IntroductionI
The quest for sustainable growth has been the most intriguing topic in the
world for economists and policy makers since Adam Smith’s An Inquiry
into the Nature and Causes of the Wealth of Nations was published in
1776. Measured by today’s living standards, all countries in the world
were poor at the beginning of the 18th century. Their economies were predominately
based on agriculture. Growth of gross domestic product (GDP)
per capita had lingered at around 0.05 percent a year for millennia. Only
after the onset of the Industrial Revolution did per capita income growth
in the now advanced countries accelerate, jumping to around 1 percent a
year in the 19th century and doubling to about 2 percent in the 20th century.
This was an unimaginable change. While it took about 1,400 years
for world income to double before the 18th century, the same process took
only about 70 years in the 19th century and only 35 years in the 20th century
for the now advanced countries (Maddison 1995). Nevertheless, the
acceleration of growth was largely limited to the United Kingdom, where
the Industrial Revolution began, a few western European economies, and
Britain’s “offshoots”: Australia, Canada, New Zealand, and the United
States (Maddison 1982). The result was a great divergence in income
levels as the ratio of the top few to the majority bottom-income countries
increased from 8.7 in 1870 to 38 by 1960 (Pritchett 1997).
After World War II, most countries in the developing world gained
economic and political independence and started their postwar or postindependence
reconstruction. By the end of the 20th century, a small set of
developing countries was able to achieve prolonged high growth, catching
up with or signifi cantly narrowing their gap with the advanced industrial
economies. Japan, in 1950 a developing country with a per capita
income one-fi fth of the United States, reached 63 percent of U.S. income
by 1970 and became the world’s second-largest economy. Japan’s rise was
the result of an impressive annual growth performance of 9.6 percent during
the 1950s and 1960s, driven by the transformation from an agrarian
to an industrial economy and continuous upgrading in key manufacturing
sectors. Using an outward-oriented, market-friendly development strategy,
the Asian Tigers—Hong Kong SAR, China; the Republic of Korea;
Singapore; and Taiwan, China—grew in excess of 7 percent annually
between the early 1960s and the early 1990s, demonstrating that it is
possible to maintain impressive growth rates and to close the gap with
advanced economies. More recently, growth in several large economies,
such as China, Brazil, and India, has taken off, turning them into new
global growth poles (World Bank 2011). These high growth rates have
led to a signifi cant reduction in poverty. Between 1981 and 2005, the
percentage of people living below US$1.25 a day was halved, falling from
52 percent to 26 percent. This drop in poverty was nowhere as apparent
as in my home country, China. In 1981 a staggering 84 percent of Chinese
lived in poverty. By 2005 this proportion had fallen to 16 percent—well
below the average for the developing world.
Although the occurrence of high, sustained growth further diversifi ed
in the 21th century to some Sub-Saharan African and Latin American
countries, such growth still remains the exception rather than the rule.
Most developing countries suffered from prolonged uninterrupted spells of
anemic growth (Reddy and Minoui 2009). Between 1960 and 2009, only
about one third of low-income countries reached at least middle-income
status. Despite the rising weight of middle-income countries in supporting
global growth, many of them have been stuck in the “middle-income trap.”
Of the countries that were independent and had middle-income status in
1960, almost three-fourths remained middle-income or had regressed to
low-income by 2009. The ones that made it to high-income status are
Introduction | 3
countries in Western Europe, Japan, the Asian Tigers, and two island economies
in Latin America (Barbados and Trinidad and Tobago). If we can
learn from the failed development attempts by most developing countries
and especially the few successes, explore the nature and determinants of
economic growth, and provide policy makers with the tools to unleash
their country’s growth potential, poverty could become within a generation
or two a memory of the past.
Sustained economic growth cannot happen without structural changes
(Kuznets 1966). All countries that remain poor have failed to achieve
structural transformation, that is, they have been unable to diversify away
from agriculture and the production of traditional goods into manufacturing
and other modern activities. In Sub-Saharan Africa, which constitutes
the core of the development challenge today, agriculture continues to play
a dominant role, accounting for 63 percent of the labor force. Its share of
manufacturing in 2005 was lower than in 1965 (Lin 2011). Recent empirical
work confi rms that the bulk of the difference in growth between Asia
and developing countries in Latin America and Africa can be explained
by the contribution of structural change to overall labor productivity
(McMillan and Rodrik 2011).
Economic development is a process of continuous technological innovation and structural transformation. Development thinking is inherently tied to the quest for sustainable growth strategies. This book provides a neoclassical approach for studying the determinants of economic structure and its transformation and draws new insights for development policy. The market is the basic mechanism for effective resource allocation at each level of development. However, economic development as a dynamic process entails structural changes, including industrial upgrading and diversification and corresponding improvements in hard and soft infrastructure. Such upgrading and improvements require coordination and go hand in hand with large externalities to firms transaction costs and returns to capital investment. Thus, in addition to an effective market mechanism, the government should play an active role in facilitating structural changes. The book provides empirical evidence in support of this framework as well as concrete advice to development practitioners.
world for economists and policy makers since Adam Smith’s An Inquiry
into the Nature and Causes of the Wealth of Nations was published in
1776. Measured by today’s living standards, all countries in the world
were poor at the beginning of the 18th century. Their economies were predominately
ba
per capita had lingered at around 0.05 percent a year for millennia. Only
after the onset of the Industrial Revolution did per capita income growth
in the now advanced countries accelerate, jumping to around 1 percent a
year in the 19th century and doubling to about 2 percent in the 20th century.
