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Stages of Development, Economic Policies and a New World Economic Order

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  • Polterovich, Victor
  • Popov, Vladimir

Abstract

This paper summarizes theoretical arguments, empirical evidence, and econometric findings to support the statement that rational economic policies depend qualitatively on stages of development that are defined by productivity and institutional indicators of a country. We consider the impact of industrial policies, speed of foreign exchange reserves accumulation, technology transfers and immigration policies, as well as FDI and liberalization of capital flows, on rate of economic growth. It is argued that the impact may be positive or negative; in many cases a threshold combination of GDP per capita and institutional quality indicators may be found to separate two different outcomes. A precondition of economic success is the timely switching of economic policies to avoid both types of mistakes: excessive inertia or premature use of instruments that are effective for more advance countries only. The stage of development theory implies that international financial institutions (including IMF, WB, and EBRD) should work out a list of differentiated prescriptions that may be efficiently followed by countries with different levels of institutional and technological development, and so the system of assistance to developing countries could be improved. This and some other elements of "a New World Economic Order" are discussed in the paper.

Suggested Citation

  • Polterovich, Victor & Popov, Vladimir, 2006. "Stages of Development, Economic Policies and a New World Economic Order," MPRA Paper 20055, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:20055
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    Cited by:

    1. Vladimir Popov, 2010. "Development theories and development experience: half a century journey," Working Papers w0153, New Economic School (NES).
    2. Vladimir Popov, 2009. "Why the West Became Rich before China and Why China Has Been Catching Up with the West since 1949: nother Explanation of the “Great Divergence” and “Great Convergence” Stories," Working Papers w0132, New Economic School (NES).
    3. Popov, Vladimir, 2015. "Разрыв Между Югом И Западом По Уровню Экономического Развития Сокращается? [Catching up: Developing countries in pursuit of growth]," MPRA Paper 65893, University Library of Munich, Germany.
    4. Popov, V., 2011. "Do We Need to Protect Intellectual Property Rights?," Journal of the New Economic Association, New Economic Association, issue 11, pages 107-126.
    5. Popov, Vladimir, 2015. "Catching Up: Developing Countries in Pursuit of Growth," MPRA Paper 65878, University Library of Munich, Germany.
    6. Popov, Vladimir, 2013. "Economic Miracle of Post-Soviet Space: Why Uzbekistan Managed to Achieve What No Other Post-Soviet State Achieved," MPRA Paper 48723, University Library of Munich, Germany.
    7. Vladimir Popov, 2009. "Lessons from the Transition Economies: Putting the Success Stories of the Postcommunist World into a Broader Perspective," WIDER Working Paper Series RP2009-15, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    Stages of development; economic growth;

    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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