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The Quest for Prosperity

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The Quest for Prosperity

How Developing Economies Can Take Off

Princeton UP,

15 min read
10 take-aways
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Why are some countries rich and others poor? A prominent economist explains.

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Editorial Rating

8

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  • Innovative

Recommendation

When it comes to economic growth, Brazil, India and China are on fire, but Argentina and Russia are barely smoldering. Why is there such a difference? Economist Justin Yifu Lin provides a useful critique of what has worked – and what hasn’t – in economic development around the world. A former chief economist for the World Bank – and the first non-Westerner to hold that position – Lin acknowledges that every country’s path is different and that a nation’s strategy must adjust as the world changes. In that context, he clarifies the common traits of successful economies, advocates for judicious state involvement in business and offers six steps developing nations could follow to grow economically. Though his study meanders at times, Lin’s thoughtful approach to the subject – replete with historical, philosophical and literary allusions – raises his text above the usual economics fare. getAbstract recommends this comprehensive prescription for global economic development to nonprofit organizational leaders, development economists and emerging-markets specialists.

Summary

The Mystery of Economic Development

Burundi and Switzerland might look similar in some respects, given that both are landlocked countries with about the same number of inhabitants. But these two nations couldn’t be more different. Burundi’s per capita income of $400 makes it a poor country. Its main exports are coffee and tea. Switzerland, on the other hand, is one of the world’s richest nations. Less than 2% of its economic output comes from agriculture; services account for more than 70%. As this contrast shows, even when some factors are comparable, the world’s economies can follow wildly divergent paths.

Recently, the US and other developed economies faced decidedly tepid economic conditions, with stagnant growth, weak labor markets, mounting public debt and volatile stock markets. Some emerging economies, on the other hand, continue to experience high growth. The stars of the global economy – Brazil, China, India and Indonesia – have growth rates that routinely exceed 6% annually. The Republic of Korea, Malaysia, Vietnam and Thailand also are among high-growth countries with rapid industrialization and rising incomes. Left behind, in addition to poor countries...

About the Author

Justin Yifu Lin was the World Bank’s chief economist from 2008 to 2012. He is the founding director of the China Centre for Economic Research at Peking University and the author of Demystifying the Chinese Economy.

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