Globalization and Competition: Why Some Emergent Countries Succeed while Others Fall Behind

by Luiz Carlos Bresser Pereira

• ISBN13: 9780521196352
• ISBN10: 0521196353
• Edition: 1st
• Format: Hardcover
• Copyright: 2009-12-28
• Publisher: Cambridge University Press

Summary

Globalization and Competition explains why some middle-income countries, principally those in Asia, grow fast while others are not successful. The author criticizes both old-style developmentalism and the economics of the Washington Consensus. He argues instead for a "new developmentalism" or third approach that builds on a national development strategy. This approach differs from the neoliberal strategy that rich nations propose to emerging economies principally on macroeconomic grounds. Developing countries face a key obstacle to growth, namely, the tendency to overvaluate foreign exchange. Instead of neutralizing it, the policy that rich countries promote mistakenly seeks growth through foreign savings, which causes additional appreciation of the national currency and often results in financial crises rather than genuine investment.

Table of Contents

Introduction

Political Economy

Globalization and catching up

The key institution

New developmentalism

Development Macroeconomics

The tendency of the exchange rate to overvaluation

The Dutch disease

Foreign savings and slow growth

Foreign savings and financial crises

Conclusion

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