Saturday, February 12, 2005

Getting Everything Wrong

My friend Erik Reinert of The Other Canon has just sent me a draft of his latest paper which examines, to use his own words, "the curse of standard textbook economics in the Third World". He has a neat and telling way of summarising the surreal world of orthodox development economists. Their project, he says, is the constant search for the panacea which in addition to neoclassical economics would set free the magic of the market. And here is how their litany has evolved over the last decade or so:
  • "get the prices right"
  • "get the property rights right"
  • "get the institutions right"
  • "get the governance right"
  • "get the competitiveness right"
  • "get the national innovation systems right"
  • "get the entrepreneurship right"
Of course we could always ask the simple first order question: get what right for whom? As Erik notes, all this policy tinkering is based merely on a theoretical fantasy. "None of the sequential focuses on single issues will unleash a magic of factor-price equalization under instant free trade, this never existed in history nor will it ever exist". When are these developmental charlatans going to realise just how much they have got wrong?


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