dismantled, inflation The World Bank’s Economic Growth in reduced, trade opened up, and significant the 1990s: Learning from a Decade of amounts of privatization undertaken.1 Reform (2005, henceforth Learning from Such was the enthusiasm for reform in Reform) is one of a spate of recent attempts many of these countries that Williamson’s at making sense of the facts of the last decade original list of do’s and don’ts came to look and a half, and probably the most intelligent. remarkably tame and innocuous by compar- In fact, it is a rather extraordinary document ison. In particular, financial insofar as it shows how far we have come and opening up to international capital flows from the original Washington Consensus. went much farther than what Williamson There are no confident assertions here of had anticipated (or thought prudent) from what works and what doesn’t—and no blue- the vantage point of the late 1980s. prints for policymakers to adopt. The Williamson’s (2000) protestations notwith- emphasis is on the need for humility, for pol- standing, the reform agenda eventually came icy diversity, for selective and modest to be perceived, at least by its critics, as an reforms, and for experimentation. “The cen- overtly ideological effort to impose “neo- tral message of this volume,” Gobind liberalism” and “” on Nankani, the World Bank vice-president developing nations. who oversaw the effort, writes in the preface The one thing that is generally agreed on of the book, “is that there is no unique uni- about the consequences of these reforms is versal set of rules . . . [W]e need to get away that things have not quite worked out the from formulae and the search for elusive way they were intended. Even their most ‘best practices’. . .” (p. xiii).3 Occasionally, ardent supporters now concede that growth the reader has to remind himself that the has been below expectations in Latin book he is holding in his hands is not some America (and the “transition crisis” deeper and more sustained than expected in former socialist economies). Not only were success 2 In a book edited with Pedro-Pablo Kuczynski in 2003, stories in Sub-Saharan Africa few and far in John Williamson laid out an expanded reform agenda, emphasizing crisis-proofing of economies, “second- generation” reforms, and policies addressing inequality and social issues (Kuczynski and Williamson 2003). 1 To cite just one example, fifty percent or more of the 3 Roberto Zagha led the team that prepared the state-owned enterprises were divested during the 1990s in report. Members of the team were J. Edgardo Campos, the Central African Republic, Cote d’Ivoire, Gambia, James Hanson, Ann Harrison, Philip Keefer, Ioannis Ghana, Guinea-Bissau, Kenya, Mali, , Togo, Kessides, Sarwar Lateef, Peter Montiel, Lant Pritchett, , and Zambia (John Nellis 2003). On the extent of S. Ramachandran, Luis Serven, Oleksiy Shvets, and trade reform in Africa, see Vinaye D. Ancharaz (2003). Helena Tang. dec06_Article3 11/15/06 9:23 PM Page 975

Rodrik: Goodbye Washington Consensus, Hello Washington Confusion? 975

radical manifesto, but a report prepared by extreme poverty.4 The paradox is that that the seat of orthodoxy in the universe of was unexpected too! China and India development policy. increased their reliance on market forces, of course, but their policies remained highly 2. The Record unconventional. With high levels of trade protection, lack of privatization, extensive Here is how Learning from Reform sum- industrial policies, and lax fiscal and finan- marizes the surprises of the 1990s. First, cial policies through the 1990s, these two there was an unexpectedly deep and pro- economies hardly looked like exemplars of longed collapse in output in countries mak- the Washington Consensus. Indeed, had ing the transition from to they been dismal failures instead of the suc- market economies. More than a decade into cesses they turned out to be, they would the transition, many countries had still not have arguably presented stronger evidence caught up to their 1990 levels of output. in support of Washington Consensus Second, Sub-Saharan Africa failed to take policies.5 off, despite significant policy reform, Along with this telling, if anecdotal, evi- improvements in the political and external dence has come a more skeptical reading of environments, and continued foreign aid. the cross-national relationship between The successes were few—with Uganda, policy reform and economic growth. Tanzania, and the most com- Characteristically, it is the World Bank itself monly cited instances—and remained frag- that has been prone to make grandiose ile more than a decade later. Third, there claims on the impact of policy reform. In one were frequent and painful financial crises in particularly egregious instance cited by Latin America, East Asia, Russia, and William Easterly (2005), Paul Collier and Turkey. Most had remained unpredicted by David Dollar (2001) argued that policy financial markets and economists until capi- reform of the conventional type could cut tal flows started to reverse very suddenly. world poverty by half. Work by Easterly Fourth, the Latin American recovery in the (2005) and Francisco Rodríguez (2005) first half of the 1990s proved short-lived. show that the data do not support such The 1990s as a whole saw less growth in claims. The evidence that macroeconomic Latin America in per capita GDP than in policies, price distortions, financial policies, 1950–80, despite the dismantling of the and trade openness have predictable, robust, state-led, populist, and protectionist policy and systematic effects on national growth regimes of the region. Finally, , rates is quite weak—except possibly in the the poster boy of the Latin American eco- extremes. Humongous fiscal deficits or nomic revolution, came crashing down in autarkic trade policies can stifle economic 2002 as its currency board proved unsustain- growth, but moderate amounts of each are able in the wake of Brazil’s devaluation in associated with widely varying economic January 1999. outcomes.6 Significantly, the period since 1990 was not a disaster for economic development. Quite to the contrary. From the standpoint 4 According to World Bank estimates, there were of global poverty, the last two decades have roughly 400 million fewer people living below the $1 a day poverty line in 2001 compared to two decades earlier proved the most favorable that the world (Chen and Ravallion 2004). has ever experienced. Rapid economic 5 See Dani Rodrik (2005a) for an interpretative survey growth in China, India, and a few other of recent growth experience. 6 See also Rodrik (2005b) for a general methodological Asian countries has resulted in an absolute critique of growth regressions with policy variables on the reduction in the number of people living in right-hand side. dec06_Article3 11/15/06 9:23 PM Page 976

