<i>Globalization, Development and Transition: Conversations with Eminent Economists</i> ‐ by Brian Snowdon

Globalization, Development and Transition: Conversations with Eminent Economists by Snowdon, Brian , Cheltenham and Northampton, Mass. , Edward Elgar Publishing , 2007 , xviii + 537 pp . This book aims to interpret a survey of several economic and political events that have had a lasting influence on the evolving international economic and political system of the twenty-first century. The book focuses on the many controversies relating to the causes and consequences of increasing international economic integration and globalization, long-run economic growth and development, the rise and fall of socialist economies, and the problem of the transition to capitalism. To shed light on these major issues, the volume contains interviews with 11 leading economists. Throughout the text, the author provides many references to enable interested readers to follow up various topics in greater depth. Undergraduate students of economics and the social sciences as well as graduate students, and anyone else seeking a broad introductory survey of the topics discussed in this book, will find much to interest them. Chapter 1 provides a historical survey of the fall and rise of globalization in the twentieth century. According to the author, a globalization backlash is possible, just like the one that occurred during the period between 1914 and 1950. This makes it all the more important that international political and economic disintegration, which occurred during the inter-war period and had such catastrophic consequences, is avoided in the process of globalization (p. 60). During the last quarter of the twentieth century, the process of global economic integration, or globalization as it is widely known, accelerated markedly (p. 1). According to the author, theoretical and empirical research by economists on economic growth indicates the existence of three important “pillars” that are widely accepted as key factors critical for sustainable economic growth in any country. These are macroeconomic environment, quality of public institutions, and technological progress (p. 47). The remaining sections of Chapter 1 explore how the basic ideas of economists regarding the fundamentals of economic growth are reflected in several composite measures of competitiveness and growth. In conclusion, the author argues that because the main driving forces behind increasing international integration are economic forces, economists must have a key role to play in the contemporary debate on globalization, not least to counter the many myths that are perpetuated in public discussion of the topic (p. 60). Chapter 2 reviews the main conclusions that have been reached in historical perspectives of economic development. The twentieth century was a century of unrivalled increases in prosperity, and life in the higher income countries has been substantially transformed. However, progress across the world has been uneven, and there are roughly one billion people in the developing countries who suffer from illness, hunger, or destitution. The author suggests that the key factors contributing to growth and development are the maintenance of macroeconomic stability, the existence of strong and focused government, global economic integration, high rates of productive investment in physical and human capital, and sound public institutions. However, the author also admits that economic development is largely a process of “self-discovery” and of the removal of economic and political barriers to growth (p. 140). In Chapter 3, the author reviews the legacy of Marx and examines some of the important events of the twentieth century, including those that led to the eventual collapse of the great socialist experiment and the subsequent trials of transition. This review provides a background to interviews with leading commentators such as Padma Desai, Stanley Fischer, János Kornai, and Jeffrey Sachs on issues relating to the political economy of the transition process. The author and the interviewees seem to think that there has never been a democracy in history whose economy has not been dominated by private ownership and market coordination, features that are taken to represent economic freedom (p. 181). Although economic freedom is a necessary condition for democracy rather than a sufficient condition in itself, and although grief and disappointment have been felt by many of the inhabitants of Central and Eastern Europe (CEE) over the changes that have occurred since the end of communism, the author and the interviewees seem to remain convinced that, on balance, the recent and ongoing developments that have taken place in the CEE and other regions amount to an unparalleled success story that has followed from the promotion of democracy and the achievement of economic efficiency (p. 184). The remaining part of the book contains interviews with eminent economists Daron Acemoglu, Ablerto Alesina, Padma Desai, William Easterly, Stanley Fischer, János Kornai, Michael Porter, Dani Rodrik, Jeffrey Sachs, Xavier Sala-i-Martin, and Jeffery Williamson. The topics include: the impact of globalization, ethnic diversity, the problems of transition from socialism to capitalism, the shock therapy versus gradualism debate, the political economy of reform, economic growth and international inequality, international competitiveness, the microeconomic foundations of productivity, the impact of institutions and geography on growth, the importance of macroeconomic stability for sustainable growth, the development tragedy of sub-Saharan Africa, economic integration, the size and break-up of nations, exchange rate regimes and currency unions, the role of foreign aid, international labor migration, political barriers to macroeconomic stability and economic development, the political economy of fiscal policy, the natural-resource curse, and democracy and development (Preface, p. xv). Students of development economics are invariably interested in topical issues, such as poverty and discrimination, conflicts, health, and human security. However, before they can properly grasp these issues, they first have to study economic theory and econometrics, often for several years, and in the process of doing so, some of them find it difficult to maintain the motivation needed to continue with their study and research. One way for students to understand the relevance of economic theory for devising practical solutions for current issues in developing countries is to read the biographies of eminent economists. By reading this book, students should be able to grasp the historical background of current theory in development economics. The book provides useful supplementary reading for courses on development economics. Moreover, the comprehensive bibliography at the end (pp. 455–521) is valuable not only for students, but also for researchers. The book's discussion of theories in development economics covers topics such as state intervention and economic growth (p. 8, fig. 1.1), regional convergence in a neoclassical model (p. 21, fig. 1.5), the economic impact of immigration (p. 38, fig. 1.9), foreign aid in the framework of the Harrod–Domar growth model (pp. 124–30), and the poverty traps within the framework of the standard Solow growth model (pp. 130–38). These topics are handled in rather simple terms, and readers will be well advised to refer throughout to the standard textbooks in development economics.11 For example, Malcolm Gills, Dwight H. Perkins, Michael Roemer, and Donald R. Snodgrass, Economics of Development, 3rd. ed. (New York: W. W. Norton, 1992); Gerald M. Meier, ed., Leading Issues in Economic Development, 5th ed. (New York: Oxford University Press, 1989); and Pranab Bardhan and Christopher Udry, Development Microeconomics (New York: Oxford University Press, 1999). In addition, the book's introduction of the Human Development Index (HDI) of the United Nations Development Programme (pp. 72–82) is also too simple insofar as the discussion does not include reference to debates on the concepts of development.22 See, for example, the Appendix, “Is Economic Growth Desirable?” in The Theory of Economic Growth by W. Arthur Lewis (London: George Allen and Unwin, 1955): 420–35. Without the benefit of adequate background reading, students will find it impossible to understand why the HDI is so important and original. Readers may also benefit from having the Human Development Report to hand while reading Snowdon's book. In the opinion of the present reviewer, several important issues have been omitted from Snowdon's survey. For example, the book gives insufficient attention to global environmental problems or to the possibility of pursuing environmentally sustainable development. Moreover, gender aspects are not covered, even though they are important in understanding current issues of poverty and inequality. The economists who feature in this book seem to belong to the mainstream of the discipline, and no room has been made for those who are critical of current mainstream economics. Researchers working in fields such as environmental and ecological economics, gender studies, and other institutional aspects of development may well be critical of the mainstream thinking reflected in this book. It is hoped that readers of the book under review will not overlook the importance of these and other approaches that lie outside the mainstream of economic thinking, for only with an understanding of these alternative perspectives will a fully informed appreciation of development economics become possible.

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