The Economist Recommends - Ending Poverty

The Economist, “Five Books on Ending Poverty” (22 July 2022), named along with 1998 Nobelist Amartya Sen; 2019 Nobelists Abhijit Banerjee & Esther Duflo; 2024 Nobelists Daron Acemoglu, Simon Johnson & Jim Robinson, and William Easterly.

“The enduring drag of weak institutions on a country’s development might imply pessimism. Such thoughts can be dispelled by considering the example of China, which has lifted nearly 800m people out of poverty in the past four decades or so. Yuen Yuen Ang, a political scientist, attributes China’s remarkable transformation to a “co-evolutionary” process, where markets and institutions interact and evolve together. China exploited institutional weaknesses, such as corruption and unstable property rights, to build markets. For instance local government officials were encouraged to take a cut from any growth they helped generate. (Ms Ang dives deeper into the role of graft in growth in a subsequent book [China’s Gilded Age, also reviewed in The Economist].) These flourishing markets helped strengthen institutions which in turn developed markets further. Underpinning this process was the concept of “franchised decentralisation” which gave local officials incentives to constantly innovate.”