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Countries that ignite a process of rapid economic growth almost always do so while lacking what experts say are the essential preconditions for development, such as good infrastructure and institutions. This book uses this paradox to explain what is wrong with mainstream development thinking—and to offer a practical blueprint for moving poor countries out of the low-income trap regardless of their circumstances. The book begins with an observation of the increasingly globalized world economy in which technological development allows the use of factors of production in locations that maximize returns and utility, and countries gain mutually by trading with each other if their strategies focus on comparative advantage. The prospects for sustained and inclusive growth are even greater for low-income economies that enjoy the benefits of backwardness. The book advocates implementing viable strategies to capture new opportunities for industrialization, which can enable low-income economies to set forth on a dynamic path of structural change and lead to poverty reduction and prosperity. It concludes with an evaluation of lessons from development thinking and experience and identifies the main reasons why past intellectual and policy frameworks failed to yield the expected results. It then offers a pragmatic blueprint for allowing low-income countries to ignite and sustain economic growth without preconditions.

Throughout the twentieth century, the U.S. government willingly deployed power, hard and soft, to protect American investments all around the globe. Why did the United States get into the business of defending its citizens' property rights abroad? This book looks at how modern U.S. involvement in the empire business began, how American foreign policy became increasingly tied to the sway of private financial interests, and how postwar administrations finally extricated the United States from economic interventionism, even though the government had the will and power to continue. The book examines the ways that American investors initially influenced their government to intercede to protect investments in locations such as Central America and the Caribbean. Costs were small—at least at the outset—but with each incremental step, American policy became increasingly entangled with the goals of those they were backing, making disengagement more difficult. The book discusses how, all the way through the 1970s, the United States not only failed to resist pressure to defend American investments, but also remained unsuccessful at altering internal institutions of other countries in order to make property rights secure in the absence of active American involvement. Foreign nations expropriated American investments, but in almost every case the U.S. government's employment of economic sanctions or covert action obtained market value or more in compensation—despite the growing strategic risks. The advent of institutions focusing on international arbitration finally gave the executive branch a credible political excuse not to act. The book cautions that these institutions are now under strain and that a collapse might open the empire trap once more.

Free trade is always under attack, more than ever in recent years. The imposition of numerous U.S. tariffs in 2018, and the retaliation those tariffs have drawn, has thrust trade issues to the top of the policy agenda. Critics contend that free trade brings economic pain, including plant closings and worker layoffs, and that trade agreements serve corporate interests, undercut domestic environmental regulations, and erode national sovereignty. Why are global trade and agreements such as the Trans-Pacific Partnership so controversial? Does free trade deserve its bad reputation? This book aside the misconceptions that run rampant in the debate over trade and gives readers a clear understanding of the issues involved. In its fifth edition, the book has been updated to address the sweeping new policy developments under the Trump administration and the latest research on the impact of trade.

The worldwide rise of sovereign wealth funds is emblematic of the ongoing transformation of nation-state economic prospects. This book maps the global footprints of these financial institutions, examining their governance and investment management, and issues of domestic and international legitimacy. Through a variety of case studies—from the China Investment Corporation to the funds of several Gulf states—the book shows that the forces propelling the adoption and development of sovereign wealth funds vary by country. The book also shows that many of these investment institutions have identifiable commonalities of form and function that match the core institutions of Western financial markets. The book suggests that the international legitimacy of sovereign wealth funds is based on the degree to which their design and governance match Western expectations about investment management. Undercutting commonplace assumptions about the emerging world of the twenty-first century, the book demonstrates that even small countries with large and globally oriented sovereign wealth funds are likely to play a significant role in international relations. This book considers how such financial organizations have altered not only the face of finance, but also the international geopolitical landscape.