Competitiveness and Development
Myth and Realities
About This Book
Almost all industrial countries have undergone strategies to maintain, or improve, competitiveness in order to improve the standard of living of their population, particularly during the last quarter-century or so. But how have they treated developing countries? ‘Competitiveness and Development’ explains how developing countries can attain competitiveness at a high level of development, examines the possibilities and constraints in achieving it, and proposes remedial measures at the national and international levels.
The author Mehdi Shafaeddin illustrates how developed countries impose restrictive policies on developing countries through international financial institutions and the WTO as well as regional and bilateral agreements, thereby limiting their policy space for promoting dynamic comparative advantage in order to achieve competitiveness at a high level of development. Such policies, the author argues, lock developing countries which are at early stages of development in specialization in primary commodities, or at best simple processing and assembly operations in accordance with their static comparative advantage.
To support this argument, the author critically examines the neoclassical theory of economics, which is the philosophy behind the principle of static comparative advantage as well as the policy stances of international financial institutions and the WTO. The author also reviews the historical experience of developed countries through industrialization, development and achieving competitiveness based on the principle of dynamic comparative advantage. In this context, he explains the importance of trade and industrial policies and the role of government in human resource development, innovation and technological development. To illustrate his case, the author compares the contrasting experience of China and Mexico since the 1980s when globalization has been intensified.
Readership:
This book will benefit policy makers in developing countries; postgraduate and fourth year undergraduate students, university teachers, other scholars and researchers; international organizations and NGOs.
Author Information
Mehdi Shafaeddin is a development economist with a DPhil degree from Oxford University and over 30 years of experience in teaching, research and policy advice at the national and international levels. He held the position of Head, Macroeconomic and Development Policies Branch, UNCTAD. He is currently an international consultant. Shafaeddin is the author of many articles on trade, industrialization and development policy issues in international academic journals. His latest books include ‘Trade Policy at the Crossroads: The Recent Experience of Developing Countries’ (Palgrave Macmillan, 2005).
Erik S. Reinert is Professor of Technology and Development Strategies at the Tallinn Technical University in Estonia, and is the President of the Other Canon Foundation.
Table of Contents
List of Tables and Figures; Foreword by Erik S. Reinert; Preface; Acknowledgements; List of Abbreviations; 1. Introduction: Framework of Analysis; 2. The International Context and Conditions; 3. Alternative Theories of Competitiveness; 4. Firm Strategy and Industrial Organization; 5. External Economies: Organization of Inter-firm Relations; 6. Firm’s Relations with Stakeholders and Others: Reputation and Trust; 7. Innovation and Upgrading; 8. Government Policies; 9. Experience of China and Mexico; 10. Concluding Remarks: Policy Implications for Other Developing Countries; Appendix, References; Index
