EconLog

The Elusive Quest for Growth, 2002-10-17

In an unusually long Web article, Hans H. J. Labohm surveys the problem of generating economic growth in underdeveloped countries. (In a recent book, William Easterly calls this The Elusive Quest for Growth.) Labohm covers many issues, which would make this a good introductory article to assign to students. In one section, he makes use of an index of corruption, which is

based on a survey by Transparency International on the perceptions of business people, academics and country analysts...

The richer a country, the less corruption and vice versa.

He summarizes current thinking.

It is an holistic framework, which offers objectives for macroeconomic policy and trade; the role of government, regulations and the fight against corruption, the creation of a social safety net, health care, education, infrastructure, environment, rural development, the promotion of private enterprise, and the creation of equal opportunities for women. Additionally, attention should be paid to the overarching problem of institutional reform.

In my view, these dry words do not match the challenge of underdeveloped countries. After reading Robert Kaplan's Eastward to Tartary, I came away with a picture of countries like Syria or Turkmenistan that was more immediate and frightening. Terms like "fight against corruption" or "infrastructure" do not begin to describe the issues of ethnic conflict and organized crime that plague such states.

Discussion Question. Should economists try to offer "holistic" advice, or should they restrict their policy recommendations to their areas of expertise, such as trade policy?