Did you read the article in the new issue of Foreign Policy, from the former teacher of Kim Jong Il… Your line reminded me of it. Its pretty interesting

Nope. What’s it on?

Good for you buddy. Hope you stay true to it. Life has a way of making a mockery of our ideals sometimes.

Seems more like you’re making a mockery of my ideals. Cheers!

Development is very complicated Happy for scholars, terrible for ordinary people.

Did you read the article in the new issue of Foreign Policy, from the former teacher of Kim Jong Il… Your line reminded me of it. Its pretty interesting

This isn’t the place to go even further down this tangential road, but nearly all developing countries have potential – i.e. natural endowments and whatever positive legacies they’re left with at independence (Atul Kohli has made a case that Japanese colonialism did a lot of the dirty work that allowed South Korean capitalism to take off). The question is the extent to which they are able to create policy space to employ that potential in an effective way (i.e. where my opposition to what passes for “free trade” comes) and whether they actually do so within those confines (i.e. the realm of domestic political economy, which is complicated by a lot of other things like social structure, etc) (i.e. a certain level of policy autonomy is necessary but not sufficient). However, the latter is virtually impossible without meeting the former; hence Bangladesh is likely far more screwed than India is, to get back to South Asia, all else equal. You can see this in the extent to which state policies in various developing countries in reality actually reflect domination by wealthy countries / foreign capital — this is why India and China can engage in subsidization of businesses through a variety of mechanisms, whereas countries like Bangladesh or Pakistan are far more vulnerable to aid, ideological demands like the elimination of corruption (which is ridiculous), and other well-intentioned or malintentioned “recommendations” from countries and institutions wiht more geopolitical power.

The other difficulty with this free trade stuff is exactly in how ideological it is and how different ideas get lumped together. State/private and liberal/protectionist are not the same dichotomy and may not even be the relevant one (imo ideological/pragmatic is the most relevant and subsumes these – the real questions are how you develop forward and backward linkages, how you provide long term funding for industries you’re not competitive at, how you mobilize enough resources, how you preserve policy autonomy to the extent possible for the appropriate policies, etc.). They’re not the same – as Pakistan’s history shows – where it incubated and created an industrial sector under Ayub and even took some steps towards moving up – through a state-directed economy that engaged in trade but had subsidies and other protection in place. But the economic policy didn’t fit the political / social situation in Pakistan, which may be part of the reason for the collapse in the 1960s.

Development is very complicated Happy for scholars, terrible for ordinary people.

Government officials and their family members own most businesses. Undeveloped natural resources include titanium, iron ore, manganese, uranium, and alluvial gold. Growth remained strong in 2007, led by oil.

Its actually just the people from one tribe, who aren’t even from the mainland where most of the oil is.

I know it is chaotic, but they tried a lot of different things until they struck oil actually. See EG used to be the nation with the highest per capita in Africa until the 40s (I think). They had the single largest share in the cocoa market of the world, but then after they gained their “liberation” from Spain (!) they ended up screwing up their country good.

There are a lot of different dynamics here, but I believe that if they hadn’t struck oil when they did, they would have satisfied the criterion you specified.

On a totally interesting sidenote, Frederick Forsyth wrote a book called “Dogs of war” about 30 -40 yrs ago, about a Western Industrialist sponsored coup of an African nation where Gold was struck…when they found oil in EG, there was actually a plan for such a coup…several people got indicted including Margaret Thatcher’s son. But I digress…

So yea…thats why I mentioned EG…I still think they have a lot of potential. Very nerdily, I befriended some EquatoGuineans on Facebook and we exchanged notes on their country, so at least the outlook isn’t totally bad.

Rahul, this is your example of successful free-trade led industrialization??? Set aside all the stuff about inequality, about authoritarianism, about myriad things that most decent people don’t like but many people interested in development, including me, recognize as legitimately debatable for economic analyses. There’s no evidence of industrialization here–this is an extraction economy:

The discovery and exploitation of large oil reserves have contributed to dramatic economic growth in recent years. Forestry, farming, and fishing are also major components of GDP. Subsistence farming predominates. Although pre-independence Equatorial Guinea counted on cocoa production for hard currency earnings, the neglect of the rural economy under successive regimes has diminished potential for agriculture-led growth (the government has stated its intention to reinvest some oil revenue into agriculture). A number of aid programs sponsored by the World Bank and the IMF have been cut off since 1993, because of corruption and mismanagement. No longer eligible for concessional financing because of large oil revenues, the government has been trying to agree on a “shadow” fiscal management program with the World Bank and IMF. Government officials and their family members own most businesses. Undeveloped natural resources include titanium, iron ore, manganese, uranium, and alluvial gold. Growth remained strong in 2007, led by oil.