2017 l VOLUME 8 l ISSUE 1

VICE PRESIDENCY FOR ECONOMIC GOVERNANCE

AND KOWLEDGE MANAGEMENT

Truth is the Safest Lie

A Reassessment of Development Economics
Célestin Monga
On Twitter: @CelestinMonga

1| Sins, Blame, and Redemption

Ghanaians pride themselves for being the first African country strength, the popular support, and the basic wit. He even
to reclaim its independence from colonialists. The pride and recruited as one of his senior advisors, Sir Arthur Lewis, one
the boasting have reached new heights this year, as they of the greatest economic minds of the time and to this day,
celebrate the sixtieth year of their freedom. But behind the and the only Black person to ever win the Nobel Prize in
chanting, dancing, talking, and conferencing, the question economics.
often discussed mezza voce is the true length of the road
traveled since then, and the size and value of the dividends of Yet, great economic thinking did not seem to help policy-
freedom. Many Ghanaians in the poor slums of Accra and making. Six decades after independence and despite
Kumasi, and in the miserable rural areas of the country, are experimenting with almost all types of modern forms of
blaming their political leaders of the past six decades for being government and the rebasing and the statistical revisions of
mainly sinners who should be held responsible for their plight. gross domestic product, Nkrumah’s country still is not doing
They don’t think that independence has yielded its promise. very well. Growth has been insufficient to reduce poverty, and
In fact, it is an appropriate moment for Ghanaian, African most of the labor force—whether highly skilled or not—is still
leaders, and development economists to step aside from the underemployed in not unemployed.
dancing and the chanting to reflect on progress—and on
what went wrong in the quest for prosperity, not just in this What happened?
country, but throughout the developing world. And perhaps to
seek redemption. Like many developing country leaders since independence,
Nkrumah was a bright young man, well educated, and a true
Back in 1957 when Osagyefo Kwame Nkrumah successfully hero to his people. But he lacked some basic wisdom—which
led Ghana’s quest for independence, I was not yet born but I manifests itself in the humble search for the truth and the
know from reading history books that this country was willingness to ignore ideological jargon and focus instead on
expected to quickly become the beacon of hope for the economic theories and policy practices that provide
continent and for the Third World. There was a lot of undisputable, quick and sustainable results. Compare
excitement. Since then, Ghana has gone through its ups and Nkrumah to Deng Xiaoping or Lee Kuan Yew, who rose to the
downs but has mostly underachieved—like most countries challenge of leadership and presided over successful
elegantly branded as “developing.” Nkrumah seemed to have experiments in politically difficult circumstances. What did
all that was needed to convert freedom into collective welfare they know that Nkrumah di not? What can we learn from their
for his people: he had the vision, the passion, the inner stories?

Disclaimer: The findings of this Brief reflect the opinions of the authors and not those of the African Development Bank,its Board of Directors or the
countries they represent.

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It would be unfair to pick on Ghana. In fact, Ghana’s story has ventional ways, and spent most of their energy either trying to
largely been Africa’s story, and that of many other developing replicate the governance models from colonial times, or to
countries. I will argue in this think piece that Ghana’s failure to imitate policy frameworks in vogue in advanced countries but
rise to its potential and achieve its goals has mainly been the inappropriate for theirs. Then, they quickly ended up
failure not of politics, the weakness of institutions, or the lack succumbing to the intoxicating luster of authority and
of initial conditions, but the failure of economic thinking and struggling to maintain their grip on the levers of state political
policymaking. Therefore, I believe that the failure of develop- and financial power. Many of them failed to understand that
ment was not—and still is not—caused by insufficient human the most effective way to remain at the top and retain control
capital, by inadequate access to finance, or by such popular was to deliver quick, tangible results, and to improve the lives
notions as infrastructure deficits or corruption. These factors of their people. Most of the time, they consistently picked and
made matters worse but they are consequences of bad initial implemented bad ideas, often from well-meaning economists
strategic choices. But they are not the causes of the problem. and development experts.

