
Contents
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The Unrealistic Standard Model of Random Growth The Unrealistic Standard Model of Random Growth
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Validating a Myth: How the Standard Model Survived Its Flaws Validating a Myth: How the Standard Model Survived Its Flaws
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Sorting Facts from Fiction: Misleading Tales and Revisionist Stories Sorting Facts from Fiction: Misleading Tales and Revisionist Stories
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The Missing Parts: Coordination and Externalities The Missing Parts: Coordination and Externalities
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What Sustains Growth? What Sustains Growth?
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Why Are the Opportunities Not Being Seized? Why Are the Opportunities Not Being Seized?
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Following Comparative Advantage Following Comparative Advantage
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An Unpleasant Side Effect: The Soft Addiction to Foreign Aid An Unpleasant Side Effect: The Soft Addiction to Foreign Aid
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Careful What You Wish For Careful What You Wish For
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Meta-economics of Aid addiction and Standard Growth Recipes Meta-economics of Aid addiction and Standard Growth Recipes
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Distorted Expectations and Compulsive Behavior Distorted Expectations and Compulsive Behavior
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Limited Policy Space and Trust Limited Policy Space and Trust
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Appendix 4.1 Appendix 4.1
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Basic Statistics and Facts Basic Statistics and Facts
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Have Aid-Addicted Countries Performed Better than the Others? Have Aid-Addicted Countries Performed Better than the Others?
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Country Lists Country Lists
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4 The Mechanics of Failure and the Secrets of Success
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Published:August 2019
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Abstract
This chapter analyzes the mechanics of failure and the secrets of economic success. Cesar Luis Menotti's strategy's main ingredients could serve as a metaphor for the basic argument in the chapter: any low-income country can achieve sustained and inclusive growth if it properly identifies its endowment structure and uses its most competitive factors to exploit its comparative advantage. The chapter starts with a presentation of the standard model of stabilization and structural adjustment, which has come to dominate development thinking and policy across the world and has survived several decades of critical research. It then explores reasons why the model has endured despite criticism from across the ideological spectrum, especially in the 1980s and 1990s. It also offers an analysis of why traditional policy frameworks derived from the standard model often do not yield results, and it stresses the need to focus growth strategies on coordination and externalities. The chapter ends with a discussion of one of the main side effects of the standard model and its growth prescriptions: the extreme dependence on foreign aid by many low-income economies, especially those in Africa.
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