- Paperback: 280 pages
- Publisher: Princeton University Press (January 18, 2009)
- Language: English
- ISBN-10: 0691141177
- ISBN-13: 978-0691141176
- Product Dimensions: 6 x 0.8 x 9 inches
- Shipping Weight: 14.4 ounces (View shipping rates and policies)
- Average Customer Review: 11 customer reviews
- Amazon Best Sellers Rank: #849,719 in Books (See Top 100 in Books)
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One Economics, Many Recipes: Globalization, Institutions, and Economic Growth
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"Rodrik packs a great deal into his 260 lucid, cogent pages. Orthodoxies always need serious criticism. Rodrik has supplied it. He has no simple, single recipe for remedying deficient growth--just the eminently sensible advice that there is none--there are many."--Peter Sinclair, Times Higher Education
"Dani Rodrik, a Harvard academic usually associated with the active-government side, has written an intriguing book, One Economics, Many Recipes. He argues that economists who agree who agree in general about where countries should be going can conduct open and honest--and technical rather than ideological--debates about how to get there."--Alan Beattie, Financial Times
"This book is certainly among the best of the many works on development economics recently published. . . . One Economics, Many Recipes is also a model of how applied economics should be done."--John Kay, Prospect
"The Harvard development economist Rodrik here collects a several of his recent papers into a coherent book. . . . In short, [One Economics, Many Recipes] is a critical response to the international 'consensus' approach to economic policymaking, with its implicit assumption that one set of policies is suitable in all, or at least in most, countries. Rodrik has become known for emphasizing the importance of institutions, but he here makes clear that appropriate policies are also important and that effective institutions can take many forms."--Richard Cooper, Foreign Affairs
"Rodrik's book hits many of the right buttons. He has put together a collection of essays of sufficient breadth to engage both the technical observer and the casual reader. His treatment of the subject will come as a bitter pill to both the anti-globalisation movement and the developmentariat, that international coterie of practitioners and commentators working on development issues."--Mario Pisani, New Statesman
"Rodrik is known for rigorous analysis that challenges the conventional wisdom, and this book does not disappoint. Economic growth is a very important goal, Rodrik argues, but the evidence indicates that there is no single recipe for growth."--M. Veseth, Choice
"Rodrik serves as an important, moderating voice in the globalization debate and this book proves no exception."--Sarah Cleeland Knight, Democracy and Society
"In his recent book, One Economics, Many Recipes, Harvard professor of international political economy Dani Rodrik wisely reminds us that there exists no general theory of growth, though he offers pragmatic suggestions in individual cases."--Carl J. Schramm, Claremont Review of Books
"[T]he thoughtful and scholarly elaboration of his pro-industrial policy views in this book should be essential reading for all interested in stimulating growth in these countries."--Robert E. Baldwin, World Trade Review
"Rodrik wins all hearts and minds by a careful consideration of the facts and sheer breadth of coverage. . . . Thus, market mavens, policy pros, global gurus and institutional irredentists can all savor what he says!"--Alice Amsden, EH.net
From the Inside Flap
"Dani Rodrik is a leader in applying rigorous economic analysis and informed common sense to the challenges of economic development. His knowledge, his sense of what we do and do not know, his important pointers to humility, pragmatism, and attention to context--all of these qualities permeate these excellent chapters. A book for academics and practitioners alike."--A. Michael Spence, Nobel Laureate in Economics, Stanford University
"Maybe Tolstoy was right about happy and unhappy families, but the same rule of thumb does not apply to developing economies. The success stories are not all alike. There is no practical, universal formula for rapid economic growth. That is Dani Rodrik's central argument, and he develops it forcefully and convincingly with many examples. Best of all, he insists that the need for policies tailored to local circumstances is exactly what basic economic theory suggests. He may not be right about every single thing, but I think he is right about that."--Robert M. Solow, Nobel Laureate in Economics, Massachusetts Institute of Technology
"One Economics, Many Recipes does for economic development what Julia Child did for French cooking. Child taught would-be cooks how to be excellent chefs. Dani Rodrik teaches economists and policy planners how to construct successful, sustainable development programs. He teaches and preaches the subtle correct practice of development economics."--George Akerlof, Nobel Laureate in Economics and Koshland Professor of Economics, University of California, Berkeley
"Dani Rodrik is that rare beast, both fox and hedgehog: a first-rate economist who steeps himself in politics, technology, and history to come up with striking insights and overarching principles for generating economic growth. Scholars and general readers alike will be swept along by the current of Rodrik's good-natured erudition--even those who do not share his faith in neoclassical economics. One Economics, Many Recipes is a landmark in post-Washington Consensus thinking."--Robert H. Wade, London School of Economics and Political Science, author of Governing the Market