I will also argue that Ghana’s failures and developing countries’ The combination of the two processes gradually made things
failures may reflect poor leadership but not in the traditional, worse and worse. The main results were economic failures,
popular and vague sense. Few political leaders ascend to massive unemployment, poverty, despair, distorted belief
power and devote their efforts to destroying their country or systems, social and political chaos, and the generalization of
impoverishing their people. In fact, politicians everywhere witchcraft.
often have the same utility function: when their political regime
is secure, safe and stable—as Nkrumah’s was in 1957—they Frustrated by the course of events, many good economists
are typically interested in staying in power as long as they can, gave up—in fact, the field of development economics was
and in having a good name in history after they are gone. This pushed to the fringes of the discipline for much of the sixties
is true in democratic and autocratic regimes. Barring some and seventies. Others opted for intellectual laziness, spending
extremist and crazy characters, they all have these same their time in intellectual mimicry, and simply transferring
basic motivations. The major difference among political whatever concepts or theories were in fashion in Latin
leaders across political systems is indeed their leadership America and Asia to their analyses of African countries. It is
ability, but leadership defined more narrowly as the capacity not surprising that a lot of development economics has been
and willingness to articulate bold but credible visions, choose dominated by the identification of the sins committed and the
good economic advisers, and lead teams that can implement search for who is to blame.
plans with discipline and humility to achieve results rapidly—
while correcting the unavoidable mistakes along the way. The good news is that time has gone by. Lessons have been
learned. Spectacular successes such as the rise of China,
Most African politicians have, on average, been bad leaders. Taiwan-China, Singapore, South Korea, Dubai, and the United
But the failure of economic development is primarily due to Arab Emirates, and unfolding ongoing successes in Mauritius,
the pervasiveness of bad ideas, which translate into bad or Vietnam, have shed light on what should be done or
advice by influential economists—those in the position to avoided. Despite many failed experiments, economic history
shape or influence policymaking. Poverty and underemploy- now provides enough good stories that do not have to be
ment in Africa today (at a time when resources of all kinds and copied but that can certainly inspire both researchers and
opportunities have never been so numerous and so cheaply policymakers. There are possibilities of redemption for political
available everywhere) primarily reflect the imagination deficit leaders and development economists in Ghana and elsewhere.
among development economists—not the incompetence of
politicians. After all, politicians everywhere do what they are This note summarizes some of the key elements of the
supposed to: politics, a selfish and often dreadful sport. knowledge accumulated in development economics. It is
obviously biased toward my own work with Justin Yifu Lin
It is the responsibility of economists to put great ideas on the (under the label New Structural Economics), and Joseph
table and find ways to positively influence the public discourse Stiglitz (on the rethinking of industrial policy)—a selected
and the policies that are implemented. Retreating to their ivory reading list is provided in the references. Section 2 challenges
towers, and complaining that political leaders do not solicit the dominant paradigms of development thinking, from a
their wisdom and knowledge, is an easy escape route. It does fundamental, philosophical perspective. Section 3 sums up
not absolve them from their duty as elites, intellectuals, social the key recommendations for a more appropriate approach.
leaders, and minority members of a community in which they Section 4 offers concluding thoughts.
represent what W.E.B. Du Bois called “the talented tenth.”
They do not seem to fully grasp the burden of the
responsibility that comes with being highly educated in a 2| Economics as a Prayer: A Critique
society that craves for knowledge and learning.
Years ago, while studying in Boston, I asked Robert Solow
To repeat: What exactly happened to Ghana and to other why many great economists like him had stayed away from
African and developing countries? In my view, two basic African issues. I was trying to provoke him because the truth
dynamics negatively reinforced each other over decades. is that many great economic minds had worked on Africa. In
First, national leaders gained political power, often in uncon - his typical direct style, Solow responded that he avoided

