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Ha-Joon Chang explains the case of South Korea in details in his book "Kicking away the ladder": Korea developed because it was extremely protectionist, while r
by wazoox 4y ago
Ha-Joon Chang explains the case of South Korea in details in his book "Kicking away the ladder": Korea developed because it was extremely protectionist, while receiving substantial financial support from the US (because of North Korea, China and USSR).
While Ghana has been under the rule of the IMF the whole time.
IMF policies are arguably extremely toxic; they basically guarantee that countries can't develop by keeping them open to a flood of subsidized products from more powerful countries, killing their ability to develop their agriculture and industry.
China developed similarly by stringently protecting its interior markets. The US did the same in the 19th century. Basically, all countries that successfully developed were staunchly protectionist, then became "free traders" once they become powerful enough to defend themselves on open markets.
See https://www.allencheng.com/kicking-away-the-ladder-book-summary-ha-joon-chang/ https://www.allencheng.com/kicking-away-the-ladder-book-summ...
- zozbot234 4y ago> IMF policies are arguably extremely toxic Correlation, not causation. The whole point of IMF intervention is to rescue countries that are already in the toilet, and need to consolidate foreign debt.
- amanaplanacanal 4y agoI wonder if a lot of those countries would do better to declare bankruptcy and not pay those debts.
- kodyo 4y agoIf by country you mean the people who live there, yes. If you mean whatever oligarchy is nominally in charge, well, the bankers can make sure they’re taken care of as long as the interest payments keep rolling in.
- deterministic 4y agoIceland did this? And it worked beautifully.
- chii 4y agoand you would have a situation like recently in Sri Lanka where they defaulted on loans, and cannot obtain necessary resources like oil to run their economy. IMF loans are bandaids to stop the bleeding, but the cure depends on the disease. If the country does not cure the disease, the bandaid will not help after a while.
- dr_dshiv 4y agoThis was the policy of the USA— see Henry Charles Clay, the chief economic advisor of Abraham Lincoln. Started “the American School” of economics. It is all about healthy markets, but still allows for some protectionism. A middle way.