Brink Lindsey: evaluation

Transcript context

…Let me play devil’s advocate for a moment and try to defend crony capitalism. If I ask, what are the two greatest growth miracles in the last 50 years of history? It seems plausible candidates would be South Korea and China. And both of those places, there crony capitalism run amok. Maybe isn’t the distinction between forms of crony capitalism that encourage infrastructure and education, and those work out fine, and forms of crony capitalism that thwart infrastructure and education. But crony capitalism itself really isn’t so bad at all, maybe at some margins we even should have more of it, because it helps get things done, gets us of the Kludgeocracy, as your friend Steve would say. I agree that there are different kinds of corruption, and there is sort of growth-enabling corruption in less-developed countries and growth-stifling corruption. But the two examples you picked are very different from our present case; these are both examples of countries that took off from poverty and took advantage of opportunities for catch-up growth. Precisely because they were so backward and impoverished, they had a lot of artificially accelerated or… Let me back up and scrap that. Because they were so poor and backward, they had a lot of catch-up growth that they could grow faster than rich countries that must slug along expanding the technological frontier rather than borrowing good ideas from abroad and implementing them home. I think, generally, institutional quality in less-developed countries can be appreciably lower than in rich countries. It takes less high quality institutions to catch up than it does to blaze trails at the technological frontier. As countries get richer, the stakes for policy makers keep getting higher. They have to up their game continually, or they will run into the growth slump that so many formerly rapidly growing less-developed countries have run into. Singapore has higher per capita income than the Unites States, so arguably we need to catch up to them. Maybe a dose of crony capitalism is exactly what we need to put that extra zing in our step.…

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