Friday, December 22, 2006

Good Sense on Problems of Development

In The Austrian Economists (the Blog), Frederic Sautet posts (‘The US Supreme Court’) on the subject of Government acting either as a player or a referee, and refers to a paper by Pete Boettke and Chris Coyne (downloadable in PDF): ‘The Role of the Economist in Economic Development’.

The paper has to be read to be appreciated – no summary by me could do it justice – but the gist of it is about the role of economists in advising governments or the people who influence them, and whether they act as ‘Saviours’ or ‘Students’.

(Neither Pete Boettke nor Chris Coyne may agree, perhaps, with my interpretation of the world development situation that follows, but we shoot at the same target.)

Those international bodies, nominally ‘in charge’ of economic development, hire hordes of economists, almost exclusively from the neoclassical paradigm who think the same, with possible minor variants of their ‘solutions’ for economic development, all of which have failed badly, though nobody seems to mind, and almost all act as ‘saviours’, each with The ‘one true solution’.

Of course, donor governments are complicit too, being composed of opinionated politicians, each considering their pet solution is immune to contradiction, especially when mixed with large doses of ‘moral fervour’ and aspirations to confirm their tenuous occupancy of the ‘moral high ground’, which makes them vulnerable to blindness towards, or at least sophisticated toleration of, the blandishments of access to ‘famous’ (‘infamous’?) crooks, bandits and comic singers, who are lauded by UN protocols as ‘presidents’ of corrupt, cruel and incompetent member-states of that body.

Governments have the roles of either ‘Players’ or ‘Referees’. The usual unworkable combination is one of government as Players and economists as Saviours. The more appropriate workable combination is for governments to act as ‘Referees’ (rule of law, justice, and, in my view, instigating public sectors as in Smith’s Book V of Wealth of Nations) and economists to act as ‘Students’ (crudely, getting out of the hopeless prediction business and into the ‘understanding of what’s going on’ business).

Cheer yourself up this week. Read something worthy of your attention. Follow the URL and download the PDF.
The Austrian Economists (the Blog is found at:

For the downloadable paper by Pete Boettke and Chris Coyne, click to lead in the posting: ‘The Role of the Economist in Economic Development’, The Quarterly Journal of Austrian Economics, vol. 9, no. 2, Summer 2006, pp 47-68.


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