Normatively weak institutions can be functionally strong: A surprising lesson from China

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By Yuen Yuen Ang, Associate Professor of Political Science at the University of Michigan and the author of “How China Escaped the Poverty Trap


This blog is part of an ongoing series evaluating various facets
of
Development in Transition. The 2019 “Perspectives on Global Development” on “Rethinking Development Strategies” will add to this discussion


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Guangzhou, China. Photo : shutterstock.com

For the past decades, policymakers and development practitioners have clung to the idea that “good governance” is the solution to poverty. If only poor countries could eradicate corruption, enforce laws, hold leaders accountable and achieve a checklist of best practices, their economic and social problems would be resolved.

This thinking, however, runs into a chicken-and-egg problem: in the first place, it’s hard for poor countries to quickly and meaningfully establish good governance. Indeed, if it were easy to achieve good governance, poor countries would have done it long ago.

But if insisting on one-size-fits all good governance is not the solution, then what is the alternative? My research on China’s development reveals a surprising lesson: normatively weak institutions can be functionally strong. Seen through first-world lenses, the norms and structures found in low-income, pre-industrialised countries are often regarded as “weak” or “backward,” that is, as impediments to development. In fact, these institutions can be creatively adapted or repurposed to kick-start development.
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Are women holding up Chinese and African skies?

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By Hannah Wanjie Ryder, CEO, Development Reimagined, and China Representative, China Africa Advisory


Learn more about this timely topic on the upcoming
OECD Global Forum on Development
Register today to attend


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In 1968, Chairman Mao might have proclaimed that women hold up half the sky, but it remains a sad fact that the majority of top African and Chinese politicians are still men. This is also the case for CEOs of state-owned and other large Chinese and African businesses. No woman has been president of any African country since Ellen Johnson Sirleaf stepped down last year, and in a recent study by the World Economic Forum (WEF), China was ranked 77th out of 144 countries in terms of female political representation, and 86th for economic participation and opportunity. Only eight sub-Saharan African countries featured overall in the top 50 of the same index. When I attended the Forum on China Africa Cooperation (FOCAC) in 2015, which has been running since 2000 and tends to be a very government-led affair, only two women were prominent – the head of the African Union Commission at the time Nkosazana Dlamini-Zuma, and Kenya’s then Foreign Minister Amina Mohamed.

But I am now noticing an interesting new phenomenon: Women from all over the world seem to be aiming to shape China-Africa relations.

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Opportunities and Challenges in Southeast Asia, China and India

BannerForumAsiaMobile_ENBy Mario Pezzini, Director, OECD Development Centre, and Special Advisor to the OECD Secretary-General on Development, and Kensuke Tanaka, Head of Asia Desk, OECD Development Centre


Learn more about this timely topic at the upcoming
1st International Economic Forum on Asia
Register today to attend on 14 April 2017!


Mario-KantsukeStrong growth – averaging 6.2% per year – is expected in Emerging Asia (Southeast Asia, China and India) over 2017-21, though trends vary across the region. While growth in China is projected to continue slowing, it will still average 6.0% over the medium term, below the 6.7% forecast for 2016. India, on the other hand, will average 7.3% annual growth in the years to 2021. The ten ASEAN member countries together are forecast to average growth of 5.1%, led by the CLM countries (Cambodia, Lao PDR and Myanmar), which will all see annual growth rates above 7%. Amongst the large ASEAN-5 economies, the highest growth rates are projected for Viet Nam (6.2%) and the Philippines (6.1%) over 2017-21. Singapore and Brunei Darussalam are both expected to see growth of 1.8% in the medium term. Private consumption is expected to continue to be an important driver of growth across much of the region, particularly with slow export growth (Figure 1):  Continue reading

A view into China’s Development: Opportunities, Challenges, Actions

By Li Wei, President (Minister), Development Research Center of the State Council of China

shutterstock_chinaThe increasing economic integration and interdependence of countries around the world constitute the driving force behind common prosperity. In this pursuit, China, as the world’s second largest economy with an economic aggregate exceeding 15% of global GDP, plays a pivotal role. In fact, China’s development will, more or less, impact the development of other countries. So, what is China doing to realise its own domestic development goals that, in turn, can help spur a new round of prosperity for the global economy?

The way forward begins with understanding current realities. China indeed faces some unprecedented challenges. The working age population is in absolute decline as society is aging. Traditional industries, especially low value-added sectors, face serious over-capacity. Ecological and environmental problems challenge the country’s continuous development. Continue reading

China’s economic slowdown: Good or bad news for Europe and Central Asia?

By Maurizio Bussolo, Europe and Central Asia Chief Economist Office, The World Bank Group

 

China-Dev-MattersChina’s economy looms large in global markets. After decades of sustained economic growth, the country became the world’s largest exporter in 2007 and today sells abroad 60% more goods and services than the United States and 75% more than Germany – the second and third largest exporters, respectively. In addition, China is the second largest importer of goods and services in the world, after the United States.

Because of China’s importance in the global economy, news of its economic slowdown and financial sector turmoil have caused many observers to worry. In fact, at the beginning of 2016, some were explaining the plummeting of stock markets as anticipating a growth collapse in China (also reflected in very low oil prices). Continue reading

How China’s Rebalancing Affects Africa’s Development Finance … and More

By Helmut Reisen of Shifting Wealth Consulting and former Head of Research at the OECD Development Centre

 

Africa-globe2015 has been a challenging year for Africa. Average growth of African economies weakened in 2015 to 3.6%, down from an average annual 5% enjoyed since 2000. Total financial flows have decreased 12.8% to USD 188.8 billion, including UNCTAD estimates for foreign direct investment. Africa´s tax-GDP ratio tumbled to 17.9%, down from 18.7% in 2014.

Three core factors have underpinned Africa’s good economic performance since the turn of the century: high commodity prices, high external financial flows, and improved policies and institutions. Now, China´s decline in investment and rebalanced growth is depressing commodity prices and producing headwinds for Africa. Such macroeconomic headwinds for net commodity exporters also imply that Africa’s second pillar of past performance — external financial inflows — have suffered as well.

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Developing countries and the renewable energy revolution

By Prof. John A. Mathews, Professor of Strategy at Macquarie Graduate School of Management in Sydney, Australia and author of Greening of Capitalism

There was a time when arguments about development and energy were seen as different discourses. They came together in the familiar call for poor people in developing countries to have access to electricity. As for energy needed for industrialisation, fossil fuels – with all their burdens on the balance of payments and geopolitical entanglements – were tapped to fill the need.

To be sure, the Western world as it industrialised over the past 200 years enjoyed enormous benefits from fossil fuels. The transition to a carbon-based economy liberated economies from age-old Malthusian constraints. For a group of select countries representing a small slice of the global population, burning fossil fuels enabled an era of explosive growth, ushering in dramatic improvements in productivity, income, wealth and living standards. Continue reading