October 02, 2007
Fair Trade, Free Trade
Posted by David Zaring

Dani Rodrik is the development economist who likes to zig where everyone else zags.  He appears to think that Korean, Singaporean, etc, style dirigiste economics often works better than shock therapy transitions to absolutely free markets, if you're interested in economic growth.

Okay, great, got him ... he's one of the few people willing to defend industrial policy as a tool of development.  Savvy place to be, given that so many countries in practice think industrial policy can promote growth, but so many economists in theory think it doesn't.  He can arbitrage that.

But wait: even though shock therapy isn't good, Rodrik thinks that Naomi Klein's uber-paranoid book on how shock therapists like Jeff Sachs and Milton Friedman control the world needs to be trashed.  (So does Geoff Manne, in language at least as zippy as Klein's.)

And double-wait: Rodrik thinks that "fair trade" programs, under which consumers choose to purchase products with sustainability guarantees, may not create suitably high prices.  Plus the decision about what exactly goes into fair trade certification is not transparent (sounds like Rodrik thinks there needs to be a Global Administrative Law).

Huh.  Maybe Rodrik is all about public, as opposed to private, development initiatives.  But whatever the case, he doesn't appear to be a big coalition builder.

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