"Dani Rodrik's One Economics, Many Recipes is a deep and important book about the relative success of nations. It considers the substance of economic policies over their superficial form. Highly successful countries have leaders who respect economic principles but keenly observe how their country differs from others and are flexible and creative in applying these principles to their own circumstances."--Robert J. Shiller, Yale University, author of Irrational Exuberance and The New Financial Order
"Although there are many articles and books on economic growth, this book is different because it proposes a new perspective that is likely to have a significant influence on academic economists as well as policymakers around the world. Dani Rodrik's new approach respects the fundamental economic principle of the market, but it also allows individual countries to formulate their own growth strategies based on their own local conditions."--Yingyi Qian, University of California, Berkeley
"In this important book, we have an author (Dani Rodrik) whose views are eminently worth hearing and a subject (globalization) in constant need of hearing them. Rodrik has long been a passionate but nuanced thinker on the role of 'economic fundamentals' in shaping growth. He resolutely uses the tools and methods of economics even as he arrives at conclusions that often do not square with what orthodox economics might prescribe or want to hear."--Michael Woolcock, the World Bank--This text refers to an out of print or unavailable edition of this title.
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The author's economic solutions are in line with Smith's support for both retaliatory and revenue tariffs.Opening up an economy to foreign imports should be done in very slow gradations to make sure that the underdeveloped countries agricultural and industrial sectors are not crushed by giant multinational corporations attempting to institute trade relations based on absolute advantage, which is what has been going on for the last 30 years, at least as far as the policies of the World Bank,International Monetary Fund,Export -Import Bank amd World Trade Organization are concerned.
One can apply the basic model to Haiti.Economic growth in Haiti is an absolute impossibility as long as the Haitian government is controlled by a totally corrupt and rapacious upper class devoted to using government institutions and power to loot the country.The same holds for the Haitian army ,poloce force,judicial system and judges.All of these institutions would have to be eliminated first before any development plan could have any probability of working.Haiti has been a failed state for the last 60 years.
Rodrik begins by illustrating the flaws in what a typical policy advisor educated in Western economic theory would propose to developing countries searching for sustainable economic growth. Lulled into our narrow views brought about by our idiosyncratic perspectives, the author pushes for a realization that many approaches (recipes) are capable of achieving economic success. A systematic growth diagnostics framework is presented for targeting the appropriate policy reform in the face of economic distress. An emphasis is placed in the desirability of knowledge in the particularities of a region's economy and policy implications in that will ensue. Rather than finding or importing a blueprint for the most successful growth strategy, the author suggests targeting policy at addressing the most binding constraints to growth. A trial and error process may appear risky but Rodrik suggests the most unorthodox approaches geared toward solid principles have been the most successful in history for institutions.
Aside from policy formation, institutions play a vital role in developing a suitable environment for growth. At a minimum, institutions must provide market participants with political and macroeconomic stability, basic property rights, a level of global integration, and regulation. These basic principles have been present to varying degrees in historical precedents of economic growth. The level at which institutions provide these principles is a determinant of how sustainable growth may inevitably be. Rodrik advocates "participatory political institutions," namely democracies, due to their ability to devise policy based on local particularities, provide the basic principles previously discussed, and adapt in the face of adversity. Evidence is provided that suggests these metainstitutions (democracies) are generally safer bets for sustainable economic growth, although exceptions to the rule exist.
In the closing sections, Rodrik discusses his views on the response of institutions to globalization and the role international organizations have in promoting growth. While some of his views on federalism and international agency reforms seem speculative in nature, I found many of his arguments well-grounded in economic reason. I completely agree in his view of the role trade liberalization has played in economic growth and how overstated its benefits are typically preached. Any expectation of the benefits to trade liberalization must be heavily weighed against the struggle that institutions as well as markets will undergo during the transformation. I believe these sections hold several worthwhile concerns about the strategies that our current international organizations employ.