976 Journal of Economic Literature, Vol. XLIV (December 2006)

The question is how to interpret this recent implemented” (p. 11, emphasis in the origi- experience, and how to turn the interpreta- nal). The authors go on to point out that tion into concrete policy advice. Here each of these ends can be achieved in a Learning from Reform makes some valuable number of ways. For example, trade open- progress. I summarize some of the main con- ness can be achieved through lower import clusions below, emphasizing those that depart tariffs, but also through duty drawbacks, most strongly from the earlier approach. export subsidies, special economic zones, export processing zones, and so on. This renunciation of standard “best practice” in 3. The Interpretation World Bank policy advice is quite re- One of the insights of Learning from markable, and must not have come without a Reform is that the conventional package of significant internal fight. reforms was too obsessed with deadweight- Third, different contexts require different loss triangles and reaping the efficiency solutions to solving common problems. gains from eliminating them, and did not pay Enhancing private investment incentives enough attention to stimulating the dynamic may require improving the security of prop- forces that lie behind the growth process. erty rights in one country but enhancing the Seeking efficiency gains does not amount to financial sector in another. Technological a growth strategy. Although the report does catch-up may call for better or worse patent not quite put it in this way, what I think the protection, depending on the level of devel- authors have in mind is that market or gov- opment. This explains why countries that are ernment failures that affect accumulation or growing—the report cites Bangladesh, change are much more costly, Botswana, Chile, China, Egypt, India, Lao and hence more deserving of policy atten- PDR, Mauritius, Sri Lanka, Tunisia, and tion, than distortions that simply affect static Vietnam—have such diverse policy configu- resource allocation. They may also be harder rations, and why attempts to copy successful to identify. Focusing on the latter instead of policy reforms in another country often end the former results in small benefits, and up in failure. could even turn out to be counterproductive Fourth, Learning from Reform argues that when policy makers face a political budget there has been a tendency to exaggerate the constraint (more reform in one area means advantages of rules over discretion in govern- less reform in another). ment behavior. Rules were meant to disci- A second conclusion is that the broad pline the malfeasance of governments. But it objectives of economic reform—namely turns out that “government discretion cannot market-oriented incentives, macroeconomic be bypassed” (p. 14). Argentina’s currency stability, and outward orientation—do not board, which removed monetary policy from translate into unique set of policy actions. In the hands of the government, worked well the words of the Report, “The principles when the binding constraint was lack of cred- of . . .‘macroeconomic stability, domestic ibility, but led to disastrous outcomes when liberalization, and openness’ have been the binding constraint became an overvalued interpreted narrowly to mean ‘minimize fis- currency. There is no alternative to improv- cal deficits, minimize inflation, minimize ing the processes of decisionmaking (better tariffs, maximize privatization, maximize lib- checks and balances, better guiding princi- eralization of finance,’ with the assumption ples, better implementation) such that that the more of these changes the better, at discretion leads to better outcomes. all times and in all places—overlooking the Finally, reform efforts need to be selective fact that these expedients are just some of and focus on the binding constraints on eco- the ways in which these principles can be nomic growth rather than take a laundry-list dec06_Article3 11/15/06 9:23 PM Page 977

Rodrik: Goodbye Washington Consensus, Hello Washington Confusion? 977

approach à la Washington Consensus. While put out a document that focused on much there is no foolproof method of identifying the same issues in the context of Latin these constraints, common sense and eco- America (Anoop Singh et. al. 2005). This is nomic analysis can help (see below). When an equally remarkable document which investment is constrained by poor property shows that in Washington there is anything rights, improving financial intermediation but consensus these days. The IMF report will not help. When it is constrained by high starts from the same basic premise—growth cost of capital, improving institutional quali- has been disappointing—but its basic argu- ty will hardly work. Experimentation and ment could not be more different. learning about the nature of the binding According to its authors, the problem was constraints, and the changes therein, are not with the approach taken to reform, but therefore an integral part of the reform that it did not go deep and far enough. Using process. Even though countries may face sit- the report’s own words, “reforms were uations in which many constraints need to be uneven and remained incomplete” (p. xiv). addressed simultaneously, the report jud- “More progress was made,” the IMF report ges these situations to be rare: “In most claims, “with measures that had low up-front cases, countries can deal with constraints costs, such as privatization, relative to sequentially, a few at a time” (p. 16). reforms that promised greater long-term Taking these conclusions at face value, benefits, such as improving macroeconomic what they entail is nothing less than a radical and labor market institutions, and strength- rethink of development strategies. Of ening legal and judicial systems” (p. xiv). The course, it would be naïve to think that the same diagnosis is expressed succinctly in the World Bank’s practice will therefore change title of one of Anne Krueger’s speeches on overnight. There is little evidence that oper- policy reform: “Meant Well, Tried Little, ational work at the Bank has internalized Failed Much” (Krueger 2004). From this these lessons to any significant extent.7 And, perspective, the failures have to be chalked as I will discuss below, there are contending up to too little reform of the kind that interpretations of what has gone wrong and Washington has advocated all along and not how to move forward. But the mere fact that to the nature of these reforms itself.8 The such views have been put forward in an offi- policy implication that follows is simple: do cial World Bank publication is indicative of more of the same, and do it well. the changing nature of the debate and of the Several key ideas underpin this interpreta- space that is opening up within orthodox cir- tion of the evidence. First, political leaders cles for alternative visions of development may have had the talk, but they didn’t quite policy. have the walk: their commitment to genuine reform was often “skin-deep” and there was 4. The Alternatives I: Institutions “lack of follow-through” (Krueger 2004). Second, and more fundamentally, even com- Around the same time that the World mitted reformers stopped well short of Bank was grappling with the lessons of the undertaking the full gamut of institutional 1990s, its sister institution across the street, changes needed to create well-functioning the International Monetary Fund (IMF), market economies. Regulatory and supervi- sory institutions in product and financial 7 Along with Ricardo Hausmann and the lead author of the World Bank report, Roberto Zagha, I have been involved in an effort to bring some of these implications to 8 But even within the IMF, there are divergent views. bear on the country operational work at the Bank. One The IMF’s Evaluation Office (nominally independent and thing we have discovered is how difficult it is to wean the headed until recently by a distinguished outsider, Montek Bank’s country economists away from the Washington- Ahluwahlia, but staffed largely by IMF economists) has Consensus, laundry-list, best-practice approach to reform. produced reports that often reach different conclusions. dec06_Article3 11/15/06 9:23 PM Page 978

978 Journal of Economic Literature, Vol. XLIV (December 2006)

TABLE 1 THE AUGMENTED WASHINGTON CONSENSUS

“Augmented” Washington Consensus Original Washington Consensus the previous 10 items, plus:

