Arnold Kling

The Growth Crusade

Arnold Kling, Great Questions of Economics
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In August of last year, Brad DeLong wrote a review of William Easterly's The Elusive Quest for Growth. Easterly is a World Bank economist whose book received a boost when his bosses clumsily attacked him.

Easterly's book describes the failure of past efforts to promote development in the poorer nations. DeLong, who calls his review "The Last Crusade," agrees with the dismal assessment, and he remains pessimistic.

It is clear that the neoliberal policy prescriptions--try to make government honest and smaller (so it doesn't have its fingers in as many economic decisions), try to keep the macroeconomy stable, and boost world trade and thus cross-border economic links as much as possible--affect only a small proportion of these requirements for successful economic development. Neoliberal policy prescriptions have little ability to create governments that energetically invest in collective goods, a political system that enforces accountability, a national consensus for growth, and a commitment by donors to reward success only.

Two months later, in October, DeLong was nonetheless arguing for pressing the growth crusade forward, because he sees it as a way to thwart terrorism. In Dealing with the Islamic Reformation, he wrote

When governments cannot provide the very basics--law and order, education, hospitals, famine relief, the promise of a job, the promise of a standard of living better than ones parents saw--false prophets who promise a Puritan paradise and the imminent arrival of the reign of God have an easy time finding followers for their message. Nation-building cannot be something we "don't do." Nation-building and economy-building must be at the very heart of the long-run enterprise.

I am doubtful of the thesis that economic inequality breeds terrorism. I am more open to the idea that political backwardness is conduciveness to both terrorism and economic backwardness.

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