A manual for growth diagnostics

My colleague Ricardo Hausmann along with two co-authors (Bailey Klinger and Rodrigo Warner) have just put up an interesting essay on the practice of growth diagnostics (GD).  Ricardo calls this a "mindbook"--i.e. a manual on getting your mind around GD.  It is chock-full of illustrative examples, and also discusses some common misunderstandings.

Here is the kind of insight you will get from the piece:

Suppose you were asking: what is the binding constraint to animals thriving in the Sahara desert? This is not unlike the question of what limits economic growth in a country. However, in the Sahara, it is instructive to note that of those few animals that do thrive in that environment, a very large proportion are camels and a very small proportion are hippopotamus. The fact that the animals most intensive in the use of water, hippopotamus, are scarce while the animals least intensive in the use of water, camels, are thriving suggests that the supply of water may be a binding constraint to the spread of animals in the Sahara.

In general, the idea is that looking at the nature of the most successful parts of the economy can be informative of the constraints that affect others. We would expect to observe that those who are either structurally less intensive in the constrained factor, or at least more able to bypass it, will be doing comparatively well. Conversely, those sectors most intensive in the constraint will be doing relatively poorly.

A very simple principle, but it can be surprisingly powerful in practice.  For example, it suggests that asking successful firms what are the main problems they face--a very common strategy both in business consulting and in country analysis--is not only uninformative about the binding constraints of the economy, it may lead the analyst precisely in the wrong direction.  After all, successful firms are successful (relative to other firms) because they have been able to surmount the binding constraints.  So they are least likely to complain about the blockages that are holding the rest of the economy back.   

Comments

[Gaddy]

Welcome back!

The idea of growth diagnostics is very powerful. We are trying now to understand its application in Israel.

[Ryan]

I believe this is the correct link for Hausmann's essay/mindbook (which doesn't appear to be available online yet): http://www.cid.harvard.edu/cidwp/177.html

[Taylormade R7 3 Wood]

You actually have a very good point. The people who are successful don't complain about blocks, they just move around it and do what they need to do to gain that next sale or that next lead. The people who when they meet a roadblock and stop and whine about it are not going to get that next sale or lead because they are busy whining.

Great insight right here.

[rolex watches]

This is clearly replica watches the job for our legal fraternity to engage the establishment to necessary breitling watches steps by filing petitions in various courts. IF one fails another should be cartier watches filed taking every one to task. It is rolex watches useless to suggest ways and means to solve tag heuer watches the day to day problem to well paid employees tissot watches of government controlled establishments. Only active omega watches judiciary will resolve this problem.
http://www.watchvisa.com
http://www.watchvisa.com/breitling-watches.html
http://www.watchvisa.com/cartier-watches.html

[rado watches]

Why is everyone just montblanc watches willing to accept power cuts? Don't you think that patek philippe watches having continious power is your right? If people aren't going to demand rado watches 24X7 power, don't expect anything zenith watches to change. The government needs to look at other sources parmigiani watches of power generation. The only solution is more power panerai watches production. Nothing less.
http://www.watchvisa.com/montblanc-watches.html
http://www.watchvisa.com/patek_philippe-watches.html
http://www.watchvisa.com/rado-watches.html
http://www.watchvisa.com/tudor-watches.html

[bvlgari watches]

They should take up building BVLGARI Watches dams for power generation. We should FRANCK MULLER watches learn from china. They have the world's largest dam for power CHANEL Watches production, it alone produces 22,000 MW of LONGINES Watch power. So, unless the government opens up the economy more for iwc watches foreign investors, this power cut problem is a life long disease every hublot-watches india will need to face.
http://www.watchvisa.com/bvlgari-watches.html
http://www.watchvisa.com/chanel-watches.html
http://www.watchvisa.com/franck_muller-watches.html

[bvlgari watches]

They should take up building BVLGARI Watches dams for power generation. We should FRANCK MULLER watches learn from china. They have the world's largest dam for power CHANEL Watches production, it alone produces 22,000 MW of LONGINES Watch power. So, unless the government opens up the economy more for iwc watches foreign investors, this power cut problem is a life long disease every hublot-watches india will need to face.
http://www.watchvisa.com/bvlgari-watches.html
http://www.watchvisa.com/chanel-watches.html
http://www.watchvisa.com/franck_muller-watches.html

[kobe]

Thank you! This article gives me inspiration!