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development economics simply because it was “too hard! sensitivity analyses could correct. Second, these compound-
Most of my colleagues who ventured in that area did not do ing mistakes have generated a false economics of
too well.” He also explained that the kind of macroeconomics preconditions, and the wrong policy prescriptions. Let me
he did would apply only in socioeconomic and political briefly discuss these two mistakes in turn.
environments where the institutions required to make it work
were already in place. He felt that developing countries were The wrong model economy and reference
intrinsically different from advanced economies.
It is obviously legitimate for Burundi to try to be like
In 2008 while an economist at the World Bank, I tried to Switzerland, and there is indeed no reason for the many
convince Olivier Blanchard, then the chair of the Economics hardworking citizens of Bujumbura to expect to live the
department at MIT, to express interest in the World Bank Chief supposedly good life of the not so hardworking people of
Economist position, which had just become vacant. I felt that Zurich. But even leaving aside history, the current endowment
his stellar intellectual contributions to the analysis of structures of two economies are so different that it would not
employment, unemployment, and labor market issues would make much analytical sense to study them with the same
bring them to the center of the global agenda. I always tools and to derive policy recommendations from similar
believed that the job creation should be at the core of our econometric models. It is legitimate for political leaders in
poverty reduction strategies. Olivier’s response was swift and Burundi to try to emulate the success of others in advanced
clear: “I think I know a bit about macroeconomics, but I know economies. It is strange for economists to rigidly and
very little if anything about economic development. I certainly mechanically apply methods and tools designed for capital-
would not qualify for that job.” intensive Switzerland to capital-poor, labor-intensive Burundi.
It has been reported that Nkrumah wanted the Ghanaian
Later, after he became the chief Economist of the IMF, I asked economy to surpass that of England almost the day after
how he felt about the research his institution was doing on independence. A noble political goal perhaps, but a foolish
Africa. He praised his team but told me very candidly that he predicament for economic policy. The model economy that
was not satisfied with some of the analytical tools used for Burundi 2017 or Ghana 2017 may want to “emulate” should
policy analysis and simulations on low-income countries. He not be Switzerland 2017 or the United Kingdom 2017 but,
indicated that some of the work was too often small variations perhaps, Mauritius 1974. There is a sequencing of strategies
from dynamic stochastic general equilibrium models designed that low-income economies ignore only at their own peril.
for industrialized economies. The day we discussed this, he
had just reviewed the econometric model for Togo and could Let me stress one point: I am not advocating a teleological view
tell that the assumptions about the functioning of the labor of economic development. Of course, one can move faster
market there were probably inappropriate for a low-income from one step to the other, and Walt Rostow was wrong in
African country. He also expressed frustration at not being suggesting that there is an almost linear process with a rigid
able to provide a suitable econometric model for effective timing in the various “stages of economic development.” The
policymaking in Togo. acceleration of economic history is the evidence that he was
wrong. Prior to the 18th century, it took 1,400 years to double
Beyond their remarkable humility and their refusal to venture income in the Western world. In the 19th century, it took only
outside their field of expertise, Solow and Blanchard were about 70 years. In the 20th century, it required only about 35
highlighting one of the biggest intellectual problems in develop- years. The changing pace of performance among individual
ment economics: The disconnect between high-income and countries is even more encouraging. It took 150 years for Great
low-income economies, and the refusal of some economists to Britain to initially double its income. The United States needed
acknowledge the structural differences that this implies or to 50 years to do the same. And without the natural resources,
draw the analytical implications from that central fact. Solow and excellent infrastructure, or human capital of Britain, the US, or
Blanchard intuitively recognized that Burundi is not Switzerland the Scandinavian countries, China did it in just 12 years.
even though both are small and landlocked, and that
Madagascar is not Japan, even though both are sea-locked. Some economists draw the wrong inference from these facts:
they mistakenly conclude that low-income economies can
Structure matters. Neglecting that intrinsic truth has been the achieve prosperity without developing manufacturing, by just
biggest of all analytical sins by development economists. That launching high-value added industries or encouraging the
sin has led to two major strategic mistakes, which in turn have emergence of tradable services. Such strategies, which
invalidated much of the excellent work done since the violate comparative advantage, would not be sustainable.
emergence of development economics as a subdiscipline of Trying to develop sophisticated, capital-intensive industries
economics after World War II. First, in thinking about and services in a $500 per capita economy whose
convergence and the task of transforming low-income comparative advantage is still in labor-intensive industries is
countries into industrialized economies, we have too often the problem: with a labor force of some 600 million people,
selected the wrong comparators and benchmarks, and set most of them low-skilled workers, Africa puts less than 20
the wrong objectives for our work—and obviously that of the percent of its labor force in the formal sector.
policymakers who follow our advice. The wrong choice of
model economies has led many theoreticians and empiricists The lesson here is not that poor economies should try to
to adopt some profoundly misleading assumptions that no circumvent the steps of industrialization and jump from low-

