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Growth strategies and dynamics : insights from country experiences (English)

The paper examines the challenges that developing countries face in accelerating and sustaining growth. The cases of China and India are examined to illustrate a more general phenomenon which might be called model uncertainty. As a developing economy grows, its market and regulatory institutions change and their capabilities increase. As a result, growth strategies and policies and the role of government shift. Further, as the models of economies in these transitional states are incomplete and because models used to predict policy impacts in advanced economies may not provided accurate predictions in the developing economy case, growth strategies and policies need to be responsive and to evolve as the economy matures. This has lead governments in countries that have sustained high growth to be somewhat pragmatic, to treat the policy directions that emerge from the advanced economy model with circumspection, to be somewhat experimental in seeking to accelerate export diversification, to be sensitive to risks, and as a result to proceed gradually in areas such as the timing and sequencing of opening up on the current and capital accounts. The last is an area in which existing theory provides relatively little specific guidance, but in which there are relatively high risks that decline over time as the market matures.

Details

  • Author

    El-Erian,Mohamed A., Spence,Andrew Michael

  • Document Date

    2008/01/01

  • Report Number

    57706

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    World,

  • Region

    The World Region,

  • Disclosure Date

    2010/11/26

  • Disclosure Status

    Disclosed

  • Doc Name

    Growth strategies and dynamics : insights from country experiences

  • Keywords

    global economy;marginal product of labor;township and village enterprise;Net private capital inflows;exchange rate management policy;short period of time;graduate school of business;early stage of development;growth and development;foreign direct investment;mature market economy;transfer of knowledge;Exchange Rates;advanced economy;dynamics of growth;centrally planned economy;share of trade;public sector investment;productive employment;Export Diversification;exchange rate mechanism;tariff on import;per capita income;accumulation of reserve;tariff import;impact of policy;state owned enterprise;state of knowledge;marginal social cost;evaluation of results;social marginal cost;import of goods;supply of labor;package of policy;rate of growth;world war ii;export of goods;private sector market;movement of people;control of inflation;process of discovery;design of policy;foreign currency deposit;human capital accumulation;country case study;foreign private sector;incentives for investment;lack of coherence;cost of capital;increase in income;ex ante risk;sound policy choices;modern market economy;greenhouse gas emission;global private sector;domestic banking system;asset price inflation;implications for policy;special economic zone;private capital flow;lack of knowledge;balance of payment;exchange rate policy;Exchange rate policies;direct investment incentive;process of reform;surplus labor;informational gap;Labor Market;traditional sector;advanced country;export sector;learning process;Industrial Policies;demonstration effect;market institution;social return;Industrial Policy;export zone;modern sector;capital account;higher growth;global demand;building consensus;regulatory institution;Global Warming;trade surplus;price signal;relative price;comparative advantage;opportunity cost;agricultural sector;thematic papers;financial market;macroeconomic model;reserve accumulation;capital control;import tariff;supply curve;inclusive growth;reaction function;potential output;macroeconomic environment;nontraded good;market system;food price;foreign investor;Political Economy;industrialized country;domestic investment;Industrialized countries;limited capacity;domestic economy;regulatory provision;coastal area;capitalist society;significant attention;state ownership;skill upgrading;labor-intensive export;market pressure;price change;social opportunities;Social Sciences;industrial country;permanent subsidy;take time;investment design;financial wealth;domestic inflation;external investor;tax provision;adaptive process;productive asset;international pressure;inflationary impact;safe asset;domestic consumption;employment opportunity;employment opportunities;important change;absolute poverty;subsidiary right;export competitiveness;policy process;support infrastructure;consumption increase;significant loss;outward flow;productivity differential;lending procedures;worst outcomes;institutional foundation;foreign reserve;nontradable goods;domestic price;conceptual framework;financial matter;multilateral institution;market mechanism;government regulatory;dramatic reduction;universal agreement;market price;learning curve;labor mobility;dynamic system;common feature;professor emeritus;price reform;consensus building;open market;economic stagnation;radical change;industrialization policy;dynamic process;property ownership;industrial base;support policy;effective governance;high inflation;external shock;import substitution;social infrastructure;financial intermediaries;fiscal policy;price liberalization;Fiscal policies;reform effort;external account;open economy;financial flow;growth policy;enabling conditions;sustainable policy;international influence;industrial enterprise;tangible asset;postwar period;International Trade;empirical knowledge;high probability;reform process;institution building;regulatory system;domestic demand;intangible asset;social contract;external environment;road transport;driving force;private return;external market;Public Spending

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Citation

El-Erian,Mohamed A. Spence,Andrew Michael

Growth strategies and dynamics : insights from country experiences (English). Commission on growth and development working paper ; no. 6 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/121881468161096755/Growth-strategies-and-dynamics-insights-from-country-experiences