1. Fiscal discipline 11. Corporate 2. Reorientation of public expenditures 12. Anti-corruption 3. 13. Flexible labor markets 4. Financial liberalization 14. WTO agreements 5. Unified and competitive exchange rates 15. Financial codes and standards 6. Trade liberalization 16. “Prudent” capital-account opening 7. Openness to DFI 17. Non-intermediate regimes 8. Privatization 18. Independent central banks/inflation targeting 9. Deregulation 19. Social safety nets 10. Secure Property Rights 20. Targeted

markets proved too weak. Poor governance not work if fiscal institutions were not in and corruption remained a problem. Courts place to make up for lost trade revenue, cap- and the judiciary were ineffective. And labor ital markets did not allocate finance to market institutions were not sufficiently expanding sectors, customs officials were not “flexible.” competent and honest enough, labor-market Of course this second point, about the institutions did not work properly to reduce lack of emphasis on institutional reform, is transitional unemployment, and so on. The itself an implicit repudiation of the original upshot is that the original Washington version of the Washington Consensus, inso- Consensus has been augmented by a long far as the latter did not feature institutional list of so-called “second-generation” reforms reform of the type that Krueger and the that are heavily institutional in nature. The IMF have in mind in their interpretation of precise enumeration of these requisite insti- the 1990s. Most of the items in Williamson’s tutional reforms depends on who is talking original list were relatively simple policy and when, and often the list seems to extend changes (liberalize trade, eliminate currency to whatever it is that the reformers may not overvaluation, reduce fiscal deficits, and so have had a chance to do—which is one of the on) that did not require deep-seated institu- problems that I will discuss below. tional changes. Williamson did include Nonetheless, one possible rendition is “property rights” in his list, but that was the shown in table 1, where I have listed ten last item on the list and came almost as an second-generation reforms to maintain sym- afterthought. metry with the original Washington What has become clearer to practitioners Consensus. of the Washington Consensus over time is This focus on institutions has also received that the standard policy reforms did not pro- a strong boost from the (largely unrelated) duce lasting effects if the background insti- rediscovery of institutions as a driver of long- tutional conditions were poor. Sound term economic performance in the empirical policies needed to be embedded in solid literature on economic growth. In particular, institutions. Moreover, there were signifi- Daron Acemoglu, Simon Johnson, and cant complementarities across different James A. Robinson’s (2001) important work areas of reform. Trade liberalization would drove home the point that the security of dec06_Article3 11/15/06 9:23 PM Page 979

Rodrik: Goodbye Washington Consensus, Hello Washington Confusion? 979

property rights has been historically perhaps Learning from Reform pays lip service to the single most important determinant of why the importance of institutions, but to its some countries grew rich and others credit it steers clear from too much institu- remained poor. Going one step further, tions determinism. That is wise because the Easterly and Ross Levine (2003) showed that Augmented Washington Consensus’ focus policies (i.e., trade openness, inflation, and on institutional change proves to be largely a exchange rate overvaluation) do not exert any dead-end upon closer look. There are two independent effect on long-term economic major reasons for this, which I summarize performance once the quality of domestic here. institutions is included in the regression. First, the cross-national literature has Often, this work has taken a form that may be been unable to establish a strong causal link called “institutions fundamentalism”—to between any particular design feature of relate it to (and distinguish it from) the ear- institutions and economic growth. We know lier wave of “market fundamentalism.” that growth happens when investors feel Getting the institutions right is the mantra secure, but we have no idea what specific of the former, just as getting prices right institutional blueprints will make them feel was the mantra of the latter. The more secure in a given context. The litera- Augmented Washington Consensus derives ture gives us no hint as to what the right its academic support largely from this work levers are. Institutional function does not on the primacy of institutions.9, 10 uniquely determine institutional form. If you Taken to its logical conclusion, the focus on think this is splitting hairs, just compare the institutions has potentially debilitating side experience of Russia and China in the mid- effects for policy reformers. Institutions are by 1990s. China was able to elicit inordinate their very nature deeply embedded in society. amounts of private investment under a sys- If growth indeed requires major institutional tem of public ownership (township and vil- transformation—in the areas of rule of law, lage enterprises), something that Russia property rights protection, governance, and so failed to do under Western-style private on—how can we not be pessimistic about the ownership. Presumably this was because prospects for growth in poor countries? After investors felt more secure when they were all, such institutional changes typically happen allied with local governments with residual very rarely—perhaps in the aftermath of war, claims on the stream of profits than when civil wars, revolutions, and other major politi- they had to entrust their assets to private cal upheavals. The cleanest cases that link contracts that would have to be enforced by institutional change to growth performance incompetent and corrupt courts. Whatever occur indeed at such historical junctures: con- the underlying reason, China’s experience sider for example the split between East and demonstrates how common goals (protec- West Germany, or of North and . tion of property rights) can sometimes be But what are poor countries that do not want achieved under divergent rules. This is a to go through such upheavals to do? theme that Learning from Reform loudly trumpets. 9 A mea culpa here: My article on “Institutions Rule” (Rodrik, Arvind Subramanian, and Francesco Trebbi Second, we should not forget that 2004) is frequently seen as being in the frontline of insti- Acemoglu, Johnson, and Robinson (2001) tutions fundamentalism (although there are important work and other related research focused on caveats in the second half of the paper). 10 The most serious challenge to institutions funda- long-term economic performance. The typi- mentalism has been launched by Edward L. Glaeser, cal dependent variable in this line of literature Rafael La Porta, Florencio Lopez-de-Silanes, and Andrei is the level of income in some recent year, not Shleifer (2004) who find the empirical approach in the institutions-cause-income literature flawed and think it is the rate of economic growth over a particular human capital (and dictators) that cause growth. period. When institutional indicators are dec06_Article3 11/15/06 9:23 PM Page 980

