EconLog

Cracking the Code of Growth, 2002-12-03

Why have economists not succeeded in achieving economic growth in less-developed countries? In this essay, I write

There are two reasons that economists are unable to develop a fool-proof program for economic growth. The first issue is that growth is a nonlinear feedback process. The second issue is that economic policies themselves are only one ingredient in the recipe for growth.

Still, as Brad DeLong points out, we can look at Robert Mugabe's Zimbabwe and know that trying to violate fundamental economic principles is not a good strategy.

Discussion Question. We talk about liberalization and privatization, but in the essay I point out that in the United States the government is heavily involved in a number of major economic sectors. How can it be determined where such intervention is constructive or not?