Just Get Out of the Way: How Government Can Help Business in Poor Countries.

• Author: Cole, Julio H.
• Position: Book Review

Just Get Out of the Way: how Government Can Help Business in Poor Countries

By Robert E. Anderson Washington, D.C.: Cato Institute, 2004. Pp. vii, 274. $24.95 paperback.

Just Get Out of the Way is a very good book, though I wish it had a better title. The danger is that it might be dismissed as just another ideologically driven "do away with the state" toolkit--convincing only to people already of like mind and rarely read by those who really need to hear its message. Such dismissal would be a shame because this book is not about ideology at all. Instead, it is about something that is all too often missing from discussions of development policy: sound economic and business principles, consistently applied, buttressed by simple common sense and a healthy dose of pragmatism. (Are all these expressions synonymous? If not, then they should be.)

Robert Anderson, a development consultant and former World Bank economist, is a convinced free-market advocate. He takes it for granted that the only way to promote long-term economic growth in poor countries is to transfer most economic activities from the public to the private sector. However, this transfer in itself is not enough because a good "business environment" is also needed in order to encourage the private sector to function efficiently. Indeed, if the market economy works better than any other alternative, it does so not because private businesspeople are somehow better people: "Private businesspeople are not inherently more honest or more capable than government officials and politicians" (p. 6). In fact, they are just as self-serving as the rest of us ordinary humans. What makes the market economy tick is competition; without this crucial element, there is no guarantee that the resources the private sector employs will in fact be used efficiently. Echoing an insight that dates at least from the time of Adam Smith, Anderson notes that businesspeople everywhere (and not just in the Third World) are quite creative in enlisting the government's help in order to stifle competition. The trick, therefore, is not to let them get away with it. And "there's the rub," because the low levels of competence in Third World officialdom, coupled with high levels of corruption, increase the likelihood that private special-interest groups will end up manipulating government power for their own purposes. This problem should be constantly borne in mind, says Anderson, especially when implementing policies...