Openness and the market friendly approach to development: Learning the right lessons from development experience

Abstract

Two central policy issues in economic development today are: how open should a developing country be to the world economy, and what should the government do, or not do, to promote rapid growth. This paper examines these questions in relation to the highly successful East Asian countries, and contributes to the debate between World Bank and heterodox economists. The paper suggests that there has been significant convergence between the two schools on analytical and empirical issues, but not on policy. It takes this debate further by analyzing the principal issues still in contention.