Globalization and Competition

GlobalizationandCompetitionexplainswhysomemiddle-incomecountries,principallythoseinAsia,growfastwhileothersarenotsuccessful.Theauthorcriticizesbothold-styledevelopmentalismandtheeconomicsoftheWashingtonConsensus.Hearguesinsteadfora'newdevelopmentalism'orthirdapproachthatbuildsonanationaldevelopmentstrategy.Thisapproachdiffersfromtheneoliberalstrategythatrichnationsproposetoemergingeconomiesprincipallyonmacroeconomicgrounds.Developingcountriesfaceakeyobstacletogrowth,namely,thetendencytoovervaluateforeignexchange.Insteadofneutralizingit,thepolicythatrichcountriespromotemistakenlyseeksgrowththroughforeignsavings,whichcausesadditionalappreciationofthenationalcurrencyandoftenresultsinfinancialcrisesratherthangenuineinvestment.