The book, The Quest for Prosperity, is written by, Justin Yifu Lin. Mr. Lin is the chief economist and senior vice president of the World Bank. He illustrated in his book, a fascinating overview of development, development of economies, development for the underdeveloped countries and economies particularly after the Second World War. The book written by Justin Yifu Lin has been notable and it has been acknowledged as a knowledgeable and highly sophisticated book for people that have their interest in economic development, economic policies, economic growth, development of economies and development for third world countries that are struggling to improve and develop their economies. To show the path to the development of the economic particularly for under developed countries, the book aims to analyse the practices that are followed by different countries and how these practices and policies have helped economies to grow and improve.
This book is written in an exceptional way that is easily understandable by the reader. People that do not have high knowledge about economics and macroeconomics are still able to understand the book as the author has focused on not only explaining the concepts and definitions, but their practical applications and implications have also been analysed. The salient attribute of this book is the technique of comparing the concepts with the actual practices adapted and implemented by countries around the world to improve and develop.
The book is at the utmost peak of the subject’s intelligence, originality and thoughtfulness. This book sets a record on the analysis of modern economic development. Full of practical experience and opinion is what this book is compiled with and it is aimed to helped different users like the policy makers, students who are undergraduates and doing their studies in development economics or even economics, analysts and investors, governmental agencies and others.
After analyzing the experience and understanding of many countries and how these countries have developed, with a special focus on China, the author at all times argued and forced for an active role of the government in the growth and development and provision of sets of laws. The author has also emphasized on supporting the industries as industries contribute towards the success and development of the economy. So this would make the overall industry or environment more competitive in the market and it would also encourage growth. According to the author, it is the responsibility of the government to develop and work for the betterment of the industries which are too far from progression and have gone against the country’s advantage. However, the author has precisely argued that industrial sectors have a key role in most cases of economic growth as well as the swift growth of the economy. Industries have played improve role the development of both the developed and developing countries. For continues operation and development of industrial sector, it is imperative for the government to support the firms in these sectors financially and by providing other supporting facilities (Ray, 2011). According to the author, the government should always target those industries which are effective and can provide the economy with advantage in the international and local market. Economic growth mostly depends on the endurance and growth of the industrial sectors and the firms. Ray (2011) has stated that the role of government is critical in providing facilities and in supporting the industries so that government needs to provide infrastructure and facilities like electricity, transportation facilities and other necessity facilities so that these industries can operate successfully.
The Quest for Prosperity has covered different aspects of development economics. The author has also presented how different economies and countries have prospered. By analyzing the strategies and tactics used by different economies that have developed, the author has highlighted and recommended the policy makers on how to improve their economic situation. In addition to this, criticism has also been presented on the economic policies of different economies and how these policies could have been improved. By highlighting and comparing the economic policies of different economies and their outcome, the author has presented and identified important lessons that policy makers need to keep in mind while making important decisions as well as while formulating important economic policies. Moreover, the author has also discussed the strategies that have lead to failure for different countries and the author has highlighted the flaws in their strategies so that policy makers do not repeat the same mistakes. The author has also discussed structural changes that are required for the nation to prosper and grow. Moreover, the author has emphasized on the need of structural changes for economic growth and development. It has been revealed by the author using different research studies that structural changes are important factor in the economic development of the country. By using different external and reliable sources, the author has improved the reliability of the findings and information presented in the book.
The chapter recipe for economic prosperity has discussed the ingredients and important factors that are critical for the growth of the economy. This chapter highlighted important factors and ingredients that an economy needs to prosper. Human resource and quality of human resource along with its supply are important ingredients for a prosperous economy.
In addition, development and betterment of agriculture sector is one more essential factor to be considered by the government. Agriculture sector can highly participate in reducing poverty; un-employment and can bring funds for the investment in the industrial market and for sure agricultural sector can aid in the development of the country (Mankiw, 2009). Most of the underdeveloped and developing economies heavily rely on agricultural sector and therefore this sector is very critical for the underdeveloped and developing countries of the world. There is also a need of structural modernization in technology and product composition for the advancement of agricultural sector. Income growth mainly depends on betterment of agricultural areas and improvement in hard and soft structure (Schultz, & Strauss, 2008). The author has highlighted the cases of countries that have focused on agricultural sector and have focused on similar strategies and recommendations as presented by Schultz, & Strauss (2008).
The book "The Quest for Prosperity” is written with clarity and simplicity and reflects a deep understanding of economic issues and matters and proffers practical solution that policy makers and economists are concerned with. The writer in his book displays his concentration, on the methods, how nations can help themselves in their development. The book has highlighted on different occasions what other scholars and researchers have also discussed in their publications. The author at different occasions have reflected his views and then compared his views with the views of other renowned scholars, economists and researchers.
