An Enquiry into the Asian Growth Model

Das, Dilip K.

doi:10.1057/9781137529275_1

Cited by 1 publication

(1 citation statement)

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“…In the new structuralist approach, an informed and competent state has a significant role to play as a leader of change and as a cushion to any market dysfunctionalities. Accordingly, the government has an active role as a facilitator in (i) guiding the economy by identifying the sectors of latent comparative advantages with low factor costs of production but too high transation costs to be competitive and in (ii) overcoming obstacles by means of providing information, coordinating infrastructure construction, offering incentives, attracting FDI and so on, to turn the latent comparative advantages to competitive advantages (Das 2015;Xiaoyang 2019). In Lin's view, an efficient market and a facilitating state are the two institutional preconditions for a country to develop according to its comparative advantages, as determined by its endowment structure (Lin 2021).…”

Section: New Structural Economicsmentioning

confidence: 99%

The failure of Algeria’s industrialization strategy, 1967–1989: a new structural economics perspective

Haouas¹,

Lin

2024

RHI-IHR

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Following the New Structural Economics theoretical framework, this article attempts to explain why Algeria’s industrialization strategy has failed over the period 1967-1989. Based on this approach, this paper has shown that the overdevelopment of a big push industrialization strategy in Algeria since independence, which prioritized capital –intensive heavy industry, violates the comparative advantage principle identified by its factor endowments and gives rise to domestic market distortions and the misallocation of scarce resources. Simultaneously, to scaffold such a development mode, the Algerian government put forth an organic system, yet deeply distorted. We conclude that the experience engendered serious weaknesses in Algeria’s industrial structure and planning, and it resulted in an unbalanced economic structure. Thus, Algeria’s industrialization strategy was disappointing in terms of economic outcomes and impact. This failure is often perceived as one of the main origins of the political, social and economic crisis faced by the country for more than a decade. Our findings suggest that the redesign of growth and industrialization strategies should better reflect Algeria’s endowments structure and level of development. Indeed, consistency of a broad–based and industry–based economy with its comparative advantage is one of the best ways to achieve high sustainable economic growth in Algeria.

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Section: New Structural Economicsmentioning

confidence: 99%