980 Journal of Economic Literature, Vol. XLIV (December 2006)

introduced in growth regressions, the results problem must be with lack of safety nets and are much weaker and less robust. Empirical inadequate social insurance. You reformed work focusing on transitions into and out of those with little effect? Obviously the prob- growth has found little evidence that large- lem was that your political system was scale institutional transformations play a role unable to generate sufficient credibility, (Hausmann, Pritchett, and Rodrik 2005; lock-in, and legitimacy for the reforms. In Benjamin F. Jones and Benjamin A. Olken the end, it is always the advisee who falls 2005). To take two important examples, short, and never the advisor who is proved China embarked on rapid growth in the late wrong. 1970s with changes in its system of incen- tives that were marginal in nature (and cer- 5. The Alternatives II: Foreign Aid tainly with no ownership reform or significant change in its trade regime early Yet another vision of reform strategy is on), and India’s transition to high growth in offered by the U.N. Millennium Project the early 1980s was preceded (or accompa- (2005), led by . This vision is no nied) by no identifiable institutional less holistic than that of the institutions fun- changes. These and other experiences sug- damentalists, although the elements of the gest that a policy maker interested in ignit- package and the weight placed on each dif- ing economic growth may be better served fer. The U.N. Project calls for a comprehen- by targeting the most binding constraints on sive and simultaneous increase in “public economic growth—where the bang for the investments, capacity building, domestic reform buck is greatest—than by investing resource mobilization, and official develop- scarce political and administrative capital on ment assistance,” while providing “a frame- ambitious institutional reforms. Of course, work for strengthening governance, institutional reform will be needed eventual- promoting human rights, engaging civil soci- ly to sustain economic growth. But it may be ety, and promoting the private sector” (p. easier and more effective to do that when xx). But it also abounds in concrete details of the economy is already growing and its costs what can and should be done. Some of the can be spread over time. “quick-win actions” it proposes include free In the limit, the obsession with compre- distribution of bed nets against malaria, end- hensive institutional reform leads to a policy ing user fees for primary education and agenda that is hopelessly ambitious and vir- essential health services, expansion of school tually impossible to fulfill. Telling poor coun- meals programs in hunger zones, and tries in Africa or Latin America that they replenishment of soil nutrients on small- have to set their sights on the best-practice holder agriculture through subsidized or institutions of the United States or Sweden free distribution of chemical fertilizers. is like telling them that the only way to The U.N. Millennium Project views cur- develop is to become developed—hardly rent levels of foreign aid to be a significant useful policy advice! Furthermore, there is constraint on the achievement of global something inherently unfalsifiable about this poverty reduction. Hence it calls for a sig- advice. So open-ended is the agenda that nificant increase in aid—a doubling of annu- even the most ambitious institutional reform al official development assistance to $135 efforts can be faulted ex post for having left billion in 2006, rising to $195 billion by something out. So you reformed institutions 2015—to finance public investments in in trade, property rights, and macro but still human capital and infrastructure and to did not grow? Well, it must be that you did develop the technologies needed to trans- not reform labor-market institutions. You did form health and agriculture in poor societies. that too but still did not grow? Well, the Sachs and his collaborators exhibit a certain dec06_Article3 11/15/06 9:23 PM Page 981

Rodrik: Goodbye Washington Consensus, Hello Washington Confusion? 981

impatience with those who argue that the countries have embarked on high growth in real constraint is poor institutions and weak this big-push fashion or through the infusion governance, and that large aid flows are of large amounts of foreign aid? As Sachs’s more likely to disappear in the pockets of critics love to point out, there has not been a corrupt officialdom than to foster develop- shortage of foreign aid in Africa, and some of ment. They argue that many of the poorest the most rapidly growing countries of the countries of the world (e.g., Benin, Mali, past have done so without relying much on Senegal) have in fact made significant strides Western aid. Sachs and his collaborators in improving their economic and political counter that Africa is special because it suf- institutions, and that in any case the invest- fers from high transport costs, low- ments in human capital that they advocate productivity agriculture, a very heavy disease would likely foster better institutions as well. burden, adverse geopolitics, and slow diffu- In their view, the obsession with governance sion of technology from abroad (Sachs et al. is often just an excuse for rich countries not 2004, pp. 130–31), all of which make the doing more to help poor nations. region particularly prone to a poverty trap. The theory underlying the U.N. Millenium But couldn’t one have said much the same of Project’s view of the world is that low-income Vietnam, a war-torn, impoverished country countries in Africa (and possibly elsewhere) facing economic sanctions from the United are stuck in a low-level equilibrium, a “pover- States, which took off in the late 1980s even ty trap” (Sachs et al. 2004). The neoclassical though it did not receive much aid from production function assumes that the margin- Western nations until the mid-1990s? al product of capital is high at low levels of Or what do we make of the fact that eco- development (when the economy has low lev- nomic growth is actually not uncommon els of capital). But if there are some increas- among Sub-Saharan African nations them- ing returns to scale (e.g., setting up a modern selves? The theory of poverty traps suggests factory requires a minimum investment to be that these countries are stuck in low-level made), complementarities (e.g., running a equilibria from which they find it very hard modern factory needs an adequate supply of to extricate themselves. The reality seems to educated workers), or negative feedback be somewhat different. Most African coun- effects (e.g., an increase in incomes raises tries have shown themselves capable of pro- population growth), the marginal return to ducing economic growth over nontrivial capital is initially low rather than high. Small time horizons. A telling statistic produced by increments to capital yield very little fruit, Jones and Olken (2005) is that three- and the economy can have multiple steady quarters of Sub-Saharan African countries states, one of which involves a poverty trap. have grown fast enough to experience some Since it does not pay to invest, households do convergence with U.S. income levels over at not save and the economy remains poor. This least one ten-year period since 1950. very old idea (going back at least to Paul N. Similarly, in Hausmann, Pritchett, and Rosenstein-Rodan (1943) and Richard R. Rodrik (2005), where we studied growth Nelson (1956)) can be used to justify a “big accelerations since the 1950s, we found such push”—i.e., a large-scale, simultaneous effort accelerations to be quite frequent in low- to raise the capital stock (public, private, income countries, including among those in human) to levels where the neoclassical Africa. In fact, growth accelerations turned forces of convergence begin to operate and out to be more common in low-income the economy breaks free of the poverty trap. countries than in middle- or high-income Several questions are raised by this take countries, in line with the neoclassical on African poverty. First, what do we make growth model. The trouble seems to be not of the fact that historically few low income that poor African countries are unable to dec06_Article3 11/15/06 9:23 PM Page 982