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productivity agriculture to high-tech industries and services looking at the glass as half full, they have consistently seen it as
when they are capital-scarce and have poor business almost completely empty.
environments. Instead, they should try to put the largest
possible fractions of their labor force to work by developing Yet, we know from the history of development that no single
industries that are consistent with their existing (and successful economy in the world started out with ideal country
changeable) comparative advantage. The dynamics of more conditions. Successful development processes always emerge
people working in the formal sector, earning gradually decent from average if not very poor institutional and policy
incomes and developing soft skills and their human capital, environments. Neither the United States nor Great Britain had
eventually moves the economy into more sophisticated, high- “excellent” infrastructure stocks prior to the Industrial
value-added industries and sectors. Of course, good public Revolution, or even in the years and decades after that. China
policies can help speed up the evolution of an economy’s did not have “adequate” levels of human capital when Deng
endowment structure and compress the timing of structural Xiaoping launched the shocking economic journey of growing
transformation. the economy by nearly 10 percent a year for three decades
and lifting some 600 million people out of poverty.
Unfortunately, some development economists continue to
neglect the need for industrial upgrading in low-income By succumbing to the Sherlock Holmes syndrome, some
countries. They still advocate benchmarking poor economies, researchers miss what should be the focus of economic policy
with high-income economies as the model to emulate. That in low-income countries—and that is structural transformation,
has been a recipe for disappointment for a long time. the transfer of human resources and capital to the most
productive activities. This may be because many of us limited
The wrong assumptions and preconditions the development agenda to the Washington Consensus
policies, mainly designed to address macroeconomic
Choosing the wrong model or reference economy to copy imbalances that developing countries experienced in the
carries some heavy implications and leads to risky optical 1980s. Macro stabilization and structural reforms were
errors. Instead of seeing the resources already in place in each necessary but not sufficient conditions for prosperity. They were
poor country and focusing the intellectual and policy resources not necessarily recipes for creating employment. Rwanda
to maximizing the existing assets and building on successes President Paul Kagame has declared that his country scores
to accelerate reforms, one focuses only on the missing among the top-performers in almost all categories of the Doing
ingredients for growth and prosperity, and quickly becomes Business Indicators but has not created enough employment
obsessed with the lengthy list of preconditions to be fulfilled— in the formal sector. That is true: his country has done
before the growth process can be ignited. This is a disturbing remarkably well in improving the business environment, but it
trend, and a counter-productive intellectual attitude. must still do even more to generate the kind of good labor-
intensive industries that will eventually bring prosperity to the
That mindset of “missing elements” and “gaps” has translated people.
into a peculiar intellectual posture: economists have confined
themselves to the role of detectives, if not prosecutors. Without Another issue not always carefully studied is good governance.
fully realizing it, many development experts behave like We all know how important that is and can see the correlation
detectives in Arthur Conan Doyle and Agatha Christie novels. with GDP per capita in cross-country regressions. But we need
They have converted themselves into a Sherlock Holmes or to dig deeper, define it more precisely in our research, and
Hercule Poirot whose divine mission is to find what is wrong customize what “good institutions” might look like in different
with low-income countries, not what may be right and sufficient country contexts. Let me just give one example to illustrate the
there to start something good. The “gap” mentality among point. Late Presidents Félix Houphouët-Boigny and Julius
researchers has therefore stimulated the emergence of a Nyerere are among the most admired in recent African political
dominant brand of development policy that is basically an history. Yet, the former—who once said at a press conference
obsessive (if not compulsive) quest to correct the “deficiencies.” that any “serious individual” should have a Swiss bank account
Of course, the search has produced long lists of true or false and urged people not to dwell on high levels of corruption in
deficiencies, real or imaginary gaps, and truly missing or illusory Côte d’Ivoire—was able to propel his country on a long path of
ingredients for development recipes, which are presented as high growth. Compare his development performance with that
necessary conditions for economic progress. But the whole of President Nyerere, widely perceived as a near saint for
exercise has not paid off. Indeed, the search has created more running arguably the least corrupt African government of the
problems for economists and policymakers than it has brought post-independence era, who apologized for failing his people
solutions. Instead of focusing on what each country—even the with low growth and high poverty. Clearly, poor governance is
poorest—already has to build a viable development strategy, a grave issue to be tacked energetically. But even as this is still
the compulsive search for the missing gap has validated and under way, smart growth strategies can be implemented and
legitimized the notion that little can be done in poor countries yield satisfactory results.
unless they meet a long list of preconditions. Instead of
adopting the mindset of how to maximize whatever few Development thinking should aim at providing more actionable
production factors are in place, development economists have sets of policies to political leaders, and avoid offering laundry
too often devoted their energy and creativity to what must be lists of reforms that are politically difficult to implement and may
done as preconditions for growth and prosperity. Instead of not immediately yield the intended results. Leaving economic

