How can developing countries grow their economies? Most answers to this question center on what the rich world should or shouldn't do for the poor world. In The Quest for Prosperity, Justin Yifu Lin--the first non-Westerner to be chief economist of the World Bank--focuses on what developing nations can do to help themselves. Lin examines how the countries that have succeeded in developing their own economies have actually done it. Interwoven with insights, observations, and stories from Lin's travels as chief economist of the World Bank and his reflections on China's rise, this book provides a road map and hope for those countries engaged in their own quest for prosperity.
Table of Contents: Preface to the Paperback Edition ix Prologue xix An Intriguing Offer xx Strange Childhood Memories from Africa xxi 1New Challenges and New Solutions 1 The Bane of Excess Capacity 3 The Apparent Mystery of Economic Success 5 Taking Einstein's Joke Seriously: A New Structural Economics 8 2A Battle of Narratives and Changing Paradigms 13 Giving Meaning to One's Life 14 The Evolution of Growth 17 Deciphering the Mystery of Poverty and Wealth 20 Robert Lucas and the Drycleaner's Daughter 26 Explaining Convergence and Divergence 29 Development Thinking: A Tale of Progress, Waves, Fads, and Fashion 33 The Frustrating Search for New Answers 42 The Need for New Strategic Thinking 45 3Economic Development: Lessons from Failures 49 Viability as the Hidden Ingredient to Economic Success 52 The Political Economy of Dreams and Ignorance 61 "Do Not Look Where You Fell but Where You Slipped" 67 Not Throwing the Baby Out with the Bathwater 71 4Lessons from Successful Catch-up Countries 76 Squaring the Circle: The Contribution of The Growth Report 78 Recognizing That Some Countries May Have Found the Holy Grail 85 Modern Economic Growth: The Secret of Advanced Countries 97 5A Framework for Rethinking Development: A New Structural Economics 102 Why Burundi Is Not Switzerland 104 Understanding Economic Development: A Conceptual Framework 108 The Optimal Speed and Sequencing of Prosperity 112 Putting New Wine in New Bottles 117 6What Would Be Done Differently under the New Structural Economics? 121 Fiscal Policy: Free Airplanes, Railroads, and Bridges? 123 Money to Impoverish--or Money to Enrich 127 Surviving Wealth: Public Revenue Management in Resource-Rich Countries 130 Financial Development: Those Bankers We Love to Hate 136 The Need for Poor Countries to Choose Their Type of Foreign Capital 139 Sorting Out the Paradoxes of Trade Policy 141 Deciphering the Mysteries of Human Development 143 7Putting the New Structural Economics into Practice: Two Tracks and Six Steps 147 To Identify or Not to Identify: That Is the Question 149 How to Identify Industries with Latent Comparative Advantages: A Few Principles 154 A Practical Guide for Sequencing Structural Transformation 158 8The Peculiar Identities and Trajectories of Transition Economies 179 Imaginary Confessions in Heaven: The Politics of Reforms 181 Back to Earth: The Economics of Multiple Distortions 190 Options for Economic Reform: Big Bang or Gradualism? 195 Thriving Transitions: Lessons from China, Slovenia, and a Few Other Countries 201 9Fostering Structural Change at Higher Levels of Development 209 Fighting Off the Middle-Income Curse 214 Keeping Pace with the Times 221 GIF Principles and Continued Structural Transformation 224 Understanding the Economics of Wealth and Greatness 229 10A Recipe for Economic Prosperity 234 Understanding the True Nature and Causes of Economic Development 237 Industrial Policy in Action 242 Being Too Cautious: The Greatest Risk of All 246 Glossary 251 Notes 259 References 287 Index 309