Beyond the World Bank Agenda: An Institutional Approach to Development

Description

Howard Stein has written an important new book which seeks to get us to think about the importance of institutional development, context, history and complexity. He eschews simple one size fits all "market is best" approaches to draw on the lessons of history and great thinkers such as Gunnar Myrdal to develop a nuanced argument about the importance of the state in fostering a dynamic and productive private sector which can foster general improvements in living standards. He begins the book by discussing the political economy of changing paradigms in the World Bank. The fact that he has conducted interviews and had extensive contacts with senior employees in the Bank give new insights, particularly when combined with Stein's mastery of the theory and literature on economic development. He then develops a critique of the micro-foundations of structural adjustment, focussing on its oversimplifications of human motivations and history, resulting in practical problems in real world implementation and effects on the ground. He then examines the way in which neoliberal development theory has been reinvented through the concept of social capital, without questioning the underlying neoclassical paradigm, however. This book is unusual though because it moves from critique to suggesting feasible policy alternatives based on appropriate institutional matrices consisting of "norms, organizatons, regulations, capacities and incentives". The book concludes with case studies of the effects of liberalization on financial development and health and what alternative policies might look like. This is a tour de force from one of the leading critics of neoliberal development policies, whilst still be accessibly written. It is required reading for those interested in practical ways of making another world possible.