CR Economic Role Model?
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- Category: The Nation
- Published on Saturday, November 06 2010 09:21
- Written by Rod Hughes
- Hits: 746
Prof. Jeffrey Frankel of Harvard credits Costa Rica with an unaccustomed place in the modern world: economic role model. His idea is that in a changing world, big ideas may come from small countries.
A professor of government at Harvard University's prestigious John F. Kennedy School of Government, he points out that the Japanese model of the 1980s was all the rage. In the 1990s, economists were sure that U.S. capitalism was the way to go. Now that has gone down the tube.
So...who has the right ideas? He thinks Costa Rica, Singapore, Mexico, Mauritius in Africa Chile, among others, have made some innovative moves that it might be good to follow. Both this country and Mauritius have ditched their military as an unnecessary drain on budgets (Costa Rica in the middle of the last century) freeing up their budgets for education and other social programs.
(Costa Rica has been telling the world this for 62 years. In the region only Panama finally listened.) Frankel points out that both countries are singularly free of coups and other economic disruptions.
All the above countries manage to outperform their neighbors economically. Chile's innovations include institutions that do not follow boom/bust spending cycles but are regulated by two panels of apolitical experts using the world copper price as their measure.
Innovative approaches abound in his article, from Singapores' use of prices to reduce urban traffic glut to Mexico's pioneering of Conditional Cash Transfers. But his point remains consistent throughout: countries on the "periphery" of the industrial world are more apt to try new schemes.
(This blog is grateful to The Globe and Mail Web site of Toronto for drawing our attention to this story.)