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The Facilitating State and Economic Development: The Role of the State in New Structural Economics

Author

Listed:
  • Lin Justin Yifu

    (Center for New Structural Economics, Peking University, Beijing, China)

  • Wang Xiaobing

    (Department of Economics, The University of Manchester, Oxford Road, ManchesterM13 9PL, UK)

Abstract

This paper explores the ideas of development and the role of the state in economic development and institutional change from the New Structural Economics perspective. We argue that economic structures – including the structure of technology and industry, and hard and soft infrastructure – are endogenous to the endowment structure, which is given at any specific time and changeable over time. We advocate a state to facilitate structural change by using industrial policy to overcome market failures in order to help industries with latent comparative advantages to become competitive in the market and the state should pragmatically prioritize the use of its limited resources and implementation capability to create enclaves with favourable infrastructure and institution to jump start a dynamic growth in a country beset with poor infrastructure and institution.

Suggested Citation

  • Lin Justin Yifu & Wang Xiaobing, 2017. "The Facilitating State and Economic Development: The Role of the State in New Structural Economics," Man and the Economy, De Gruyter, vol. 4(2), pages 1-19, December.
    • Handle: RePEc:bpj:maneco:v:4:y:2017:i:2:p:19:n:8
    DOI: 10.1515/me-2017-0013
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    References listed on IDEAS

    as
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    8. Justin Yifu Lin, 2011. "New Structural Economics: A Framework for Rethinking Development," The World Bank Research Observer, World Bank, vol. 26(2), pages 193-221, August.
    9. Lin,Justin Yifu, 2009. "Economic Development and Transition," Cambridge Books, Cambridge University Press, number 9780521514521.
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    12. Justin Yifu Lin, 1989. "An Economic Theory of Institutional Change: Induced and Imposed Change," Cato Journal, Cato Journal, Cato Institute, vol. 9(1), pages 1-33, Spring/Su.
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    1. Dong, Zhiqiang & Wang, Xiaobing & Zhang, Tianhua & Zhong, Yuejun, 2022. "The effects of local government leadership turnover on entrepreneurial behavior," China Economic Review, Elsevier, vol. 71(C).

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    More about this item

    Keywords

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    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

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