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Saturday, 10 May 2008

Dani Rodrik on the "Great Question"....

2 comments:

  1. It is interesting to consider that China has very strong central planning and that all it's (physical and social) infrastructure has been built under communism.

    People often say that communism as an economic system has failed, but once it switches to a freer economy, progress is made extremely quickly.

    Which tells me that government input in building infrastructure and wealth distribution is extremely important, before liberalizing the economy.

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  2. It is interesting to consider that China has very strong central planning and that all it's (physical and social) infrastructure has been built under communism.

    That's an exageration. Most of the relevant physical infrastructure (the roads, the ports) has been built quite recently. And the strong Chinese planning is not as strong as one may think. Otherwise, the central government wouldn't be so concerned about not being able to prevent overheating.
    As far as the social infrastructure, the Communist Party deserves full credit for the increased human capital (through education and gender-equality), but I wouldn't say communism as an economic system deserves the credit. Communist and Socialist governments everywhere were succesful in those domains, irrelevant of the type of economic system they worked under (think Kerala for instance). It's more an issue of will and dedication.

    That said, you're right on how fast post-communist societies grew and how much the egalitarian heritage helped. However, it still happened after the restrictions were removed. And as Rodrik would argue because the right restrictions were removed.

    So failed system ? yeah definetly.

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