- Historically, industrialization has driven rapid growth in developing countries who will need unorthodox policies to attain or accelerate it.
Source | www.fairobserver.com | Atul Singh | Founder, CEO and Editor-in-Chief of Fair Observer
On the seventh anniversary of the 9/11 attacks, Dani Rodrik posed a controversial question: “Is Export Led Growth Passé?” Writing on September 11, 2008, this famous Harvard professor argued that advanced economies were unlikely to run large current account deficits and import as they did in the past. Export markets would shrink and long-term success for developing countries would depend “on what happens at home rather than abroad.”
In 2016, Rodrik gave a key lecture at the University of Sussex in the UK developing this argument further. He argued that the “East Asia style growth miracles are less likely in the future.” Furthermore, if growth miracles happen, they would no longer be based on exports alone. Rodrik also made the case that growth in emerging markets has been unsustainably high in the last decade and will come down by a couple of percentage points.
In this day and age, it is common sense for most economists to hold a notion of convergence. As per this idea, Third World countries can grow fast and achieve standards of living similar to advanced economies in a matter of decades or less. As latecomers, these countries, also referred to as developing economies or emerging markets, have access to the latest thinking, new technologies, First World capital and global markets. This access should allow these poorer countries to converge with richer ones in a matter of decades or less.