Dani Rodrik’s new book, <em>One Economics, Many Recipes: Globalization, Institutions, and Economic Growth</em> takes on a problem of fundamental importance, how to stimulate and sustain economic growth in underdeveloped countries and lift people out of poverty.
Past attempts to solve this problem can, for the most part, be identified with one of two polar extremes, solutions that involve pervasive and persistent government intervention, and solutions that rely upon extreme <em>laissez faire</em> market-oriented policies. Neither of these approaches has been very successful, and the book argues for a different approach that combines these extremes and allows market forces to operate in an environment shaped by government policy. Under this combination approach the government in partnership with the private sector uses industrial policy and institutional change to strategically kick-start, coordinate, and sustain economic activity.
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