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Evaluating recipes for development success

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  • Dixit, Avinash

Abstract

This paper provides a review of the contradictions and conflicts in the literature on economic governance and sketches an approach to use some of the conceptual and empirical findings from that literature for development policy. The literature offers conflicting conclusions on big questions: whether history and geography preordain a country's economic fate, whether democracy or authoritarianism promotes growth; whether informal or formal mechanisms are best; whether"big bang"or gradual transitions promote growth; and whether disasters and demographics are stumbling blocks or stepping stones. The author finds recipes for success that are infeasible, contradictory and shifting, and that ignore the role of luck in development policy. While the researcher may ask,"What creates success on average across countries?"the policymaker needs to know,"What is going wrong in this country and how can we put it right?"The author suggests a preliminary approach to combine the practitioner's detailed knowledge of country conditions with the broader patterns uncovered by scholars, building on"growth diagnostics"that identify binding constraints to development. But he shifts from the sequential"decision tree"framework to a more directly"diagnostic"approach that recognizes that policymakers must deal with many factors simultaneously. The framework he suggests combines empirical information on potential causes, estimates of their probabilities, and observed effects. He proposes this framework as the foundation, not for another recipe, but for a broader mode of thought to tackle the complexity and variance in development processes and patterns across countries and time-one country at a time.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3859.

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Date of creation: 01 Mar 2006
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Handle: RePEc:wbk:wbrwps:3859

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Keywords: Governance Indicators; National Governance; Children and Youth; Economic Theory&Research; Economic Policy; Institutions and Governance;

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Citations

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Cited by:
  1. Abbott, Philip & Andersen, Thomas Barnebeck & Tarp, Finn, 2010. "IMF and economic reform in developing countries," The Quarterly Review of Economics and Finance, Elsevier, vol. 50(1), pages 17-26, February.
  2. World Bank, 2012. "Liberia : Inclusive Growth Diagnostics," World Bank Other Operational Studies 12609, The World Bank.
  3. William Easterly, 2008. "Can the West Save Africa?," NBER Working Papers 14363, National Bureau of Economic Research, Inc.
  4. World Bank, 2010. "Bhutan Investment Climate Assessment Report : Vitalizing the Private Sector, Creating Jobs, Volume 2," World Bank Other Operational Studies 12872, The World Bank.
  5. World Bank, 2010. "Bhutan Investment Climate Assessment Report : Vitalizing the Private Sector, Creating Jobs, Volume 1. Summary Report," World Bank Other Operational Studies 12871, The World Bank.
  6. Klump, R. & Prüfer, P., 2006. "Prioritizing Policies for Pro-Poor Growth: Applying Bayesian Model Averaging to Vietnam," Discussion Paper 2006-117, Tilburg University, Center for Economic Research.

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