Globalization and Economic Growth
Let me begin with the question of globalization and economic growth and tell you why I am basically optimistic about the implications of globalization for world economic growth and, even more importantly, for growth in developing countries, where I feel it will be of positive significance for the development prospects of the vast majority of the world's population that still lives at very low-income standards.
To do so let me first ask why we are experiencing this massive globalization. Why do so many countries proclaim policies of radical economic liberalization and international integration and enter the world market through policy change thereby affecting the lives of perhaps as many as 3.5 billion people all over the world? While technology certainly plays a role in this process and while the information superhighway, and improvements in communications and transport are undoubtedly important, the most fundamental factor underpinning globalization is policy change rather than technological change.
What we are observing is a deliberate policy change reversing decades of fundamental policy error in much of the developing world. Developing countries are integrating into world markets which they had largely cut themselves out of for three decades, with dire consequences. It is a policy reversal which ends decisions taken in the immediate post-colonial era, at the end of the Second World War, or at the beginning of the period of independence; choices that led countries to the infamous import-substitution strategies, or autarkic development strategies, or, in extreme cases, to socialist strategies, all of which failed to produce sustained increases in living standards.
With this perspective as my point of departure, I believe that, for the first time in decades, 60 or 70 countries are availing themselves of sensible economic policies. By sensible I mean policies that are oriented towards the integration...