982 Journal of Economic Literature, Vol. XLIV (December 2006)

grow, but that their growth spurts eventually This approach consists of three sequential fizzle out. This suggests a rather different elements. First, we need to undertake a remedy, one that focuses in the short run on diagnostic analysis to figure out where the selectively removing binding constraints on most significant constraints on economic growth (which may well differ from country growth are in a given setting. Second, we to country), and in the medium- to longer- need creative and imaginative policy design run on enhancing resilience to external to target the identified constraints appropri- shocks.11 I will elaborate on this remedy ately. Third, we need to institutionalize the below. process of diagnosis and policy response to Ultimately, where the U.N. Millennium ensure that the economy remains dynamic Project differs most from Learning from and growth does not fizzle out. Reform is in the extent of knowledge that it 6.1 Step 1: Growth Diagnostics assumes we have and consequently in the degree of self-confidence exhibited by its Policy reforms of the (Augmented) authors. The U.N. Millennium Project is Washington Consensus type are ineffective based on the view that we basically know because there is nothing that ensures that enough to mount a bold, ambitious, and they are closely targeted on what may be the costly effort to eradicate world poverty. We most important constraints blocking eco- have successfully identified all the margins nomic growth. The trick is to find those that matter, and we better move on all of areas where reform will yield the greatest them simultaneously. Learning from Reform, return. Otherwise, policymakers are con- by contrast, is an ode to humility. What we demned to a spray-gun approach: they shoot have learned, it says implicitly, is the folly of their reform gun on as many potential tar- assuming that we know too much. We need gets as possible, hoping that some will turn to downplay grandiose claims, move cau- out to be the ones they are really after. A suc- tiously, and concentrate our efforts where cessful growth strategy, by contrast, begins the payoffs seem the greatest. by identifying the most binding constraints. But can this be done? In Hausmann, Rodrik, and Velasco (2005), we develop a 6. A Practical Agenda for Formulating framework that we believe suggests a positive Growth Strategies answer. We begin with a basic but powerful But what is the operational content of taxonomy (see figure 1). In a low-income such a cautious, experimentalist approach? economy, economic activity must be con- If we adopt the path recommended by strained by at least one of the following two Learning from Reform, can we say anything factors: either the cost of finance must be too more than “different strokes for different high or the private return to investment must folks” or avoid a nihilistic attitude where be low. If the problem is with low private “everything goes”? Learning from Reform returns, that in turn must be due either to says little that is useful on this, but I think low economic (social) returns or to a large the answer is “yes” to both questions. Let me gap between social and private returns (low briefly outline here a way of thinking about private appropriability). The first step in growth strategies that avoids some of the the diagnostic analysis is to figure out obvious pitfalls. which of these conditions more accurately characterizes the economy in question. Fortunately, it is possible to make progress because each of these syndromes throws out 11 For an empirical analysis which emphasizes the role of external shocks (in interaction with weak institutions) as different sets of diagnostic signals or gener- the culprit for growth collapses, see Rodrik (1999). ate different patterns of comovements in dec06_Article3 11/15/06 9:23 PM Page 983

Rodrik: Goodbye Washington Consensus, Hello Washington Confusion? 983

Problem: Low levels of private investment and entrepreneurship

Low return to economic activity High cost of finance

Low social returns Low appropriability bad international bad local finance finance

government market failures failures

poor bad information coordination geography infrastructure externalities: externalities “self-discovery” low micro risks: macro risks: low poor human property rights, financial, domestic inter- capital corruption, taxes monetary, fiscal saving mediation instability

Figure 1. Growth Diagnostics

economic variables. For example, in an aid or remittances will finance consump- economy that is constrained by cost of tion, housing, or capital flight. These in turn finance we would expect real interest rates are the circumstances that characterize to be high, borrowers to be chasing lenders, countries such as El Salvador and Ethiopia. the current account deficit to be as large as When we identify low private returns as the foreign borrowing constraint will allow, the culprit, we will next want to know and entrepreneurs to be full of investment whether the source is low social returns or ideas. In such an economy, an exogenous low private appropriability of those returns. increase in investible funds, such as foreign Low social returns can be due to poor human aid and remittances, will spur primarily capital, lousy infrastructure, bad geography, investment and other productive economic or other similar reasons. Once again, we need activities rather than consumption or invest- to be on the lookout for diagnostic signals. If ment in real estate. This description comes human capital (either because of low levels of pretty close to capturing the situation of education or the disease environment) is a countries such as Brazil or Turkey, for exam- serious constraint, we would expect the ple. By contrast, in an economy where eco- returns to education or the skill premium to nomic activity is constrained by low private be comparatively high. If infrastructure is the returns, interest rates will be low, banks will problem, we would observe the bottlenecks be flush in liquidity, lenders will be chasing in transport or energy, private firms stepping after borrowers, the current account will be in to supply the needed services, and so on. near balance or in surplus, and entrepre- Appropriability problems—i.e., a large neurs will be more interested in putting gap between private and social returns—can their money in Miami or Geneva than in in turn arise under two sets of circum- investing it at home. An increase in foreign stances. One possibility has to do with the dec06_Article3 11/15/06 9:23 PM Page 984

984 Journal of Economic Literature, Vol. XLIV (December 2006)

policy/institutional environment: taxes may previous step. The principle of policy target- be too high, property rights may be protect- ing offers a simple message: target the poli- ed poorly, high inflation may generate cy response as closely as possible on the macro risk, labor–capital conflicts may source of the distortion. Hence if credit con- depress production incentives, and so on. straints are the main constraint, for example, Alternatively, the fault may lie with market and the problem is the result of lack of com- failures such as technological spillovers, petition and large bank spreads, the appro- coordination failures, and problems of eco- priate response is to reduce impediments to nomic “self-discovery” (i.e., uncertainty competition in the banking sector. about the underlying cost structure of the Simple as it may be, this first-best logic economy; see Hausmann and Rodrik 2003). often does not work, and indeed can be As usual, we look for the tell-tale signs of even counterproductive. The reason is that each of these. Sometimes, the diagnostic we are necessarily operating in a second- analysis proceeds down a particular path not best environment, due to other distortions because of direct evidence but because the or administrative and political constraints. other paths have been ruled out.12 In designing policy, we have to be on the It is possible to carry out this kind of lookout for unforeseen complications and analysis at a much finer level of disaggrega- unexpected consequences. Let me return to tion, and indeed any real-world application an example from China. Formal ownership has to be considerably more detailed than rights in China’s township and village enter- the one I have sketched here. But I hope this prises (TVEs) were vested not in private summary conveys the value of an explicitly hands or in the central government, but in diagnostic framework. Even a rudimentary local governments (townships or villages). application of these principles can some- From the lens of first-best reform, these times reveal important gaps or shortcomings enterprises are problematic since, if our in traditional reform packages. For example, objective is to spur private investment and when the cost of finance is an important entrepreneurship, it would have been far binding constraint (as seems likely in Brazil), preferable to institute private property institutional improvements aimed at improv- rights (as Russia and other East European ing the “business climate” (i.e., reducing red transition economies did). But the first-best tape, lowering taxes, and so on) will be not logic is not helpful here because a private only ineffective (since the problem does not property system relies on an effective judici- lie with investment demand), but it can also ary for the enforcement of property rights backfire (since an increase in investment and contracts. In the absence of such a legal demand will put further upwards pressure system, formal property rights are not worth on interest rates). much, as minority shareholders in Russia soon discovered to their chagrin. Until an 6.2 Step 2: Policy Design effective judiciary is created, it may make Once the key problem(s) are identified, more sense to make virtue out of necessity we need to think about the appropriate poli- and force entrepreneurs into partnership cy responses. The key in this step is to focus with their most likely expropriators, the on the market failures and distortions associ- local state authorities. That is exactly what ated with the constraint identified in the the TVEs did. Local governments were keen to ensure the prosperity of these 12 So in the case of El Salvador we concluded that lack enterprises as their equity stake generated of self-discovery was an important and binding constraint revenues directly for them. In the environ- in part because there was little evidence in favor of the other traditional explanations (Hausmann and Rodrik ment characteristic of China, property 2005). rights were effectively more secure under dec06_Article3 11/15/06 9:23 PM Page 985

