Ambitious Pragmatism: First-Order Economic Principles

Abstract

This chapter draws on lessons from history to argue that policy disappointments such as Ghana's mainly reflect failure not of politics but of economic thinking and policy making. There are now enough both failed and successful experiments in economic development for researchers and policy makers to draw on. It highlights the possibilities for poor countries to transform into middle-and even high-income economies and stresses the benefits of such transformations for the world economy as a whole. The chapter starts with a discussion of the role of agricultural development in developing countries today, stressing both its potential contribution in the short term and its limitations in the medium and long term. It then details some first-order economic principles for success, pointing to the need for structural change, which occurs only through industrialization. For the process to be successful, economic policy should aim at “ambitious pragmatism,” which requires calibrating the pace of economic take-off with the existing economic structure and country development level.