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Development paths: A case for public investment as the alternative to the Washington Consensus

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  • Lauka, Earta

Abstract

This paper's aim is to provide a different standpoint in the development debate, by focusing on the short-sightedness of the international institutions when they propose a development agenda. Focusing on macroeconomic performance and on privatisation, they have found a solution in PPPs, which offer financing opportunities for public investment and at the same time they reduce the burden on governments budgets. As an alternative this paper proposes a model based on investment and self-dependency with combining elements from post- Keynesian theory as well as the Beijing Consensus. The model rests on the importance of SOEs to use industrial policy as a tool to achieve independence from western powers as well as to increase investment. The theoretical claims are supported by empirical analysis based on 98 developing countries over a 15 year period.

Suggested Citation

  • Lauka, Earta, 2018. "Development paths: A case for public investment as the alternative to the Washington Consensus," IPE Working Papers 108/2018, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
  • Handle: RePEc:zbw:ipewps:1082018
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    References listed on IDEAS

    as
    1. Dani Rodrik, 2008. "Goodbye Washington Consensus, Hello Washington Confusion? A Review of the World Banks Economic Growth in the 1990s: Learning from a Decade of Reform," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 55(2), pages 135-156, June.
    2. Przemyslaw Kowalski & Max Büge & Monika Sztajerowska & Matias Egeland, 2013. "State-Owned Enterprises: Trade Effects and Policy Implications," OECD Trade Policy Papers 147, OECD Publishing.
    3. John Williamson, 2004. "The strange history of the Washington consensus," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 27(2), pages 195-206.
    4. Peter Kriesler, 2011. "Post-Keynesian Perspectives on Economic Development and Growth," Discussion Papers 2012-04, School of Economics, The University of New South Wales.
    5. John Marangos, 2014. "A Keynesian alternative to the Washington consensus policies for international development," International Journal of Trade and Global Markets, Inderscience Enterprises Ltd, vol. 7(1), pages 67-85.
    6. Rodrik, Dani, 2004. "Industrial Policy for the Twenty-First Century," CEPR Discussion Papers 4767, C.E.P.R. Discussion Papers.
    7. Hyman P. Minsky, 1968. "Effects of Shifts of Aggregate Demand upon Income Distribution," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 50(2), pages 328-339.
    8. Kuczynski, Pedro-Pablo & John Williamson (ed.), 2003. "After the Washington Consensus: Restarting Growth and Reform in Latin America," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 350, July.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    development state; PPP; Washington Consensus; privatization; public investment; Beijing Consensus; SOEs;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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