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The Other Hand: High Bandwidth Development Policy

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  • Ricardo Hausmann

    (Harvard's Growth Lab)

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. Keywords: structural transformation, coordination failures

Suggested Citation

  • Ricardo Hausmann, 2008. "The Other Hand: High Bandwidth Development Policy," CID Working Papers 179, Center for International Development at Harvard University.
    • Handle: RePEc:cid:wpfacu:179
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    Cited by:

    1. ROUGIER Eric, 2015. ""The parts and the whole”: Unbundling and re-bundling institutional systems and their effect on economic development," Cahiers du GREThA (2007-2019) 2015-12, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    2. Piveteau, Alain & Rougier, Éric, 2010. "Émergence, l’économie du développement interpellée," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 7.
    3. Cadot, Olivier & Iacovone, Leonardo & Pierola, Martha Denisse & Rauch, Ferdinand, 2013. "Success and failure of African exporters," Journal of Development Economics, Elsevier, vol. 101(C), pages 284-296.
    4. Lant Pritchett & Salimah Samji & Jeffrey S. Hammer, 2012. "It's All about MeE: Using Structured Experiential Learning ('e') to Crawl the Design Space," WIDER Working Paper Series wp-2012-104, World Institute for Development Economic Research (UNU-WIDER).
    5. 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, Volume I: Government and Institutions, pages 215-260, National Bureau of Economic Research, Inc.
    6. Anyfantaki, Sofia & Caloghirou, Yannis & Dellis, Konstantinos & Karadimitropoulou, Aikaterini & Petroulakis, Filippos, 2024. "The need for an industrial policy for long-term growth," LSE Research Online Documents on Economics 121983, London School of Economics and Political Science, LSE Library.
    7. Lant Pritchett & Salimah Samji & Jeffrey Hammer, 2012. "It’s All About MeE: Using Structured Experiential Learning (‘e’) to Crawl the Design Space," CID Working Papers 249, Center for International Development at Harvard University.
    8. Sofia Anyfantaki & Yannis Caloghirou & Konstantinos Dellis & Aikaterini Karadimitropoulou & Filippos Petroulakis, 2024. "The 2013 Cypriot Banking Crisis and Blame Attribution: survey evidence from the first application of a bail-in in the Eurozone," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 193, Hellenic Observatory, LSE.
    9. repec:idb:brikps:72918 is not listed on IDEAS

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    More about this item

    Keywords

    Transformation; Coordination Failures;

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • H10 - Public Economics - - Structure and Scope of Government - - - General

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