Any reader of One Economics, Many Recipes must appreciate the author's willingness to return to the basic principles of economic theory in each of his arguments. Rodrik's expertise in international matters and numerous examples of development issues in a multitude of countries is applaudable. No assertion goes without statistical backing or a historical reference. I rate the piece a solid 8.5 out of 10. I dock a few marks in my rating because the repetition of identical examples grew excessive from time to time. This is most likely due to the fact the book is composed of several essays previously written by the author. Nonetheless, I enjoyed the read.
The first three essays lay out Rodrik's interpretation of the post-World War 2 growth experience, and the `growth diagnostics' framework that he proposes in response. He argues that development is fundamentally about the introduction of new products and new methods of production. This may fail to happen because the returns to such innovation are too low, or because the cost of finance is too high. Following one path down his decision tree, the returns to innovation may be low because of poor infrastructure, lack of human capital, or unfavourable geography. Or, the returns may be high but not appropriable by the innovator, due to government or market failure. Rodrik argues that each of these potential problems will produce a different set of symptoms if it is really the binding constraint on the economy. A shortage of finance will reveal itself with high interest rates or current account deficits, a shortage of human capital with a high skill premium, and so on.
The rest of the book suggests how reforms might be designed and implemented. Rodrik pays by far the most attention to the `market failure' branch of the tree. His ideal industrial policy is not about `picking winners' or comprehensive planning, but encouraging experiments with new types of economic activity. Many will fail, but even a few successes can amply repay the costs of failure.
This is a self-confessedly modest program. Yet it contradicts everyone currently making a noise on the subject: activists because it does not demonise the IMF, World Bank, and WTO; heterodox economists because it asserts the value of neoclassical theory; neoclassical economists because it advocates industrial policy ; foreign aid advocates because it denies the importance of poverty traps; and pessimists because it offers, if not a one-size-fits-all solution, at least some concrete advice on how to engineer growth.
It is no small achievement to disagree with so many luminaries and still receive back-cover endorsements from three Nobel laureates. He is very convincing arguing against the `laundry lists' of comprehensive reforms that have been advocated by international institutions, whether the first generation of privatisation and liberalisation, or the more ambitious second generation focused on institution building. The case against a generalised poverty trap is equally strong: spurts of growth lasting several years are relatively common, while sustained growth over decades is rare.
This very fact, however, points to a weakness, or gap, in the book. If lighting the fire is relatively easy compared to keeping it going, why spend so much time focusing on ignition techniques? For the long run, Rodrik's only specific advice is to actively diversify the industrial base, and build institutions of conflict management, which he links with democracy. There is a more general recommendation to use the time bought by growth accelerations to gradually implement more ambitious institutional reforms, but this is rather vague. Is this just the standard `laundry list' implemented more slowly? Then what becomes of the `many recipes'? Or is the long run, from a policy point of view, just a series of short runs -- life is one binding constraint after another? In this case, growth diagnostics offers no way to identify and fix constraints before they start to bind, which is what he seems to be recommending. How can you avoid Argentina's long decline, or Japan's stagnation, or the East Asian financial meltdown, except with hindsight?
Short-run success is, of course, not to be disparaged. It would be nice to have a reliable method of making poor countries rich, but failing that (which we have been), significantly raising the number of growth accelerations would be a great start. With this more limited goal in mind, Rodrik's advice seems sensible, although I am sceptical of his emphasis on `cost discovery' as a justification for industry policy. He argues that those entrepreneurs who introduced garment manufacturing to Bangladesh and soccer balls to Pakistan were revealing new information about what was profitable in those countries, which could then be copied by others. This treats manufacturing as some exotic crop that will only grow under particular conditions of soil and climate, as if it was not equally likely that Pakistan would have ended up making shirts and Bangladesh balls. Rodrik's own summary of the evidence concludes that `managerial and labour turnover' is the key mechanism by which innovations spread, which points to a `learning by doing' or `human capital' interpretation. He mentions these only briefly, which is strange, as he has argued elsewhere that the widely accepted economic case for government involvement in education is similar to the case for industry policy. I would go further and say that they are practically identical.
This is, however, splitting hairs. Specifying the exact market failure is far less important than recognising that a particular activity (in this case, innovation) is likely to be undersupplied by profit-seeking enterprise. First-best intervention is usually impractical, if not impossible, so there is no one-to-one mapping from diagnosis to policy. It is a great strength of the book that it does not offer such precise, pre-packaged answers, even in a country-specific form but, rather, hints as to the right questions to ask as part of an open-ended policy-making process.
Original version published in Agenda 15(1), 2008