On my to read list...
Governance, Crisis, and the Longer View:
Which Dani Rodrick recently mentioned...
Exhibit no.2 is Dani Kaufmann, who led the World Bank's work on governance and has done probably more than any other living soul to bring governance issues to the top of the policy agenda in the developing world. In a recent lecture, he takes pretty much the same line as Johnson, arguing that the financial crisis in the U.S. was the by-product of capture and corruption: "If anybody thought that the governance and corruption challenge was a monopoly of the developing world ... that notion has been disposed of completely."
As an example of recent changes from "good governance" reformers
How the financial crisis has killed the governance reform agenda
There was a time when economists believed that institutional reform--improving governance--was a key ingredient in improving living standards in the developing world. "Good governance" is surely a good thing in its own right. But a lot of recent academic and policy research has focused of late on its instrumental value for growth.
The argument is simple and appealing. Rich countries are those characterized by democracy, rule of law, political competition, and low levels of corruption. So poor countries have to emulate them in all these respects if they want to get rich too.
Oddly, some of the most vociferous advocates of this view have apparently given up on it in the aftermath of the financial crisis. Not consciously, perhaps. But a repudiation is implicit in the arguments that they now make about the central role of governance failures in the current crisis in the U.S.
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