Wednesday, April 23, 2014

Roads to Prosperity

Dani Rodrik

Is free trade always the best policy? Should developing countries open their financial systems? Do foreign-exchange controls serve any useful purpose in our globalized world?

Anyone who reads economics knows that it is often aridly impervious to the cultural specificities and political constraints that shape real-world events. Pages filled with equations describe a world not of fallible people and imperfect governments, but of "agents" and "actors" who are supposedly as rational as Star Trek’s Mr. Spock.

The dominance of neoclassical economics has led to a rigid belief that free trade, small government, lower taxes, and financial openness are appropriate at all times and in all circumstances. But a few dissident economists, observing how and why countries actually develop, have been chipping away at this orthodoxy.

Dani Rodrik, a professor at Harvard University's John F. Kennedy School of Government, is one of this movement’s most imaginative and creative thinkers. He is a leading authority on globalization and economic development, and his unconventional yet rigorous analyses have helped undermine the Washington Consensus. A “clinical” economist, he has advocated heterodox development policies and a social-welfare agenda to complement globalization and allow developing countries to withstand the financial crises that have swept over them during the past two decades.

Enlivened by the boldness and insight that mark his award-winning scholarship, Dani Rodrik's monthly commentaries, written exclusively for Project Syndicate, get to the heart of today's controversies surrounding globalization and economic development. Roads to Prosperity forges a singular path – grounded in the historical experience of countries struggling to develop – through the thickets of industrial policy, international trade, financial liberalization, global governance, and institutional reform.

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