The Quest for Prosperity : How Developing Economies Can Take Off by Lin Justin Yifu

Author:Lin, Justin Yifu [Lin, Justin Yifu]
Language: eng
Format: epub
Publisher: Princeton University Press
Published: 2014-10-10T07:00:00+00:00

For a very long time, mainstream economists were reluctant to engage any intellectual exercise that could be construed as facilitating industrial growth. The legacy of the failure of industrial policies based on development strategies inconsistent with comparative advantage has certainly led many economists to conclude that it may be impossible for any government to successfully pick winners. But things have changed lately, and a rich body of research now exists—and several approaches have recently been suggested by various authors to reopen the debate on the government’s role in promoting growth.58 Although many of the suggested approaches are likely to yield some useful results, none of them focuses specifically on the identification of industries in which a developing country may have latent comparative advantage. The GIF framework fills that gap and presents a practical tool that policymakers can use to elaborate and implement a realistic strategy for industrial upgrading and diversification.

The question now is whether the insights from the GIF framework could be extended to countries with a long legacy of distortions and central planning and to middle- and high-income economies—a question discussed in the next chapters.

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