No comments about Targeting the Computer: Government Support and International Competition.

No comments about The Swahili: The Social Landscape of a Mercantile Society (Peoples of Africa).

No comments about Economic Development: Theory and Practice for a Divided World (Prentice Hall Series in Economics).

2 comments about The New Global Economy and Developing Countries: Making Openness Work (Policy Essay, No. 24).

1. Like clothes, economic development policies are subject to the trends of fashion. This book examines the current development fad, "openness," and critiques it as a flawed economic model when applied simplistically to developing countries. The author, Dani Rodrik, professor of international political economy at Harvard, is no enemy of an open world economy, but he argues that its boosters greatly oversell its virtues and neglect its vices. He contends that too many governments and their policy advisors are fixated on openness --the unrestricted flow of goods, services, and capital across borders--as an end in itself. The dangers to this approach, he warns, are that: 1) openness alone is an unreliable mechanism to generate and sustain economic growth; 2) it tends to widen income and wealth inequalities within both developed and developing countries; and 3) it exposes countries to external shocks that can trigger domestic conflicts and political upheavals.

   A developing country can gain much from openness to trade and investment, he agrees, but it must also do much in actively "making openness work"--the theme of the book. The minuses of openness may outweigh the pluses if a country fails to develop its own internal "complementary policies and institutions." What kind of policies and institutions? He cites these as among the most important: "participatory institutions, civil and political liberties, free labor unions, non-corrupt bureaucracies, high-quality independent judiciaries, and mechanisms of social insurance such as social safety nets." He offers specific evidence on how such institutions are valuable to developing countries for coping with turbulence in the world economy and for countering the widening of inequality that openness often brings. For most economists Rodrik is heretical because he debunks the "free market religion" and derides "knee-jerk globalizers," though only in passing. This is far from a diatribe against globalization. Instead, the book presents a detailed factual case for openness as "part of a development strategy," rather than a substitute for one. His forceful advice to governments and policy advisers: "Stop thinking of international economic integration as an end itself. Developing nations have to engage the world economy on their own terms, not on terms set by global markets or multilateral institutions." A valuable chapter of the book is one titled "Is Africa Is Different?" Rodrik answers No; openness can work its wonders there but (as anywhere) definitely not if applied simplistically.

   Rodrik slips into jargon from time to time, but you can still benefit from reading his book even if you don't have a degree in economics.

   --Robert A. Senser, editor of the Website Human Rights for Workers




2. In this book, Danny Rodrik offers some valuable guidance for policy-makers. They should focus on the fundamentals of economic growth - investment, macro-economic stability, human resources and good governance - and not let international economic integration dominate their thinking. The potential benefits of openness will only be realised when "complementary policies and institutions are in place domestically".

   An important result from his analysis is that a strong, participatory, democracy is good for growth. This is very much in line with Barro's "Determinants of Economic Growth" (1998).The resoning is that a country with a strong democracy will be better at resolving the social conflicts emerging from external economic shocks, and therefore benefit from greater macroeconomic stability. In order to increase the effectiveness of dealing with shocks, the channels to which non-elites can make themselves heard, and participate, in policy making needs to be improved. Otherwise dissatisfaction will lead to social unrest.To play the role of honest broker, the state needs to perceived as competent and free of corruption.

   Two policy areas are identified as being central to achieving long-term growth and making openness work: A domestic investment strategy; the strengthening of domestic institutions of conflict management.

   Many of his findings offer support for much of current policy thinking on development. The importance of political freedom, security of person, and the need for a reasonable degree of macroeconomic stability is widely recognised. Good governance has moved firmly up the list of priorities. Also, attempts are being made to try and increase the widespread "ownership" of reforms through e.g. the Comprehensive Development Framework of the World Bank.

   However, there are several important areas where Rodrik's analysis requires further consideration:

   · Developing countries, in devising a domestic investment strategy, are better advised to look at ways of reducing risk and improving their credibility in the eyes of domestic and foreign investors, rather than following Rodrik's suggestion to improve investment returns through e.g. investment subsidies. (see Moran (1998) "Foreign Direct Investment and Development").

