Reclaiming Development

An Alternative Economic Policy Manual

Ha-Joon Chang and Ilene Grabel

There is no alternative - to neo-liberal economics, Americanisation and globalisation - remains the driving assumption within the international development policy establishment. Ha-Joon Chang and Ilene Grabel explain the main assertions of this dominant school. They combine data, a devastating economic logic, and an analysis of the historical experiences of leading Western and East Asian economies, to question the validity of the neo-liberal development model. They then set out practical alternatives in the key areas: trade and industrial policy; privatisation; intellectual property rights; external borrowing; investment; financial regulation; exchange rates, monetary policy, government revenue and expenditure. The most useful proposals that have emerged around the world are combined with some innovative measures of their own, in an empowering and accessible book.

Reviews

'This unusually well-written, direct and succinct book describes neo-liberal positions fairly; offers theoretically rigorous and empirically accurate critiques; and describes feasible, practical alternative policies that take realistic account of political, economic and financial constraints. Discussion of financial, monetary, fiscal, trade and industry policy and intellectual property rights is especially strong and constructive and makes important innovative contributions. It is a fine, carefully analytical achievement which would contribute to hastening both efficient and socially just development wherever the insights are appropriately used.' - John Langmore, Representative of the ILO to the UN

'Chang and Grabel demolish the myths (or fabrications) underlying neo-liberal views about economic development and provide succinct, constructive suggestions for policies regarding trade and industry, privatization and intellectual property rights, private capital movements, financial regulation, and macroeconomics. Reclaiming Development is a manifesto that should be on the shelves of policy-makers, academics, and students worldwide.' - Lance Taylor, Arnhold Professor, New School University, and author of Reconstructing Macroeconomics

'A growing number of developing countries are taking back control over economic policy from the IMF and the World Bank. The wide range of policy suggestions contained in this book provides a rich mine of concrete and practicable alternatives from which to choose in taking advantage of whatever room globalization still allows developing countries and reshaping economic policy in their own interests.' - Martin Khor, Director, Third World Network

'This book is not only a superb antidote to the numbing myths of neoliberalism but also a cogent and stimulating presentation of the many possibilities for alternatives to neo-liberal economic policy that both theory and history provide policy-makers and students of development.' - Thandika Mkandawire, Director, United Nations Research Institute for Social Development (UNRISD)

'The dominant neo-liberal economic doctrine asserts that there is no alternative to its policy prescriptions which provide the foundations for success in an age of globalization. This book questions and refutes the belief system implicit in the assertion. It does so in a manner that is highly iconoclastic. Yet, it is solidly grounded in economic theory and empirical evidence, both historical and contemporary.' - Deepak Nayyar, Vice Chancellor, University of Delhi

'The alternatives offered in this book make established wisdom turn cartwheels...Those in the higher echelons of power would have much to learn from a thorough read of a book such as this.' - Nina Gera, Dawn

Introduction: Reclaiming Development
Part I. Myths and Realities about Development
Introduction
1. Myth 1: Today‘s Wealthy Countries Achieved Success through a Steadfast Commitment to the Free Market
2. Myth 2: Neo-liberalism Works
3. Myth 3: Neoliberal Globalisation Cannot and Should Not be Stopped
4. Myth 4: The Neo-liberal American Model of Capitalism Represents the Ideal that All Developing Countries Should Seek to Replicate
5. Myth 5: The East Asian Model is Idiosyncratic; the Anglo-American Model is Universal
6. Myth 6: Developing Countries Need the Discipline Provided by International Institutions
and Politically Independent Domestic Policymaking Institutions
Part II. Economic Policy Alternatives
7. Policy Alternatives 1: Trade and Industry
8. Policy Alternatives 2: Privatisation and Intellectual Property Rights
9. Policy Alternatives 3: International Private Capital Flows
10. Policy Alternatives 4: Domestic Financial Regulation
11. Policy Alternatives 5: Macroeconomic Policies and Institutions
Conclusion: Obstacles and Opportunities for Reclaiming Development

About the Authors:

Dr Ha-Joon Chang is Assistant Director of Development Studies in the Faculty of Economics and Politics, University of Cambridge. Born in the Republic of Korea, and educated at the Seoul National University and subsequently at Cambridge. His books include Kicking Away the Ladder - Development Strategy in Historical Perspective (Anthem, 2002), and Globalisation, Economic Development, and the Role of the State (Zed, 2003). Since 1992 he has also servesd on the editorial board of the Cambridge Journal of Economics. He was a member of the Advisory Panel for the Human Development Report, 1999 and has acted a research project coordinator and consultant to numerous UN agencies and international agencies including the World Bank, the Asian Development Bank, the British Government's DfID, and the IDRC in Canada, and the South African Government's DTI.

Ilene Grabel is Associate Professor and Co-Director of the graduate program in Global Finance, Trade and Economic Integration at the Graduate School of International Studies of the University of Denver. She also lectures at the Cambridge University Advanced Programme on Rethinking Development Economics. Grabel has published widely in academic journals on financial policy and crises, international capital flows, and central banks and currency boards. She has worked as a consultant to the UN/UNCTAD Group of Twenty-Four and the UN University's World Institute for Development Economics Research and works with the international NGO coalition,

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An Alternative Economic Policy Manual

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