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The Other Hand: High Bandwidth Development Policy

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  • Hausmann, Ricardo

    (Harvard U)

Abstract

Much of development policy has been based on the search for a short to do list that would get countries moving. In this paper I argue that economic activity requires a large and highly interacting set of public policies and services, which constitute inputs into the production process. This is reflected in the presence, in all countries, of hundreds of thousands of pages of legislation and hundreds of public agencies. Finding out what is the right mix of the public inputs, and more importantly, what is a valuable change from the current provision is as complex as determining what is the right mix of private provision of goods. In the latter case, economists agree that this process cannot be achieved through central planning and that the invisible hand of the market is the right approach, because it allows decisions to be made in a more decentralized manner with more information. I argue that a similar solution is required to deal with the complexity of the public policy mix.

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Paper provided by Harvard University, John F. Kennedy School of Government in its series Working Paper Series with number rwp08-060.

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Date of creation: Oct 2008
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Handle: RePEc:ecl:harjfk:rwp08-060

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  1. C. A. Hidalgo & B. Klinger & A. -L. Barabasi & R. Hausmann, 2007. "The Product Space Conditions the Development of Nations," Papers 0708.2090, arXiv.org.
  2. Hausmann, Ricardo & Klinger, Bailey, 2006. "Structural Transformation and Patterns of Comparative Advantage in the Product Space," Working Paper Series, Harvard University, John F. Kennedy School of Government rwp06-041, Harvard University, John F. Kennedy School of Government.
  3. Hausmann, Ricardo & Rodrik, Dani, 2002. "Economic Development as Self Discovery," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3356, C.E.P.R. Discussion Papers.
  4. Dani Rodrik & Arvind Subramanian, 2004. "From "Hindu Growth" to Productivity Surge," IMF Working Papers 04/77, International Monetary Fund.
  5. George J. Stigler, 1971. "The Theory of Economic Regulation," Bell Journal of Economics, The RAND Corporation, The RAND Corporation, vol. 2(1), pages 3-21, Spring.
  6. Dani Rodrik & Arvind Subramanian, 2005. "From "Hindu Growth" to Productivity Surge: The Mystery of the Indian Growth Transition," IMF Staff Papers, Palgrave Macmillan, vol. 52(2), pages 193-228, September.
  7. Kornai, Janos, 1992. "The Socialist System: The Political Economy of Communism," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780198287766, October.
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Cited by:
  1. Olivier Cadot & Leonardo Iacovone & Denisse Pierola & Ferdinand Rauch, 2011. "Success and Failure of African Exporters," CEP Discussion Papers dp1054, Centre for Economic Performance, LSE.
  2. Pritchett, Lant & Samji, Salimah & Hammer, Jeffrey, 2012. "It.s All About MeE: Using Structured Experiential Learning (.e.) to Crawl the Design Space," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  3. Mary Hallward-Driemeier & Gita Khun-Jush & Lant Pritchett, 2014. "Deals versus Rules: Policy Implementation Uncertainty and Why Firms Hate It," NBER Chapters, in: African Successes: Government and Institutions National Bureau of Economic Research, Inc.
  4. repec:idb:brikps:72918 is not listed on IDEAS

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