Evan Lieberman, CIS director, provides commentary on a recent World Bank study that concludes that in a slow growth world more governments are considering a return to more deliberate policy to spur particular economic activities.
Over the summer, I’ve been researching industrial policy and its potential role in African development. A recent World Bank study highlights that in a slow growth world, more governments are considering a return to more deliberate policy to spur particular economic activities after a few decades during which the idea of a more interventionist state was very much out-of-vogue.
I’m not ready to say whether it is a good or bad idea to encourage such industrial policy, including my own focus – “green” industrial policy. But the work got me thinking: industrial policy towards what end? What would “successful development” look like?
A small cottage industry has generated various metrics as a way of answering this question, including the Human Development Index, the World Happiness Report, and the Flourishing Measure. Still, there’s no one perfect answer to what success should look like. The most widely used indicator remains GDP per capita: the size of the economic pie divided by all of the people who want a slice.
Outside of Africa, and based on such measures and conventional wisdom, a few models of successful development prevail: Sweden (maybe all of Scandinavia), China, Singapore, Costa Rica, and yes, the United States! All have enjoyed some notable prosperity, but they vary along several dimensions, including wealth and income distribution, how much freedom citizens enjoy, and the types of social safety nets available to those when the chips are down. Reasonable people might disagree about how to rank these, but they are all solid candidates.
For those of us who teach on African politics and development, we usually point to Botswana as a success story – or sometimes the success story – of the continent. Nobel Laureate James Robinson wrote several papers highlighting the country as a model. Robert Rotberg, a veteran Africanist, made Botswana a centerpiece of his recent book.
Many of the hallmark features of the country undergird the reputation: No ethnic strife on a continent with lots of it. Lots of economic growth where there’s been very little of it. A very successful diamond industry business on a continent where such natural resources are frequently a source of violent conflict. And a pretty competent and professional bureaucracy.