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development to the market is taking a bet on what I call the Velasco have shown, not all binding constraints are equal—
painful economics of chance, approaching economics as a or deserve the same amount of attention from high-level
prayer that may or may not be answered. Different industries policymakers.
require distinct types of infrastructure. And since low-income
country governments do not have the financial resources to The very words “selection” and “targeting” tend to immediate-
accommodate all industries at once, it is best to work with the ly raise concerns about “industrial policies” by activist
private sector to identify industries where the economy has a governments. So, let me clarify what I have in mind. All
comparative advantage, and to focus on providing specific governments are “activist” in one sense or the other. The
infrastructure and transparent, limited incentives that would question is whether their “activism” is devoted to creating the
allow these industries to grow. optimal conditions for agents to strive, and to addressing
coordination and externalities that prevent the private sector
Look at the list of recent success stories in Africa to understand from flourishing and generating jobs.
the role of industrial policies. Textiles in Mauritius, apparel in
Lesotho, cotton in Burkina Faso, cut flowers in Ethiopia, All governments in the world are constantly engaged in
mangos in Mali, and gorilla tourism in Rwanda all required that various forms of industrial policies—they take actions that
governments provide different types of infrastructure. The favor certain industries more than others and therefore shape
refrigeration facilities needed at the airport and the regular flights sector allocations in the economy. In all countries, some
to ship Ethiopia’s cut flowers to the auctions in Europe are industries, sectors, and even firms are favored within the legal
obviously quite different from the improvements required at the framework and often heavily subsidized, often in opaque
port facilities for textile exports in Mauritius. Similarly, the type ways. Bankruptcy laws that put derivatives first in line in the
of infrastructure for the garment industry in Lesotho is distinct event of bankruptcy effectively give preference to the financial
from the one for mango production and export in Mali or for sector. Most countries’ tax codes are riddled with tax
attracting gorilla tourism in Rwanda. Because fiscal resources expenditures that provide hidden subsidies to some
and implementation capacity are limited, the government in industries. But even in the absence of such “special” provi -
each of those countries had to prioritize and decide which sions, the design of depreciation allowances will affect
specific infrastructure they should improve or where to optimally industries with different capital lifespans differently. Budget
locate the public services to make those success stories policies also inevitably have impacts on industrial structure:
happen. where governments locate roads and ports affects different
industries and firms differently. In short, one cannot escape
thinking about the different impacts of different policies on
3| Enriching and Strengthening different sectors.
Development Thinking
True, the record of most activist governments is mixed. Critics
Where do we go from here? Well, back to the basics. If we of the industrial policies in many African countries just after
believe the long-run statistics put together by Angus independence argue that they introduced profound
Maddison, we must accept that for 1,400 years of economic distortions: they used limited public resources to pursue
history all countries in all regions of the world were low unsustainable import-substitution policies. To reduce the
income. Then the Industrial Revolution separated regions and burden of public subsidies, governments sometimes resorted
countries. The divergence did not happen by chance: clever to administrative measures—granting the nonviable enter-
ideas generated prosperity in some places while bad ideas prises in priority industries a market monopoly, suppressing
took hold in others. If we have learned anything since the interest rates, overvaluing domestic currency, and controlling
Industrial Revolution, it is the basic truth that modern prices for raw materials. Such interventions introduced further
economic growth is a process of industrial, technological, and distortions, sometimes even causing shortages in foreign
institutional upgrading that reflects the changing dynamics of exchange and raw materials. Preferential access to credit
comparative advantage and endowment structure. Ignoring it deprived others of resources. There was a high opportunity
leads to policy prescriptions that defy the laws of economics cost. While industrial policies were often blamed for these
and inevitably to disappointments, and to what Ernest disappointing outcomes, failures in macro-economic policies
Aryeetey has called “negative diversification” (moving labor and governance often played a role—and often were the real
from low-productivity, subsistence agriculture, to low- source of the problem.
productivity, informal services).
The standard argument was that markets were efficient, so
The challenge to development economists is to continue there was no need for government to intervene either in the
building richer and more credible economic models that also sector allocation of resources or in the choices of technique.
offer policymakers clearer road maps for implementing a key And even if markets were not efficient, governments were not
principle of the discipline: allocating scarce resources to likely to improve matters. But the 2008–2009 global crisis has
industries, sectors, and geographical areas with the highest shown that markets are not necessarily efficient. Indeed, there
possible payoffs. Inevitably, this would imply being more was a broad consensus that without strong government
rigorous in selecting where to put the money and other intervention—which included lifelines to certain firms and
resources, and being more thoughtful in targeting reform certain industries—the market economies of the United
efforts. As Ricardo Hausman, Dani Rodrik, and Andres States and Europe may have collapsed. It is a mistake to trust