   · The strong link between good governance and openness is very important and needs greater attention. Red tape and corruption are strongly correlated. Trade restrictions nearly always introduce distortions, caused by "rent seeking" activities, and create vested interest groups.

   · As he suggests, all countries are able to improve their "fundamentals". But it is also true that different regions are likely to benefit from integration - in terms of both growth and poverty reduction - to very different extents.

   · Rodrik suggests that Africa is not "different". He is right in so far as domestic factors - stability and security - are central to its success. But sub Saharan Africa is different . It faces great difficulties in building institutions of conflict management and has a legacy of being the most trade and capital hostile region.

   · As is always the case in the "never ending question" of empirical tests of the links between trade and growth, the interpretation of the results of his work is very much open to question. He is far from decisively refuting this link.

   Taking some of these factors into account suggests that Rodrik's somewhat sanguine attitude to inward-looking developm t is ill advised. Also, the potential role for international governance in helping to overcome several of and the problems facing poorer countries - low credib ity, limited regulatory resources, small markets -becomes more important. But these rules will help in so far as they encourage certainty, transparency and non-discrimination, rather than in offering flexibility. However, as Rodrik states, " these rules of the internation economy must be flexible in order to allow developing countries to develop their own "styles of capitalism"".

2 comments about The East Asian Miracle: Economic Growth and Public Policy (World Bank Policy Research Reports).

1. This book explores the causes for the extraordinary growth experienced by a few Asian countries in the pre-1997 crisis era. It describes, in great detail, the policies adopted in each country that are believed to have spurred such development; to its credit (being a World Bank book), it even suggests that some unorthodox policies may have been beneficial, even though it does suggest that these benefits are not there to be reaped again by a country trying to emulate them. One of the main arguments is also that income distribution improvements have been a common experience across these countries, which is a topic not often discussed in development economics.

   There are, however, some obvious fallacies in this book. Having been written pre-1997 crisis, it does highlight the strenght of the banking system in many of these countries; these banking systems were later to be blamed for much of the pain in the 1997 crisis.

   I find this book fascinating, not as a source of development ideas (those can be found elsewhere), but due to the historical context in which it was written (praising economies that were about to collapse). Of course, these economies are still better off that most developing countries, so I do not believe that they are mistaken in many points, but there are certain contradictions that arose with the crisis that make it worth reading this book to determine what is good advice and what is hot air.




2. Good overview explaining the policies behind East Asia's phenominal economic success. Should be read by all students of economic development. However, the book is very weak when it comes to discussing the area's merchantalist policies. Reading this one would think they did not exist and have played no role (good or bad) in these nations' development.

2 comments about Leveling the Carbon Playing Field: International Competition and Us Climate Policy Design.

1. In seventy-eight pages, the authors provide one of the most complete and thoughtful analyses of the complex strategies for reducing carbon emissions internationally.
   
   As nations struggle with the competing demands of economic competition and the dire threat of globla warming, one of the most critical needs is to develop viable strategies for reducing carbon emissions without destroying the economic viability of developed nations and threatening to destroy the economies of the underdeveloped nations.
   
   For the past 50 years, the US has enjoyed being at the top of the economic pyramid. With the emergence of China, India and other large economies, the need for international cooperation is essential.
   
   This small volume provides a framework for understanding this issue and formulating effective policies.
   Hugh McIsaac.
   Santa Cruz, Calif.



2. The United States has the ability to be the one of the biggest players in the oil industry, but how does it level the playing field and stay competitive, while remaining mindful of environmental concerns? "Leveling the Carbon Playing Field: International Competition and US Climate Policy Design" is a scholarly and educated examination of the oil industry and how American policy affects both the oil trade and related environmental issues. Packed with smart ideas and advice, "Leveling the Carbon Playing Field" should be considered essential reading for anyone in the center of these vital issues. A good choice for community library environmental and social issues collections.