Hope in the study to you! Sorry, the

advertisement!
http://www.christian-louboutin-sandals.com
http://www.jp-brand-jp.com
http://www.showjordanshoes.com

[Generic Viagra]

September marks the beginning of the ecclesiastical year in the Eastern Orthodox Church.[citation needed] September begins on the same day of the week as December every year, because there are 91 days separating September and December,

[rolex watches]

People usually say :"Seeing is believing." http://www.tt88times.com
Each attempt has a corresponding gain, in part or obvious, or vague. At least we have the kind of satisfaction After I bought this watch ,in a sense,it means a great deal to me. http://www.fashionhairfu.com

[ghd straighteners]

GHD straighteners was kmown as ghd flat iron, which was authorized online seller provides all kinds of hair straighteners,pink ghd,purple ghd,babyliss. By visiting ghd australia , you will find what you want and made yourself more beautiful.If you miss it ,you miss beauty.Buy a piece of ghd for yourself.Come and join us http://www.ghdoutlet-au.com/ to win the ghd iv styler.

[Cheap Jordans]

Seeing the blog should leave some comments, I think that is a polite to blog host, and thank you for sharing!

[birkenstock]

Birkenstock was Made in Germany since 1774 . Check out our Birkenstock sandals and Birkenstock shoes including the Birkenstock gizeh,at the lowest regular outlet prices, free shipping and when you put on Birkenstocks. you will feel very comfortable.

[air jordan shoes]

Your article is very good, I am interested in, usually I like to browse sites about air Jordan shoes, because I really like air Jordan shoes, I saw a very nice air Jordan shoes web site, if you have friends also like it can take a look!
Like air Jordan shoes http://www.mydiscountjordanshoes.com/ air Jordan shoes! Support Jordan!

[Bell & Ross]

This is all very new to me and this article really opened my eyes.Thanks for sharing with us your wisdom.

[michael jordan shoes]

You actually have a very good point. The people who are successful don't complain about blocks, they just move around it and do what they http://www.mydiscountjordanshoes.com/ air jordan shoes need to do to gain that next sale or that next lead. The people who when they meet a roadblock and stop and whine about it are not going to get that next sale or lead because they are busy whininhttp://www.vibramfivefinger.us/ vibram five fingers

[bridesmaid dresses]

he people who are successful don't complain about blocks

[who called me]

Perhaps the problem is with the misnomer "developing country". Countries that don't have the basics of "peace, easy taxes, and a tolerable administration of justice" may well indeed be caught in a Malthusian trap where greater national income gets translated into high population but not per capita GDP.

[Dana]

Not a lot talk about growth diagnostics, nice to hear about it

[Acronym List]

I haven't really noticed much of this new intellectual climate here amongst development practitioners in Africa. But perhaps that is because there aren't many intellectuals here.

[air max]

Suppose you were asking: what is the binding constraint to animals thriving in the Sahara desert? This is not unlike the question of what limits economic growth in a country. However, in the Sahara, it is instructive to note that of those few animals that do thrive in that environment, a very large proportion are camels and a very small proportion are hippopotamus. The fact that the animals most intensive in the use of water, hippopotamus, are scarce while the animals least intensive in the use of water, camels, are thriving suggests that the supply of water may be a binding constraint to the spread of animals in the Sahara.

http://www.cheapshoeshop.com/Nike-Basketball-Shoes.html Nike Basketball Shoes
http://www.cheapshoeshop.com/Nike-Air-Force-Shoes.html Nike Air Force Shoes

[designer shoes]

Not a lot talk about growth diagnostics, nice to hear about it

[wholesale handbags]

don't complain about blocks.....

[clothing store]

Thanks for sharing with us your wisdom.

[Moncler]

Not a lot talk about growth diagnostics, nice to hear about it

[jordan 11 shoes]

as a big fan of NBA, i am well-informed of the updates and can see things in two aways. that is every word is just based on facts rather than rumors. I bet you will get some idear about my crazy about NBA from my complete collection of Shoes. I have made a very complete collection of Air Jordan Shoes. I boasts have one of all version ever released, regardless of replica and authentic

[watchstore]

3.?Very perfect and cool apperance?let's this Invicta Watch is popular around the world?Black?face?a. Now, the Watch has many series and its feature is nice?big?face?and?thick?band.?Wanted?to?keep?for?myslelf.

