One Economics, Many Recipes: Globalization, Institutions, and Economic Growth

The Harvard development economist Rodrik here collects several of his recent papers into a coherent book. Its main message is that policymakers and their advisers should keep their eyes on basic principles (for example, the ability of entrepreneurs to appropriate the gains from their entrepreneurial activities) rather than on particular policies (for example, that taxes on capital earnings should be low). The basic principles can be satisfied by a variety of institutional and policy settings, he argues, and the most efficacious policies vary from country to country, depending on local institutions, expectations, and circumstances. Rodrik also develops a framework for diagnosing impediments to growth and suggests that policymakers focus on the most significant impediments for each country. In short, the book is a critical response to the international "consensus" approach to economic policymaking, with its implicit assumption that one set of policies is suitable in all, or at least in most, countries. Rodrik has become known for emphasizing the importance of institutions, but he here makes clear that appropriate policies are also important and that effective institutions can take many forms. Curiously, he argues that the international economic system has not served developing countries well, despite the historically unprecedented growth and poverty reduction they have enjoyed within it.