Tuesday, March 27, 2012

Dying for Growth

Jim Yong Kim edited a book called "Dying for Growth" that has some people worried about what he would do if given the helm at the World Bank.   The FT quotes William Easterly as a worrier, and Tim Geithner as a soother.  Easterly:
"Dr Kim would be the first World Bank president ever who seems to be anti-growth," said William Easterly, professor of economics at New York University. "Even the severest of World Bank critics like me think that economic growth is what we want."
"[Dr. Kim] has an incredible feel for what matters most in development and recognizes that for economies to grow they have to invest in expanding opportunities for their people, in healthcare and in education. Those are lessons that the most successful emerging and developing countries have learned and been forced to learn, and in that sense he has the ideal feel. His experience comes from what he has done in the field, not just from his academic research."
Yves Smith is scathing:
"It isn't hard to see how self serving these attacks are. Notice who is making them: economists! When I was at the Atlantic Summit the week before last, Larry Summers made a remarkably transparent "why you need economists" pitch: all the problems the US was facing (big military commitments, need for more healthcare spending, perceived need to reduce the deficit as a percent of GDP) could all be solved with one magic bullet: growth!" 

 Yves mentions that Joe Stiglitz, Amartya Sen, and Jean-Paul Fitoussi are working on a "better measure of economic performance than GDP," with sponsorship from France.  Is that the Commission on the Measurement of Economic Performance and Social Progress?    Then there's the gross national happiness project (which tries to measure "psychological wellbeing, health, time use, education, culture, good governance, ecology, community vitality and living standards").  It's a tough sell because GDP is so nice and numerical and gives us confidence that we know what we're supposed to be trying to achieve.

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