Thursday, December 10, 2009

Killers of growth

We can all agree that growth is necessary, but not sufficient, for a country to develop. How growth will happen, is a long studied subject by academia, donor agencies, think tanks, and multi-lateral institutions. All of these actors have failed miserably in the quest for growth. In fact, we may even argue that the more external interventions a country has had in the past, without a basic internalization of the deep structural changes needed, the more likely the country will fail in is quest for growth and development.

Lets first start with the easy part, a partial list of things that kill growth. These have been well documented in the literature. The hard part is taking these "killers of growth" and coming up with solutions that fit into a coherent and realizable plan and action. Let me post however, a sobering question, actually made by Easterly, "Are we planners or searchers (of solutions)." One has to decide which choice one adopts...

1) Corruption
2) (Bad) government and poor provision of basic services such as health, education, food, place to live, utilities, and communication services
3) Mismanagement and incompetence
4) Lack or mis-understanding of the importance of technology. We have significant "technological gaps" that desperately need closing.
5) Land tenure and private property ownership. One can convincingly argue that in Honduras we have a quasi-feudal land tenure system.
6) Imperfect markets. We have "privatized" public enterprises, converting them from a state monopoly to a private monopoly or duopoly. Not much change I might add...
7) Mis-understood and mis-guided politics and politicos
8) Mis-guided aid and investment. Is it benefiting Honduras the process where we spent significant resources to become a HIPC, gained conditioned debt-forgiveness and the approval of poverty reduction strategy funds? Has this process of debt forgiveness worked elsewhere? Under what conditions?
9) Unclear or lacking energy, food security, science and technology, economic, agricultural, environmental policies.
11) Mis-guided decentralization.
12) Having 24/7/365 political rent-seeking and thus a permanent stream of candidacies for president and for other positions of power

1 comment:

  1. Jose, I Amazoned (to invent a new verb) the book you suggested, (Reinterpreting the Banana Republic...) and my daugther's bringing it down from DC for xmas, so I'll read it over the holidays. Will get back to you with comments on this posting later (we're going through three hour power cuts every day here in Quito). saludos, Lars Klassen