How can Middle-Income Countries Escape ‘Gravity’ and Catch up with High-Income Countries? The Case for Open Economy Industrial Policy
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Abstract
Washington Consensus or neoliberal policy prescriptions of a
rather simple free market kind continue to constitute ‘global policy’ – policy advocated by multilateral actors like the World Bank, the Asian Development Bank, and the IMF, and by large swathes of developing country elites. At the same time, the consensus is less strong than it used to be during the 1980s and 1990s. There is too much evidence that countries which have fully embraced the Washington Consensus have not seen substantial improvements in economic performance; and new developments in trade theory and growth theory question the theoretical foundation of the Washington Consensus.
rather simple free market kind continue to constitute ‘global policy’ – policy advocated by multilateral actors like the World Bank, the Asian Development Bank, and the IMF, and by large swathes of developing country elites. At the same time, the consensus is less strong than it used to be during the 1980s and 1990s. There is too much evidence that countries which have fully embraced the Washington Consensus have not seen substantial improvements in economic performance; and new developments in trade theory and growth theory question the theoretical foundation of the Washington Consensus.
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