Rodrik: Goodbye Washington Consensus, Hello Washington Confusion? 985

direct local government ownership than scheme that had developed in the banking they would likely have been under a private sector collapsed, and cleaning up the mess property-rights legal regime. cost the government 20 percentage points of Such examples can be easily multiplied GDP and led the economy into a downward (Rodrik 2005a). As an additional illustration, spiral. It turned out that the economy had consider the case of achieving integration outgrown its weak institutional underpin- with the world economy. Policymakers in nings. The same can be said of , countries such as South Korea and Taiwan in where the of 1997–98 led to the early 1960s and China in the late 1970s total economic and political collapse. It may had decided that enhancing their countries’ yet turn out to be case also of China unless participation in world markets was a key this country manages to strengthen the rule objective. For a western economist, the most of law and enhance democratic participation. direct route would have been to reduce or What is needed to sustain growth? Two eliminate barriers to imports and foreign types of institutional reform seem to become investment. Instead, these countries critical over time. First, there is the need to achieved the same ends (i.e., reduce the maintain productive dynamism. Natural antitrade bias of their economic policies) resource discoveries, garment exports from through unconventional means. South Korea maquilas, or a free-trade agreement may and Taiwan employed export targets and spur growth for a limited of time. Policy export subsidies for their firms. China needs to ensure that this momentum is carved out special economic zones where maintained with ongoing diversification into foreign investors had access to a free-trade new areas of tradables. Otherwise, growth regime. Policymakers chose these uncon- simply fizzles out. What stands out in the ventional solutions presumably because they performance of East Asian countries is their created fewer adjustment costs and put less continued focus on the needs of the real stress on established social bargains. economy and the ongoing encouragement of technology adoption and diversification. 6.3 Step 3: Institutionalizing Reform The second area that needs attention is the strengthening of domestic institutions of con- The nature of the binding constraint will flict management. The most frequent cause necessarily change over time. For example, for the collapse in growth is the inability to schooling may not be a binding constraint deal with the consequences of external initially, but as investment and entrepre- shocks—i.e., terms of trade declines or rever- neurship pick up, it will likely become one sals in capital flows. Endowing the economy unless the quality and quantity of schools with resilience against such shocks requires increase over time. In Hausmann, Rodrik, strengthening the rule of law, solidifying (or and Velasco (2005), we illustrate this issue putting in place) democratic institutions, using the example of the Dominican establishing participatory mechanisms, and Republic. This country was able to spur erecting social safety nets. When such insti- growth with a number of sector-specific tutions are in place, the macroeconomic and reforms that stimulated investment in other adjustments needed to deal with tourism and maquilas. But it neglected mak- adverse shocks can be undertaken relatively ing the institutional investments required to smoothly. When they are not, the result is lend resilience and robustness to economic distributive conflict and economic collapse growth—especially in the area of financial (Rodrik 1999). The contrasting experiences market regulation and supervision. When of South Korea and Indonesia in the imme- September 11 led to the drying of tourist diate aftermath of the Asian financial crisis in inflows, the country paid a big price. A Ponzi 1997–98 are quite instructive in this regard. dec06_Article3 11/15/06 9:23 PM Page 986

986 Journal of Economic Literature, Vol. XLIV (December 2006)

Institutional reforms in these areas are think harder and deeper about the econom- difficult to implement and they take time. ics of reform than anything else out there. It Economic science typically provides very lit- warns us to be skeptical of top-down, com- tle guidance on how to proceed (Avinash K. prehensive, universal solutions—no matter Dixit 2004). But the point is that these diffi- how well intentioned they may be. And it culties do not need to stand in the way of for- reminds us that the requisite economic mulating less ambitious, more selective, and analysis—hard as it is, in the absence of spe- more carefully targeted policy initiatives that cific blueprints—has to be done case by case. can have very powerful effects on igniting These should be music to any economist’s economic growth in the short run. What is ears. After all, what distinguishes profession- required to sustain growth should not be al economists from ideologues is that the for- confused with what is required to initiate it. mer are trained to make contingent statements: policy A is to be recommended 7. Concluding Remarks only if conditions x, y, and z obtain.14 It is now time for a confession. As the pre- Sensible advice consists of a well-articulated ceding discussion ought to have made clear, mapping from observed conditions onto its I find Learning from Reform a useful and policy implications. This simple but funda- important document in no small part mental principle seems to have gotten lost because its central themes parallel those that in much of the thinking on economic reform I have been advocating for some time along in the developing world, which has often with a number of my colleagues at the taken an a priori and mechanical form. Its Kennedy School (see in particular Rodrik 2005a; Hausmann, Rodrik, and Velasco 14 As a trite, but still useful illustration, consider trade 2005; and Hausmann, Pritchett, and Rodrik liberalization, which is one of the most common policy 2005). It is gratifying to see one’s ideas being reforms recommended to developing countries (typically taken seriously, particularly by an institution unconditionally) (Rodrik 2005a). Economic theory says that trade liberalization is guaranteed to enhance welfare that has frequently served as a target for only under a long list of conditions: The liberalization one’s criticisms. The report pays me compli- must be complete or else the reduction in import restric- ments in other ways too: one of its two open- tions must take into account the potentially quite compli- cated structure of substitutability and complementarity ing quotes is taken from my work (the other across restricted commodities. There must be no micro- is from Al Harberger). And I return the economic market imperfections other than the trade compliment by acting as one of the restrictions in question, or if there are some, the second- 13 best interactions that are entailed must not be adverse. endorsers on its back cover. Had the editor The home economy must be “small” in world markets or of this Journal not insisted, I would not have else the liberalization must not put the economy on the found it proper to write this review essay. wrong side of the “optimum .” The economy must be in reasonably full employment or, if not, the monetary and But I would like to think that the laudato- fiscal authorities must have effective tools of demand ry note I have struck above has to do not just management at their disposal. The income redistributive with an ego that is being stroked. Coming effects of the liberalization should not be judged undesir- able by society at large or, if they are, there must be com- from the institution that is one of the chief pensatory tax-transfer schemes with low enough excess architects of the reforms of the last twenty burden. There must be no adverse effects on the fiscal bal- years, Learning from Reform is a genuinely ance or, if there are, there must be alternative and expedi- ent ways of making up for the lost fiscal revenues. The interesting document: it represents a mea liberalization must be politically sustainable and hence culpa as well as a way forward. It pushes us to credible so that economic agents do not fear or anticipate a reversal. And an even longer list of requirements would have to be present for trade liberalization to generate eco- 13 To add to the incestousness of the relationship, Lant nomic growth, i.e., go beyond static Harberger triangles. Pritchett, my coauthor on Hausmann, Pritchett, and While the theory of the second-best should not paralyze Rodrik (2005), served as the principal author of two of the us, neither should we hand-wave it away as easily as we chapters of Learning from Reform. seem to do in our role as policy advisors. dec06_Article3 11/15/06 9:23 PM Page 987

