A New Growth Strategy for Developing Nations

Not so long ago, the development community was brimming with optimism on the developing world’s economic prospects. Economic growth was up, extreme poverty sharply down, and there seemed to have emerged a clear consensus on the outlines of a growth strategy based on integration in the world economy. There were plenty of debates on the particulars of the strategy: the experience of China, which had engineered history’s most spectacular poverty reduction, gave ammunition to advocates of both market-oriented and more state-directed approaches to development alike. But both sides agreed that, however achieved, export-oriented industrialization was the way to go.

This consensus has been shattered by several developments. Some of these were long-time in the making.