…some interesting things may happen.
On December 11, Brad DeLong wrote:
At the final review class, the most interesting question asked me was:
What is the difference between Joseph Stiglitz’s Dani Rodrik’s approaches to economic development policy and the proper structuring of economic institutions?
D—ed if I know the answer to that. Maybe one of them does.
The very next day, December 12, Dani Rodrik read Brad DeLong’s blog and actually answered the question:
Brad DeLong reports that a student of his wants to know the difference, if any, between Joe Stiglitz’s views on development and mine. Frankly, I had not thought about this quite in this way before, so the question set me thinking. I know that I have shaken my head many times at things that Joe has said or written, so I know there are differences. But what are they?
Leaving issues of rhetoric aside (which I am afraid are often important), here are a few points for future students who want to see the product differentiation a bit more clearly.
- Joe sees the world economic system as grossly unfair to poor nations, and this unfairness as a severe constraint on their development. This has never been a big part of my own thinking, partly because I don’t see things in quite the same black-and-white terms, and also more importantly because I do not believe the constraints lie in the external rules. I see the main constraints as being internal–domestic politics and policies. Consequently, our take on issues like Doha is quite different. Joe sees a one-sided set of commitments on the part of rich countries to open up their markets in agriculture and other goods as being very important. I see very little benefits from Doha for the poor countries under the best of scenarios.
- Joe sees international organizations (in particularly the IMF) as being the driver of policy in many developing countries, with uniformly negative consequences. I think that to the extent that this is true, it is more because poor-country leaders choose to rely on their advice excessively than it is because these institutions have the power and ability to impose their will on the world. Much of the bad economic policy in these countries has been self-imposed, and I don’t think the fault should be placed at the doorstep of multilateral institutions. The truth is that developing country leaders have too often abdicated their own responsibilities.
- On the substance of development policy, I think Joe’s approach is holistic and comprehensive, whereas mine is selective and sequential. As far as I am aware he has not articulated a vision of how developing nations should choose among competing priorities, whereas a lot of my recent work focuses on that specifically. He thinks of growth, development, and social policies as all one thing–whereas I think of them as distinct in terms of policy needs.
- On macroeconomic policy, Joe has an instinctively dove-ish position on inflation, believing that central banks can always loosen up at the margin with little cost to overall macro stability. I think many circumstances demand a more hawkish position on monetary policy and inflation-especially when fiscal policy is not cooperative.
There. That should be enough to fill up an essay question.
I wish Keynes had a blog… 🙂