What do you think?
Rate this book
New Structural Economics. A Framework for Rethinking Development and Policy
Economic development is a process of continuous technological innovation and structural transformation. Development thinking is inherently tied to the quest for sustainable growth strategies. This book provides a neoclassical approach for studying the determinants of economic structure and its transformation and draws new insights for development policy. The market is the basic mechanism for effective resource allocation at each level of development. However, economic development as a dynamic process entails structural changes, including industrial upgrading and diversification and corresponding improvements in hard and soft infrastructure. Such upgrading and improvements require coordination and go hand in hand with large externalities to firms' transaction costs and returns to capital investment. Thus, in addition to an effective market mechanism, the government should play an active role in facilitating structural changes. The book provides empirical evidence in support of this framework as well as concrete advice to development practitioners.
'This splendid collection of essays, by one of the world's outstanding experts on economic development, puts to work a newly emerging view, which he has helped to shape, of why in recent decades some countries have prospered while others have languished. Lin's focus is on countries that were all economically underdeveloped six decades ago, but his analysis offers strong hints about future prospects of the rich world as well. His style is dispassionate and unadorned by drama, which makes the essays all the more moving and illuminating.'
— Sir Partha Dasgupta, Frank Ramsey Professor Emeritus of Economics, University of Cambridge
'New Structural Economics is a truly important and ambitious book. Justin Lin, with some help from other distinguished scholars, has succeeded in laying out the complex structural microeconomic dynamics of economic growth, diversification and development, and in capturing the crucial complementary roles of government as investor, regulator, coordinator of activity and expectations, and guide. All of this is set in a global economy that is itself in the midst of massive structural change. This book will become an essential reference for scholars and for policy makers not only in developing countries, but also, increasingly, in developed countries.'
— Michael Spence, William R. Berkley Professor in Economics and Business,
New York University Leonard N. Stern School of Business; 2001 Nobel Prize in Economics
'The World Bank has long been committed to the goal of achieving a world without poverty. In this brilliant volume, its Chief Economist, Justin Yifu Lin, lays out an economic agenda for how to make this dream a reality. He argues that the successes of China can be achieved elsewhere around the world, and explains clearly and forcefully the structural transformations that will be required and the role that government can and must play in that transformation. The book will be a landmark in rethinking development. It provides an alternative to the now discredited Washington Consensus policies that guided the Bretton Woods Institutions for years. Justin Lin's ideas have already stirred discussion and debate. This book will ensure that they will continue to be central in the reexamination of developmental policy.'
— Joseph Stiglitz, 2001 Nobel Prize in Economics; University Professor, Columbia University
'This splendid collection of essays, by one of the world's outstanding experts on economic development, puts to work a newly emerging view, which he has helped to shape, of why in recent decades some countries have prospered while others have languished. Lin's focus is on countries that were all economically underdeveloped six decades ago, but his analysis offers strong hints about future prospects of the rich world as well. His style is dispassionate and unadorned by drama, which makes the essays all the more moving and illuminating.'
— Sir Partha Dasgupta, Frank Ramsey Professor Emeritus of Economics, University of Cambridge
'New Structural Economics is a truly important and ambitious book. Justin Lin, with some help from other distinguished scholars, has succeeded in laying out the complex structural microeconomic dynamics of economic growth, diversification and development, and in capturing the crucial complementary roles of government as investor, regulator, coordinator of activity and expectations, and guide. All of this is set in a global economy that is itself in the midst of massive structural change. This book will become an essential reference for scholars and for policy makers not only in developing countries, but also, increasingly, in developed countries.'
— Michael Spence, William R. Berkley Professor in Economics and Business,
New York University Leonard N. Stern School of Business; 2001 Nobel Prize in Economics
'The World Bank has long been committed to the goal of achieving a world without poverty. In this brilliant volume, its Chief Economist, Justin Yifu Lin, lays out an economic agenda for how to make this dream a reality. He argues that the successes of China can be achieved elsewhere around the world, and explains clearly and forcefully the structural transformations that will be required and the role that government can and must play in that transformation. The book will be a landmark in rethinking development. It provides an alternative to the now discredited Washington Consensus policies that guided the Bretton Woods Institutions for years. Justin Lin's ideas have already stirred discussion and debate. This book will ensure that they will continue to be central in the reexamination of developmental policy.'
— Joseph Stiglitz, 2001 Nobel Prize in Economics; University Professor, Columbia University
384 pages, ebook
First published January 6, 2012
3 people are currently reading
89 people want to read
About the author
Justin Yifu Lin
52 books34 followersJustin Yifu Lin is a Chinese economist and former Chief Economist and Senior Vice President of the World Bank.
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 of 1 review
November 10, 2012
A new generation of development economics! Lin's theory is based on neoclassical economics and the experience of successful developing countries such as China. The theory is simple yet versatile. Comments and debates with other leading scholar of development economics provide some context and feedback and largely confirm the value of this theory. It is interesting that there is a lot of focus on industrialization, which some do not agree with. But how can a country develop without industrializing?
Lin's theory is about the process of development. My attempt to summarize it in two sentences: Based on current factor endowments, a country should focus on an industry that it's competitive in, which will result in the highest possible profits (compared to industries that are too capital or technology intensive, which will result in lower capital returns and suboptimal employment of non-capital factors). These profits will allow the country to improve its factor endowments (capital, technology, or roads, education infrastructure etc.), which will shift the competitive advantage and allow the country to develop higher-level industries.
I never really understood why the Washington Consensus has been taken seriously by so many people, or why Todaro's textbook became so widely adopted (which is basically about misery and poverty, not about development, and completely ignores the role of industry). I hope that this book will transform the way development is imagined, debated, and taught.
Lin's theory is about the process of development. My attempt to summarize it in two sentences: Based on current factor endowments, a country should focus on an industry that it's competitive in, which will result in the highest possible profits (compared to industries that are too capital or technology intensive, which will result in lower capital returns and suboptimal employment of non-capital factors). These profits will allow the country to improve its factor endowments (capital, technology, or roads, education infrastructure etc.), which will shift the competitive advantage and allow the country to develop higher-level industries.
I never really understood why the Washington Consensus has been taken seriously by so many people, or why Todaro's textbook became so widely adopted (which is basically about misery and poverty, not about development, and completely ignores the role of industry). I hope that this book will transform the way development is imagined, debated, and taught.
Displaying 1 of 1 review