Why have some developing economies grown so much faster than others? Do economies grow faster when left alone, or can interventions such as subsidies spur more growth? Which kinds of interventions accelerate economic development—and which policies hinder it?
Those were the questions motivating a talk by award-winning economist and Berkeley Haas Dean Ann Harrison, who delivered the 2021 Paul Streeten Distinguished Lecture on Global Development Policy at Boston University last week. This annual lecture celebrates the legacy of Boston University Economics Professor Paul Streeten, and was last given by Nobel Laureate Joseph E. Stiglitz.
In a talk punctuated by historical and present-day examples and grounded in empirical research, Harrison made the case that policies which promote competition are the most effective, and those that limit competition—such as tariffs—end up reducing a country’s productivity. Dean Harrison concluded by speaking about how industrial policy can be employed to fight climate change, which she described as “the biggest market failure in human history.”
Watch the lecture and read a summary of the talk by by James Sundquist, a Global China Initiative Fellow at BU’s Global Development Policy Center, below.
Don’t Be Afraid to Compete: The Role of Industrial Policy in Global Development