The Ends and the Means of Development

The last year that China’s growth rate was below 7.5 percent was 1990. On a PPP-adjusted basis, Chinese GDP has already overtaken Japan and Germany, making China the world’s number two economy. This impressive growth performance has turned the Chinese economy into an important contributor to global growth, a major force in commodity markets, the most important destination for foreign direct investment and, hence, an emerging power in international trade. Chinese exports and imports in relation to GDP were less than 15 percent in the mid-1980s, but by 2008 had risen to 33 percent for exports and 26 percent for imports. Whereas Chinese exports were less than 1 percent of total world trade in 1984, this share 20 years later had risen above 5 percent. So, if the intent of the strengthened reform effort seen in China in the last 20 years was to contribute to its integration to the global economy, it has succeeded well beyond anyone’s expectations. The above trends have all contributed to in...

An impressive performance Sweden was the top-ranked country in the 2009—and now just recently in the 2010—edition of the Innovation Capacity Index , 1 because it does exceptionally well in all the areas captured by the Index. Sweden is an exceptionally good performer, very often placing in the top ranks in those areas identified as being particularly important to assessing innovation capacity. Indeed, Sweden has a rank of number one among 131 countries in transparency and judicial independence, corruption perceptions, gender equity, e-government readiness, personal computer penetration rates, receipts of royalties and license fees, as well as the “doing business” indicators for the time and number of procedures required to register property. It has a rank of 2 in scientific and technical journal articles per capita, environmental sustainability, and research and development expenditure in relation to GDP, where it is second only to Israel. There are 12 other indicators in which Sweden...

Russia is in many ways a unique case, with a relatively mediocre ranking of 56 on the Innovation Capacity Index (ICI), 1 well below the rank of countries such as Chile (31), Malaysia (39), and Poland (40), which share broadly similar levels of income per capita. Russia has a solid human capital endowment, reflecting decades of investment in education in science and technology. If Latin America has a grand total of three Nobel Laureates in science, there are at least ten Russian Nobel Laureates in physics alone. And had Alfred Nobel created a category for mathematics, there is little doubt that Russian mathematicians would have been awarded many prizes, perhaps more than any other nation. At the same time, however, it is a country where there is a huge gap between the stock of resources spent in past decades to foster contributions to knowledge, on the one hand, and, on the other, the kind of output that we would normally recognize today as reflecting achievements in scientific innovat...

Viewed in a long-term perspective, India’s recent economic performance has been quite impressive. According to the OECD, GDP per capita has accelerated from 1.2 percent in the 30-year period to 1980 to 7.5 percent currently, a growth rate, which, if sustained, would double income per capita in a decade. This is clearly an important achievement that has brought with it a substantial reduction in the incidence of poverty, from 36 percent in 1994 to some 27 percent by 2005. 1 Inevitably, the global financial crisis has contributed to a deceleration of India’s economic growth in 2008 and 2009, and the emergence of other problems, such as a substantial widening of the budget deficit. However, assuming this to be a temporary phenomenon, the key question for Indian economic policy for the foreseeable future will be what policies will allow it to sustain or, indeed, accelerate its growth performance over the next decade. Just as China has benefited from a massive process of urbanization in the...