The Summer 2011 class of Glenn Fellows visited the Ronald Reagan Building last Friday and enjoyed a presentation by Ohio State alumna Virginia Brown and her USAID colleague Wade Channell, who did a fantastic job of showing that the making of public policy is both an art and a science, and that analytical skills are crucial to the making of enlightened public policy.
The subject of nation building and international development reminded me of an article that appeared some time ago in
The New York Review of Books. "The Anarchy of Success," by William Easterly, an economics professor at NYU, was a review of two then-new books, Leonard Mlodinow's
The Drunkard's Walk: How Randomness Rules Our Lives, and Ha-Joon Chang's
Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism.
Here's a link.
Here's the nub of Easterly's argument. He says that the phenomenal rates of economic growth enjoyed by Hong Kong, South Korea, Singapore (see skyline photo above), and Taiwan in the period between 1960 and 2007 inspired a tsunami of research by economists eager "to find in the empirical data which factors reliably lead to growth. Yet hundreds of research articles later, we wound up at a surprising end point: we don't know."
Think of it. After the investment of billions and billions of dollars in the righteous cause of economic development, we actually don't know what accounts for rates of growth. According to Easterly, summarizing Mlodinow, economists have identified 145 factors associated with growth, but "most of the patterns were spurious, because they failed to hold up when other researchers tried to replicate them." As for
Bad Samaritans, Easterly says that Chang criticizes "those who have made overly strong claims for free trade and orthodox capitalism, but then he turns around and makes equally strong claims for protectionism and what he calls 'heterodox' capitalism, which includes such features as government promotion of favored industries, state-owned enterprises, and heavy regulation of foreign direct investment."
Could it be that "the science of muddling through" is the best we can do?
On the miracle of economic growth,
here (with a tip of the cap to Carmen Flores-Carrion) is a link to a YouTube mini-lecture by Hans Rosling.
