Dani Rodrik's weblog

The Globalization Paradox in South Sudan

A student send me this picture, taken in South Sudan:

The view from the windshield nicely illustrates the subject matter of the book...

A couple of videos

The International Food Policy Research Institute has posted videos of the presentations from a conference in Ghana a few months back.  My presentation on the paper Globalization, Structural Change, and Productivity Growth is here.  My discussion of the policy implications in the second-best policy environments of the developing countries is here.

Unconditional convergence

I have a new paper out by this title, which you can download here. It shows that unconditional convergence is alive and well, but that we need to look for it within manufacturing industries rather than the economy as a whole. Industries that start at lower levels of labor productivity grow faster, regardless of the quality of policies or institutions in their home economies.

Here are four illustrative cases:

The initial level of labor productivity is on the horizontal axis, while subsequent growth rates (net of a constant term) are shown on the vertical axis.

Similar scatter plots never show convergence at the aggregate (country) level. Hence what seems to matter for growth is the ability to pull resources into the economies' "convergence industries," manufacturing in particular. What high-growth countries have in common is their ability to deploy policies that compensate for the market and government failures that block such structural transformation. Countries that manage to affect the requisite structural change grow rapidly while those that fail don't