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Diagnostics Before Prescription

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  • Rodrik, Dani

Abstract

Development economists should stop acting as categorical advocates (or detractors) for specific approaches to development. They should instead be diagnosticians, helping decisionmakers choose the right model (and remedy) for their specific realities, among many contending models (and remedies). In this spirit, Ricardo Hausmann, Andres Velasco, and I have developed a "growth diagnostics" framework that sketches a systematic process for identifying binding constraints and prioritizing policy reforms in multilateral agencies and bilateral donors. Growth diagnostics is based on the idea that not all constraints bind equally and that a sensible and practical strategy consists of identifying the most serious constraint(s) at work. The practitioner works with a decision tree to do this. The second step in growth diagnostics is to identify remedies for relaxing the constraint that are appropriate to the context and take cognizance of potential second-best complications. Successful countries are those that have implemented these two steps in an ongoing manner: identify sequentially the most binding constraints and remove them with locally suited remedies. Diagnostics requires pragmatism and eclecticism, in the use of both theory and evidence. It has no room for dogmatism, imported blueprints, or empirical purism.

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Paper provided by Harvard Kennedy School of Government in its series Scholarly Articles with number 8057678.

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Date of creation: 2010
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Publication status: Published in Journal of Economic Perspectives
Handle: RePEc:hrv:hksfac:8057678

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  1. Angus S. Deaton, 2009. "Instruments of development: Randomization in the tropics, and the search for the elusive keys to economic development," NBER Working Papers 14690, National Bureau of Economic Research, Inc.
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  4. Michael Kremer & Alaka Holla, 2009. "Improving Education in the Developing World: What Have We Learned from Randomized Evaluations?," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 513-545, 05.
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  6. Commission on Growth and Development, 2008. "The Growth Report : Strategies for Sustained Growth and Inclusive Development," World Bank Publications, The World Bank, number 6507, August.
  7. Anne O. Krueger, 1997. "Trade Policy and Economic Development: How We Learn," NBER Working Papers 5896, National Bureau of Economic Research, Inc.
  8. Charles R. Frank Jr. & Kwang Suk Kim & Larry E. Westphal, 1975. "Foreign Trade Regimes and Economic Development: South Korea," NBER Books, National Bureau of Economic Research, Inc, number fran75-1, July.
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Cited by:
  1. Shaikh, Salman, 2012. "Examining Theories of Growth & Development & Policy Response Based on Them from Islamic Perspective," MPRA Paper 38530, University Library of Munich, Germany.
  2. Robert, Christopher LeBaron & Zeckhauser, Richard Jay, 2010. "The Methodology of Positive Policy Analysis," Scholarly Articles 4450129, Harvard Kennedy School of Government.
  3. Dandume, Muhammad Yusuf, 2013. "Institution and Economic Growth performance in Nigeria," MPRA Paper 52356, University Library of Munich, Germany, revised 2013.
  4. Riccardo Crescenzi & Andrés Rodríguez-Pose, 2011. "Reconciling top-down and bottom-up development policies," Environment and Planning A, Pion Ltd, London, vol. 43(4), pages 773-780, April.
  5. Christopher Robert & Richard Zeckhauser, 2011. "The methodology of normative policy analysis," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 30(3), pages 613-643, Summer.
  6. Jean Cartier-Bresson, 2013. "Le pouvoir du positivisme et ses limites : microéconométrie et macroéconométrie actuelles du développement," Working Papers hal-00847005, HAL.
  7. Foellmi, Reto & Oechslin, Manuel, 2012. "Globalization and Productivity in the Developing World," Economics Working Paper Series 1203, University of St. Gallen, School of Economics and Political Science.
  8. Muhammad, Yusuf & C.A, Malarvizhi, 2012. "Good-Governance and Poverty Reduction Relationship a case study of Nigeria," MPRA Paper 52351, University Library of Munich, Germany, revised Jan 2013.
  9. Richard Bluhm & Adam Szirmai & UNICEF Innocenti Research Centre, 2011. "Institutions, Inequality and Growth: A review of theory and evidence on the institutional determinants of growth and inequality," Innocenti Working Papers inwopa634, UNICEF Innocenti Research Centre.
  10. Marc Deschamps, 2013. "Pourquoi des politiques de concurrence ?," GREDEG Working Papers 2013-23, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
  11. Binswanger, J. & Oechslin, M., 2014. "Disagreement and Learning About Reforms," Discussion Paper 2014-020, Tilburg University, Center for Economic Research.
  12. Choon-Yin Sam, 2013. "Partial privatisation and the role of state owned holding companies in China," Journal of Management and Governance, Springer, vol. 17(3), pages 767-789, August.
  13. Roland Hodler, 2011. "Development (Paradigm) Failures," Working Papers 11.01, Swiss National Bank, Study Center Gerzensee.
  14. Harald HABERMANN & Pablo PADRUTT, 2011. "Growth Diagnostics: Strengths and Weaknesses of a Creative Analytical Framework to Identify Economic Growth Constraints in Developing Countries," Journal of Knowledge Management, Economics and Information Technology, ScientificPapers.org, vol. 1(7), pages 25, December.

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