About the book
‘There is no alternative’ – to neoliberal economics, the Americanisation of the world’s economies, and globalization. This remains the driving assumption within the international development policy establishment.
In this joint effort, two economists, Ha-Joon Chang and Ilene Grabel, cogently explain this dominant school’s main assertions about how economies develop and the policies that all countries ought to pursue. They then combine logic with an analysis of the historical experiences of leading Western and East Asian economies during their development, in order to question the validity of the neoliberal development model.
Turning to policy, the authors set out concrete, practical alternatives to neoliberalism across the key economic areas: trade and industrial policy: privatization; intellectual property rights; external borrowing, portfolio and foreign direct investment; domestic financial regulation; and management of exchange rates, central banking and monetary policy, and government revenue and expenditure. In doing so, they advocate the most useful proposals that have emerged around the world along with some innovative measures of their own.
About the authors
Dr Ha-Joon Chang is Assistant Director of Development Studies in the Faculty of Economics and Politics, University of Cambridge. Born in the Republic of Korea, and educated at the Seoul National University and subsequently at Cambridge, he is the author of The Political Economy of Industrial Policy (Macmillan, 1994), Kicking Away the Ladder: Development Strategy in Historical Perspective (Anthem, 2002); Globalization, Economic Development, and the Role of the state (Zed, 2003), and Restructuring Korea Inc. (RoutledgeCurzon, 2003; with Jang-Sup Shin); editor of seven other volumes, and has written numerous scholarly journal articles. Since 1992 he has also served on the editorial board of the Cambridge Journal of Economics. He was a member of the Advisory Panel for the Human Development Report 1999 and has acted as research project coordinator and consultant to numerous UN agencies and international agencies including the World Bank, the Asian Development Bank, the British Government’s DfID, the Canadian Government’s IDRC, and the South Centre in Geneva.
Dr Ilene Grabel is Associate Professor and Co-Director of the graduate programme in Global Finance, Trade and Economic Integration at the University of Denver’s Graduate School of International Studies. She also lectures at the Cambridge University Advanced Programme on Rethinking Development Economics. She has published widely in academic journals on financial policy and crises, international capital flows, and central banks and currency boards. She has been a consultant to the UN/UNCTAD Group of Twenty-Four and the UN University’s World Institute for Development Economics Research (WIDER) and works with the international NGO coalition New Rules for Global Finance.
List of Abbreviations
PART 1 Myths and Realities about Development
Myth 1 ‘Today’s wealthy countries achieved success through a steadfast commitment to the free market’
Myth 2 ‘Neoliberalism works’
Myth 3 ‘Neoliberal globalization cannot and should not be stopped’
Myth 4 ‘The neoliberal American model of capitalism represents the ideal that all developing countries should seek to replicate’
Myth 5 ‘The East Asian model is idiosyncratic; the Anglo-American model is universal’
Myth 6 ‘Developing countries need the discipline provided by international institutions and by politically independent domestic policymaking institutions’
PART II Economic Policy Alternatives
Policy Alternatives 1 Trade and Industry
Policy Alternatives 2 Privatization and Intellectual Property Rights
Policy Alternatives 3 International Private Capital Flows
Policy Alternatives 4 Domestic Financial Regulation
Policy Alternatives 5 Macroeconomic Policies and Institutions
Conclusion Obstacles and Opportunities for Reclaiming Development
Recommended Further Reading