Customer Reviews

Institutional Change and Economic Development

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Ha-Joon Chang, Reader in the Political Economy of Development at Cambridge University, has edited this important collection of 15 essays on institutions and economic development. There are 17 contributors, most from Britain, but also from Brazil, Switzerland, the USA, Uganda, Estonia and China.

Part 1 presents an overview. Part 2 looks at the evolution of particular institutions - civil services, central banks, corporate governance, tax systems, and legal systems. Part 3 studies different countries' experiences - Britain, the USA, Switzerland, Brazil, China, Botswana, Mauritius and Uganda.

These studies show that countries have taken many different routes to development, and that a `one size fits all' approach is quite wrong. But one common element to all their experiences is that they have not adopted the neo-liberal dogma that all a country needs is the holy trinity of liberalisation, deregulation and privatisation.

Yet the Brown and Bush governments have schemed together in the IMF and the World Bank to force this dogma on developing countries. They demand that developing countries adopt at once `global-standard' institutions, especially the strongest possible protection of private property rights. Orthodox academics serve the ruling class by falsely claiming that private property, and legislation guaranteeing it, was key to the growth of Western economies.

One of the most fascinating contributions, by Julius Kiiza of Uganda, examines the different experiences of Mauritius, Botswana and Uganda. He shows how Uganda has suffered because its leaders have rejected the post-colonial commitment to development. They dropped what he calls `developmental nationalism' in favour of economic liberalism, and they destroyed, by privatisations and sackings, Uganda's meritocratic civil service and its developmental bodies, such as the Uganda Development Corporation.

He points out that the developed countries developed by using nationalistic and mercantilist policies, such as infant industry protection. Now their governments tell the developing countries, `do as we say, not as we did'.