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A Paradigm Shift that Never Will Be?: Justin Lin’s New Structural Economics

Author

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  • Ben Fine

    () (Department of Economics, SOAS, University of London, UK)

  • Elisa Van Waeyenberge

    () (Department of Economics, SOAS, University of London, UK)

Abstract

This paper assesses the attempt by Justin Lin, former Chief Economist of the World Bank, to posit a new development paradigm through his New Structural Economics, NSE. Lin’s attempt to redefine development economics deserves scrutiny for at least two reasons. He launched his new framework from the platform that his position as Chief Economist at the Bank. Critical scrutiny of his propositions then allows for continued insights into the complex relationship between scholarship and policy at the Bank and further illuminates, more broadly, the role of the Bank across the spectrum of development economics, development studies and development policy. Second, Lin’s framework claims a return to a “structural†understanding of development, with a strong industrial policy rhetoric emanating from it. This has been greeted with considerable enthusiasm by erstwhile critics of the Bank. Closer scrutiny of the NSE, however, both reveals the flawed nature of its core theoretical notion of comparative advantage and exposes its strong, if unfortunately conservative, commitment to a flawed and incoherently applied neoclassical economics. These issues are explored across Lin’s propositions regarding structural change, the role of the state and finance and are further examined in the context of specific policy interventions that Lin attaches to the NSE.

Suggested Citation

  • Ben Fine & Elisa Van Waeyenberge, 2013. "A Paradigm Shift that Never Will Be?: Justin Lin’s New Structural Economics," Working Papers 179, Department of Economics, SOAS, University of London, UK.
  • Handle: RePEc:soa:wpaper:179
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    File URL: http://www.soas.ac.uk/economics/research/workingpapers/file81928.pdf
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    References listed on IDEAS

    as
    1. Lin, Justin Yifu, 2003. "Development Strategy, Viability, and Economic Convergence," Economic Development and Cultural Change, University of Chicago Press, vol. 51(2), pages 276-308, January.
    2. Lin,Justin Yifu, 2009. "Economic Development and Transition," Cambridge Books, Cambridge University Press, number 9780521514521, May.
    3. Stephen Cecchetti & Enisse Kharroubi, 2012. "Reassessing the impact of finance on growth," BIS Working Papers 381, Bank for International Settlements.
    4. Justin Yifu Lin & David Rosenblatt, 2012. "Shifting patterns of economic growth and rethinking development," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 15(3), pages 171-194, September.
    5. Robert H. Wade, 2012. "Return of industrial policy?," International Review of Applied Economics, Taylor & Francis Journals, vol. 26(2), pages 223-239, November.
    6. Hausmann, Ricardo & Rodrik, Dani, 2003. "Economic development as self-discovery," Journal of Development Economics, Elsevier, vol. 72(2), pages 603-633, December.
    7. Elisa Van Waeyenberge, 2009. "Selectivity at Work: Country Policy and Institutional Assessments at the World Bank," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 21(5), pages 792-810, December.
    8. Jean Arcand & Enrico Berkes & Ugo Panizza, 2015. "Too much finance?," Journal of Economic Growth, Springer, vol. 20(2), pages 105-148, June.
    9. Reinert, Erik S., 2012. "Neo-classical economics: A trail of economic destruction since the 1970s," MPRA Paper 47910, University Library of Munich, Germany.
    10. Joseph E Stiglitz, 2009. "The Current Economic Crisis and Lessons for Economic Theory," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 35(3), pages 281-296.
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    Cited by:

    1. Lectard, Pauline & Rougier, Eric, 2018. "Can Developing Countries Gain from Defying Comparative Advantage? Distance to Comparative Advantage, Export Diversification and Sophistication, and the Dynamics of Specialization," World Development, Elsevier, vol. 102(C), pages 90-110.
    2. Amanor, Kojo S. & Chichava, Sérgio, 2016. "South–South Cooperation, Agribusiness, and African Agricultural Development: Brazil and China in Ghana and Mozambique," World Development, Elsevier, vol. 81(C), pages 13-23.

    More about this item

    Keywords

    A14; O10; O19; O25;

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

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