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markets blindly. Some of the most important national and growth comes from sources other than factor accumulation.
global policy objectives (such as equality of opportunity for all In developing countries, a substantial part of growth arises
citizens, pollution control, and climate change) are simply not from closing the technology (or knowledge) gap with those at
reflected in market prices. the frontier. And within any country, there is enormous scope
for productivity improvement simply by closing the gap
Even economists who oppose sectoral industrial policy (the between best practices and average practices. If improve-
“vertical” policies to support specific industries) acknowledge ments in standards of living come mainly from diffusing
the need for broad, neutral, “horizontal” industrial policy (one knowledge, learning strategies must be at the heart of the
that does not target specific industries). Yet the lines between development strategies.
the two can be blurry. Everything governments do or choose
not to do benefits or can be captured by vested interests. An
exchange rate policy could be presented as “neutral” and 4| Concluding Thoughts: Promised
“broad-based.” Yet, we know that some sectors, industries, Lands Ahead
social groups, and even regions are always favored or
penalized by any stance on the exchange rate. Even when Surveys of students in economics departments around the
there is no change, some benefit while others lose. world still indicate that the subdiscipline of development is not
a preferred field for young researchers. No one can blame them:
Likewise, infrastructure development is often presented as a the quest for prosperity has so far been a difficult and frustrating
suitable tool of economic policy because of its perceived academic endeavor. Yet, it is in my view the most exciting area
“neutrality.” Yet there is nothing neutral about the choice of of research—as noted by Robert Lucas in his famous 1988
infrastructure that a country needs at any given time, or where paper on the mechanics of economic development.
and when it should be built. These decisions always involve
some political judgment about priorities, and therefore Development economics is also a high-risk, high-reward
represent industrial policies. The same is true for education, domain. Joseph Stiglitz said in his Nobel Prize lecture that his
which often is mistakenly presented as “neutral.” Therefore, thinking about the economics of information started when he
the question is not whether any government should engage was working in the 1960s in Nairobi, Kenya. Several other future
in industrial policy—it is how to do it right. Nobel Prize laureates were there at the same time: James Tobin
and Peter Diamond. Many other very successful and influential
All governments in the world, regardless of their politics, economists—such as Gary Fields and John Harris—also
engage in industrial policies every single day. In fact, the entire started their careers in Nairobi. Africa has attracted in recent
budget exercise—which consists of submitting to parliament years many of the best minds in the business—from Roger
a law that grants different tax rates and different programs, Myerson (another Nobel laureate) to Timothy Besley, Paul Collier,
projects, and expenditure levels to different industries, Lord Nicholas Stern, Dani Rodrik, Kaushik Basu, Justin Yifu Lin,
sectors, and regions—is itself industrial policy. and many others.

