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Beating the OddsJump-Starting Developing Countries$
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Justin Yifu Lin and Célestin Monga

Print publication date: 2019

Print ISBN-13: 9780691192338

Published to Princeton Scholarship Online: May 2020

DOI: 10.23943/princeton/9780691192338.001.0001

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The Mechanics of Failure and the Secrets of Success

The Mechanics of Failure and the Secrets of Success

(p.111) 4 The Mechanics of Failure and the Secrets of Success
Beating the Odds

Justin Yifu Lin

Célestin Monga

Princeton University Press

This chapter analyzes the mechanics of failure and the secrets of economic success. Cesar Luis Menotti's strategy's main ingredients could serve as a metaphor for the basic argument in the chapter: any low-income country can achieve sustained and inclusive growth if it properly identifies its endowment structure and uses its most competitive factors to exploit its comparative advantage. The chapter starts with a presentation of the standard model of stabilization and structural adjustment, which has come to dominate development thinking and policy across the world and has survived several decades of critical research. It then explores reasons why the model has endured despite criticism from across the ideological spectrum, especially in the 1980s and 1990s. It also offers an analysis of why traditional policy frameworks derived from the standard model often do not yield results, and it stresses the need to focus growth strategies on coordination and externalities. The chapter ends with a discussion of one of the main side effects of the standard model and its growth prescriptions: the extreme dependence on foreign aid by many low-income economies, especially those in Africa.

Keywords:   economic success, Cesar Luis Menotti, low-income countries, ideological spectrum, policy framework, Africa, comparative advantage, foreign aid dependence, low-income economies

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