Shortcut or Piecemeal: Economic Development Strategies and Structural Change

Shortcut or Piecemeal: Economic Development Strategies and Structural Change

Shortcut or Piecemeal: Economic Development Strategies and Structural Change

Shortcut or Piecemeal: Economic Development Strategies and Structural Change

Synopsis

In Shortcut or Piecemeal, Jan Winiecki, one of the top liberal economists in Europe, presents a penetrating, empirically based analysis of the statist systems and strategies. He unmasks their theoretical and philosophical fallacies and explains why they have failed economically, while also describing the successes of free-market systems. The book is both very erudite and clearly written.

Excerpt

My prime interest is in economic change taking place in the process of development and, additionally, in its policy determinants—past, present, and future. Therefore, Part I of the book looks at the developmental strategies most often applied over the period of the last hundred years. More precisely, since 1917, when the first Marxian-based economic system and associated state strategy were briefly (but devastatingly!) applied. Next came the centrally planned and administered economy (command economy) that also turned out to be a failure, although it collapsed after more than six decades.

Altogether, Part I consists of three chapters. Chapters 1 and 2 look at two popular types of strategies, similar in their philosophy and intent, that is, a communist command economy and a highly interventionist strategy based on the economic thinking known as development economics (see Chapter 2 for details). Both were state-driven and undertaken in the hope for a “shortcut,” which would see industrialization accomplished over a much shorter time-span than it took the West.

The third and last chapter in Part I relates these two “shortcut” strategies to the ideas of classical economics. It looks at these ideas within the framework of departures from and returns to the classical ideas of economic development. By “classical” I mean the framework of a capitalist market internally and economic openness externally. The chapter follows twists and turns in the policies of poor countries of the South (Asia, Middle East, Africa, and Latin America) as they coped with distortions generated by “shortcut” strategies. Over time, as problems of economic growth were pushed aside by growth of economic problems, the search for other than “shortcut”-type solutions—however hesitant and halting— began. And, more often than not, the solutions found were precisely those which strengthened the role of markets domestically and opened them up to the stimuli of the world economy.

In contrast to the developments in the South, the shift toward the classical economic prescriptions in communist countries, considered in Chapter 1 . . .

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