In sum, the intellectual challenge for development economists Perhaps Robert Solow was too pessimistic: there is a promised
is not to engage in semantic debates about what industrial land for economists working on Africa and other developing
policy is. It is to come up with better guiding principles on how areas. I can even foresee a few Nobel Prize winners in this field
“best” any society should move its human, capital, and in the next decade. We have recently completed the two-
financial resources out of subsistence sectors. For the volume, 90-chapter Oxford Handbook of Africa and Economics,
process to be efficient, coordination issues and externality which features their work and highlights some the insights that
issues must be addressed. Markets typically do not manage the study of Africa brings to economic science. The World
such structural transformations on their own well. And Bank’s research department has released a World Development
governments must play no more but no less of their facilitating Report on “Minds and Culture,” which takes behavioral
role in the process. economics to new heights and shows how some of the findings
in the African context can enlighten our understanding of
A general rule may be to encourage only industries in which economic development. My exhortation to all economists
the economy has a clear comparative advantage—and the interested in development is never to abandon the arduous
private sector usually identifies these industries and sector work it entails. In fact, for all economists in the world, Africa is
easily. When that is done, the government can come in and the intellectual deal of the century (to paraphrase a recent
help foster learning among firms, within firms, and with the statement by African Development Bank President Akinwumi
economy. Solow’s work helped us understand how most Adesina). There are many jackpots to be won there if one
increases in standard of living are related to the acquisition of remembers the words of civil rights leader John Lewis: “Don’t
knowledge, to “learning.” Most increases in per capita income give up, don’t give in, don’t give out!” Yes, there is a promised
arise from advances in technology—about 70 percent of land ahead.

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Selected References

Lin, J.Y. 2012a. New Structural Economics: A Framework for Rethinking Development and Policy. Washington DC: World Bank.

Lin, J.Y. 2012b. The Quest for Prosperity: How Developing Economies Can Take Off. Princeton, NJ: Princeton University Press.

Lin, J.Y. 2012c. “From Flying Geese to Leading Dragons: New Opportunities and Strategies for Structural Transformation in
Developing Countries.” Global Policy 3(4): 397–409.

Lin, J. Y., 2009. Economic Development and Transition: Thought, Strategy and Viability (Marshall Lectures). New York:
Cambridge University Press.

Lin, J. Y. and C. Monga, 2017. Beating the Odds: Jump-Starting Developing Countries, Princeton, N.J., Princeton University Press.

Lin, J.Y. and C. Monga. 2014. “The Evolving Paradigms of Structural Change.” In Bruce Currie-Adler, Ravi Kanbur, David
Malone, and Rohinton Medhora (eds.), International Development: Ideas, Experience, and Prospects. New York: Oxford
University Press, 277–294.

Lin, J.Y. and C. Monga. 2013. “Comparative Advantage: The Silver Bullet of Industrial Policy.” In Joseph E. Stiglitz and Justin Yifu
Lin (eds.), The Industrial Policy Revolution I: The Role of Government Beyond Ideology. New York: Palgrave MacMillan, 19–39.

Lin, J.Y. and C. Monga. 2012. “Solving the Mystery of African Governance.” New Political Economy 17(5): 659–666.

Lin, J. Y., and C. Monga. 2011. “Growth Identification and Facilitation: The Role of the State in the Dynamics of Structural
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