Rodrik: Goodbye Washington Consensus, Hello Washington Confusion? 987

rediscovery is therefore good news not just Kuczynski, Pedro-Pablo, and John Williamson, eds. 2003. After the Washington Consensus: Restarting for poor nations, but for the economics Growth and Reform in Latin America. Washington, profession as well. D.C.: Institute for . Naim, Moises. 1999. “Fads and Fashion in Economic REFERENCES Reforms: Washington Consensus or Washington Acemoglu, Daron, Simon Johnson, and James A. Confusion?” Paper Prepared for the IMF Conference Robinson. 2001. “The Colonial Origins of on Second Generation Reforms, Washington, D.C. Comparative Development: An Empirical Nellis, John. 2003. “Privatization in Africa: What Has Investigation.” American Economic Review, 91(5): Happened? What Is To Be Done?” Center for 1369–1401. Global Development Working Paper 25. Ancharaz, Vinaye D. 2003. “Determinants of Trade Nelson, Richard R. 1956. “A Theory of the Low-Level Policy Reform in Sub-Saharan Africa.” Journal of Equilibrium Trap in Underdeveloped Economies.” African Economies, 12(3): 417–43. American Economic Review, 46(5): 894–908. Chen, Shaohua, and Martin Ravallion. 2004. “How Rodríguez, Francisco. 2005. “Cleaning Up the Kitchen Have the World’s Poorest Fared since the Early Sink: On the Consequences of the Linearity 1980s?” World Bank Policy Research Working Assumption for Cross-Country Growth Empirics.” Paper 3341. Unpublished. Collier, Paul, and David Dollar. 2001. “Can the World Rodrik, Dani. 1999. “Where Did All the Growth Go? Cut Poverty in Half? How Policy Reform and External Shocks, Social Conflict, and Growth Effective Aid Can Meet International Development Collapses.” Journal of Economic Growth, 4(4): Goals.” World Development, 29(11): 1787–1802. 385–412. Diaz-Alejandro, Carlos. 1985. “Good-Bye Financial Rodrik, Dani. 2005a. “Growth Strategies.” In Handbook Repression, Hello Financial Crash.” Journal of of Economic Growth, Vol. 1A, ed. P. Aghion and S. Development Economics, 19(1–2): 1–24. Durlauf. Amsterdam: North-Holland, 967–1014. Dixit, Avinash K. 2004. Lawlessness and Economics: Rodrik, Dani. 2005b. “Why We Learn Nothing from Alternative Modes of Governance. Princeton: Regressing Economic Growth on Policies.” Princeton University Press. Unpublished. Easterly, William. 2005. “National Policies and Rodrik, Dani, Arvind Subramanian, and Francesco Economic Growth: A Reappraisal.” In Handbook of Trebbi. 2004. “Institutions Rule: The Primacy of Economic Growth, Vol. 1A, ed. P. Aghion and S. Institutions over Geography and Integration in Durlauf. Amsterdam: North-Holland, 1015–59. Economic Development.” Journal of Economic Easterly, William, and Ross Levine. 2003. “Tropics, Growth, 9(2): 131–65. Germs, and Crops: How Endowments Influence Rosenstein-Rodan, Paul N. 1943. “Problems of Economic Development.” Journal of Monetary Industrialization of Eastern and South-Eastern Economics, 50(1): 3–39. Europe.” Economic Journal, 53: 202–11. Glaeser, Edward L., Rafael La Porta, Florencio Lopez- Sachs, Jeffrey D., John W. McArthur, Guido Schmidt- de-Silanes, and Andrei Shleifer. 2004. “Do Traub, Margaret Kruk, Chandrika Bahadur, Michael Institutions Cause Growth?” Journal of Economic Faye, and Gordon McCord. 2004. “Ending Africa’s Growth, 9(3): 271–303. Poverty Trap.” Brookings Papers on Economic Hausmann, Ricardo, Lant Pritchett, and Dani Rodrik. Activity, (1): 117–216. 2005. “Growth Accelerations.” Journal of Economic Singh, Anoop, Agnes Belaisch, Charles Collyns, Paula Growth, 10(4): 303–29. De Masi, Reva Krieger, Guy Meredith, and Robert Hausmann, Ricardo, and Dani Rodrik. 2003. Rennhack. 2005. “Stabilization and Reform in Latin “Economic Development as Self-Discovery.” Journal America: A Macroeconomic Perspective of the of Development Economics, 72(2): 603–33. Experience since the 1990s.” IMF Occasional Hausmann, Ricardo, and Dani Rodrik. 2005. Paper 238 “Discovering El Salvador’s Production Potential.” U.N. Millennium Project. 2005. Investing in Development: Economia, (6)1: 43–102. A Practical Plan to Acheive the Millennium Hausmann, Ricardo, Dani Rodrik, and Andrés Velasco. Development Goals. New York: United Nations. 2005. “Growth Diagnostics.” John F. Kennedy Williamson, John, ed. 1990. Latin American School of Government, Harvard University. Mimeo. Adjustment: How Much Has It Happened? Jones, Benjamin F., and Benjamin A. Olken. 2005. Washington, D.C.: Institute for International “The Anatomy of Start–Stop Growth.” NBER Economics. Working Papers, no. 11528. Williamson, John. 2000. “What Should the World Bank Krueger, Anne O. “Meant Well, Tried Little, Failed Think about the Washington Consensus?” World Much: Policy Reforms in Emerging Market Bank Research Observer, 15(2): 251–64. Economies”, remarks at the Roundtable Lecture at World Bank. 2005. Economic Growth in the 1990s: the Economic Honors Society, New York University, Learning from a Decade of Reform. Washington, March 23, 2004. D.C.: World Bank. This article has been cited by:

