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A Paradigm Shift that Never Will Be?: Justin Lin’s New Structural Economics

Author

Listed:
  • Ben Fine

    (Department of Economics, SOAS University of London, UK)

  • Elisa Van Waeyenberge

    (Department of Economics, SOAS University of London, UK)

Abstract

This paper assesses the attempt by Justin Lin, former Chief Economist of the World Bank, to posit a new development paradigm through his New Structural Economics, NSE. Lin’s attempt to redefine development economics deserves scrutiny for at least two reasons. He launched his new framework from the platform that his position as Chief Economist at the Bank. Critical scrutiny of his propositions then allows for continued insights into the complex relationship between scholarship and policy at the Bank and further illuminates, more broadly, the role of the Bank across the spectrum of development economics, development studies and development policy. Second, Lin’s framework claims a return to a “structural†understanding of development, with a strong industrial policy rhetoric emanating from it. This has been greeted with considerable enthusiasm by erstwhile critics of the Bank. Closer scrutiny of the NSE, however, both reveals the flawed nature of its core theoretical notion of comparative advantage and exposes its strong, if unfortunately conservative, commitment to a flawed and incoherently applied neoclassical economics. These issues are explored across Lin’s propositions regarding structural change, the role of the state and finance and are further examined in the context of specific policy interventions that Lin attaches to the NSE.

Suggested Citation

  • Ben Fine & Elisa Van Waeyenberge, 2013. "A Paradigm Shift that Never Will Be?: Justin Lin’s New Structural Economics," Working Papers 179, Department of Economics, SOAS University of London, UK.
    • Handle: RePEc:soa:wpaper:179
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    References listed on IDEAS

    as
    1. Lin, Justin Yifu, 2003. "Development Strategy, Viability, and Economic Convergence," Economic Development and Cultural Change, University of Chicago Press, vol. 51(2), pages 276-308, January.
    2. Jean Arcand & Enrico Berkes & Ugo Panizza, 2015. "Too much finance?," Journal of Economic Growth, Springer, vol. 20(2), pages 105-148, June.
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    4. Robert H. Wade, 2012. "Return of industrial policy?," International Review of Applied Economics, Taylor & Francis Journals, vol. 26(2), pages 223-239, November.
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    6. Hausmann, Ricardo & Rodrik, Dani, 2003. "Economic development as self-discovery," Journal of Development Economics, Elsevier, vol. 72(2), pages 603-633, December.
    7. Joseph E Stiglitz, 2009. "The Current Economic Crisis and Lessons for Economic Theory," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 35(3), pages 281-296.
    8. Lin, Justin Yifu, 2003. "Development Strategy, Viability, and Economic Convergence," Economic Development and Cultural Change, University of Chicago Press, vol. 51(2), pages 276-308, January.
    9. Justin Yifu Lin & David Rosenblatt, 2012. "Shifting patterns of economic growth and rethinking development," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 15(3), pages 171-194, September.
    10. Kate Bayliss, 2008. "Water and Electricity in Sub-Saharan Africa," Palgrave Macmillan Books, in: Kate Bayliss & Ben Fine (ed.), Privatization and Alternative Public Sector Reform in Sub-Saharan Africa, chapter 5, pages 88-122, Palgrave Macmillan.
    11. Lin,Justin Yifu, 2009. "Economic Development and Transition," Cambridge Books, Cambridge University Press, number 9780521735513.
    12. Stephen Cecchetti & Enisse Kharroubi, 2012. "Reassessing the impact of finance on growth," BIS Working Papers 381, Bank for International Settlements.
    13. Lin,Justin Yifu, 2009. "Economic Development and Transition," Cambridge Books, Cambridge University Press, number 9780521514521.
    14. Elisa Van Waeyenberge, 2009. "Selectivity at Work: Country Policy and Institutional Assessments at the World Bank," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 21(5), pages 792-810, December.
    15. Reinert, Erik S., 2012. "Neo-classical economics: A trail of economic destruction since the 1970s," MPRA Paper 47910, University Library of Munich, Germany.
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    Cited by:

    1. Lectard, Pauline & Rougier, Eric, 2018. "Can Developing Countries Gain from Defying Comparative Advantage? Distance to Comparative Advantage, Export Diversification and Sophistication, and the Dynamics of Specialization," World Development, Elsevier, vol. 102(C), pages 90-110.
    2. Pauline Lectard & Eric Rougier, 2018. "Can Developing Countries Gain from Defying Comparative Advantage? Distance to Comparative Advantage, Export Diversification and Sophistication, and the Dynamics of Specialization [Les pays en dével," Post-Print hal-04587399, HAL.
    3. Varga, Mihai, 2022. "Getting the “basics”? The World Bank’s narrative construction of poverty reduction in China," Land Use Policy, Elsevier, vol. 120(C).
    4. Anton Malkin & Bessma Momani, 2016. "An Effective Asian Infrastructure Investment Bank: A Bottom Up Approach," Global Policy, London School of Economics and Political Science, vol. 7(4), pages 521-530, November.
    5. Ben Fine & Seeraj Mohamed, 2022. "Locating Industrial Policy in Developmental Transformation: Lessons from the Past, Prospects for the Future," Working Papers 247, Department of Economics, SOAS University of London, UK.
    6. Veerayooth Kanchoochat & Patarapong Intarakumnerd, 2014. "Tigers Trapped: Tracing the Middle-income Trap through the East and Southeast Asian Experience," Competence Centre on Money, Trade, Finance and Development 1404, Hochschule fuer Technik und Wirtschaft, Berlin.
    7. Gnangnon, Sèna Kimm & Priyadarshi, Shishir, 2016. "Has the multilateral Hong Kong Ministerial decision on duty free quota free market access provided a breakthrough in the Least developed countries' export performance?," WTO Staff Working Papers ERSD-2016-06, World Trade Organization (WTO), Economic Research and Statistics Division.
    8. Amanor, Kojo S. & Chichava, Sérgio, 2016. "South–South Cooperation, Agribusiness, and African Agricultural Development: Brazil and China in Ghana and Mozambique," World Development, Elsevier, vol. 81(C), pages 13-23.
    9. Richard E. Itaman, 2022. "The finance‐growth nexus enigma: Bringing in institutional context and the productiveness debate," Journal of Economic Surveys, Wiley Blackwell, vol. 36(2), pages 504-527, April.

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    More about this item

    Keywords

    A14; O10; O19; O25;
    All these keywords.

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

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