No comments about Health Economics in Development (Health, Nutrition and Population Series).

No comments about American Intergovernmental Relations: Foundations,perspectives, And Issues.

No comments about Organizing: A Guide for Grassroots Leaders, Revised Edition.

2 comments about Capitalism and Justice: Envisioning Social and Economic Fairness.

1. I would like to say that this book is as bad as it gets, but I've learned that such optimism is rarely justified. I can say no more, then, than that Capitalism and Justice is the most flagrant example of economic casuistry that I've run across to date.

   The general, and supportable, thesis is that moral considerations require a certain amount of intervention in the economy and our personal lives in order to correct the amoral influence of free markets. Nothing that you won't find in cocktail party conversations anywhere within fifty miles of an ocean. This book does not do a very good job of the demonstration.

   A synopsis of Isbister's discussion of equality should do to show exactly how vapid his arguments are. After examining some justifications for equality as a moral postulate (including Rawls), he denies that any are viable. Since he wants to base his analysis of justice (particularly income inequality) on equality, freedom, and efficiency, obviously he needs to give us a reason why we should. Citing the Declaration of Independence, he decides that he can simply assume equality is good, and go on from there.

   Now, he has to decide which sort of equality to use, and so sets up a false dichotomy: should it be equality of opportunity or equality of outcome? The most obvious third choice (equality under the law) is discussed later in a different context (freedom), but what he does with these two is hilarious. He looks at what he wants to call fair, and stipulates that someone who works harder should receive more; therefore he eschews the later equality and prefers the former, which are obviously contradictory in this context. However, he notes, that if outcomes are different for one generation, then opportunities are different for the next; therefore the one implies the other. Rather than note that this is a real problem to which a real solution is needed (such as only using equality of outcomes), he just calls this an "indeterminacy" and decides to apply both principles to income distributions.

   How does he do this? He decides that having a 1:1, or equal, distribution of incomes is neither possible nor good, so there must be a larger one. What is it? 8:1; specifically, $20,000 to $160,000. Why? "This is the roughest and most intuitive of conclusions." He guessed. The distribution should also be Gaussian, he says, even though he admits that supervisors should usually be paid more than their subordinates, which would normally imply something closer to a gamma distribution.
   About seventy percent of us already fall into the category given (including children under eighteen, college students and retired people and not including all redistributive programs). Why we should put any effort into modifying the income distribution is not given.

   His account of freedom is similarly insipid (using the kind of analysis of liberty that the Soviets used as a rationalization), and his criticisms of Nozick are inept. He tells us that it is not just for us to willingly give a quarter to Wilt Chamberlain to see him play, or at least for him to keep the money, because part of the reason he was so good is that he's so much taller than we.

   Isbister also looks at the nature of capitalism, globalization, and the environment with just as much insight.

   I wonder whom this book was meant for. It is certainly not a scholarly tome, nor is it introductory. Nowhere does it look like a book meant for history. It's really just the sort of thing that Isbister probably talks about once the vodka martinis start flowing out of the mouths of fountains camouflaged as busts of Marx at the college library; it's a book meant to show his friends how dedicated he is to the cause.

   If you're considering this book, I'd suggest leafing through it at the library before buying it to make sure it's your cup of tea.




2. John Isbister hits the nail head-on in his text "Capitalism and Justice: Envisioning Social and Economic Fairness," with the example he gives immediately at the start of chapter one:
   
   "The little red hen finds some grains of wheat in the farmyard. She asks the other animals-the cat, the rat, and the pig-who would like to help her plant the grains, the reap the harvest, then carry the wheat to the mill for grinding into flour, and then bake the flour into bread. `Not I,' says each of the animals, each time it is asked. Finally, when the bread is baked, the little red hen asks who would like to help her eat it, and the cat, the rat, and the pig all volunteer. The little red hen declines their help and eats the bread herself."