Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- Preface
- 1 Development, transition and divergence
- 2 The search for a fundamental and changeable cause of prosperity
- 3 Aspirations and social thought of modernisation
- 4 Development strategy, viability and performance
- 5 Viability and strategies of transition
- 6 Development strategy, development and transition performances: empirical analysis
- 7 Why are east Asian economies so special? Are there any general lessons to be learnt from east Asian development and transition experiences?
- 8 Towards a right development and transition strategy
- Appendix 1 Development strategy and economic institutions in developing countries
- Appendix 2 Data description
- References
- Index
Appendix 1 - Development strategy and economic institutions in developing countries
Published online by Cambridge University Press: 05 June 2012
- Frontmatter
- Contents
- List of figures
- List of tables
- Preface
- 1 Development, transition and divergence
- 2 The search for a fundamental and changeable cause of prosperity
- 3 Aspirations and social thought of modernisation
- 4 Development strategy, viability and performance
- 5 Viability and strategies of transition
- 6 Development strategy, development and transition performances: empirical analysis
- 7 Why are east Asian economies so special? Are there any general lessons to be learnt from east Asian development and transition experiences?
- 8 Towards a right development and transition strategy
- Appendix 1 Development strategy and economic institutions in developing countries
- Appendix 2 Data description
- References
- Index
Summary
Introduction
As discussed in the lectures, after the Second World War, governments in developing countries – socialist and non-socialist – instituted a complicated set of regulations and distortions that suppressed the functions of markets, such as financial depression, trade restriction, the rationing of capital and foreign exchange, the licensing of investments, administrative monopoly and state ownership. It has now been recognised that, no matter what the motivation might be, these policies often led to poor economic performance, low living standards and even frequent crises in developing countries. Despite the many competing hypotheses about the causes and effects of these regulations and distortions, none has revealed, convincingly, the internal logic among the various policies in the complicated set of regulations and distortions.
The classical theory for government regulations (Pigou, 1938) has been called the ‘helping hand’ view. Seeing the adverse effects of government regulations and distortions in developing countries, economists have proposed an alternative – ‘grabbing hand’ view (Acemoglu, 2007b; Grossman and Helpman, 1994; Shleifer and Vishny, 1994; Sokoloff and Engerman, 2000). These authors propose that government interventions were pursued for the benefit of politicians and bureaucrats – for example, favouring friendly firms and other political constituencies so as to obtain benefits such as campaign contributions and votes or benefiting selected groups within a country that had unusually strong political influence.
- Type
- Chapter
- Information
- Economic Development and TransitionThought, Strategy, and Viability, pp. 97 - 139Publisher: Cambridge University PressPrint publication year: 2009