With having experience from economic analysis, history and practice, Lin, scrutinized that how specifically the countries have worked on their development and have actually done it. Moreover, the author at different occasions has connected theories with the current situations of countries and has used models that policy makers of different less developed countries could have applied to formulate policies and strategies for economic growth. Démurger et al. (2002), it is important for economies to formulate policies that encourage economic growth and it is in accordance with what the author has written. He stated that the persistent changes in technological modernism, structural change and industrial upgrading are important factors and these factors can play a big hand in the development of the economy. The author has also emphasized different countries particularly the underdeveloped countries and the developing countries on how the country can make the most of from the resources it has like land, capital, labor, and infrastructure. The author believes these resources are very critical for the growth of the economy and therefore these resources should be used in the best possible manner. Close attention should be paid to the technologies as this encourages competition in the industry according to the author. Cheng (2003), competition is an important factor in improving the economic conditions of the countries. Lin stated, by following the strategies discussed in the book, even the poorest nation can improve their position and can report growth. Some of these strategies that Lin has discussed in the book are investing in technology, making the most of the resources, capitalizing on the opportunities available in the local as well as international market, focusing on agricultural sector and others. These strategies can help in reducing the poverty and unemployment and can improve the income level of people in the country as in the case of Chile (Martínez, 2011). The author has studied and analysed how different countries have improved and developed over the period of time and he stated that the role of government needs to be active in the economic development. Government should also help sectors and firms that are in pecuniary deficiency (Rao, 2000). It will become much easier for the firms and the sectors to be competitive and practical once the government helps them to overcome the problems. (Leamer, 2009) At the same time, state needs to be familiar with the market and with the limitations that the firms in the industry are facing and also with the sets of rules and regulation of the government so that the firm can prosper and can do well and contribute in developing the economy. All these steps from the government can encourage growth in the underdeveloped and less developed countries (Gartner, 2009).
In this book, the author has shown his consideration on many different facts that study about production of wealth, distribution of wealth, consumption of wealth, and exchange of wealth. Meaning of production of wealth is that the production of goods and services. After the production of wealth, the author has explained and discussed how it is being distributed in different ways. He claimed, if the provided resources are being used in the right way, then it can lead to the success and growth of the economy. It is important to keep in reserve some of the resources for future time, as it can prove to be helpful for country’s development (Perkins et al., 2001). According to the author, development must leap, but in small ones so that it makes sense and can prove secure. It is necessary for the country to be ambitious and formulate goals and objectives that are to be achieved.
According to the author, Countries that are really willing for the development need to recognize and win advantage from those sectors from where they think better results can be realized. Moreover, countries need to identify areas from where they can produce products with the most effective means and can use them as a basis of development (Lin, 2012). Absolute advantage needs to be focused by the government and the government should support firms that can give the country in gaining absolute advantage (Rao, 2000). The growth of income in modern economy is totally dependent on the continuous amendment and advancement in the field of technology, industries and basic infra structure and facilities of the economies. After the Second World War, several suggestions and instructions have been reported for the growth of the economics and nearly every country started their mission autonomously for the development of their economy and wealth (Lin, 2012).
In countries where the infrastructure and other facilities that are required are poor and not up to the mark, then it is important for the government to formulate policies in order to attract investors (Ferris, Thompson, and Valsan, 1994). According to Lin, it is important to formulate policies that would attract and engage the foreign investors as foreign investors would not only bring capital, advanced technology, skilled labour, but it will also enhance the level of competition. Moreover, this would further encourage the local firms to improve their quality and processes and thus it would eventually help the economy to improve. Some of the strategies that the government can follow to attract FDI would include establish industrial parks and economic zones (Wessels, 2000).
Foreign Investment (FDI) is needed to encourage industrial sectors (Athukorala, 2003). FDI is an important factor for the development of the country (Markusen, & Venables, 1999). So, including FDI in the book has covered an important topic from the perspective of Development economics. FDI helps in increasing the growth rate of countries (Balasubramanyam, Salisu, and Sapsford, 1996). Policies should be formulated in a way to attract foreign investors and foreign businesses to invest in the country and this would help in development of the economy as mentioned in the book. In most of the countries that have not been able to develop and growth over the years, one of the reasons for the failure is the policies that have been adapted by the government (Groh, and Wich, 2012; Hussein, 2009)
Different theories have been presented that are related to economic development such as Kuznets U-hypothesis, structural change theory, neoclassical theory etc. Moreover, the author has discussed the role of each of the stakeholder and group in the economy and what these groups can do in order to improve the situation and economy of the country. Human Development Index which is a way to analyse the growth and development of the country has also been discussed in detail. Moreover, contributions of different authors and researchers in the field of economic development have also been discussed in this book and therefore the book has included all the important and major contributions in this field. China, Brazil, India and other developing countries have been discussed in this book and how these economies have prospered and now have become important economies of the world. The book has highlighted the policies adapted by China and India in particular and how these policies have helped these two countries to grow with the passage of time. There have been advices given by the author in the book at different occasions for the governments, investors, policy makers, economists, analysts etc.
Although the book has covered different important aspects of economic development and have explained them in detail, however one of the weaknesses in the book is that the book at times have criticized too much on economic policies instead of analyzing the overall perspective and situation in which these policies have been formulated. Moreover, developing economies generally have limited resources and limited skills, this is another important aspect because of which they are not able to flourish and this aspect at times has been ignored by the author.
Concluding this book review in a nutshell, it can be said that that it is requisite for the government to bring a change in order to develop the economies. As it is important to bring in some new innovations and advancement in technologies for continues growth, therefore the focus of the government should be towards these important factors. Capital investment should be made in both ways, locally as well as from foreign investors for the immediate growth and development of the sectors. Therefore infrastructure and required facilities should be provided. In this book, most of the focus has been put on the governmental policies, economic policies, policy makers and to encourage policies and facilities that could help in attracting investment from foreign countries. The main positive aspect of the book has been that the author has relate the theories and concepts with the practices used by different economies and government. Moreover the other important and positive aspect of the book has been the cases of different countries of the world that have helped and developed over the years.
It is crucial for the government to take steps to formulate right policies and framework in order to facilitate the economic development of the private sectors as well as the government sectors. The book covered most aspects that are to be covered and included in the book related to economic development. Moreover, the research studies of different scholars and authors have also been incorporated by the author that has helped in relating the findings and discussion of the author with what other scholars, economists and researchers have said.
References
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