From Growth Commission to Growth Dialogue

Commission on Growth and Development made waves in 2008 with its superb array of economists and policymakers as members. Its report also  created waves with some different findings. It emphasised there is no one size fits all strategy and importance of leadership:

According to the Commission, fast sustained growth is not a miracle; it is attainable for developing countries with the “right mix of ingredients.” Countries need leaders who are committed to achieving growth and who can take advantage of opportunities from the global economy. They also need to know about the levels of incentives and public investments that are necessary for private investment to take off and ensure the long-term diversification of the economy and its integration in the global economy.

As role of the commission is over, it has moved on to become Growth Dialogue:

The Growth Dialogue is a venture supported by the governments of Canada, the United Kingdom, Sweden, and Korea that is being generously housed by George Washington University’s School of Business. While it has the support of the World Bank, which was instrumental in its inception, it receives no funding or support from the World Bank, and is an independent entity. It is governed by an Executive Board of donors and guided by an International Advisory Board. Its founding Managing Director is Dr. Danny Leipziger, Professor of International Business at GWSB and former Vice Chair of the Commission on Growth and Development.

Similar to the Growth Commission, that was led by Nobel laureate Michael Spence, the Growth Dialogue seeks to be an independent voice on economic growth and a platform for policy dialogue among those entrusted with producing it in developing and emerging market economies. The Dialogue is in many ways a successor to the Growth Commission that worked between 2006 and 2009 to produce the Growth Report in 2008 as well as a Special Report in 2009 and many background papers by distinguished academics, former political leaders, and economic observers on the major challenges of growth. 

The Growth Dialogue will not focus on research, since there are many others ably doing this; nor is it a technical assistance activity. It is simply a network to bring growth thinkers, practitioners and policymakers together to share and promulgate views and experience.

Here is a message from the MD of the initiative. Here is their first working paper which questions Chile’s growth strategy:

This paper contrasts Chile’s record of economic growth with that of high performing East Asian economies. It argues that the latter have done more with detailed microeconomic reforms and public sector interventions that have spurred faster innovation and accumulation of human and physical capital. The East Asian process builds on a vision, quantitative growth targets, and a partnership with the private sector that is constantly fine-tuned during implementation. The Chilean process is rules-based. Chile may benefit from a mindset change from “get the policies right and growth will follow” to one of “focus on high growth and the policies will emerge.” The policy challenge is to undertake this shift without exposing public institutions to elite capture.

I think again the paper is getting into one size fits all kind of strategy. Just becuase it has worked for Asia does not mean it can work for Chile as well. Latin American experience has been pretty bad wrt to time inconsistent policies and hence the rule based framework.

It is an irony of sorts that Asian economies in particularly India is looking to adopt Chile kind of rule-based policies. The Indian Finance Ministry in its midterm economic review for 2010-11 mentioned how Chile has been able to manage its countercyclical fund so well.

Infact, most Asian economies face this problem of elite capture of public institutions and would be wanting to adopt a rule based framework. So, they might be looking at how they can revamp their economic systems using Chilean eyes!

One Response to “From Growth Commission to Growth Dialogue”

  1. Tweets that mention From Growth Commission to Growth Dialogue « Mostly Economics -- Says:

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