This was an unimaginable change. While it took about 1,400 years
for world income to double before the 18th century, the same process took
only about 70 years in the 19th century and only 35 years in the 20th century
for the now advanced countries (Maddison 1995). Nevertheless, the
acceleration of growth was largely limited to the United Kingdom, where
the Industrial Revolution began, a few western European economies, and
Britain’s “offshoots”: Australia, Canada, New Zealand, and the United
States (Maddison 1982). The result was a great divergence in income
levels as the ratio of the top few to the majority bottom-income countries
increased from 8.7 in 1870 to 38 by 1960 (Pritchett 1997).
After World War II, most countries in the developing world gained
economic and political independence and started their postwar or postindependence
reconstruction. By the end of the 20th century, a small set of
developing countries was able to achieve prolonged high growth, catching
up with or signifi cantly narrowing their gap with the advanced industrial
economies. Japan, in 1950 a developing country with a per capita
income one-fi fth of the United States, reached 63 percent of U.S. income
by 1970 and became the world’s second-largest economy. Japan’s rise was
the result of an impressive annual growth performance of 9.6 percent during
the 1950s and 1960s, driven by the transformation from an agrarian
to an industrial economy and continuous upgrading in key manufacturing
sectors. Using an outward-oriented, market-friendly development strategy,
the Asian Tigers—Hong Kong SAR, China; the Republic of Korea;
Singapore; and Taiwan, China—grew in excess of 7 percent annually
between the early 1960s and the early 1990s, demonstrating that it is
possible to maintain impressive growth rates and to close the gap with
advanced economies. More recently, growth in several large economies,
such as China, Brazil, and India, has taken off, turning them into new
global growth poles (World Bank 2011). These high growth rates have
led to a signifi cant reduction in poverty. Between 1981 and 2005, the
percentage of people living below US$1.25 a day was halved, falling from
52 percent to 26 percent. This drop in poverty was nowhere as apparent
as in my home country, China. In 1981 a staggering 84 percent of Chinese
lived in poverty. By 2005 this proportion had fallen to 16 percent—well
below the average for the developing world.
Although the occurrence of high, sustained growth further diversifi ed
in the 21th century to some Sub-Saharan African and Latin American
countries, such growth still remains the exception rather than the rule.
Most developing countries suffered from prolonged uninterrupted spells of
anemic growth (Reddy and Minoui 2009). Between 1960 and 2009, only
about one third of low-income countries reached at least middle-income
status. Despite the rising weight of middle-income countries in supporting
global growth, many of them have been stuck in the “middle-income trap.”
Of the countries that were independent and had middle-income status in
1960, almost three-fourths remained middle-income or had regressed to
low-income by 2009. The ones that made it to high-income status are
Introduction | 3
countries in Western Europe, Japan, the Asian Tigers, and two island economies
in Latin America (Barbados and Trinidad and Tobago). If we can
learn from the failed development attempts by most developing countries
and especially the few successes, explore the nature and determinants of
economic growth, and provide policy makers with the tools to unleash
their country’s growth potential, poverty could become within a generation
or two a memory of the past.
Sustained economic growth cannot happen without structural changes
(Kuznets 1966). All countries that remain poor have failed to achieve
structural transformation, that is, they have been unable to diversify away
from agriculture and the production of traditional goods into manufacturing
and other modern activities. In Sub-Saharan Africa, which constitutes
the core of the development challenge today, agriculture continues to play
a dominant role, accounting for 63 percent of the labor force. Its share of
manufacturing in 2005 was lower than in 1965 (Lin 2011). Recent empirical
work confi rms that the bulk of the difference in growth between Asia
and developing countries in Latin America and Africa can be explained
by the contribution of structural change to overall labor productivity
(McMillan and Rodrik 2011).
本文摘自《新结构经济学》
Economic development is a process of continuous technological innovation and structural transformation. Development thinking is inherently tied to the quest for sustainable growth strategies. This book provides a neoclassical approach for studying the determinants of economic structure and its transformation and draws new insights for development policy. The market is the basic mechanism for effective resource allocation at each level of development. However, economic development as a dynamic process entails structural changes, including industrial upgrading and diversification and corresponding improvements in hard and soft infrastructure. Such upgrading and improvements require coordination and go hand in hand with large externalities to firms transaction costs and returns to capital investment. Thus, in addition to an effective market mechanism, the government should play an active role in facilitating structural changes. The book provides empirical evidence in support of this fr