But then I guess with the right environment then capital inflows did work in at least this country.
The questions we seemed to be trying to answer are: 1. Name a large economy that made a transition from poor/agricultural to prosperous/industrial without the use of protectionism to first build an industrial base. From: Ask ET: Protectionism and Fledgling Economies
So by your statement you seem to provide the concept that poor governance results in poor results and good governance results in good results.
On a side note, I am a strong proponent of Liberal Democracies including the positive effects of growth on freedoms of society.
Lastly I would love to see what others think of transition phase of merging the two economies. ------------------------------ Rutherfordian RDRutherford
Actually, it fits better into another group I pointed to in this diary, a nation whose closed trade systems after successful industrialisation has led to underinvestment.
Especially when we talk about the state apparatus, the two parts of Germany developed in two quite different directions. (The different directions within economic policy are so obvious I am not going to extrapolate on them.)
Those differences in attitudes and preconceptions is probably part of why East German developments in many areas have gone so slow. And one of the reasons why Linkspartei rose from the ashes of the SED to become a genuine leftist power block within the BRD in the last few years.
I might try to flesh out these avenues of thought when I finally get around to writing a diary on my thesis on the reconstruction of Germany after the war.
Yes, any two countries that merge will have a lot of frictional aspects. That is what made "Goodbye Lenin" such an interesting story line. And not just culturally, it seems like a lot of movement of peoples also. ------------------------------ Rutherfordian RDRutherford
To imply that job security, an ok living standard and free education and health care is not benefits for the population is a bit of a stretch. DDR was a repressive communist dictatorship, but the East German people were better off (especially materially) than the majority of the people in the world today.
But no matter what one might feel about the specific case of the DDR, it is nevertheless outside of the scope of what I was talking about in my diary. That part of Germany has been industrialised since the Bismarck era.
Maybe this would be better: Name a large economy that made a transition from poor/agricultural to prosperous/industrial through the removal of trade barriers and liberalisation of the economy.
Jagdish Bhagwati defines it as "Freer Trade". Thus economist understand the importance of trade for increasing the wealth of nations, but to say all barriers should be removed may not make sense especially in a developing country that has no market control of its own.
It may be hard for me to describe it but he also talks about whether the government and industry is outward directed or whether it is inward directed. Much as many countries have tried Import Substitution with poor results. It is very hard for a government to pick winners and losers.
Jagdish talks about the growth occurring in both India and China after they started policies that were outward directed. ------------------------------ Rutherfordian RDRutherford
I have not seen the debate between Bhagwati and Joseph Stiglitz, but after reading some of both of them, I really do not see much difference in their opinions. ------------------------------ Rutherfordian RDRutherford