1. Henny A. Romijn, Marjolein C. J. Caniëls. 2011. Pathways of Technological Change in Developing Countries: Review and New Agenda. Development Policy Review 29:3, 359-380. [CrossRef] 2. ROBBERT MASELAND. 2011. How to make institutional economics better. Journal of Institutional Economics 1-5. [CrossRef] 3. ANDREAS KERN, ALEXANDER SALHI. 2011. The Euro-Mediterranean Partnership: A Macroeconomic Governance Perspective*. JCMS: Journal of Common Market Studies no-no. [CrossRef] 4. Gareth Williams, Alex Duncan, Pierre Landell-Mills, Sue Unsworth. 2011. Politics and Growth. Development Policy Review 29, s28-s55. [CrossRef] 5. Eleanor Doyle, Inmaculada Martinez-Zarzoso. 2011. Productivity, Trade, and Institutional Quality: A Panel Analysis. Southern Economic Journal 77:3, 726-752. [CrossRef] 6. Seth Pipkin. 2011. Local Means in Value Chain Ends: Dynamics of Product and Social Upgrading in Apparel Manufacturing in Guatemala and Colombia. World Development . [CrossRef] 7. Antonio Ciccone, , Marek Jarociński. 2010. Determinants of Economic Growth: Will Data Tell?Determinants of Economic Growth: Will Data Tell?. American Economic Journal: 2:4, 222-246. [Abstract] [View PDF article] [PDF with links] 8. Erik Lundsgaarde, Christian Breunig, Aseem Prakash. 2010. Instrumental Philanthropy: Trade and the Allocation of Foreign Aid. Canadian Journal of Political Science 43:03, 733-761. [CrossRef] 9. Daniela Gabor. 2010. The International Monetary Fund and its New Economics. Development and Change 41:5, 805-830. [CrossRef] 10. Keun Lee, John A. Mathews. 2010. From Washington Consensus to BeST Consensus for world development. Asian-Pacific Economic Literature 24:1, 86-103. [CrossRef] 11. Caroline A. Hartzell, Matthew Hoddie, Molly Bauer. 2010. Economic Liberalization via IMF : Sowing the Seeds of Civil War?. International Organization 64:02, 339. [CrossRef] 12. Hakim Ben Hammouda, Nassim Oulmane, Mustapha Sadni Jallab. 2010. De Washington à Pittsburgh : d'un consensus subi à un consensus nouvellement établi ?. Mondes en développement 150:2, 69. [CrossRef] 13. Rumen Dobrinsky. 2009. The Paradigm of Knowledge-Oriented . Journal of Industry, Competition and Trade 9:4, 273-305. [CrossRef] 14. RICHARD G. LIPSEY. 2009. Some Legacies of Robbins' An Essay on the Nature and Significance of Economic Science. Economica 76, 845-856. [CrossRef] 15. Nitsan Chorev, Sarah Babb. 2009. The crisis of and the future of international institutions: A comparison of the IMF and the WTO. Theory and Society 38:5, 459-484. [CrossRef] 16. Alvaro Cuervo-Cazurra, Luis Alfonso Dau. 2009. Structural Reform and Firm Exports. Management International Review 49:4, 479-507. [CrossRef] 17. Christian von Luebke, Neil McCulloch, Arianto A. Patunru. 2009. Heterodox Reform Symbioses: The Political Economy of Investment Climate Reforms in Solo, Indonesia. Asian Economic Journal 23:3, 269-296. [CrossRef] 18. William Easterly. 2009. Can the West Save Africa?Can the West Save Africa?. Journal of Economic Literature 47:2, 373-447. [Abstract] [View PDF article] [PDF with links] 19. John Mathews. 2009. China, India and Brazil: Tiger technologies, dragon multinationals and the building of national systems of economic learning. Asian Business & Management 8:1, 5-32. [CrossRef] 20. Sawa OMORI. 2009. Assessing the IMF Conditionality Programs: Implications for Governance of International Finance. Interdisciplinary Information Sciences 15:2, 189-196. [CrossRef] 21. Kim P. Huynh, David T. Jacho-ChávezA nonparametric quantile analysis of growth and governance 25, 193-221. [CrossRef] 22. Gareth Williams, Alex Duncan, Pierre Landell-Mills, Sue Unsworth. 2009. Politics and Growth. Development Policy Review 27:1, 5-31. [CrossRef] 23. Roy T. Meyers. 2009. Governance Ideas for and from the “Knowledge Banks”. Public Administration Review 69:1, 167-171. [CrossRef] 24. M. J. Piore. 2008. SASE Annual Meeting 2008, San Jose, Costa Rica: Second thoughts: on economics, sociology, neoliberalism, Polanyi's double movement and intellectual vacuums. Socio-Economic Review 7:1, 161-175. [CrossRef] 25. Sebastian Edwards. 2008. Globalisation, Growth and Crises: The View from Latin America. Australian Economic Review 41:2, 123-140. [CrossRef] 26. Derek D. Headey. 2008. National policies and the sectoral pattern of economic growth. Agricultural Economics 38:3, 287-299. [CrossRef] 27. Philipp H. Lepenies. 2008. Possibilism: An Approach to Problem-Solving Derived from the Life and Work of Albert O. Hirschman. Development and Change 39:3, 437-459. [CrossRef] 28. Martin Paldam, Erich Gundlach. 2008. Two Views on Institutions and Development: The Grand Transition vs the Primacy of Institutions. Kyklos 61:1, 65-100. [CrossRef] 29. 2007. Book ReviewsBook Reviews. Journal of Economic Literature 45:4, 1024-1093. [Abstract] [View PDF article] [PDF with links] 30. Tomasz Iwanow, Colin Kirkpatrick. 2007. Trade facilitation, regulatory quality and export performance. Journal of International Development 19:6, 735-753. [CrossRef] Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.