Well, lets look at what Russia and Iran are getting up to. There is no doubt that the authoritarain regimes in these countries are trying to leverage the pressure on energy prices which is produced by rapid growth in the developing world to play their own ‘games’.

Now the big, big danger on my radar screen is that thinking in the OECD world moves rapidly geoplolitically in the direction of the idea that growth should go back to being more not less elusive.

I often see people from the US arguing these days that the global economy is growing too fast. Even Brad Setser’s argument about the US deficit issue can, I fear, be used in this way (although this I am sure isn’t Brad’s intent).

Yes Reuben, I’m afraid I have, and unfortunately I wasn’t very impressed.

I think this is now well behind the curve. Growth isn’t so elusive these days, except in the cases of what the UN HDI calls the demographic outliers. They aren’t growing, and are indeed going backwards.

But one big chunk of humanity just took off, and Easterly doesn’t seem to offer any coherent explanation of why this is happening. This would be the starting point, since if we can understand why some rockets are streaking ahead then there is more possibility of better targeting our proposals in the case of those countries whose rockets aren’t doing so.

Basically I am deeply dissatisfied with the two main approaches to this issue today. On the one hand Jeffrey Sachs (who IMHO has gone off the rails since he started this Millenium ) and

Basically, I do agree with this implicit critique of Sachs from Easterly:

“I find the audacious claim that policy reform can cut world poverty in half a little daunting”

http://www.nyu.edu/fas/institute/dri/Easterly/File/national%20politics%20and%20economic%20growth.pdf

And I do agree about proposals for reform needing to be more modest. But I don’t think Easterly really understands the heart of the problem better than Sachs does. I am still working on my own ideas, and haven’t got the story completely straight to my own satisfaction yet. Also I have been more focused on the growth issues of the developed economies, but I am aware that I need to better explicitly address the Sachs/Easterly debate, and I will get round to it (soon, I hope).

But yes, you’re right about the *optimum* role of government in the growth process. Unless we figure that out (and this involves questioning a lot of the generally held assumptions in the light of the Asian growth story), fiery debates without much evidence are what we have to resign ourselves to :) Jeff Sachs makes a good start with economic geography?

Well this is what we are about to find out. Maybe a bit longer than de Jonquières and those with a more pessimistic inclination imagine. One of the points I would highlight is that if the important point is ‘hands off’ government, then at least not doing anything isn’t doing nothing.

I still feel that conventional theorists are having a hard time coming to terms with the dynamism you can now see across developing economies from China to India to Turkey to Chile. I think maybe the first thing that need to do is to start believing their eyes, and then start digging a bit deeper.

“Education cries out for investment.”

Of course this is the 100% important point.