One Economics, Many Recipes: Globalization, Institutions and Economic Growth.

• Author: Johnsson, Amalia
• Position: Further Reading - Book review

ONE ECONOMICS, MANY RECIPES: GLOBALIZATION, INSTITUTIONS AND ECONOMIC GROWTH

Dani Rodrik

(Princeton, NJ: Princeton University Press, 2007), 278 pages.

There is an irony in reviewing a book that examines the role of institutions in developing economies at a time when the U.S. financial system is in upheaval. When the world's foremost proponent of open markets has been humbled by its own lack of oversight, revisiting the potential benefits of industrial policies seems somehow appropriate.

Rodrik's book is a great reminder of why allowing government to intervene in the economy can be beneficial. Using past examples such as agricultural policies in China, Rodrik illustrates how sustained economic growth has often been achieved by governments engaging in partial deregulation and active management. In the long term, Rodrik argues, maximizing economic integration should still be our aim, but in the near term some domestic autonomy can fortify institutions and facilitate sustainable growth.

Rodrik relies on growth diagnostics to determine the main barriers to growth in specific countries. Once the key issues have been identified, government policies can be more effectively designed to fit country-specific problems. It is an accessible, bottom-up...