[Vibram Five Fingers]

i am well-informed of the updates and can see things in two aways. that is every word is just based on facts rather than rumors. I bet you will get some idear about my crazy about NBA from my complete collection of Shoes. I have made a very complete collection of Air Jordan Shoes. I boasts have one of all version ever released, regardless of replica and authentic

[coach hire]

Common sense should have dictated that, after the destruction of its infrastructure and the dismantling of its (brutal but stable) government, Iraq didn't need to become a laboratory for neoliberal economics. It needed jobs and basics like electricity, water and sewage systems, and it needed them quickly.

[costa rica medical services]

Animals are a major group of mostly multicellular, eukaryotic organisms of the kingdom Animalia or Metazoa. Their body plan eventually becomes fixed as they develop, although some undergo a process of metamorphosis later on in their life. Most animals are motile, meaning they can move spontaneously and independently. All animals are also heterotrophs, meaning they must ingest other organisms for sustenance

[lachou]

I like these articles , democratic countries formulate policies are both team and the interests of the people of power, but the undemocratic countries rarely for the interests of the people, http://www.jerseysky.com it is the sorrow of many democracy, I like the western and northern state policy.
http://www.cheapsaleing.com

[lachou]

I like these articles , democratic countries formulate policies are both team and the interests of the people of power, but the undemocratic countries rarely for the interests of the people, http://www.jerseysky.com it is the sorrow of many democracy, I like the western and northern state policy.
http://www.cheapsaleing.com
http://www.nikeairmaxshoe.ocm

[lv store]

was kmown as ghd flat iron, which was authorized online seller provides all kinds of hair straighteners,pink ghd,purple ghd,babyliss. By visiting ghd australia , you will find what you want and made yourself more beautiful.If you

[Moncler]

This article is to my feelings, thanks for your sharing, hoping to see more useful content, refueling

[jordan shoes]

I am happy to find this post very useful for me, as it contains lot of information. I always prefer to read the quality content and this thing I found in you post. Thanks for sharing.

[jordan shoes]

I am happy to find this post very useful for me, as it contains lot of information. I always prefer to read the quality content and this thing I found in you post. Thanks for sharing.

[cheap jordans]

Thanks a lot for sharing. You have done a brilliant job. Your article is truly relevant to my study at this moment, and I am really happy I discovered your website. However, I would like to see more details about this topic. I'm going to keep coming back here.

[jordan shoes]

I’ve seen progression in every post. Your newer posts are simply wonderful compared to your posts in the past. Keep up the good work!

[Moncler]

This article is to my feelings, thanks for your sharing, hoping to see more useful content, refueling

[Hugmeez]

Very interesting, everyone should be aware of growth diagnostics.

[viagra online]

Oh you are an enabler. I pointed these out to DH and he said that Hanukkah isn't that far, Maybe if I waited they might show up. I can wait. Maybe.
Ooooo! Thanks! I have been looking for just this thing!! I am going to order right now!!! Bye!

[viagra online]

Our brains function as sorters, organizers, catagorizers, a file cabinet if you wish. When trauma occurs and drugs are introduced the assorted thoughts, images, wishes, memories etc. meld to produce the fantastical. Your dream is a lovely perfect example of that phenomenon.

[earth4energy]

It is rolex watches useless to suggest ways and means to solve tag heuer watches the day to day problem to well paid employees tissot watches of government controlled establishments. Only active omega watches judiciary will resolve this problem.

[ugg outlet]

a story

[weddingdresses]

The first stage Wedding Dresses of spring wedding will give you so many things to plan and organize. Taking some time first to think and jot down some initial wedding ideas or Evening Gowns themes is really important before referring to any wedding vendors or Evening Dresses
venues. In this way, you will be able to easily conceptualize the perfect touches Quinceanera Dresses for your spring wedding day.As we all know, spring is the mark of time of birth and renewal. Having your wedding in this beautiful season can bestow a marriage life full of excitement and adventure.

[Wholesale Jerseys]

Thanks for the nice blog. It was very useful for me. I'm happy I found this blog.(^_^)

[how to grow taller 4 idiots]

We are trying now to understand its application in Israel.

[Viagra Online]

The creativity of your blogs is best.This is something very best on your part.Providing information in the best possible manner is your best attribute.I love when you share your views through the best articles.Keep sharing and posting articles like these.This article has helped me a lot.Keep posting this stuff.

