Some trends and perspectives on globalization, economic growth, equality, and development

Abstract

The world economy is more complex than it has ever been. This paper looks at some frameworks used for description, analysis, and prediction in the three areas of economic growth, equality, and development, while also highlighting some important past and current trends. The selection of frameworks and trends represents clearly a necessarily brief and subjective choice of the author on the basis of his perception of their “usefulness” for purposes of public and private decision-making. The paper starts by discussing how economic growth is impacting the classification of the economies of the world. It then looks at how countries’ economies can be viewed in terms of ease of doing business, of adaptability to openness and change, and of types of capitalism adopted. In the second section, issues of economic inequality within and between the countries of the world and their citizens are examined. In the third section, the paper looks at development. It starts by briefly discussing the merits of going beyond GDP and of looking at the Human Development Index (HDI) in order to try to measure other forms of progress, such as in health and education. The paper then traces the evolution of development economics and the advice given to policy makers in developing countries, and also examines the role of institutions in development and the controversies surrounding foreign aid. It concludes by looking briefly at additional dimensions of human development such as empowerment and sustainability. The picture that emerges is one of a world in which decision-makers have to make use in a combined way of a plurality of disciplines to understand the realities confronting them and to design and implement good policies. In so doing, they have to confront the challenges of appropriate sequencing, must very often choose second-best options, and have to make clever use of the lessons learned from countries with very different geographical, political, economic, social, legal, technological, and cultural environments and constraints.