The Assessment: The Twentieth Century--Achievements, Failures, Lessons

The past century saw unprecedented rises in life expectancy and living standards. It also witnessed major structural changes, the rise of "big government" and two globalizations. Yet, the century's economic history was marred by policy and market failures resulting in a massive world-wide depression, frequent financial crises (particularly in the developing world), and several inflation spurts. Central planning set back development for one-third of the world's population; transition to the market economy was at best slow, in some instances disastrous. Income distribution within countries changed little, while productivity convergence between rich and poor economies was virtually absent. Policy-making learnt some lessons from the 1930s experience, particularly in the areas of macroeconomic management, international cooperation, and free trade. Dogmatic recipes, however, were often resorted to at home, aided and abetted by the pretensions of the economics profession. Copyright 1999 by Oxford University Press.