Globalization and Competition: Why Some Emergent Countries Succeed while Others Fall Behind »

Globalization and Competition explains why some middle-income countries, principally those in Asia, grow fast while others are not successful. The author criticizes both old-style developmentalism and the economics of the Washington Consensus. He argues instead for a "new developmentalism" or third approach that builds on a national development strategy. This approach differs from the neoliberal strategy that rich nations propose to emerging economies principally on macroeconomic grounds. Developing countries face a key obstacle to growth, namely, the tendency to overvaluate foreign exchange. Instead of neutralizing it, the policy that rich countries promote mistakenly seeks growth through foreign savings, which causes additional appreciation of the national currency and often results in financial crises rather than genuine investment.

Introduction 1

Pt. I Political Economy

1 Globalization and Catching Up 19

2 The Key Institution 54

3 New Developmentalism 78

Pt. II Development Macroeconomics

4 The Tendency of the Exchange Rate toward Overvaluation 125

5 The Dutch Disease 148

6 Foreign Savings and Slow Growth 182

7 Foreign Savings and Financial Crises 204

Conclusion 220

References 233

Index 245