[jordan shoes]

Suppose you were asking: what is the binding constraint to animals thriving in the Sahara desert?

http://www.thumbbags.com

[Account Deleted]

We understand all too well that scholars convey extensively hefty learned burdens chasing a stage which pledges a brighter future career. Affordable Writing is joyous to offer expert term paper assist to those who seem bogged down with critical written check stress.

Essay Writing

[Account Deleted]

raf

Thanks.

[Account Deleted]

Thank for sharing. I want to add that action is always louder than words. So stop complaining and get things moving ahead.

Share a url
http://howcanigrowtaller.net

[oyunlar]

I seem to remember a little document called Constitution, it talks about pursuit of happiness and Human Rights for Americans and democracy in USA. orjin krem I don't remember it postulated pursuit of Globaloonie, Free Trade, Supernation Federation run by Jeffry Sachses of this world.

[Account Deleted]

http://www.ghdstyle-au.com/ghds.html
http://www.chihairflatirons.us
http://www.ghdsoutlet.com
http://www.googleghdhair.com

[Account Deleted]

Hi! Very nice up date about growth diagnostics. This is one of the greatest articles I am very glad to read your blog. Thanks a lot.

Forex brokers review

[Account Deleted]

Raf
raf

Thanks for news ...

[Account Deleted]

Many places and centers offer business and trade promotions to both buyers and supplier.What about the differences in skill intensities across industries? The job losses in the relatively unskilled-labor intensive battery industry should have little effect on the relatively skilled-labor intensive machinery
sexshop
sexyshop
sexshop online
alongador peniano

[Account Deleted]

You've done a lot of hard work in presenting the information with us. You give a warm material that would be useful. Nice to read your writing.
http://seotoolinfo.blogdetik.com/files/2012/07/77b70216697c5355b397b021087dfa47_bavetline-agen-judi-bola-terpercaya.jpg

[Account Deleted]

Whether you need any help in giving a finishing touch to your papers or writing the difficult chapters or need the analysis of those critical assignments, you can take help from us anywhere anytime. We are just a call away.

Essay Paper Writing

[Rastia Rigie]

Bank Mandiri Bank Terbaik di Indonesia
Bank Mandiri Bank Terbaik di Indonesia
Promo Bonus 100% Sbobet, Ibcbet dan Casino Online Dalam Rangka HUT BAVETLINE Yang Kedua
Masterbet88 Grand Opening Promo Bonus 50% Sportsbook dan Casino Online

[Kinsell Emma]

They are very convincing and will definitely work.
Ultrabook Parts|AU AC Adapters|Global AC Adapter|Ersatz Laptop Akkus

[AgenBolaKaki]

http://www.mahapoker.com/ Dewa Poker http://www.mahapoker.com/ Permainan Poker http://www.mahapoker.com/support/carabermain.html Cara Bermain Poker http://www.mahapoker.com/ Poker Online http://www.mahapoker.com/ Game Poker http://www.mahapoker.com/ Poker Online Indonesia http://www.mahapoker.com/ Agen Poker http://www.mahapoker.com/ Poker Uang Asli http://www.mahapoker.com/ Agen Poker Online http://ligabebek.com Agen Bola - http://ligabebek.com Agen Bola Terpercaya - http://ligabebek.com Agen Sbobet - http://ligabebek.com Casino sbobet - http://ligabebek.com Sbobet - http://ligabebek.com Bola Tangkas http://tangkaspro.com/ Bola Tangkas http://tangkaspro.com/ Bola Tangkas Terpercaya http://tangkaspro.com/ Bola Tangkas Online http://tangkaspro.com/ Agen Bola Tangkas http://tangkaspro.com/ Bola Tangkas Online Indonesia http://tangkaspro.com/ Tangkas Online http://the-infinitygroup.com/ Poker Dewa http://the-infinitygroup.com/ Texas Holdem Poker http://the-infinitygroup.com/ Games Poker http://the-infinitygroup.com/ Zinga Poker http://the-infinitygroup.com/ Poker Texas Boyaa http://the-infinitygroup.com/ Dewa Poker Online http://the-infinitygroup.com/ Zyngapoker http://the-infinitygroup.com/ Holdem Poker http://the-infinitygroup.com/ poker online terpercaya http://walibola.com Agen Bola Terpercaya http://walibola.com Agen Bola Online http://walibola.com Situs Agen Bola Terpercaya http://walibola.com Agen Bola Tangkas http://walibola.com Agen Bola Sbobet http://walibola.com Sbobet http://walibola.com Ibcbet